Wednesday, March 28, 2007

WalMart (story about growing global footprint) earlier this decade quickly went from America's darling to a lightning rod for criticism. On Fortune's list of "America's Most Admired Companies", WalMart went form #1 is 2004 to #20 today. This sharp rise can be mostly attributed to the negative publicity it has spawned. My personal view is that WalMart has made some big mistakes (locking workers in stores, discriminating against women), but that conceptually WalMart doesn't deserve it's growing negative reputation. People seem to attack WalMart for the same reason they complain about outsourcing and such. WalMart is hardly worse than stores like Target, Kohl's, and KMart, but it gets the brunt of the criticism. Yet what people want WalMart to do would cause it to get crushed by these same competitors. We're talking about a business with a 3% or so profit margin.

Anyway I'm curious to see how much WalMart's negative reputation hurts the brand. I own the stock, but when I told my mom she should have her investment club invest in it, she said absolutely not. They own Costco and won't buy WalMart on principle. I make some stock decisions for my sister, and when I included WalMart, she asked me to sell it. How many customers don't shop there for the same reason?

On a random note, I'm curious to see how much a presence Tesco can establish in the US. It is a British big-box grocer/retailer like WalMart. They like WalMart focus on operations excellence and efficiency. The game is far from over. In general, I think these big box retailers will do well. I just wonder who gets more of the pie.


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