Posted on 01/17/2010 10:58:08 AM PST by Captain Peter Blood
The other night I was reading Nathan’s Economic Edge Blog, http://economicedge.blogspot.com/, and he had a link posted to an interview done by Eric King of King World News with Gerald Celente of The Trends Research Institute, http://kingworldnews.com/kingworldnews/Broadcast/Entries/2010/1/9_Gerald_Celente.html, where he gave his take on 2010.
Mr. Celente has a pretty good track record in discerning future trends in business, politics, social and world events. He has been at this for 30 years. You can examine his website at; http://www.trendsresearch.com/index.htm.
One of the things that caught my attention in this interview was his prediction for big box retailing, i.e. Wal-Mart, Target, Home Depot, etc.. His thesis was that we have seen the apex of big box retailing as we know it and it is now on it’s way down and with it a change will come to a new or I might say previous form of retailing to the public.
I will use Wal-Mart as the main example since I happen to work for them and see quite a bit of validity to what Mr. Celente was talking about.
All big box retailers, especially Wal-Mart, for the last 35 plus years have had a same formula for success and growth, a constant round of new store openings.
Even in past troubled economic times Wal-Mart has never Faltered, they have even prospered greatly in previous recessions. Until now Wal-Mart has never closed a store or laid off workers at the retail level.
One of the main problems Wal-Mart has had in recent years is where else to grow. They saturated most every market in the country along with all the other big box retailers. Their solution has been to build more stores in clusters around existing stores.
Example, you have two Wal-Mart Supercenters in a two to five mile radius, depending on population density, that are doing well. The company decides to build another Supercenter in the area knowing that it will cannibalize customers from the other stores, but based on sales figures it says that together all three will have a combined increase. Even though sales at the other two Wal-Marts will suffer to some degree.
Now you take an area like Southern California where this practice has gone to outer extremes. In a two the three square mile radius you have three Wal-Mart Supercenters, a Sam’s Club, and all the other big box retailers in a cluster. With rising wages and a expanding economy somehow all these stores can be supported to a certain level.
But in times like these, with a severe economic crisis with no end in sight and the California unemployment rate at 12.5% plus then that economic model can’t continue to work and won’t.
Wal-Mart and other big box retailers have hit the wall on growth, that is opening new stores. Stores open at least one year or more have had flat or declining sales and will continue to do so. The past Christmas shopping season was a disaster even for Wal-Mart, the fourth quarter numbers will tell the tale and I look for flat profit or maybe after we really dissect the numbers a loss.
Witness last week Wal-Mart announced that it was closing, primarily in California and Western States, 10 Sam’s Clubs. The Wal-Mart explanation is that they were barely profitable or losing money. The real explanation is that this economic crisis has made it nigh impossible to support all the big box retailers in these so called cluster areas.
In my opinion in the next few months the unheard of and unspeakable will happen, Wal-Mart in high population density suburban areas will start closing stores. I look for this to happen in states like California, Florida, Michigan, places where there is very high unemployment.
If we get another market crash and/or banking crisis, which I fully expect to happen in the next 12 months or so then Wal-Mart and all of the other big box retailers will be retrenching even more.
Mr. Celente’s theory is that big box retailing will be out and small box retailing in. Sort of the reverse Wal-Mart effect, the local Mom and Pop will make a comeback as people will want better service and will be willing to pay more for a quality product.
In a way I see this as a positive for the new long term rejuvenation of this country. By reversing that trend it could possibly promote resurgence in a domestic manufacturing base that we need to have along with a more balanced economy and then we can wean ourselves off the cheap Chinese goods we have been consuming like a ravenous beast for the last 15 to 20 years.
Our economy for the last 20 years had evolved into a consumer driven one where the consumer was 70% of GDP. That was never a sustainable long term viable economic model. We have to get back where we once were, that of a balanced economy to have any hope of once again being the prosperous Capitalistic country we were 50 years ago.
Joseph Schumpeter the Austrian Economist once said, “Capitalism by its very nature is a wave of destruction”. I took that to mean it is ever changing and evolving and with this country’s great resource of Entrepreneurs we can turn things around. At least that is my hope.
“Sure, when somebody else is paying the freight and you want to consolidate your FF miles.”
Actually that has little to do with it. Business travelers have to answer for their costs these days. Arriving on time, not losing your luggage and other items are important.
I went into one of their competitors stores.
It was a two story super Walmart in size. Greated at the front door by 3 very cute young ladies instead of a grumpy old guy. The store was very clean.
Nearly every aisle had a cute lady there to help you find stuff.
Great customer service all the way around. Prices weren’t bad either.
Target has pretty things but Target ‘picks and chooses’ what it will or will not sell. I'm speaking in terms of a sort of ‘banning’ of things they object to. Supposedly they have ‘sturdy’ clothing but the women's clothing is very humdrum and plain.
If Walmart has competition, it will be from the Dollar Stores. They are proliferating like rabbits.
Friday you could have bought 1000 BJ for $33,590. The alphabet soup stands for Beverly Jean, daughter of one of the founders.
With eight children screaming that they're bored, and if you don't stop for pizza, they will all sing Lynyrd Skynyrd songs until you drive the van into a telephone pole and have to explain everything to the Lord. "Honestly, I was hanging in there until 'Ooooh, That Smell!' Forgive me!"
Walmart has trouble in some markets, just like any other retailer in this economy. And some of the issues others have mentioned are legitimate - I'm having trouble finding clothes to fit my girls this year, and what's with the shelves of shorts when it's 12 degrees? This will cause some shoppers to buy elsewhere for some items. It's causing me to say, "The holes don't mean they're worn out - you're in fashion!"
founders of what?
Is it some kind of a store?
I hope they start up in this country, if they promise to bring along those cute Korean ladies.
What happened in Germany was even simpler. The government restricted the hours - no 24 hour Wal Marts allowed. The government prohibited price competition. No every day low pricing; only 2 sales a year. And, they had to contract out the bakery department.
They did, however, sell Playboy. But it wasn’t enough to make a difference.
Obviously, you either didn't read the article, or it was too complex for your talking-points-only mentality.
The article lays out some particular events, provides some analysis of those events, projects the trend of those events based on related factors in the economic environment, and formulates a sound logical conclusion based on the preceding.
So how much of that stuff was behind your snippy talking point?
Sounds like what the libtards would like to do here.
CT, you have FR mail :)
With respect, that's not the only choice. The producer can try to sell the item elsewhere. For example, I will never buy clothes at Wally. A) They don't stall tall in ladies. B) I don't like their styles.
In my opinion a place such as Dress Barn is way better.
Decent sales help for size and fashion and color (impossible to get at a place like Wal-Mart). Sure the stuff they sell costs more but you can get some items at 30%-60% off.
The clothes are more stylish (cut and added details), the colors are richer and they don't have the cheap look or feel or start to fall apart after a couple of washings like the stuff Wal-Mart sells...
Borders has got a lot of problems :(
Wal-mart can change prices on both ends. Vendors give them great prices because they are so big. And so their margins are better than others at lower prices. Plus they have been very successful going into other countries.
Mom and Pops are not coming back. Between Wal-marts and Amazon there are very few places that can exist without the help of scale or the Internet.
Wal-mart can change prices on both ends. Vendors give them great prices because they are so big. And so their margins are better than others at lower prices. Plus they have been very successful going into other countries.
Mom and Pops are not coming back. Between Wal-marts and Amazon there are very few places that can exist without the help of scale or the Internet.
And one last note, as online shipping costs to customers increase, or as margins decline because merchants are eating them, big boxes might not look so bad. It's gonna take a while for this to shake out I suspect. Glad I'm not in big business. Worrying about stuff like this would make my hair turn grey. Just another reason why I don't begrudge people who do it well their big bucks :)
When it comes to clothing, I’m screwed. I have to shop online because the 3% or so of women my height or taller don’t rate any square footage in bricks-and-mortar stores. I know I’d spend more if I didn’t have to order. I’m picky about my fit, and hate to eat shipping costs if I have to return something that doesn’t fit. Needless to say I’ve got a very homogeneous wardrobe :)
“
Until now Wal-Mart has never closed a store or laid off workers
at the retail level.
“
Huh?
They most certainly closed one store in Blackwell, OK some years back.
But I suppose they might say that was canceled by putting a Super Center
in nearby Ponca City, OK.
Also, I believe there was mention of the closure of a WalMart in
Canada after the workforce voted to unionize; suprisingly some court
in Canada said that WalMart was within their rights to close the store.
(IIRC, this was on CNBC within the last couple of months).
“If the Sheeple support labor, environmental, and tax laws that are incompatible with efficient business, then they have no right to blame China for out-competing them.”
So, if we decide businesses cannot pollute our rivers and lakes but China doesn’t care if their businesses pollute their rivers and lakes we have no right to complain about prices? I don’t think so.
Sorry, but a country is about like values and we can tariff the Chinese for their products or ban them completely if they are made using unfair practices against our own.
Free trade is not fair trade.
I am all for foreign trade that is competitive and fair, but it is not fair to protect our environment but on the other hand allow in foreign trade that does not.
I fully understand that probably 99% of all government taxation and regulation is not at all about proper regulation of businesses and should be abolished, but to allow any company to import foreign products made against our own laws is nothing but illegal to me, and I don’t care if those acts were on foreign soil.
Such as, we do not allow 16 hours work days for 7 year olds, so why would we allow importation of products that are made that way?
If a country has a like product made under conditions similar to our own business envorinment, then fine, let the product in and show Americans how stupid their taxes and regulations are.
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