You know you have hit the big time when you become a target. I’m not a hunter but I don’t think hunters go out for baby elk. They do, however, go after full grown elk with full grown enthusiasm. Similarly, mom and pop stores aren’t generally targets. But, when a business has overwhelmed competition and becomes a giant, look out.

Enter Walmart
Sam Walton opened his first store back in 1962. It is unlikely anyone worried that Mr. Walton founded what would become such a capitalistic success. Now, 47 years later, Walmart is the world’s largest retailer with more than 8,000 retail stores and more than 2.1 million associates (employees) with annual sales around $400 billion. (Read)

Fortune Magazine ranked Walmart first among general merchandise retailers and 11th among all companies in its 2009 Most Admired Companies survey of businesspeople. (Read)

Here is what I, as a shopper, like about Walmart:

• Prices I usually find products lower than at other stores. While at a non-competing store, I sometimes stumble across an identical item at a lower cost but not often enough to drive the countryside looking for bargains.

• Product availability Walmart’s superstores offer almost all products one should expect under one roof. Its offering of household items, groceries, automotive needs, sporting goods, hardware necessities, jewelry, clothing, pharmacy and more I’ll probably think of later gives me the one-stop shopping I like.

• Store availability Other than in remote areas, one can find a Walmart within a “stones throw.”

• Customer service Now and then I come upon a grumpy associate but for the most part I get the service I want.

Walmart has done a darn good job putting together such a large and efficient operation. It won’t last forever. Nothing lasts forever. Look at General Motors. And, there are others groups that were once big but are gone.

Some reasons are:

• Management changes Someday a less effective management team may come along resulting in unprofitable decisions.

• A better mousetrap It’s hard to believe but some group could come up with a combination of better products, even lower prices and a more effective marketing program.

• Not minding the store Companies fail when complacency thrives. It happens and it could happen to Walmart.

Walmart is, at least for now, a success story although smaller competitors and unions have a bone to pick with Walmart,

• Smaller competitors such as mom and pop stores understandably bite their fingernails at the thought of Walmart coming to the neighborhood. However, from what I’ve seen, initial losses are not forever. People are certain to satisfy their curiosity by looking at the new kid on the block. What about the customer who doesn’t want to spend hours walking to and from the far end of the parking lot and roam the seemingly acres of space inside the store? He or she will opt for convenient shopping at the mom and pop store when like items are available.

• Unions Walmart has a management team smart enough to know how to keep unions from crossing the moat. Why do unions want in anyway? Unions say they only have the best interests of employees in their hearts. Unlikely. Why should we believe unions care about workers they don’t even know? We shouldn’t. It’s the money in the form of union dues, plain and simple. If all Walmart associates were unionized with dues at $250 per year, the union(s) would receive $550 million annually. What union wouldn’t want adding more than half of one billion dollars to its bank account?

• Anti-Walmart websites There are two (perhaps more) anti-Walmart websites you will find interesting: Walmart Watch and Wakeup Walmart.com.
  

Back to unions
With respect to unions, there is one report that indicates the cost to a business of running a unionized operation is up to 30% more than a non-unionized operation. Why would Walmart want to put up with this? I don’t know either.

Walmart’s future
As long as Walmart keeps doing what it has proven it is good at, it will continue to be the Golden Boy of Capitalism.
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Disclosure
I worked at a Walmart store the last six months of 2008, leaving when a schedule change became inconvenient. I now have no ties to Walmart. No stock ownership and absolutely no ulterior motive for singing Walmart’s praises which I do frequently and freely.