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10/18/2007 8:07 AM
Wal-Mart Era Wanes Amid Big Shifts in Retail; Rivals Find Strategies To Defeat
Low Prices; World Has Changed
Wall Street Journal
. (Eastern edition). New York, N.Y.: Oct 3, 2007. pg. A.1
Rival retailers lured Americans away from Wal-Mart's low-price promise by offering greater convenience, more selection,
higher quality, or better service. Amid the country's growing affluence, Wal- Mart has struggled to overhaul its down-market,
politically incorrect image while other discounters pitched themselves as more upscale and more palatable alternatives. The
Internet has changed shoppers' preferences and eroded the commanding influence Wal-Mart had over its suppliers.
Wal-Mart remains an enormous force in retailing, of course. Its world-wide sales are almost three times those of France's
Carrefour SA, the world's second-largest, publicly traded retailer. Wal-Mart's U.S. revenue is 4 1/2 times that of
discount-store rival Target Corp., and four times that of second-largest U.S. food retailer Kroger Co. Its clothing and shoe
sales last year alone exceeded the total revenues of Macy's Inc., parent of Macy's and Bloomingdale's department stores.
Wal-Mart's shares trade about where they were at the start of the decade, when the company produced less than half its
current revenue. Shares closed yesterday up 40 cents at $44.87, and down 9.3% from the stock's year-earlier price. Earlier
this year, Wal-Mart took the extraordinary step of ratcheting down its U.S. expansion plans because its new stores were
stealing too much revenue from existing ones. That wasn't a concern in the 1980s and 1990s when Wal-Mart was regularly
(c) 2007 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is
prohibited without permission.
The Wal-Mart Era, the retailer's time of overwhelming business and social influence in America, is drawing to a close.
Using a combination of low prices and relentless expansion, Wal-Mart Stores Inc. emerged from rural Arkansas in the 1970s
to reshape the world's largest economy. Its co-founder, Sam Walton, taught Americans to demand ever-lower prices and
instructed businesses on running a lean company. His company helped boost America's overall productivity, lowered the
inflation rate, and strengthened the buying power for millions of people. Over time, it also accelerated the drive to
manufacture products in Asia, drove countless small shops out of business, and sped the decline of Main Street. Those
changes are permanent.
Today, though, Wal-Mart's influence over the retail universe is slipping. In fact, the industry's titan is scrambling to keep up