Walmart’s Clout

We worry about Microsoft’s clout in the tech world. Take a look at Walmart. Charles Stein writes in the Boston Globe:

With almost $250 billion in annual sales, Wal-Mart accounts for 6 percent of all US retail sales and 2 percent of the gross domestic product. If you want to know what’s going on with the American economy, Wal-Mart is the place to look. The growing trade deficit? Wal-Mart imports $12 billion worth of goods from China, about 10 percent of the US total.

For Wal-Mart, success begets more success. The company’s low prices boost sales volume, which in turn, allows Wal-Mart to drive costs still lower. It’s a virtuous cycle others can’t match. “The value Wal-Mart can deliver can be extended to an almost infinite number of businesses,” said Eric Almquist, a senior partner with Lippincott Mercer, a consulting firm. That is already happening in groceries. It took Wal-Mart a few years to learn the ropes, say analysts, but today it can duplicate the quality of most supermarkets while offering shoppers bigger bargains. “It is shocking to see how much they have improved,” said Maureen Depp, an analyst with State Street Research.

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Rajesh Jain

An Entrepreneur based in Mumbai, India.