Sunday, November 26, 2006

Black Friday = Bleak Friday for Wal-Mart

Wal-Mart started a bloodbath on Black Friday and has nothing to show for it. While other retailers are reporting sales increases of an average of 6%, the Evil Empire actually appears to have had a sales decrease over last year (see article).

So Wal-Mart had massive discounts but didn't generate any additional revenue, which means all they did was destroy their margin. While that makes me smile, I suspect almost all retailers are going to be bloody as they did similar discounts, so margins across the entire retail sector are not going to look healthy. Of course, that may be exactly what Wal-Mart has in mind, try to bleed out their competition.

I'm sure various suppliers are just enthused about this latest round of price wars Wal-Mart has started. By devaluing products, that means that means other retailers will demand lower prices for them, and while Wal-Mart may be the biggest retailer, they are not the biggest in every category and supposedly most suppliers can't afford for Wal-Mart to be more than 40% of their business. Not to mention that Wal-Mart doesn't sell the higher end of suppliers' lines. So it's not like Panasonic could tell Best Buy, Circuit City and Sears to piss off if they demand Wal-Mart's prices.

I better stop now... I feel another rant coming on.

Though I will share this: I had a shopper in the line in front of my store on Black Friday tell me that I should let them in early because they had been there so long.

"People like you are why I had to get up at 2am this morning, so I couldn't spend more time with my family on Thanksgiving," was my reply.

They stopped pestering me after that.


Anonymous Liz said...

Oh. My. Gods. Your response to that bloody customer is why you totally rock, Mr Oz! *huge grin*

11:38 AM  

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