Post-Walmart Era?

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Post-Walmart Era?

By Joe Skorupa - 04/01/2011
Joe-(1).jpgDespite a long, remarkable winning streak Walmart just reported its seventh consecutive quarter of declining sales at U.S. stores open at least a year. Same store sales for all of 2010 (including Sam’s Club stores, which actually rose) were down .8%. The amount isn’t large in itself, but the cumulative effect of seven in a row is clearly a sign that something is amiss in Bentonville.
 
Total revenue increased by 1.0% in 2010 from $401 billion to $405 billion, which is attributable to growth in global markets. This anemic increase compares unfavorably to bigger gains by the majority of retailers who are measuring against dismal 2009 sales figures. These include Target up 3.7% year over year, Dollar Tree 12.4%, Kohl’s 4.8%, TJ Maxx 8.2%, to name a few.

Cracks are starting to appear in the Walmart empire. Here's what retailers need to know as Walmart struggles to regain its footing.Cracks are starting to appear in the Walmart empire. Here's what retailers need to know as Walmart struggles to regain its footing. 
 
During Walmart’s juggernaut years many retail victims were left in its wake. However, like so many other dominant companies (think Google, Amazon and Facebook),  Walmart has many admirable qualities and led the industry by example.
 
Its explosive success was on such a grand scale that it forced many competitors to correct long-standing weaknesses. They improved structural inefficiencies rather than raising prices, and became more relevant to consumers by delivering a smarter, better and more enjoyable shopping experience.
 
Something else to admire about Walmart is its deeply held belief in the power of every-day-low-prices (EDLP). But many retailers today focus on low prices and EDLP is no longer a differentiator.
 
Retailers also fought back by adopting the customer-centricity message with messianic zeal and wasted no time leaping into mobile commerce and social media, new channels that tend to level the playing field with Walmart.
Today, we are entering a post-Walmart world. Its stock price has traded in the $50 range for the past decade, and no one believes it will break out any time soon.
 
If retailers continue to perfect the lessons they learned during Walmart’s bulldozer years, they will polish their balance sheets while Walmart treads water. The opportunity shoe is now on the other foot, and Walmart is the one that needs to make it fit.