The Oil Drum | The End of WalMart?

58 comments on The End of WalMart?

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JD on October 31, 2005 - 5:06am

Actually, I've been hearing that one for quite a while. The collapse is always a few more months out. Just curious, but is there any point at which you guys would throw in the towel and admit that the relocalization theory has problems?

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baloghblog on October 31, 2005 - 8:28am

Crude oil shot up from $10 in 1998 to $70 in 2005, and it had no impact whatsoever on Walmart.

the investing public is losing faith in WMT:

down 25% over the past 2 years. They see the writing on the wall. I'd hardly call a 25% loss in market value having no impact on the company.

I think that Walmart is secretly praying for a serious recession, that way oil prices would plummet, and they'd be the only place anyone could afford to shop at.

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Donal on October 31, 2005 - 10:16am

I think a serious shortage of gasoline would hurt WalMart and supermarkets alike, but expensive gasoline might actually help those WalMarts that are close enough to compete with supermarkets. The nearest supermarket is a mile or so away and the WalMart is perhaps five miles across town. My wife, her mother and sisters shop for certain food items at Sam's Club, but they only go once every few weeks. They buy in bulk and split it up between them. That is more social, and probably more efficient than each of them shopping at the supermarket.

WalMart is just the logical evolution of the supermarket, which put many smaller stores, grocers, bakers, butchers, etc., out of business. But they are more powerful and even more impersonal than the supermarkets.

http://www.walmartmovie.com/

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brix on October 31, 2005 - 12:25pm

JD (as well as those of you interested in rebutting this kind of argument), you would do well to read up on central place theory, which may just be the most powerful economic theory this side of supply and demand.

The relevant piece here is that a provider of a service or good has a sphere of influence, the size of which is determined by two factors: (1) how widespread demand is for the good (groceries have a smaller sphere of influence than car dealerships), and (2) the cost of transportation. Cheap transportation is the driving force behind the super-sizing of retail and more expensive transportation will drive us back to retail with a smaller sphere of influence.

The reason Wal-Mart's stock is declining, but they haven't declared bankruptcy yet? Transportation costs have gone up, but they're not prohibitive yet.

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p on November 1, 2005 - 2:39am

"Actually, I've been hearing that one for quite a while. The collapse is always a few more months out." Could you point me to a link where predictions are made about when Wallmart collapses? With dates?

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wkwillis on November 1, 2005 - 6:48am

I don't think we are going to relocalise because we will switch to hybrids and methanol cars first. Battery cars with electrical generators (Amorphous silicon thermalvoltaic? Harwell poppers?) and methanol cars more or less off the shelf.

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