business news in context, analysis with attitude


  • Selena Maranjian of The Motley Fool writes that as Wal-Mart gets bigger and bigger, inevitably the company will get to the point where its growth will start to slow…it just won’t be able to maintain that kind of growth in a world filled with Wal-Mart stores.

    So, she suggests, Wal-Mart will need to start looking for new businesses to conquer, businesses that could benefit from a little Bentonville know-how.

    Among the businesses she suggests that Wal-Mart could get into: health insurance, gasoline retailing, and stock trading. It could also, she said, decide to run Kmart on a contract basis. But the most interesting idea she has was for Wal-Mart to train and then provide – for a fee – greeters that could work for other businesses.


  • Wal-Mart announced Friday that for the first time, it will not release individual sales figures for the day after Thanksgiving, commonly known in retailing as “Black Friday.” Reuters reports that Wal-Mart believes that people will be shopping later than usual this year, and that the “Black Friday” numbers will not be representative.


  • Fascinating piece in yesterday’s New York Times about Wal-Mart’s ability to use store and customer data to drive sales, and the implications that it has both for shoppers and for the retailer’s long-term growth.

    Wal-Mart, the NYT writes, “amasses more data about the products it sells and its shoppers' buying habits than anyone else, so much so that some privacy advocates worry about potential for abuse.

    “With 3,600 stores in the United States and roughly 100 million customers walking through the doors each week, Wal-Mart has access to information about a broad slice of America - from individual Social Security and driver's license numbers to geographic proclivities for Mallomars, or lipsticks, or jugs of antifreeze. The data are gathered item by item at the checkout aisle, then recorded, mapped and updated by store, by state, by region.”

    Wal-Mart is more secretive about its data than most other retailers, which is one of the reasons, no doubt, that privacy advocates sound the alarm about the company’s data-gathering proclivities. But the evidence seems to suggest, according to the NYT, that Wal-Mart is a lot more interested in general predictive trends and supply chain efficiencies than in finding out intricate details about its customers’ financial lives. (That could, of course, change, if Wal-Mart were allowed to get into the financial services business – which has not been permitted to this point.)

    Still, the sheer size of Wal-Mart database and the potential for data-gathering can be overwhelming. The NYT writes, “By its own count, Wal-Mart has 460 terabytes of data stored on Teradata mainframes, made by NCR, at its Bentonville headquarters. To put that in perspective, the Internet has less than half as much data, according to experts.”

KC's View:
Some thoughts on each of these stories…

  • We absolutely agree that Wal-Mart will eventually need to get into other businesses…though once supercenters are everywhere, it still will be able to open Neighborhood Markets and drug stores and convenience stores on all the corners of America (not to mention China and other countries) that it doesn’t already occupy. We do think, though, that at some point Wal-Mart will make a business announcement that will catch all of us by surprise…and that, in retrospect, will seem absolutely logical.


  • The “Black Friday” story is interesting for two reasons. A Wal-Mart exec once told us that the day after Thanksgiving is the company’s least favorite day of the year, because it is the single day that the company goes off message – all year it tells shoppers that it always has low prices, and then on that one day, it goes lower. So we wouldn’t be surprised if Wal-Mart tried to take the emphasis off this one day.

    That said, maybe Wal-Mart just doesn’t expect to be able to claim a better day this year than Target…that’s certainly the way recent trends have been looking. And who needs to call attention to that?


  • The Internet has less than half as much data as Wal-Mart stores in Bentonville? And that’s not supposed to scare the hell out of people?