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November 28, 2006
Wal-Mart Goin' Down
In the latest New York Magazine, there's an interesting article by the most uninteresting James Cramer analyzing Wal-Mart's recent poor financial performance. While I vacillate betwixt supporting the big boxes and trying - on a personal level - to funnel my buying pesos into the small guy's coffers, I am - as always - a great believer in the free market society. Competition is what it's all about...and if you can't swim, Wal-Mart, it might be time to suck up your pride and strap on some Behnaz Sarafpour-designed floaties.
Here are some tidbits from the piece:
"Going into October, Wal-Mart predicted 2 to 4 percent sales growth. Then, in early October, the company lowered its projection to 1.3 percent. When it finished the month, Wal-Mart turned out to have gained only half of one percent. This at a moment when almost every other retailer was meeting or exceeding its higher targets."
"What's ailing Wal-Mart? People don't mind shopping at a down-market, politically incorrect store, if the prices are low enough. [Amen. - ed.] That was always Wal-Mart's game. But now the other guys have figured it out. A number of Wal-Mart's competitors now offer similarly low prices and a better shopping experience. Take Target. Wal-Mart's sloppy aisles, dowdy clothing, and junky presentation have all the charm of GUM, the grim old monopolistic chain of the former Soviet Union. Target, meanwhile, is a jooy. And its in-house merchandise, the key to its bountiful profit margins, rivals the stuff you can find in much more expensive stores - at price points that still make you feel like you're getting the deal of the century. We live in an era when consumers, more than ever, want to feel rich...In the most recent quarter, same-store sales for Target grew 4.6 percent, compared with 1.5 percent for Wal-Mart."
Naturally, it will certainly follow all sorts of precedence if Wal-Mart, as the leader, also becomes the fall guy. Starbucks and Whole Foods - take heed, my dears!! Heed!
But, even Target has its critics. In fact, the recent development of my own less-than-positive feelings about this, my one-time Mecca, has been a revelation which has shocked and saddened me like the loss of an important toenail or something. My problem with the place is that it's becoming too generalized - the tool section will have a hammer, some nails, a few screwdrivers - but not a hand-sander or a dremel or anything serving a deeper, dorkier need. This goes for every department. Their organic selection is crap, I haven't been able to find a lamp harp to save my life and there is apparently no such thing as cotton boy short panties in the Target world. Say WHAT?! Complicatedly put, I feel that Target's MO is now running counter to the whole "narrow crevasse," customizable experience that consumption is trending towards. Or, at least, that I hope it's trending towards. Granted, it's easy to take potshots at an innovator - and Target has done wonderful things in terms of marketing high-design to the low-denominators, but I fear its sustainability will be threatened by the phony "all things to all people" ethos.
All things to all people don't. exist. because. all. people. want. something. different. period. Amen. Hence? The inevitable decline of the big box dovetailed with a rise in consumer quality expectation.
Oh well. Things fall apart; the centre cannot hold...la la la.
Change brings opportunity. The pendulum swings. And that's why I'm banking TSC - and boutique stores like it - are gonna really raise quite a bit of hell over the next few years. Buh-bye big box; buh-bye.
Posted by Bree at November 28, 2006 01:01 PM