Monday, September 19, 2011

Inside Info On Why Walmart Will Eventually Fail

Before you call the authorities because I have "insider" info, I got mine the old fashioned way: I went inside a Walmart.  Let me back up. The first time I went into a Walmart was maybe 10 years ago. I was blown away.  It started with the "greeter" as you walked in, and went uphill from there.  In the last decade, I've seen the place decline.  The greeters and stores aren't as inviting, they seem to be employing some screwed up version of Just In Time Staffing, maybe based on dollars per hour wrung up or some such. Whatever they're using, it's an epic fail in my book. We have an unemployment rate around 8%, Walmart's making money, yet 99% of the time I'm at my local Walmart. no more than 4-6 of the 24 cash registers are open.  And the lines are crazy sometimes.  If it's after 11 PM or in the wee hours of the morning,  then we're talking 1 register is open.  If you go to Walmart after 11, be prepared to stand in line for 30-45 minutes.  They close the self serve lines whenever the person watching them has to go home.  My point is, and this is not just my opinion, people tolerate Walmart because they usually have the best prices. But there is going to come a point when we are going to stop tolerating it for the sake of saving a few dollars.  And yes, it is a bad omen when your customers "tolerate" you.

To be fair, I looked at Walmart's stock performance.  It hit $69/share in December 1999, and is now finally getting back to that point.  Walmart is famous for squeezing  pushing their supplies to cut costs so they can pass the savings on, but if you make enemies, you should also make friends. Walmart has annoyed it's suppliers and its customers. I'm going to keep my eye on it. If I do buy some, I'm not planning to hold it forever. I still feel like it's going to go down eventually.

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