Walmart To Crush Kmart Next Year?

A recent Time magazine article says a new Walmart program called Project Impact seeks to beat down its competitors. We didn’t know that was anything too new, but apparently the company is shifting to a higher gear in its efforts.

Says retail consultant Burt Flickinger III: “They’ve got Kmart ready to take a standing eight-count next year.” He also predicts the new measure will give Toys “R” Us and Rite Aid some serious problems.

At the same time, the retailer is looking at a later holiday shopping season and possibly trying out smaller stores.

Can the chain actually penetrate the retail landscape more than it already has, or is Walmart’s growth limited?

28 Responses to “Walmart To Crush Kmart Next Year?”

  1. 1 smiley1 September 15, 2009 at 8:40 am

    Low prices + poor economy = Wal-Mart success

    I don’t see that formula changing in the next several years

  2. 2 SF "Mac" McCormack September 15, 2009 at 9:08 am

    If K-Mart & Sears got their act together, they would have some good stores……. First thing they need to do is close and sub-lease the weak stores. Second, get Craftsman tools and Kenmore appliances into the K-Marts……. and third they can hire my company as a consultant!

    Come on you retailers, do something!

    And Good Luck!


  3. 3 Broker September 15, 2009 at 9:12 am

    This should finish off a few more of the walking wounded. The struggling economy and overleveraged consumers will direct more consumers to big blue.

  4. 4 james September 15, 2009 at 9:28 am

    Its time for a government intervention.

    • 5 Christi September 15, 2009 at 10:47 am

      It is NEVER time for government intervention James. That is why we are in the straits we are in right now.

      Pres Bush should have never done the Auto bailout and Pres Obama has exasserbated and made things dreadfully worse and he continues to.

      The free market economy has worked for generations and will continue to if the government does its job by keeping our military strong and our borders policed and stay out of the business worls and let the people work!

    • 6 chuck September 15, 2009 at 1:53 pm

      christi, you are so right on every point. James is still waiting for his messiah to pay his bills for him.

      • 7 james September 15, 2009 at 2:19 pm

        The point is, the day is coming when your only shopping choice will be Walmart. When competition is devoured bad things happen, look at the health care industry, the Airline industry, etc. Do you want a bunch of Bentonville ya hoos dictating your next fashion choice or the decor for your livingroom?? Do you want China to own us simply because we no longer make anything for ourselves? Walmart is promoting uniformity and conformity, they are imposing their style and ethic on America and its not all good. There are already thousands of products in a Walmart store that are no longer made here, or anywhere other than China. When is having a single supplier ever a good idea, never. Walmart is a primary channel for economic support for a communist regime that literally hates us. We are no longer THEE world super power, China is, and Walmart is shipping US dollars there by the boat load!

  5. 8 charlie wilson September 15, 2009 at 9:49 am

    K Mart is poorly run and doesn’t need much effort by WalMart to cave it. But whaty about it’s yellow running dog–Sears ?

  6. 9 Alex September 15, 2009 at 9:54 am

    why would i want to shop at k-mart instead of wal-mart? if i was a budget conscious customer, i would go to walmart first because of their super cheap prices and selection. PERIOD. Kmart is done.

    the only reason i would go to toys r us is for the selection. for basic toys i would go to walmart or even order specific items on amazon.

  7. 10 Ryan September 15, 2009 at 10:04 am

    Wow – this is great information. I will definitely not be wasting my time reading this blog again.

  8. 11 Luca Brasi September 15, 2009 at 10:10 am

    Ryan is right, how is this possibly new or interesting? Where have you been for the last 20 years? Here’s another news flash: the technology has hurt vinyl record sales. That can be your topic

  9. 13 Peter D. Morris SCSM, SCMD, CLS September 15, 2009 at 11:39 am

    The question was “is Walmart’s future growth now limited by its size?”

    The answer depends on how one defines growth. By marketshare? Then yes, it can. Taking down Kmart may be a small help to Walmart’s marketshare as compared to, say. its introduction of groceries; but it will have an impact.

    I believe Walmart’s growth won’t come eliminating weak competitors in product lines it already controls (toys for example) but from branching into new product and service areas where it can apply its technology, systems and principles to provide its low cost advantage.

  10. 14 Bahston September 15, 2009 at 12:28 pm

    There is a lot of opportunity for Wal-Mart to penetrate select markets through smaller stores. Instead of one large format store in a specific market they can have more reach and better positioning through multiple stores with a smaller footprint. Even WHEN the economy recovers it will likely take a lot of additional time before consumer psyche has recovered and ready to spend like its 2005.

    KMart will be a battle easily won, its the drugstores that they need to focus their competitive efforts on. They have already begun with their own generic pharmacy prices but as everyone knows there are plenty of other categories within the drugstores and it’s the shear quantity of the Walgreen’s, Rite Aids and CVS’ that Wal-Mart is really up against. Quantity and Quality coupled with low prices and customer service will certainly keep WM on top and in front of a broader audience than years past.

    Not Ian’s best blog, but let’s cut him some slack guys.

    • 15 chad September 15, 2009 at 3:11 pm

      No kidding…this reminds me of something obama would do…slam the blogger for posing a question but do not have the courage to suggest an alternative question! kind of like giving speeches on how we must have healthcare reform but never putting forth a plan! Nice work complainers.

      • 16 james September 15, 2009 at 4:55 pm

        Chad, This is the most seriously confused comment I have ever read, you may want to revisit the thinking station in your town, and see if they are still handing out logic chips. Why are we really just looking looking looking for ways to slam the President in a blog about retailing? Yikes.

  11. 18 JK September 15, 2009 at 3:18 pm

    Wal Mart will continue to slowly take customers and sales from Kmart, Toys and a bunch of other retailers. They’ve been doing it for over 20 years.

    What will be the death of some retailers will be the customers and sales taken by online retailers. As long as these online companies’ sales are not subject to local and states sales tax, many customers will elect to save the 5-8% on their purchases and order online.

    The combination of losing sales to Walmart on one side and to online retailers on the other will kill off the next group of retailers.

  12. 19 Ken September 16, 2009 at 1:09 am

    In response to James and Walmart dictating “your next fashion choice or the decor for your living room?” The American consumer has determined that Walmart has what they need and at the prices that they want. Walmart invests billions in the maintenance and upgrading of it’s stores to make them appealing and customer friendly. When K-Mart starts investing money in it’s stores and instill in it’s workers the kind of attitude that Walmart employees have then they will find customers beating a path to their door.

    I pity the poor union fools that picket the Walmart stores with their “Walmart is Unfair to Workers” signs. While all of the other retailers are closing stores and slashing jobs, Walmart is the only one expanding and creating jobs. Sam Walton took a look at what was wrong with retailing and stood it on it’s head and the company has not looked back.

    Is Walmart a good corporate citizen, NO! They have their fair share of problems, but what they do know is retailing and they do it better than anyone else. That is good old free enterprise at it’s best. The other American industries could take a page out of Walmarts’ book on how to dominate your business.

  13. 20 Patrick September 16, 2009 at 8:18 am

    Once again, Wal-Mart’s impact on America is glossed over. Not only is Wal-Mart not a good corporate citizen, it underpays its workers such that they can’t afford mortgages and thus can’t participate in the home ownership-based capitalist economy we all know and love. It forces many of these same workers to choose between spending their paychecks on food or on health care, thus sending many of them to public assistance programs which — right — we pay for. Wal-Mart even counsels these employees to seek public aid. But hey, we saved 10 cents on toilet paper this week!! Wal-Mart cowed many American manufacturers into setting up shop in China depriving Americans of good-paying jobs, employing Chinese for pennies so that they can send the same crappy merchandise back to us to buy, cheap. Again, we save, whee!!! Wal-Mart used predatory pricing to drive many independent retail businesses off the map, all the better to fatten the Waltons’ inheritances. Yet somehow, Wal-Mart is allowed to present itself as the savior of inner-city neighborhoods by opening stores there and using the very same tactics to help eliminate the middle class. Wal-Mart is not a good corporate citizen? In another context, Wal-Mart executives would be prosecuted for their crimes, but then, we ignore our own antitrust laws because, hey, disposable razors for 99 cents!! America, you’re getting what you’re paying for…

    • 21 james September 16, 2009 at 10:59 am

      Thanks for expressing it so well. Walmart is lowering the standard of living in America. Walmart’s version of a ponzi scheme is exchanging hard earned American Dollars for cheap goods that are produced oversees raising their standard of living, not ours! Even though I am a senior real estate executive by all accounts, I have long believed one of the solutions to our present problems would actually be to raise wages and benefits for hourly workers, something like Ford did in the early 1900’s. Jack up their earnings so they can prudently afford that new car, that new home, and college for their kids. A big part of the incentive for the tragic home financing debacle we recently went thru is the hard truth that most working Americans cannot afford a home. Housing cost and the standard house we deem minimal, has far outstripped earnings in this country and everyone knows it. Yet socially and politically we want everyone to have a home. The economic cocaine handed out by wall street and their mortgage backed securities kept our attention off the real problems. How did we miss a Bernie Madoff and a Walmart, two very large elephants right in our own backyard!

  14. 22 Glen September 16, 2009 at 9:44 am

    K-Mart has been “DONE” for a long time! It will not be missed.

  15. 23 S. Todd September 18, 2009 at 4:25 pm

    WalMart pays its employees what they are worth, period. Because if those employees were more valuable, they would find higher paying jobs elsewhere (right?). Doesn’t anyone take economics anymore? So WalMart should raise its prices so it can pay its employees more so they can buy more cars and houses? Huh? Result: higher prices at WalMart, inflated prices for cars and houses. How am I better off, unless I’m a now-overpaid WalMart worker?

    The reason that so many Americans can not (‘tragically’) afford a home is because most Americans are not willing to save enough money to allow a reasonable loan size, are creating inflated prices by spending money they don’t have (credit cards, 80%+ LTVs, etc..) and because the new definition of home ownership is not a tiny, cheaply produced tract house of the 1950’s (when home ownership suddenly because a ‘right’ as opposed to an American ‘Dream’).

    Government is not designed to, nor has any ability to, fix problems. Until we acknowledge this and individually behave accordingly, our country will become less and less what it capable of being. Americans, individually and collectively, alone have the ability and responsibility to fix problems. “Ask not what your country (government) can do for you, but what you can do for your country” What do those words mean to you?

    • 24 Master of Reality September 21, 2009 at 8:21 am

      Thank You S Todd.

      Me thinks that James’ expressed desire to overpay Wal Mart workers may have something selfishly to do with an excuse to continue to prop up the overblown, overvalued real estate market. Hmmmmmmmmmm, more money to workers, more money to overpay for an inflated real estate price. After all, this is a “real estate blog” is it not? A bit self- serving, it appears.

      How about let’s all get back to real, true valuations?

      • 25 james September 23, 2009 at 8:29 am

        How many years would you have to save and live in a state of deprivation in order to accumulate a downpayment on a typical not large but decent home based on Walmart earnings?? Maybe 10 years or more! I love it when people with good incomes blame low income people for “spending everything they earn” or ” not saving for their future”. Human fixed expenses are pretty much the same whether you earn $20K a year or $200K a year, we all have to eat, pay taxes, buy gas, put a roof over our head, pay the doctor, etc.
        Real Estate values are not entirely artificially inflated, at the end of the day they are based on COST. And costs have been rising steadily in this country without abatement for decades, while worker productivity has been increasing. In fact worker productivity has been the central contributor to holding down inflation, something that benefits us all rich and poor alike. I just happen to suspect that the relationship has become very lobsided in favor of the corporations, that it is time to reset the equation a little. The good thing about such an approach is that it can be done a little at a time, in increments, and the results could be measured or as our snotty friends say, “the metrics could be studied”!

  16. 26 Ask Not September 19, 2009 at 2:29 pm

    While American’s material expectations of the American Dream have expanded since the 1950’s, the quality of life, job security and contentment of the average American has declined. I find it a stretch to ponder the overall competitiveness of our country when I’m well-educated, and unemployed in the retail real estate industry, where the average tenure in most positions is the lifespan of a lightning bug (roughly three (3) days). These positions don’t pay enough to work for a year and be out of a job, find a job in 6 months to a year to only be out of a job again (rinse, repeat ad nauseum). Those of us who have persevered on this retail roller coaster ride are fed up with this industry.

  17. 27 bruce October 10, 2009 at 1:17 pm

    Did I miss something or did I hear that Walmart employees are underpaid.Last time I checked ALL of retail is underpaid.
    The only way to get more money is to go into management and not whine about how little you are making.
    I’ve worked for Kmart and Walmart and find that Walmart treats there employees much better.

  18. 28 Sara December 6, 2009 at 2:28 pm

    I don’t know what you people are talking about but I loved being a Wal-mart Employee. I worked there as a Teenager. I received 10 cents more than minimum wage ($5.15 at the time)as starting pay, flexible and more hours, discount card, a raise every 3 months based on my preformance. Thats more than any other store or restaraunt in the area was offering. I also got a coupon for 25%- 75% off an item of choice every so often. Christmas and New Years parties and fee food all the time. Oh and I got to shop sale items day before sale. If I were to loose my current job in this economy Wal-mart would be the first place I would apply.

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