I'm a bit less jaded about this than you are. Coughlin's vaguely couched departure is a sign of trouble for Wal-Mart. They've had several faltering periods this year. There are cracks in their business model---they are trying to build volume (and ultimately profit) by expanding into low margin merchandise (food, books, CDs). Unfortunately, most people do not buy food on the same occasion that they buy high margin items like clothing and jewelry. The exceptions are in rural and exurban areas where any shopping entails a long trip and one-stop shopping. The Superstores will attract cherry pickers who buy cheap groceries, pass on the crummy but higher margin perishables that Wal-Mart doesn't know how to sell and never get to the really profitable softline items.

Wal-Mart's opportunities to grow are in places where people are better organized and more politically savvy--big cities and established suburbs. These are also more expensive places to enter and operate. Expansion in the US will not come w/o pressure on their bottom line.

Their track record overseas is very mixed. European hypermarts like Carrefour and Tesco are well capitalized, experienced in running superstores, and have been more successful in globalizing than Wal-Mart (they adapt much more quickly to local culture and do more joint ventures with local retailers). Global expansion is no panacea for Wally World.

The US markets where Wal-Mart needs to go for expansion often tend to be well saturated with big box retailers that compete well on price and offer selections in many lines that Wal-Mart cannot match. Target has put more investment in these locations and has captured the better heeled customers that Wal-Mart has been losing for decades. Wal-Mart used to be a place that people who wouldn't be caught dead at K-Mart, Zayre, etc. would shop. Deteriorating service & selection, as well as diminishing price advantages have sent those shoppers elsewhere. Without them, Wal-Mart is stuck with the poor and the cherry-pickers. If you go to a Target, the customers reflect the local demographics. If you visit a Wal-Mart, they tend to trend lower in terms of SES than the local demographics. You can build volume on that base, but not profitability.

Wal-Mart is under siege from litigation--most of it sounds well justified. This and the negative publicity it provides will not help.

Wal-Mart has alienated many of its vendors. In toys, vendors seem poised to help ToysRUs recover because they need a competitor for Wal-Mart. Wal-Mart's real innovations have been in streamlining the supply chain---suppliers can easily turn around and use what they've learned in this process to more engage more agreeable retailers. They've already begun doing this with JC Penney and others.

In short, Wal-Mart isn't going away tomorrow, but they've begun the slippery slope downward and anyone dumb enough to buy their stock now deserves to take a bath. Their rigid, disciplined managment and marketing culture enabled their rise, it will also enable their fall.

What is more likely is that Coughlin's lieutenants will refuse to step aside and will embroil themselves in their own internecine battles for promotion, putting their own subordinates at risk of being in the wrong camp. When the bonuses stop coming at Wally World, just watch the second-tier executives start to depart in droves, because they know they have no future in a rigid, top-down organization like Wal-Mart.

"This is the season when we are bombarded by the various versions of Charles Dickens' Christmas Carol."

From a lyric in progress:

Marley, so they tell us in the book, was stone-cold dead,
Though Scrooge, his erstwhile partner, was still living.
But encounters with three spirits, not to mention Marley's shade,
Encouraged Scrooge to learn the art of giving.
We've heard this story every year since Hector was a pup,
It gets repeated sometimes ten times o'er.
Why, Christmas isn't Christmas lest they bring the damned thing up,
And yet I wonder why it's not a bore.

Chorus:

(It's 'cause)
Scrooge is the center of the story.
Ebeneezer is the focus of the fuss!
With his short-sighted, money-loving, miser-living ways,
There's a little Scrooge in every one of us.

... ©2004 Bob Clayton & Ed Drone

I like Rich's comments (and his name...). Another detail of the end of WalMart's singular empire is the falling dollar...all of those cheap junky imports just keep getting more expensive, making their cheap junk more pricey. Add to that the increase in domestic competition, and we may finally break the back of these guys.

Of course, that competition is a result of other firms copying their business practices, so it's not all rosy, by a long shot.

how is walmart resposibe for 13% of us trade deficit?do you want them to buy expensive goods and sell them to the middle class folks who frequent theor stores. sounds like a loser of a business strategy..jjj

how is walmart resposibe for 13% of us trade deficit?do you want them to buy expensive goods and sell them to the middle class folks who frequent theor stores. sounds like a loser of a business strategy..jjj