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Guest Post: Retailers - Reality Check Time

Tyler Durden's picture




 

Submitted by Jim Quinn of The Burning Platform

Retailers - Reality Check Time

Having worked for a big box retailer for 14 years, I understand the
dynamics of a high growth rollout of stores as a key to increasing
market share and profits. Some of the best retail names in the US have
practiced the identical strategy of concentrating many stores in each
market to drive the small competitors out of business. This strategy
worked wonders for Lowes, Wal-Mart, Target and Kohl’s during the early
part of this decade. The combination of solid same store sales and
opening new stores is a fantastic combination during good times. The
results actually make the CEOs of these companies think they are
brilliant. Their store expansion models based on rosy assumptions are
followed like they can’t go wrong.

What these CEOs didn’t realize was that their expansion plans were
based on lies and frauds. If they had advisors who could give them a
reality check, they could have avoided the massive downsizing that
awaits them. Their hubris didn’t leave room for a reality check. The
population of the US has grown from 281 million in 2000 to approximately
308 million today. We’ve had a 10% population increase in 10
years. Consumer expenditures have grown from $6.7 trillion in 2000 to
$10.3 trillion today. This is a 54% increase over the course of the
decade. Amazingly, real average weekly earnings have only gone up by 6%
in the last decade.

The chart below tells the story that retail CEOs have been ignoring
for a decade. Consumer credit has advanced from $1.5 trillion in 2000 to
$2.4 trillion today. This 60% increase in consumer debt has allowed
workers who have barely increased their earnings to spend like they made
a lot more money. This debt fueled consumption binge led major
retailers to expand in order to keep up with the delusional consumers.
  

Graph: Total Consumer Credit Outstanding

Retail America has run directly into a brick wall. Below are charts
detailing the expansion history of four of the most admired retailers in
America. Lowes grew their store count from 600 to 1,700 over the course
of the decade, a 183% increase. Wal-Mart grew their store count from
4,000 to 8,500, a 113% increase. Target grew their store count from
1,000 to 1,750, a 75% increase. Kohl’s grew their store count from 300
to 1,050, a 250% increase. Same store sales are the true measure of a
retailer’s health. When comp store sales are +5% or better, retailers
make substantial profits and confidently build new stores. As the charts
below clearly show, comp store sales have been in a substantial
downtrend since 2006. The new stores that have been built in existing
markets are over cannibalizing their existing stores.

Lowes has 500 more stores today than it had in 2005, $4 billion more
sales, and $1 billion less profits. Target has 340 more stores today
than it had in 2005, $12 billion more sales, and the same profit. Kohl’s
has 240 more stores than it had in 2006, $1.6 billion more sales, and
$100 million less profit. Only Wal-Mart has kept the profits flowing,
mostly due to its international expansion. The tough times have only
just begun for these retailers.

Lowe's - Annual Sales Growth

Walmart - Annual Sales Growth

Target - Annual Store Count Growth

Target - Annual Sales Growth

Kohl's - Annual Store Count Growth

Kohl's - Annual Sales Growth

The American consumer is still heavily indebted. Much of the retail
spending in the last decade came from mortgage equity withdrawals. Using
your home as an ATM is history. Home equity is at an all-time low and
25% of homeowners are underwater. Home prices are destined to fall
another 20%. There are 15 million people unemployed. Consumer
expenditures still account for 70% of GDP. In order for the US economy
to achieve equilibrium, consumer spending will need to regress back to
65% of GDP. This will require an annual reduction in consumer spending
of $800 billion. The CEOs of these retailers have not grasped the
implications of this coming adjustment in our consumer society.

There are three major errors that have been committed by every
retailer in America. They failed to recognize that the spending per
household was 30% over inflated due to debt financed demand. They then
extrapolated the spending per household using a 5% to 10% growth rate.
Lastly, they ignored the fact that
their competitors had the same strategy. There are 1.5 million retail
establishments in the US. Thousands of these stores are going out of
business every year.

Lowes, Wal-Mart, Target, and Kohl’s have yet to recognize their
predicament. They are still blinded by their hubris. The point of
recognition will occur within the next year. Each of these retailers
will be closing hundreds of underperforming stores in the next two
years. Time for a reality check.

 

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Thu, 09/09/2010 - 00:22 | 571063 A Clear thinker
A Clear thinker's picture

"Each of these retailers will be closing hundreds of underperforming stores in the next two years. Time for a reality check."

I just watched a CVS and WalGreens go up as new construction, right next to each other... Coming home from donut making, I drive past this and wonder how bad the bubble burst will be.

 

 

Thu, 09/09/2010 - 02:04 | 571156 g3h
g3h's picture

This is different.  This is fueled by the new universal health care legislation.  Drug stores believe a lot more people will buy medicines since they will be covered.

Thu, 09/09/2010 - 08:05 | 571378 dukeystick
dukeystick's picture

The drug chain build out has nothing to do with the "new" HC legislation - the build out was in progress long before Ocare.  It has been a bet on getting a piece of the drug non-market payments and medicare payments since the passage of PART D, and on clinic-care strategies to grow the slice of those payments. 

Thu, 09/09/2010 - 07:41 | 571359 NoBull1994
NoBull1994's picture

Best Buy is about to get a beat down.  Prices at Amazon 10-15% lower, plus Amazon has huge advantage of no sales tax, creating a total price advantage of 16-25%.

Coupled with the broke consumer, will be ugly, ugly, ugly.....

Thu, 09/09/2010 - 08:03 | 571370 Mercury
Mercury's picture

I just watched a CVS and WalGreens go up as new construction, right next to each other...

I see this happening all over the place too although my hypothesis is that ObamaCare will be funneling people to these mega-pharmacies for actual medical care - all kinds of outpatient tests, check-ups and procedures.

Keep an eye out inside these big boxes for areas that are obviously not intended for, or could be easily converted from retail floor space.

Thu, 09/09/2010 - 10:22 | 571732 nedwardkelly
nedwardkelly's picture

The drugstore on every corner is another sign of how much slack there still is in the 'system'.

On what planet is 4 drugstores on the same intersection an efficient/sensible use of anything? How many people actually have any level of 'brand loyalty' to one of these drugstores Vs another, as opposed to whichever one has their prescription refills or happens to be on the way to/from work?

CVS builds on one corner, so Walgreens assumes they've done their due diligence on the market in the area so whacks up a store on the other corner. Pretty soon Rite-Aid wants in on the action. Ridiculous.

Thu, 09/09/2010 - 00:24 | 571066 Serenity Now
Serenity Now's picture

Once again, the strategy was based on infinite growth.  Once you see a Starbucks on literally every corner, shouldn't people have gotten a clue?  (I realize the article was about big-box stores, but Starbucks is another good example of a growth-to-the-moon business model.)

Thu, 09/09/2010 - 04:12 | 571271 jeff montanye
jeff montanye's picture

your comment is apt.  part of this too is the unending quest for greater quarter over quarter eps growth by managers who don't own (much of) the company and have asymmetric rewards (do very well if co. grows, do pretty well to ok if co. fails) trying to please portfolio managers who don't (personally) own the stock and have asymmetric rewards (do fairly well to very well if portfolio gains value, especially faster than benchmark, do pretty darn well if portfolio loses value slower than the benchmark and are not wiped out if portfolio loses value and does much worse than the benchmark).

Thu, 09/09/2010 - 06:30 | 571311 silvertrain
silvertrain's picture

+1

 

Thu, 09/09/2010 - 00:40 | 571085 Nihilarian
Nihilarian's picture

I can't remember a time when I entered a store and didn't see "on sale" signs. Yes, perpetually on sale. I wonder if traders see the same shit when they enter NYSE?

Thu, 09/09/2010 - 10:24 | 571739 nedwardkelly
nedwardkelly's picture

Same goes for coupons. I honestly feel like a sucker any time I walk into any major retailer without some sort of 10-25% off coupon, as you know the sucker in the line in front/behind you probably has one.

 

Thu, 09/09/2010 - 00:47 | 571093 Miles Kendig
Miles Kendig's picture
If big box America were to manage and actually close 30-40% of their brick & mortar over the next 24-36 months they might actually survive for more than five - seven years.  Unfortunately, the folks that run these firms will opt for the dole just as the banks and auto manufactures did before them.  The creeping zombification of "free enterprise" continues apace
Thu, 09/09/2010 - 00:56 | 571102 Id fight Gandhi
Id fight Gandhi's picture

As Tyler would say. "we work jobs we hate to buy shit we don't need"

Thu, 09/09/2010 - 01:06 | 571112 three chord sloth
three chord sloth's picture

Heh. And then park a 30k car outside in the weather 'cause the garage is full with 1k worth of crappy plastic shit.

Thu, 09/09/2010 - 01:21 | 571129 Miles Kendig
Miles Kendig's picture

Walstreetpro2, batter up !!

Thu, 09/09/2010 - 01:06 | 571114 VeloSpade
VeloSpade's picture

Merry Christmas everbody!

Thu, 09/09/2010 - 01:09 | 571116 Number 156
Number 156's picture

I work for a paper packaging company (Boxes, chipboard, etc). I can always tell when the economy will be in decline because I see it in the sales a month or so before it happens.

I see just what the author sees, if not worse. He's right in predicting disaster within the next year for many of these retailers.

Now my question; What are the price trends for products coming from China and Mexico? Are these retailers paying less or more for these products and/or parts used to manufacture products in the US?

Thu, 09/09/2010 - 02:13 | 571160 mamba-mamba
mamba-mamba's picture

I would say that the cost trend for made-in-China goods is upwards.

I work for an American company that uses Chinese contract manufacturers (CM's) to mass produce electronic consumer goods. The electronics prices are not going up too much, but the cost of Chinese labor is driving up our ex-factory cost and eating into margin. The retailers are squeezing us hard to keep MSRP down, too, because expensive stuff doesn't sell.

Of all things, there is now talk of automating assembly to save money! In China!

Even so, the mass production jobs aren't coming back here any time soon. The problem is that EVERYTHING has shifted to Asia. Every single piece of the products we sell is made in China. Most electronics. The wire, the circuit boards, the speakers, the injection molded plastic machines and tooling, as well as the machines used to make the tooling are now all made in China. Most of that stuff isn't even available here now, or is 10 times the cost if it is. Moving all that stuff back to the USA would take decades even if there was a cost advantage, and right now there is not.

New, tricky and difficult products may continue to be pioneered here, but they will still move production overseas as fast as possible afterwards. From what I can see, the industry in China is primarily productive, but not as creative as here in the USA. Could just be bias. I am only one person, and may not have been exposed to China's best and brightest innovators.

--mamba-mamba

Thu, 09/09/2010 - 08:37 | 571412 G-R-U-N-T
G-R-U-N-T's picture

Yep...Catastrophic consequences for the U.S. manufacturing labor force when the 8th round of GATT passed new policy back in 94-95'.

Impoverishment to the U.S. workforce was predicted in this prophetic interview by James Goldsmith on the Charlie Rose Show (November 94'). Ironically Laura Tyson, who debated Goldsmith, along with republicans who passed more GATT policy back then are fighting the very policy they encouraged which, quite literally, is destroying the U.S. workforce. Which is, as we are witnessing, impoverishing the west.

Laura Tyson's thinking past and present is part of the cancer that is destroying our great nation.

Government legislators do what they do best, eventual annihilation.

Here is the interview...

http://video.google.com/videoplay?docid=5064665078176641728#

 

 

Thu, 09/09/2010 - 11:26 | 571864 Reductio ad Absurdum
Reductio ad Absurdum's picture

"republicans who passed more GATT policy"

Trying to blame one party or the other maintains the fiction that the political system, as it exists now, could be made to work again "if only the right political party were in charge."

Both parties are working for the special interests of a handful of powerful elites and not for the interests of the nation or the people. In the time frame you reference, Democrats controlled both the White House and the House of Representatives. If they had been against GATT then they could have killed the legislation at either level -- Clinton could have vetoed it but he didn't.

Globalization has been a disaster. Republicans promoted the idea but Democrats went along with it when they could have stopped it. It's like the war in Iraq: the Republicans spearheaded a bad idea but the Democrats went along with it when they could have easily said "no."

Thu, 09/09/2010 - 21:54 | 573259 G-R-U-N-T
G-R-U-N-T's picture

Republicans (Conservatives) should have known better, and I already expected dumb shit Democrats to make idiot decisions such as the GATT policies, and the WTO bullshit.

Just today Phoenix Capitol Research posted on ZH the ass backwards policy feces residue in the form of incandescent light bulb manufacturing .

"This story, more than anything else I’ve seen in recent weeks, summates beautifully the current political/ economic situation for the US today.

 Congress which is comprised of individuals who know nothing about engineering, chemistry, manufacturing, or any other technical know-how, pass a law based on political agenda without even bother to consider the impact on the US economy.

 As if that weren’t ignorant enough, Congress then proclaims that the new clean energy policies will CREATE jobs, once again proving they don’t have a clue what they’re talking about when it comes to real economic conditions in the US."

 

I hear the sucking sound in the workforce when I hear green jobs. California has a huge problem with corruption in the form of regulators called the California Air Resource Board C.A.R.B.. They are Environmentalist religious fanatics perpetrating evil to the nth degree by destroying the capacity for a man to make a living. Billions of dollars in lost revenue by  businesses leaving the state, together with an estimated 1 million jobs lost if implementation of AB32 is enacted. It's insane.

 

http://www.killcarb.org/

 

The California Assembly an absolute disaster in terms of environmental policies.What's even more tragic is that most of what is being implemented is not accurate and based on fraudulent environmental data.

Almost all the manufacturing jobs that the politicians in California want to create via the green job initiatives are out of the state.

 

It's one big sick ass looting frenzy.

 

It's fu*%&# "Atlas Shrugged"!!!

 

 

 

Thu, 09/09/2010 - 12:41 | 572035 grunion
grunion's picture

There has to be a large negative impact on innovation in the US with the manufacturing loss. Innovation was one of the biggest weapons in US manufacturing. I do not see the great leaps in product and process innovation anywhere (Novel financial strides in that area are excluded with prejudice) and it makes me feel somewhat more pessimistic.

Thu, 09/09/2010 - 01:47 | 571119 michigan independant
michigan independant's picture

We tried to tell our GeoCorporate the same thing.

Fear and praise is all they know as they loot.

All we do is pull the trigger quicker to go off line given supply chain reality's. All I have watched for over 30 years is they pull the trigger quicker now.

This disconnect is not the lack of concern on your part since when did they ever pay attention.

http://www.business.auburn.edu/~boultwr/4corecmp.pdf


Consider programs that keep key individuals from sensing they belong to one functional unit.

Really there is nothing new. Welcome to LEAN

http://www.youtube.com/watch?v=8iyDZBAFxKE&feature=watch_response

Sorry, something went wrong.

A team of highly trained monkeys has been dispatched to deal with this situation. If you see them, show them this information:

 

 

Thu, 09/09/2010 - 01:13 | 571124 runlevel
runlevel's picture

i wanna buy a decommissioned Lowe's and build a house in it.

Thu, 09/09/2010 - 01:22 | 571130 Miles Kendig
Miles Kendig's picture

Build a farm in that puppy

Thu, 09/09/2010 - 01:24 | 571134 Id fight Gandhi
Id fight Gandhi's picture

Sounds like fun.

Thu, 09/09/2010 - 02:01 | 571155 Village Idiot
Village Idiot's picture

sounds like a good place to grow mushrooms. save on electricity too.

Thu, 09/09/2010 - 02:24 | 571168 TimmyP
TimmyP's picture

A decomissioned Lowe's or Home Depot might actually be a good place to grow marijuana in CA.  I think the cap rates on the investment will be good based on the cash flows.  Although the cost of energy for black lights might impact NOI. ;-)

Thu, 09/09/2010 - 02:35 | 571176 RichardP
RichardP's picture

Chicken farms.

Thu, 09/09/2010 - 08:12 | 571387 tip e. canoe
tip e. canoe's picture

great idea, though sanitation and proper air circulation would be an issue.  would be cool to section off one area and then sweep all the shit into one pile and let it compost.

Thu, 09/09/2010 - 08:08 | 571382 tip e. canoe
tip e. canoe's picture

give LED tech another 12-18 months and your energy costs will go down significantly.  it's all about the wavelengths.  personally though, i'd rather grow on the roof and use the sun for free.  use the warehouse to farm fish and provide free fertilizer to the plants.

Thu, 09/09/2010 - 10:25 | 571724 DaveyJones
DaveyJones's picture

that's what I was thinking. Maybe do some winter stuff indoors and go all year like Elliot Coleman. Do a CSA right in the middle of town where people come to you saving on delivery. There are some folks in Brooklyn doing that now I think. 

http://beta.wnyc.org/shows/lopate/2010/jul/16/roof-gardens-nyc/

Thu, 09/09/2010 - 02:37 | 571177 traderjoe
traderjoe's picture

Thanks for the excellent article. Hadn't thought of this angle before. 

Of course, IYR/SPG, etc. still trading at 52-week highs...I think that will be a painful trade for many...

Thu, 09/09/2010 - 02:53 | 571180 Every Third Word
Every Third Word's picture

The analysis that inflated consumer debt has driven retail spending is not news. It's a corollary of the consumer debt bubble. But thanks for the fancy charts.

The problem with today's shit economists (e.g. The Man-Whore formerly known as Dr Doom and his nemesis, Lil Paulie K) is that they don't realize that each economic cycle is not comparable to prior situations as each cycle has it's own set of inputs, leverage rates, political considerations, demographic situations, and future opportunites... For example, our economist friends always miss the explanation for the 80s - that time was THE perfect storm for value creation:

1. Massive population bulge of producing citizens (more worker bees, more savings, more pension funds to play with, etc)

2. Lowered tax rates

3. Advent of private equity to spur corporate value creation (different than #5 as this focuses on increasing value for the shareholder not the manager, which we all take for granted now)

4. Massive govt debt spending to help add some kick

5. Advent of creative capital structure (LBOs, HY) create value/money out of thin air

Laffer curve, lower tax rates equals higher tax receipts, ha! Those frameworks and tools mean ZERO without an applicable population base. The 80s was the perfect storm for Laffer's laugh...

Going forward the U.S. government, realizing that seniors have zero savings, will buy excess commercial and residential properties, put all the broke seniors in such "grey housing" and impute rent to these gov't housed seniors and voila! Your cash imbalance in social security can be cut in half or 3/4 as the gov't can claim that the $2k social security check your grannie should have received is now only $300 - reduced by approx. $1k for "rent", $300 for "utilities", and $500 for health care. Cash problem of social security solved. Sure, it will require some cash outlay now... Or maybe Bernanke and BofA take all their REO property on their books now and sell it to Uncle Sam at a "fair" discount....

Thu, 09/09/2010 - 06:58 | 571323 IslandMan
IslandMan's picture

Yes, Reagan was lucky in the 80s, for the reasons you give.  But also, he benefitted from the energy crisis going away, thanks mainly to Alaska and the North Sea and some easy energy changes (legislated by Carter).  Now, there is a real headwind as we fight to maintain oil flows.

Thu, 09/09/2010 - 03:06 | 571222 A Man without Q...
A Man without Qualities's picture

We're not that far from Obama mailing store cards to every household in the country with a thousand Dollars credit on it.  I remember they did something similar in Japan a few years back, but it didn't help much.  

The problem for the US consumer is the mountain of debt that has built up in order to buy crap.  The Fed seems incapable of understanding the difference between credit used for investment (by which I mean something that returns a yield and therefore excludes housing) and credit for consumption that can only be repaid from income earned through other means.  When consumer credit rises much faster than income levels, the end result is inevitable - not only is future consumption going to decline, but the existing debts will be subject to a very high rate of default.  The "solution" of the Fed is to buy the debts from the private sector and then simply pretend those defaults are not occurring.  

Thu, 09/09/2010 - 03:18 | 571263 sweet ebony diamond
sweet ebony diamond's picture

I agree with you 100%.

Bernanke is unfortunately a doorknob.

Thu, 09/09/2010 - 06:44 | 571315 silvertrain
silvertrain's picture

1000%

 I this movie  5 years ago..A 5 person family where only the husband worked as a manager of a chain mall type store..My wife asked me how could they afford that house and boat and golf carts bla bla bla, I said simply, credit, and like all good things it will come to an end...

Thu, 09/09/2010 - 06:55 | 571318 IslandMan
IslandMan's picture

-deleted-

Thu, 09/09/2010 - 06:57 | 571320 Sudden Debt
Sudden Debt's picture

I'm into hardware retail myself and I remember those 2006 and 2007 days all to well where we had to open a store every 2 weeks to keep the investors happy.

Finding locations that work in a then overcrowded real estate market with renting money for the stores going through the roof was simply impossible. We always settled for the 3rd best thing.

Now those stores are bleeding like hell. And this is the same for the compitition. All we looked at was: How many stores are they opening and how many we did. We alway had to beat them.

And that's why we have stores sometimes 4 to 5 miles from each other and where you also have 5 to 6 competitors.

None of them is making money and one by one they are closing down.

We are just to big to act on this. The notion of a crisis just entered our company... The only thing we did was a 25% price increase to cover the loses and to be honest: It works.

Thu, 09/09/2010 - 08:31 | 571415 ZeroPoint
ZeroPoint's picture

Probably because consumers are generally too lazy to go online and find out if they can get better deals through the internet.

I have done this for along time but also noticed that many of the 'warehouse' retaliers won't actually advertize their prices. I suspect this is because 'buying in bulk' margins are flatening out.

 

Thu, 09/09/2010 - 07:51 | 571369 ZeroPoint
ZeroPoint's picture

Rite Aid is supposedly struggling as well, and where my mother lives, they just built 2 brand new stores with 10 miles of each other.

Thu, 09/09/2010 - 08:39 | 571423 tmosley
tmosley's picture

Ah, misallocation of capital thanks to easy money from the Fed. 

The problem is that all the capital is gone, used up, thanks to low, low interest rates.  There will be no more real capital saved or produced until interest rates rise substantially.  Those who think that dollars are wealth are in for a big surprise.

Thu, 09/09/2010 - 09:16 | 571508 Thomas
Thomas's picture

I live in a college town of 40,000 residents containing a Lowes, Kohl's, Target, Home Depot, Walmart, 84 Lumber, a mall independent of those, and a stunning number of big-box pharmacies. There is no way in hell that we will avoid a massive liquidation. One of the indicators I like to watch is the number of stores in the mall that are really just store displays without any real purpose (usually containing cars, lawn tractors, and other big stuff requiring no sales clerk at all.) The number of phantom stores keeps growing.

Thu, 09/09/2010 - 09:48 | 571620 fuu
fuu's picture

Sweet, there will soon be huge amounts of liquidated products from failing box stores. Might be close to time to buy some things.

Thu, 09/09/2010 - 10:23 | 571737 LooseLee
LooseLee's picture

And these are but a few of the moronic CEO's that make 300% more than their laborers!

 

HOPIUM Springs ETERNAL and DELUSIONS Die Hard!

Thu, 09/09/2010 - 12:16 | 571976 Reductio ad Absurdum
Reductio ad Absurdum's picture

300% more?! In your dreams. It's closer to 30,000% more.

Thu, 09/09/2010 - 10:34 | 571758 jal
jal's picture

This article and comments just demonstrated that the private sector is smarter and more efficient than all the gov. put together. :-)

jal

Thu, 09/09/2010 - 11:33 | 571873 chinaboy
chinaboy's picture

Great article!

What I want to add is that I suspect that Walmart and others are making the same mistakes in China.

Everytime I went back to my home town( population 7 million), I have heard stories that Walmart is expanding with more stores. Overall, I felt that there are more stores than the city needed in the first place. I don't have hard numbers, but I feel that the same dynamics is working: peoples earning did not increase that much ( unless you are super rich); more stores built; less profit for everyone.

At some point, I suspect expansion in China will contribute to loss rather than profit.

Thu, 09/09/2010 - 12:39 | 572032 Bartanist
Bartanist's picture

Great article!

The growth paradigm is killing America. We need to get to an efficient and effective use of resources regardless of fiat cost.

As the article suggests, it seems we have spawned a generation of generation of "genius" CEOs who do not understand the implications of a parabolic curve.

In a "one off" way, this might also explain why the government is so supportive of illegal alien growth in America. Illegal alien growth supports the parabola and increased spending to support the unsustainable for a little while longer.

Too much money flooding into the system through the mega-corporations/retailers means that there is less room for small companies to fill in the gaps. There are no gaps. The big guns are using artillery to kill a pigeon, when a bb-gun is more appropriate. Why not, the big companies have seemingly had infinite artillery and infinite shells reloaded by the I-Banks. 

Thu, 09/09/2010 - 12:59 | 572078 Grand Supercycle
Thu, 09/09/2010 - 13:18 | 572129 centerline
centerline's picture

Just to add to the conversation, many of the bigger retailers are aggressively moving into groceries.  Target, Walmart, etc.  I am sure they see the writing on the wall and as a result are hedging/shifting focus.  Smaller outfits like Family Dollar, Aldi and so forth are also grabbing market share on the grocery side.  The business model is changing quickly for sure.  Those who don't adapt are toast.  And no matter what, the change will surely zap some locations and store numbers regardless.  Useless plastic crap will no longer have the margins.  It is a race to the bottom in so many ways...

Thu, 09/09/2010 - 13:24 | 572147 kevinearick
kevinearick's picture

"The results actually make the CEOs of these companies think they are brilliant."

You mean the handful of people telling everyone else what to think don't know what they are talking about? And ignorance spreads from the top down in a replicative economy, like a virus?

Step away from the bomb.

Tue, 09/28/2010 - 03:41 | 609351 Herry12
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