Walmart

As Though a Government has enlisted on the Stock Market!

Statements by and against Wal-Mart which float around in stock market circles, could confuse an outsider in to thinking that it is a country we discuss! Indeed, the scale of operations of Wal-Mart is such that it is almost as though an entire Government has listed on a stock market! The dimensions emanate from its deep penetration of the U.S. market, the vast range of products and services on offer, the enormous impact on the economy, and the army of people who are provided employment.

The heart of the Wal-Mart identity in the stock market firmament is ironically simple and focused. Wal-Mart is ingrained in the public mind as an enduring symbol of good value. No one expects Wal-Mart to stock products of inferior quality, or to charge higher prices that are widely available anywhere else. These are key considerations for home makers pressed for both time and money. A single visit to Wal-Mart can save endless searching for something one needs, and the chance of buying something which does not fit the bill. Even the staunchest critics of Wal-Mart will not deny the corporation these important social contributions.

Wal-Mart defies the stock market truism of focus by adding infinitely to the variety on its shelves. Indeed, this has turned a potential working capital weakness in to a competitive strength, because selling through Wal-Mart has become an important pre-condition for new entrants in some product categories! Specialized manufacturers, who want to service consumers, can even focus on product quality and price, cutting off all resources for market development! It is therefore not surprising to chance upon a pleasantly surprising product at Wal-Mart for the first time!

Wal-Mart has always kept up with the times, rather than rest on its stock market laurels of price appreciation history and past dividends. It has joined the electronic commerce bandwagon with vigor, and has a web site to rival top performers in this new field. Wal-Mart is therefore evenly poised between the market of middle-aged and senior shoppers who prefer to buy in person, and the emerging generation of people glued to computer screens!

There are two flies in the Wal-Mart ointment for stock market observers: the withdrawals from Germany and from South Korea for one, and the continuing strife with labor unions and pressure groups on the other. It does not bode for a company to lose out to local competition in key foreign markets, and the pressures from employees and from outside groups must sap management energy.

However, the stock market is likely to give Wal-Mart time and room to make adjustments. Second quarter sales in 2006 topped $80 billion and that is not a figure for any quarter of the stock market to ignore!

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