A post-American Wal-Mart

Chart comes from Wal-Mart itself.

The top of the pyramid is crammed with stores, the bottom awaits, and the middle is filling up fast.  I will never forget my first time in a gigantic, 6-floor Wal-Mart in Nanchang, Jiangxi, China, and the fabulous escalators for carts!

A WAPO story that explores, from within via interviews, how Wal-Mart sees its future growth lying overwhelmingly beyond US borders.

The opening says it all:

The company that began as a five-and-dime in rural northwest Arkansas opened its annual shareholder meeting last week with Bollywood-style dancers, Asian balancing acts and Brazilian martial artists representing some of the 14 foreign countries in which Wal-Mart operates. Last year, its international division topped $100 billion in sales for the first time and this year it is expected to surpass the United States in number of stores.

This is the next phase of Wal-Mart domination. It built its business in small towns and suburbs across the United States, but now international sales are growing at almost nine times the rate of domestic sales.

Wal-Mart already was facing stalled growth at home after saturating the market, and that has been exacerbated by the weak labor market and high gas prices, which have battered the chain's core customers and depressed sales. That means the company has become increasingly reliant on the appetites of international shoppers to pick up the slack and drive growth, mirroring a broader global shift in purchasing power.

"The U.S. consumer is tired," said Dean Junkans, chief investment officer for PNC Wealth Management. "I think it's very possible that you can kind of have the global consumer kind of take the baton."

But dethroning the American shopper can be a risky proposition, as no one country has the replacements quite ready.

Have no doubt, Wal-Mart's arrival is even more of a socio-economic revolution in developing markets than it was/is in rural American markets: all of the local mom-and-pops either adapt to their newfound niche, somehow winning customer loyalty in ways that justify the higher prices, or they are gone.

And Wal-Mart's penchant for revolutionizing the local landscape extends far beyond the competition.  There's all the suppliers, shippers, the local ag industry--damn near everything is impacted even if only peripherally.  Just the experience of working for Wal-Mart will change the attitudes of local labor.  Even just working with Wal-Mart will alter how governments view their roles and responsibilities.

So yeah, this is a sign of globalization's next phase, and it likely to be just as tumultuous or more so than the recent decade.

Comments

[Hugh]

Wal - Mart; The Developement in a Box - Store.