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The end of the world as we know it?
October 3, 2007

The lead story in The Wall Street Journal this  morning has a cataclysmic premise, at least in the retail world. I quote, "The Wal-Mart Era, the retailer's time of overwhelming business and social influence in America, is drawing to a close."
In it, reporter Gary McWilliams credits Wal-Mart with no less than boosting America's overall productivity, lowering the inflation rate, strengthening the buying power of millions of people, accelerating the drive to manufacture products (more cheaply) in Asia, driving countless mom-and-pops out of business and speeding the decline of Main Street. But, says McWilliams, the retailer's heyday is over and rival retailers are gaining by providing the qualities Americans find lacking at Wal-Mart: greater convenience, more selection, higher quality and better service.
As evidence of Wal-Mart's waning clout with suppliers, the story sites a new beverage introduction PepsiCo opted to do with Whole Foods instead of Wal-Mart; the declining % of sales P&G gets from Wal-Mart, and the behemoth retailer's inability to mandate widespread RFID tagging.
Of course, Wal-Mart is still the biggest thing going in retailing--and it is the leading DVD retailer by a large margin.. But what if its market share begins to slip? Or, in its quest to boost sales gains--which are just 1.3% this year, compared to 4.6% at Target, it decides other product categories supply a better ROI than DVD.
Studios have long talked about not putting all their revenue eggs in Wal-Mart's basket. But from all appearance, it has been just talk, while Wal-Mart has called the shots.
Is it time for a change? And which retailers will pick up the slack?

Posted by Marcy Magiera on October 3, 2007 | Comments (0)