Monday, March 14, 2011

Can someone explain the Walmart small store strategy, please?

I don't get it.  I guess I am not just not as smart as the folks in Bentonville.  Walmart was originally a dumpy box of a store with the interior feel of a warehouse.  It wasn't a great place to shop, although it sure was the place to buy American and cheaply, at that.  Now the stores look nicer and the products are all from China but the media says Target, which I still enjoy way, way more than a Walmart, may be cheaper.  (My wife prefers Walmart locally because of size, perceived value and the fact that our Target isn't a super store.)

But that isn't the main thrust of this piece.  Rather, it is about the small store format that the company is pursing.  I really don't get that.  So Walmart is going to open a 10,000 sf store in Chatham, a south side Chicago area known as a solid middle class minority neighborhood.  (Yes, I have driven through it and driven by this site many times.  It is not a particularly pedestrian friendly location, though not an awful one either.)  Okay, that is bigger than a 7/11 or convenience store but smaller than a Walgreen's and certainly small than the Jewel-Osco almost next door, where you can get a whole lot more selection.  The only thing I guess they figure is price will win.

But then there is a different issue: cannibalization. The company is building a SuperCenter right in the neighborhood.  One store will not siphon off the other?  The one saving grace of the small format store is fewer employees, perhaps meaning less overhead.  I can see a store like this in central business districts, but in a urban area next to a Lowe's and a Home Depot, not to mention a Marshall's and a Best Buy?  Not getting this one at all.

Walmart was at its best when it followed the tenets of Mr. Sam.  This is away from that, in my opinion.  As this post from a couple of weeks ago says, "As retired executives at A & P and Sears could tell Wal-Mart executives, the middle is a very bad place for retailers to be."  In my eyes, at least, Walmart is better off going back to 1978 than in this direction.

Full disclosure: we do own a very -- indeed, laughably -- small amount of Walmart stock.

PS: Many thanks to my friend Duke Long for encouraging me to write this.

I'm still alive! A thought on lawyers racing to the bottom

I know I haven't posted in three months.  I even write a farewell post, but decided not to put it up in case I changed my mind so I would then not look like a schmuck or the blogging equivalent of a pinch-drunk boxer coming back for more punishment.  I have been concentrating on work and other things in my personal life.  As to the former, you can guess what that is about.  As to the latter, well, I am not prepared to discuss that except to say it is all good and hopefully will be better as time goes on.  If things go the way I want I will eventually tell you about it.

A couple of weeks ago one of my old bosses called with about the highest compliment one professional can pay another: a referral.  It was for a small deal that his firm could not handle economically but that I could.  After quoting a rate that I thought was fair -- I later realized that it was identical to the rate on my proprietary formula that I have for pricing flat fees -- we adjusted it and sent it on to the prospect.  About an hour later I found out I wasn't getting the work, because someone else agreed to do it for less than a third of what I thought was a fair and reasonable price to do a good job.

I'm not, by the way, trying to slam the firm that eventually got the assignment, although some might say that you get what you pay for.  Efficiencies and all exist, and perhaps this firm has a way to do good work at a cheap rate, and if so I commend them.  Nor do I have sour grapes about the work.  I am right now about as busy as I want to be.

As for me, I am not willing to go in that direction.  When you hire me you hire exactly that: me.  And I think I am pretty good at my job, if I do say so myself.  I'm not farming the work off to paraprofessionals, good that they may be in many instances.  Call me a control freak, or just someone that does not want to deal with employees. day out.  And I don't take shortcuts.  So if to survive in this "profession" -- which unfortunately is becoming less one by the day sometimes -- I have to take those shortcuts, then I will find another way to make a living.  Somehow I do not see that happening any time soon, although you never know.

I will have another post up shortly.