Is Wall Mart Beginning to address its Demographic Problems?
January 26, 2010
The recent news that Wal-Mart plans to close stores and cut jobs is a start, but it fails to address the company's key demographic problem of the ongoing decline in the number of Baby Boomer consumers and the fact that Generation Y would rather work in a uranium mine than shop in the store.
The fact that the group has again turned to the outside for help ( Shopper Events LLC of Rogers, Ark.), shows there is real concern about how large the problem the company faces.
Over the next decade many will interpret Wal-Mart's decline as the end of the U.S. consumer. We, on the other hand, do not agree, as we see the consumer landscape changing as the power switches to Generation Y and the rise of "new Wal-Mart" concepts. After all, the American consumer survived the decline of Sears with ease.
In the shorter term, analysts could become excited over how much fat can be trimmed from Wal-Mart's cost base; however, we would rather seek out retailers that are already beginning to meet the demands of the new and emerging consumer generation.
Wall Street Journal:Sam's Club, engaged in a tough struggle to stand apart from competitors, is cutting about 11,000 jobs and is turning to an independent marketing firm to handle in-store product demonstrations at its warehouses nationwide.
About 10,000 of those jobs, or about 9% of the Sam's Club work force, will come from outsourcing product demos at the company, a division of Wal-Mart Stores Inc. Most of those jobs are part-time, the company said Sunday.
Sam's also has struggled in some markets to compete with warehouse giant Costco WholesaleCorp. Earlier this month, Sam's closed 10 underperforming stores, many of them in California, a Costco stronghold. Mr. Cornell, the Sam's Club president, said the new product-demo contract would help his stores stand apart from rivals.
