Previously exuberant Walmart is getting a little worried about the economy, according to CNNMoney.
“No one has a crystal ball to look into the economic future, but we know the economy will be a critical factor this year,” Wal-Mart CEO Lee Scott said in a recorded call discussing the retailer’s results…”Some customers were a little more cautious about their spending in January,” Scott said. “That is why we will continue to be diligent in improving our business in every way.”
This non-statement is quite a change from the previously excited predictions Lee Scott shared before the Holidays:
“I feel we are well positioned for an economic downturn,” Scott said. “Our low prices and low-cost business model should give us an advantage over other retailers if things get more difficult for consumers.”
Wary of economy, Wal-Mart cautions on ’08 [CNNMoney]
(Photo:RowJimmy)
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@PotKettleBlack: Perhaps you got the 40% figure from the Vlasik case. I recall that at the point that Wal-Mart pointed their gun at Vlasik’s head and made them commit marketing suicide, Wal-Mart was responsible for around 40% of Vlasik’s gross sales.
Then again, it could be any number of individual companies that Wal-Mart has eviscerated so it could trumpet its loss-leaders. It’s one of their favorite tactics (well, that and forcing localities to give them huge tax breaks, they then use to destroy the local retailers, before pulling up stakes, leaving then repeating).
@Trai_Dep:
What gun ? Do the executives of these companies lack free will ?
I swear , you people must exist in some parallel universe where stupid business decisions are the fault of the winning party. Can you people be that stupid ?
Back in the 20th century , we invented the word “no” .The companies that WalMart “eviscerated” could have used that word and called the company’s bluff and said ,”fine,we’ll highlight the quality of our products and paint yours as cheap” . “We’ll not let you sell any of our products and work hard to build up your competitors” Nah. That would have involved hard work. Sacrifice. Long term investment.They saw a huge retailer and took the easy way out. Anyone who’s ever been on the other side of the table from WalMart in a negotiation knows that they look out for themselves first and last. This was well known when all of these companies signed ruinous deals with them in the 80′s and 90′s and it’s even more well known today. But you know what ? It will be hard to get a motel room in Bentonville tonight because of all of the vendors that are in town to pitch their products to WalMart buyers. Explain that to me. If they are a serial “eviscerator” why do companies walk over broken glass to get in their stores ?
Since you people are so ignorant of business ,let me outline a little story for you . Have you ever seen Stihl chain saws in a big box ? No . They said “No” when Home Depot , Lowes and even Walmart (eviscerator of companies) wanted their product at a knockdown price in their stores. They knew that they would kill their image of quality and become just another loss leader when it suited corporate purposes. They are sold by independents and they are doing fine.THEY MADE THE HARD DECISIONS THAT VLASIC AND OTHER COMPANIES ARE TOO WEAK TO MAKE. God bless ‘em, they fought back and even made a virtue of their exclusivity. Damn. This isn’t hard. You people just need to get over your plastic banana MBA -speak and learn how to compete.
@Snarkysnake: There’s a big difference between a high-end power tool and a jar of pickles. High-end markets don’t work like value markets (now if Vlasic made high-end heirloom organic pickles, you may have an analogy, but they don’t).
The big problem with all of your arguments is that you are so focused on the consumer getting a low price at all costs that you are neglecting the negative externalities that Wal-Mart has created with its business model.
How in-depth did you study economics? It’s too simplistic to give Wal-Mart a pass because they offer low prices on shoddy goods. So do centrally-planned economies, but they aren’t a good idea, either. You can’t take one benefit out of context and say that there’s nothing wrong with a company that offers X, because X is good.
@kimsama: quite right KIMSAMA
I call bullshit. “Negative externalities” is just lazy shorthand for your paternalistic attitude that people don’t know what they want or what is good for them. Only the enlightened elite (like yourself,of course) know what’s good for people spending their own money. Wal Mart is not the be all,end all for value shoppers ,but it gives them something they want – choice. You want two of the three parties to every sale (the manufacturer and the retailer) to conspire against the third (the consumer) so that those two make an agreed upon margin of profit. WalMart is disruptive to that and thats why elites like yourself find it so upsetting.Then, you want to tell that disruptive,successful business that it has to provide stuff that you find desireable to its employees and anybody else that you feel generous toward , like dumbass vendors that sell their goods at a loss. Fortunately for everyone , this is not taking place inside a classroom. WalMart is not some theory that you elites can poo-poo. It’s happening right now just about everywhere and the verdict is in. Wild success. Free men and women are making their decisions to shop there not because people like these jackasses tell them to,but because they want what they offer. It’s almost too easy destroying you haters transparent crackpot theories (like hunting dairy cattle with baited traps) , but wherever there is ignorance,wherever there is stupidity and overpriced pickles (and chainsaws)…Snarkysnake will be there. You’re welcome.
@Snarkysnake: Thanks for thinking I’m an elite (I’m actually firmly in the middle class but I guess I’m just eloquent ^_^).
I’m not sure that dismissing the concept of negative externalities as “lazy shorthand” for a paternalistic attitude is right. Perhaps some of the solutions dreamt up to deal with negative externalities could be seen as such, but the concept itself is pretty philosophically sound and not paternalistic at all — it is merely an acknowledgment of the fact that negative consequences will be paid for, and if not by the perpetrator, by external agents.
Failure to properly address negative externalities can lead to market failure (when an individual or organization enriches itself at the detriment of society as a whole), which is clearly the issue being raised against Wal-mart here. Or maybe you don’t believe in the concept of market failure either?
You can keep posting about the “haters” and how the concept of negative externalities and market failure are “crackpot theories” now. The people who read the comments can decide whose argument they agree with (or have they already?).
@Snarkysnake: i think you’re confusing elite with educated.
@pigeonpenelope: Didn’t you know, anyone who went to college is an ivory-tower limousine liberal who lives off of Starbucks and the tears of the working class.
Economics 101:
People without jobs do not buy goods.
Read it a few times, let it sink in.
Economics 102:
People who make minimum wage can’t afford to buy goods.
Here endeth the lesson.