I both love and despise Walmart. Fortune magazine just listed them as the largest American corporation by sales in their annual Fortune 500. I love that they are a great American success story, ruthlessly driving cost and inefficiency out of the retail supply chain, growing into a globe-straddling behemoth with $486 billion in sales in 2014 and clobbering their competitors. I hate them for the same reasons.
Walmart epitomizes American consumerism – for good or ill. They cater to consumer tastes for inexpensive products. We love big and cheap. They have singlehandedly reduced the cost of living for many shoppers by importing massive amounts of goods, especially from Asia, and driving every last dollar out of the margins of companies selling them products.
Though they have recently grown very slowly – only 8.5% cumulatively over the past three years – they still have ~11,000 stores, operate in 27 countries and employ 2.2 million associates. Amazon has doubled in sales over the past three years from $48B to $89B; Walmart does an average of $89B in sales every nine weeks.
If Walmart limps along at 4% annual growth and Amazon keeps doubling every three years, they will both reach sales of $720B in 2023 – eight years from now. It’ll be interesting to see which company wins that race – or if another company (Alibaba?) steals a march on the crown.
Posted on 7/7/2015 at 1:02:24 AM