Walmart

[Horace Cugle]

As much as I have trashed the WMT shopping experience, I think it will be a very good stock to own longer term.

I tend to think of WMT as where the lower income folks shop; I know that's not entirely true and I mean no disrespect, but it's largely true in my opinion.

We've all seen the "People of Walmart" pics and they're over the top in their overall representation of Walmart, but honestly, you probably wouldn't be totally shocked to see some of that in any Walmart you happened to shop at.

It's seems populated by 30% people who like to save a buck and 70% people who MUST save a buck. A lot of mediocre "junky" products too makes it like high level dumpster diving.

Of course this is just my perception of Walmart and it's probably a bit harsh, but I can qualify it by having been in many, many dozens of stores in my work travels, which are considerable by anyone's standard.

What I'm getting at though is since the Gov't is satisfied to pay a large percentage of the workforce to lay around and do nothing, and good full time "real" jobs are scarce, it seems WMT will have an increasing number of shoppers if we keep doing what we're doing. It seems inevitable.

I recently heard 20% of the country is receiving food stamps and 40% receive some kind of gov't assistance. I didn't research these numbers but if they're anywhere near accurate it's an outrageously poor economic condition for the country to be in. Again just my opinion and I'm not looking for a fight, but this isn't good.

If we keep heading this way we'll have more people with less money, and WMT will be a big beneficiary. Discuss, thanks.

[Kerim]

Hi Horace --

I don't know a ton about WMT as a stock. I am prohibited from owning it because of my job, and so I don't keep it on my watch list and I've never really scrutinized it. But my general observations are similar to yours with respect to the shopping experience.

If the economy suffers, and large portions of the population are short of cash, WMT might benefit, but I wonder about competition from dollar stores and other very low-price operators. I also wonder whether most of the incredible WMT stock growth resulted from expansion, rather than same-store performance. And can that expansion continue? Also, it is hard for me to imagine that there is much room left for them to eke out further efficiency or scale gains.

On the other hand, WMT has certainly made lots of people rich in recent decades, so perhaps I shouldn't question it!

[Horace Cugle]

Other than the headlines and share price I have never followed WMT all that closely either.

I have considered the competition from dollar stores and whether they cut into WMT's business I don't know but it's reasonable to assume they do because the business has to come from someplace.

I have to think that, given the culture of WMT management (almost ruthless) they can squeeze more out of their employees and suppliers. But there is a point where you just can't get any more out of something.

My wife's battery died Friday. I had charged it twice and it was shot, 4 years old I guess that's all the longer they last these days.

Autozone wanted $199, Advance Auto wanted $149, WMT had one for $99, same specs on cold cranking amps, and a little better warranty. Yes I had to park 1/4 mile away and walk in through the rain and I had to dodge a couple of comatose shoppers getting to the auto section, but to save $50-$100 on a quick shopping trip was worth it.

[Kerim]

I read an article last night and immediately thought of this thread:

http://www.nbcnews.com/business/wal-mart...6C10930050

The gist of it is that the poor are not really participating in whatever economic recovery is going on. I'm not sure if that is pro or con for your thesis about WMT, but I found it interesting. At any rate, it gave me a little hope for my recent TGT purchase.

[Horace Cugle]

That was a good article. I read a similar one on TGT and it pretty much said they were in the same boat with more upscale shoppers. I looked for it but can't remember where I read it.

All in all it sounds like that unless you're rich, many people are going to be spending a little less and continue to struggle. Some areas of the country will be better than others but when money is tight everyone cuts back a little.

I looked at the dollar stores a couple years ago and thought FDO was worthy, but I never bought it. At a glance it looks like they moved the dividend right along.

My largest holding is WAG, I wonder how they fit into the glum retail outlook?

[TomK]

(08-18-2013, 11:17 AM)Horace Cugle Wrote: All in all it sounds like that unless you're rich, many people are going to be spending a little less and continue to struggle.

You said it. I haven't really been able to put my finger on it, but even with official inflation statistics low, it absolutely seems much harder to get by today that a few decades ago. I'm not sure if that is because of increased standard of living (you didn't have a cable bill and cell / data bill decades ago) or because real wages are actually declining or some other reason. Or perhaps it has always been hard to get by and I just never really noticed it until I became a working stiff. In any case, I think being rich would be the way to go.

(I'm working on it -- should only take another 40 years or so...)

Tom