February 11, 2009 4:07 PM
- Text
Is The Internet Killing Wal-Mart?
(CBS)
The Skinny is Keach Hagey's take on the top news of the day and the best of the Internet.
Wal-Mart changed America, the Wall Street Journal reminds us this morning in its obituary for the retailer's "overwhelming business and social influence." But now America - and the world -- is changing too fast for Wal-Mart to keep up.
The price-slashing, union-busting behemoth has been having a rough go of things lately. For 10 years through 2005, Wal-Mart's sales gains at stores open at least a year averaged 5.2 percent. So far this year, its comparable-store sales are up just 1.3 percent. The pricing gap between Wal-Mart and it's competitors has narrowed, and more customers are now choosing convenience over wading through a supercenter.
The result is Wal-Mart's competitors are kicking its supersized backside: Target's comparable-store gains so far this year are 4.6 percent, while Costco's were 6 percent. And let's not even talk about the retailers bombed experiments in Germany and South Korea, both called off after failure last year.
Part of the change is competitor wiliness. Part is shifting tastes of increasingly affluent American consumers away from bargain-basement big-box toward greater convenience, more selection, higher quality or better service. ("For the first time in a long time, quality has a chance to gain on price," said one industry analyst.)
And part of it, apparently, is the Internet. Wal-Mart's loss of clout "is a reflection of a more fragmented world," the Journal reports. "Big-box stores thrived by selling recognizable national brands, which themselves were fed by two phenomena: the growth of mass media and freeways, which encouraged large stores in remote areas. Stores and brands together achieved scale efficiencies that allowed them to overwhelm local chain stores and regional brands."
"But the Internet is transforming the retail definition of scale. The once-stunning compilation of 142,000 items found in a Wal-Mart supercenter doesn't seem so vast alongside the millions of products available on the Internet. At the same time, the cost of creating and sustaining a national brand is rising because of media fragmentation."
Niche brands, promoted through Internet world-of-mouth, are stealing market share. One result is that "retail giant hold less sway over their customers - and their suppliers."
A case in point: Wal-Mart brought the barcode into our lives in 1984, when it demanded that all its suppliers have them as a way to help the store check people out more efficiently. But when the retailer jumped into the next big logistics technology, radio-frequency identification, in 2003, suppliers balked. Too expensive, they said. Sorry. We used to be scared of you, but we're just not that scared anymore.
Pakistani Army Losing To Al-Qaeda And Taliban
While Pakistanis picket about who's going to be president for the next five years, dark things are happening in the wilds of Waziristan.
Pakistan's government is losing its war against emboldened insurgent forces, giving al-Qaeda and the Taliban more territory in which to operate and allowing the groups to plot increasingly ambitious attacks, the Washington Post reports.
The radical Islamic fighters who were kicked out of Afghanistan by the 2001 U.S.-led invasion have intensified their campaign in Pakistan's tribal areas, now affecting major cities.
"Military officials say the insurgents have enhanced their ability to threaten not only Pakistan but the United States and Europe as well," the Post reports.
Meanwhile, Pakistan's military is considering pulling back from the fight in the face of mounting losses, officials say. They're not trained in counterinsurgency, they whine. The government is busy with "problems of legitimacy," the offer as an excuse.
They're also kind of embarrassed, the Post reports, ever since insurgents captured a convoy of 250 Pakistani soldiers a month ago without firing a shot. The soldiers, members of the sixth largest military in the world and recipients of $10 billion in U.S. military aid in recent years, are still in Taliban hands a month after they were taken hostage.
"In Waziristan, people are laughing at the army," said one tribal elder. "I really feel pity for those soldiers."
Anti-Smoking Police Kick Down Doors, Enter Apartments
We all knew this day would come. And, really, if we had to think about it, we probably also knew it would come first to California.
Smoking bans finally are inviting themselves into private homes this month, as lawmakers in two California cities are casting votes on unprecedented legislation that would let landlords and residents associations ban smoking inside apartments and condos, here and follow the directions to register to receive it in your inbox each weekday morning.
Wal-Mart changed America, the Wall Street Journal reminds us this morning in its obituary for the retailer's "overwhelming business and social influence." But now America - and the world -- is changing too fast for Wal-Mart to keep up.
The price-slashing, union-busting behemoth has been having a rough go of things lately. For 10 years through 2005, Wal-Mart's sales gains at stores open at least a year averaged 5.2 percent. So far this year, its comparable-store sales are up just 1.3 percent. The pricing gap between Wal-Mart and it's competitors has narrowed, and more customers are now choosing convenience over wading through a supercenter.
The result is Wal-Mart's competitors are kicking its supersized backside: Target's comparable-store gains so far this year are 4.6 percent, while Costco's were 6 percent. And let's not even talk about the retailers bombed experiments in Germany and South Korea, both called off after failure last year.
Part of the change is competitor wiliness. Part is shifting tastes of increasingly affluent American consumers away from bargain-basement big-box toward greater convenience, more selection, higher quality or better service. ("For the first time in a long time, quality has a chance to gain on price," said one industry analyst.)
And part of it, apparently, is the Internet. Wal-Mart's loss of clout "is a reflection of a more fragmented world," the Journal reports. "Big-box stores thrived by selling recognizable national brands, which themselves were fed by two phenomena: the growth of mass media and freeways, which encouraged large stores in remote areas. Stores and brands together achieved scale efficiencies that allowed them to overwhelm local chain stores and regional brands."
"But the Internet is transforming the retail definition of scale. The once-stunning compilation of 142,000 items found in a Wal-Mart supercenter doesn't seem so vast alongside the millions of products available on the Internet. At the same time, the cost of creating and sustaining a national brand is rising because of media fragmentation."
Niche brands, promoted through Internet world-of-mouth, are stealing market share. One result is that "retail giant hold less sway over their customers - and their suppliers."
A case in point: Wal-Mart brought the barcode into our lives in 1984, when it demanded that all its suppliers have them as a way to help the store check people out more efficiently. But when the retailer jumped into the next big logistics technology, radio-frequency identification, in 2003, suppliers balked. Too expensive, they said. Sorry. We used to be scared of you, but we're just not that scared anymore.
Pakistani Army Losing To Al-Qaeda And Taliban
While Pakistanis picket about who's going to be president for the next five years, dark things are happening in the wilds of Waziristan.
Pakistan's government is losing its war against emboldened insurgent forces, giving al-Qaeda and the Taliban more territory in which to operate and allowing the groups to plot increasingly ambitious attacks, the Washington Post reports.
The radical Islamic fighters who were kicked out of Afghanistan by the 2001 U.S.-led invasion have intensified their campaign in Pakistan's tribal areas, now affecting major cities.
"Military officials say the insurgents have enhanced their ability to threaten not only Pakistan but the United States and Europe as well," the Post reports.
Meanwhile, Pakistan's military is considering pulling back from the fight in the face of mounting losses, officials say. They're not trained in counterinsurgency, they whine. The government is busy with "problems of legitimacy," the offer as an excuse.
They're also kind of embarrassed, the Post reports, ever since insurgents captured a convoy of 250 Pakistani soldiers a month ago without firing a shot. The soldiers, members of the sixth largest military in the world and recipients of $10 billion in U.S. military aid in recent years, are still in Taliban hands a month after they were taken hostage.
"In Waziristan, people are laughing at the army," said one tribal elder. "I really feel pity for those soldiers."
Anti-Smoking Police Kick Down Doors, Enter Apartments
We all knew this day would come. And, really, if we had to think about it, we probably also knew it would come first to California.
Smoking bans finally are inviting themselves into private homes this month, as lawmakers in two California cities are casting votes on unprecedented legislation that would let landlords and residents associations ban smoking inside apartments and condos, here and follow the directions to register to receive it in your inbox each weekday morning.
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