Can Wal-Mart Pull It Off?
If Wal-Mart can customize its stores to fit very diverse local tastes around the globe, I believe it can pull it off in the United States.
Aside from a very attractive valuation, Wal-Mart is trading at about 16 times 2006 earnings, the whole premise of my article relied on one very important assumption: Wal-Mart will be successful at customizing its stores in the United States to appeal to the demographic it serves. Can it really pull it off? As I mentioned in my article about 20% of Wal-Mart's sales come from outside of the United Sates where people speak different languages, have different food preferences, listen to different music, celebrate different holidays - much like the United States and a lot more.
Wal-Mart has adapted its stores overseas to very diverse local tastes, not without mishaps at first (otherwise it would not be Wal-Mart). Degrees of success are different from country to country, but one thing is evident, Wal-Mart's international performance has been consistently improving. If Wal-Mart can customize its stores to fit very diverse local tastes around the globe, I believe it can pull it off in the United States.
Some readers asked me if I shop in Wal-Mart (do I walk the talk). Yes and quite a lot. We moved to a new house about two years ago which is about half a mile from a Wal-Mart Supercenter. I found myself shopping at Wal-Mart at least a couple of times a week. I buy mostly groceries, staples and pharmaceuticals – the lower margin products. However, I'd cross the aisle in a heartbeat if they had a better offering in household items and electronics – higher margin products. I accidentally bought a very nice gold necklace for my wife while I was buying her flowers at Wal-Mart for Mother's Day. Gold is gold and my wife loved it!
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.
Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
Daily Recap Newsletter