Tuesday, February 4, 2014

The Imminent Death of Brick And Mortar


I first walked into a K-Mart store sometime in the mid-sixties.  There was the blue light flashing for a fuzzy toilet lid cover and bath rug and you could smell the popcorn chugging away in their big popping machine.   The store inventory was then made up of cheap Japanese products, China still dormant under Mao, and producing nothing but mass graves.  We all thought K-Mart was the "cat's meow" as they handily beat the predominant retailer, Sears.  

Then, in the West, came White Front, another discount store laden with cheap knock offs, ten cent hot dogs and plastic doggie doo.  They lasted less than a decade before going belly up.  K-Mart was on her last legs as well.  Only the rapidly declining Sears company saved them from extinction.

And we can now see Walmart slowly going down the drain.  Just now Walmart is swirling around the old toilet bowl, stubbornly fighting the final flush…but old Sam Walton's pride and joy is not long for this world.  For the past year Walmart has announced a decline in sales, quarter after quarter.  Oh, it'll hang on for a few more years, just as K-Mart has, for fat trailer house wives in distressed spandex and hunters in red check woolen shirts coming in for their guns and ammo.  But Walmart is done for, at least as we have known it.

Sound the death knell as well for Sears-Kmart, Best Buy, Barnes and Noble, Target Stores and Toys R Us.  The future of American retail all rests with the internet.  Obama or his liberal successors will soon have gas at $10 bucks a gallon and the minimum wage at $15 dollars an hour, (adjusted higher for inflation) and the brick and mortar stores will die a miserable, slow death.  

Instead, what we'll see are the Amazons and Zappos and the other internet retail giants,  building warehouse centers where the customer can have the item shipped, or can walk into the warehouse, ala Costco and pick up the items they order.    Sam's Clubs will be the only remnants of Walmart's once mighty chain of stores.  

If you want to keep that investment account growing stay away from retailing and short sell both the retailers and the Real Estate Investment Trusts that invests in retail properties…there's gonna be a lot of retail ghost towns within the next decade.

Ironically, some of the new shopping malls may survive…but only if they cater to the kids.  They'll have to people those malls with gaming retailers, movie theaters, ratty jeans shops, fast food restaurants, and if the pot legalization continues, perhaps a toking station.  

So, if you think you might miss those "roll back" signs, if you're a big fan of distressed spandex, if you like your "Sam's choice" cola, you might want to visit a Walmart store pretty damn quick….

Note:  Stay tuned for a later blog on why brick and mortar schools will also disappear from the American scene.


Craig said...

Could this all be part of the goal to centralize population centers as the U.N. Agenda 21 policy? Time to reject the u.n. and remove them from our soil.

A Modest Scribler said...

don't think so, Craig,…just basic economic trends.

Anonymous said...

I've noticed Walmart has been looking less clean and more "ghetto" as the years pass, but I would never have guessed they're hurting sales wise. You'd never think so considering you can never park anywhere NEAR the place when you go it's so crowded. I prefer Fry's personally, and only use Walmart about twice a month for bulk pet food, but it's always a pain getting in and out of there. I thought they were going to put everyone else out of business? What happened to that?

A Modest Scribler said...

Anon, next time you go into one of those Superwalmarts, take a look at the customer demographics….what you'll find is far more customers in the grocery section (three times more?) than you'll find in the dry goods section.

And even the grocery customers are calling for price matches from Walmart on all of Fry's, Safeway and Albertson grocery sales, which cuts Walmart's margins even more. I think the only way Walmart survives is to go smaller and concentrate on the grocery trade (cause we all still have to eat).

BTW, I don't see Walmart as offering any real food bargains…since i shop when something is on sale I find a wider selection of items at lower prices at Fry's…I don't think Walmart has ever really embraced the fine points of food marketing.

A Modest Scribler said...

BTW, this are the latest figures for Walmart's net income. Look at how dramatically it has dropped in less than a year: READ THE FIGURES BACKWARDS, FROM 1ST QUARTER TO 4TH BEING LISTED FIRST…THAT'S NEARLY a 2 billion dollar decline in profits.

Net Income Applicable To Common Shares 3,738,000 4,069,000 3,784,000 5,606,000