Wal-Mart (WMT)

[HenryTo]

WMT still not doing too well:

http://cbs.marketwatch.com/news/story.asp?guid=%7B6572BD56%2D3411%2D4829%2D96E5%2D7B0F3833B221%7D&siteid=mktw&dist=

[nodoodahs]

In regular groceries, the perishables are lowest sales/man hour (labor-intensive), but vary in margin. Meat and produce are typically higher-margin, deli and bakery are typically loss leaders, an accomodation to draw the customer in. The sales/man-hour targets for deli and bakery are low, scrappage and shrinkage are high, and you generally just don't want them to lose too much money. Also usually the general merchandise (GM) is higher-margin than dry grocery.

I'm not sure what the breakout of those relationships in WMT is. I would imagine they might change, since the emphasis is on a broader variety of GM with even the dry grocery section having some accomodative factor. I've not dug into the WMT relationships because, when I focused on discretionary value, I never saw WMT as a stock that met the cut, and now that I focus on mechanical screening, I don't need to know such things.

I'm not certain about the liquid content of the fresh beef; I haven't checked, but I would be mildly surprised to see it there. I do know they generally sell Pilgrim's Pride chicken with an allowance for added liquid, as opposed to the local HEB which sells SAFM and store brands with no liquid added. I think it's more a question of brand choice that WMT has made, rather than a stance on preservatives, but I could be wrong - and I do know that HEB is making a stance on preservatives and service to compete with WMT here in the Hill Country.

We do WMT for lots of things, but generally try to do the local HEB for meats and produce, the managers do a better job. I don't know that it's institutionally true, but locally, it's true. A lot of the management in those departments is proper merchandise ordering and proper training of staff re: culling and rotation.
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He was wearing my Harvard tie. Can you believe it? My Harvard tie. Like oh, sure, HE went to Harvard.

[Odysseus]

I know Walmart sells pre-packaged fresh meat but it is usually in a solution of 7% liquid preservative. It extends the shelf life. Box beef and pork is more labour intensive but fresher. Their model doesn't work particularly well for anything perishable. But they do not break out margins so who knows.

On the whole, Walmart provides good value with almost no service. In lean times, we tend to trade off service for price.
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Psychic with Alzheimers. I can predict what I will forget.

[nodoodahs]

The quality of the perishables departments (meat, produce, bakery, deli) varies just about as much between stores in-brand as it does between brands of stores, if you get my drift. A poor meat market manager (or produce manager) can do more damage than a poor grocery or GM manager ... you might try another nearby Wal-Mart and see if you get the same result.

There's something else at work, too. WMT relies more on precutting and prepackaging for meats than your typical grocer does; they had a little tiff with the meat-cutters' union a few years back, and just found a way around them. Booyah!
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He was wearing my Harvard tie. Can you believe it? My Harvard tie. Like oh, sure, HE went to Harvard.

[Odysseus]

Okay, I'll confess to being a Wallmart shopper. Once a month I brave the hoards and stock up on larder items like canned goods and other non-pershibles.

Wallmart got it's foothold in the grocery market because they were, well, Walmart. Another tremendous advantage was the fact they did not do much if any print ads or spot TV. This is rapidly changing.

Wallmart has the worst fresh meat department in the business and it is overpriced as well. They now have a national TV ad compaign on the quality of their steak. What a hoot. BUT I believe they will be successful.

I good historical comparison would be to study the rise and fall of the Great Atlantic And Pacific Tea Company. If memory serves, they were even harangued by Congress and anti-trust over unfair competitive practices.
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Psychic with Alzheimers. I can predict what I will forget.

[HenryTo]

Wal-Mart putting a lot of squeeze on suppliers to wring out costs. Read the "Wal-Mart Effect" to get a primer to get an idea on the various Wal-Mart cost-cutting strategies and how that affects its suppliers:

http://money.cnn.com/2008/05/28/magazines/fortune/kapner_walmart.fortune/index.htm

[rffrydr]

WMT comps are 0.5% 2% expected. Ex-fuel up 1.4%. Sees EPS of EPS of $.99 to $1.03. $1.02 expected. Feb sales expected flat to +2%

Notes gift card use lower than expected and being used for food.
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Today is the Tomorrow you worried about Yesterday!

[HenryTo]

A detailed profile of Wal-Mart's new 203,000 square foot super store in Highland Village, Texas (northwest of Dallas). Also includes many pictures, for our "visual" subscribers.

Note: This pdf is over 1.3 megs in size:

http://www.retailingtoday.com/uploadedFiles/RetailingTodaycom/Digital_studio/Special_reports/2007/WMT_Highland1.pdf

[HenryTo]

WMT now below $50!

WMT hasn't been under $50 since March 2003. Consumers finally feeling the pain of high energy prices? Stay tuned.