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.
YAWN!
I’ve been there and the cute ladies were not anecdotal. They were nice, attractive, and helpful. Pretty much everything the average Walmart employee is not.
Yeah you really detest consumers exercising their freedom to spend money where they see fit. For people like you Walmart should be the only state approved business.
I think it’s funny you think having cute girls standing around waiting to help you find stuff is good customer service.
No you misunderstood. They were cute and they were good at customer service. They would actually help you instead of telling you to get the heck outta their way, or run the other direction. Both of those are common at Walmart.
Of course if you don’t want to be bothered then you can go to Walmart. You will never have someone there come up and ask if they can help you.
Exactly. Little plastic items, cards, gift wrap, birthday cards, streamers, planting soil, duct tape, etc. Never am I going to buy that stuff online.
Also, people underestimate the little kick just going about buying something has as a stress reliever, mood lifter, etc. You don't have to be a raving shopaholic to experience it either. But, it just can not be replicated with the online experience.
The louder you say it, the more factual it becomes. /sarc
Well the word Yawn really is convincing, as you claim that Walmart has GRUMPY old men welcome you into their stores instead of three nice, attractive young females like a competitor.
Your personal crusade against Walmart does lead you to a lot of highly questionable anecdotes, some of them are clearly false.
It is you that seem to want to keep consumers from marketplace freedom, I live in the 8th largest city in America, and whack, anti Walmart crusaders like you have managed to keep out any and all Walmart superstores.
Millions of Americans here are not allowed to shop at Walmart superstores.
You are free to shop at, or not shop at your local Walmart superstore, just as you are free to shop at your local union controlled supermarket, but because of people like you, we here in this region of Southern California do not have that freedom of the market place.
“Your personal crusade against Walmart does lead you to a lot of highly questionable anecdotes, some of them are clearly false.”
Really, which ones are false.
“I live in the 8th largest city in America, and whack, anti Walmart crusaders like you have managed to keep out any and all Walmart superstores.”
I’m not a crusader and not anti-wally world. I just don’t buy the hype.
“Millions of Americans here are not allowed to shop at Walmart superstores.”
No allowed? talk about questionable anecdotes.
I do not buy this article at all....
I won’t shop costco
I have never ever seen a Wal Mart close except to move to another bigger location.
what they do with employess I do not know...why would they not move them to new store?
and no I am not a Wal Mart lover....i can see why bucolic places ban them
but they are ok in areas where they are wanted
We all know that those are not grumpy old men, so that alone is a lie.
More importantly is that by the millions around the nation, we are blocked from being allowed to shop for groceries at Walmart supercenters by anti Walmart crusaders like you.
I have shopped at a Walmart supercenter in another state and liked it a lot, but with all their success, the left has blocked them from being able to build even one in this major American city, that is not a questionable anecdote.
We in places like San Diego, Los Angeles, New York city are not allowed the free market, you and your liberal, crusading ilk have managed to assert enough control to block Walmart supercenters from our cities.
“The Regulation of Superstores: The Legality of Zoning Ordinances Emerging from the Skirmishes between Wal-Mart and the United Food and Commercial Workers Union George Lefcoe, University of Southern California”
Having saturated the less populated heartland of America, Wal-Mart is carrying its supercenter expansion program to major urban areas. Wal-Mart supercenters merge discount retail with full service grocery stores under the same roof. Because supercenters compete head-on with unionized supermarkets, they place downward pressure on grocery worker wages. The United Food and Commercial Workers, the largest representative of grocery workers, has joined other Wal-Mart critics at city halls across the country in using zoning laws to restrain Wal-Mart’s supercenter expansion program. A smattering of law suits have ensued, and more are sure to follow.”
“This paper describes the types of anti-superstore zoning ordinances favored by the UFCW, and the legal objections Wal-Mart can expect to be raised against them. At the top of the legal checklist are equal protection, pre-emption by the National Labor Relations Act, and prohibitions against the use of zoning to regulate economic competition. Anticipating these objections, the UFCW and its allies can make a public record sufficient to insulate virtually any anti-superstore ordinance from being invalidated in court. But this cannot be accomplished easily or inexpensively, because enacting jurisdictions wanting to avoid remand will need to commission studies to fit the claimed rationales for these laws. Market impact assessments sensitive to the local trade area will almost always be required, and in a handful of states, including New York and California, so will environmental impact reports. If the UFCW and their grocery chain allies find the zoning effort too costly and cumbersome, they may wish to consider extending ‘living wage’ controls to grocery workers, a move more likely to be resisted in the political arena than blocked by courts.”
‘More importantly is that by the millions around the nation, we are blocked from being allowed to shop for groceries at Walmart supercenters by anti Walmart crusaders like you.”
Cut down on the booze before posting.
All you have to do to shop at walmart is drive to one. But perhaps you shouldn’t drive until you sober up.
People can travel to anywhere, but for leftwing political reasons from people like you, they cannot shop at Walmart supercenters in their own cities.
You really are a liberal activist in the “let them eat cake” tradition. You advise millions of Americans living in our major cities where your liberal activism is strong enough to block competition, that they can travel to smaller towns if they want to buy groceries at Walmarts.
I love Wal-Mart.
Last time I was there, I searched in vain for the machine gun nests trained on workers forced to be there against their will and/or shoppers forced to buy their products.
walmart is what it is. I haven’t ever had a problem finding help and the walmart employees aren’t rude or snooty here. Plus they won’t ignore yoy if you aren’t dressed right like some places. but frankly I rarely need help finding anything in walmart. Walmart is useful and fairly cheap. They’re just a store. Some stores are better or nicer than others and people can shop where they want.
“People can travel to anywhere, but for leftwing political reasons from people like you, they cannot shop at Walmart supercenters in their own cities”
I’m not leftwing and you do not have a right to have the store of your choice located in your town. deal with it or move but stop whining.
I really hope you don’t drive or vote. Cause you obviously need some help.
I stopped shopping at costco after learning they get local cities to take property via eminent domain, buy it for as low as a $1, and then build a store. All on the promise of creating a larger tax base.
You are definitely left wing, you think that Republican supporting, non union stores, can be blocked from the market place, and that American consumers just have "deal with it", no thanks, I will try and fight you liberal guys.
By the way the "towns" are some of the largest cities in the United States, have you heard of New York city, Los Angeles, San Diego? Your types are politically strong in these cities, and you are blocking my favorite grocery store for political reasons.
Stop calling me a liberal and I’ll stop calling you a drunk fool.
‘you think that Republican supporting, non union stores, can be blocked from the market place,”
Walmart tends to be non-political, not republican. The only reason they tend to support conservative causes is much of their customer base is conservative. They have recently given large amounts of money to the homosexual community though.
And yes current law says a community can determine what kind of businesses can open in their community. Perhaps you are angry because that cross dressing strip joint was denied a building permit next to your house.
You probably also think we should do away with all zoning laws.
But yes, we are targeting you specifically because we don’t want you shopping at your favorite grocery store. Yep thats the ticket.
They close them all the time. Walmart dropped Sams Club in Canada. It announced that it was closing one of it’s original stores in Brinkley, Arkansas. It just announced it’s closing stores in Nampa, Idaho; Clay, N.Y.; Rolling Meadows, Ill; Houston, Texas; Phoenix, Ariz., Louisville, Colo.; and La Quinta, Vista, Irvine and Sacramento in California. Walmart is a business. It opens stores when and where it makes sense to. It closes stores when and where it makes sense to. Like every other business it will cut workers when it feels its necessary and not think twice about it. That doesn’t make them good or evil. It makes them a business that is concerned about one thing and one thing only - shareholder return.
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