Wal-Mart Wins, Everybody Else Loses

That may be overstating things a bit. But Wal-Mart certainly is doing well these days. Wasn't it a year ago or so that everyone was talking about the Bentonville behemoth stumbling and perhaps hitting the limits of its business model? It seems to be doing extremely well now as we face recession with so many customers trading down. This doesn't change its growth prospects for future locations--something it's become very cautious about. But it is obviously good for the chain that it's existing locations are doing very, very well in today's climate.

Sales at department stores and specialty retailers are in free fall. They are cutting staff, discounting merchandise and closing stores to survive. But even as the financial turmoil strangled discretionary spending at many stores, it sent struggling consumers into the arms of Wal-Mart — and left it, the world's largest retailer, poised for a blockbuster Christmas.

“In my mind, there is no doubt that this is Wal-Mart time,” H. Lee Scott Jr., the company's president and chief executive, said recently at a meeting of analysts and investors in Wal-Mart's hometown, Bentonville, Ark. Referring to the discount chain's founder, he added, “This is the kind of environment that Sam Walton built this company for.”

During the nation's last severe recession, in the early 1980s, Wal-Mart was mainly a regional chain in the Southeast with fewer than 300 stores. Old-line national discount chains like Woolworth's were fading into irrelevance, but nothing had risen to take their place.

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