Wal-Mart May Eat Itself

According to this article by James J. Cramer in New York magazine, uppity neighborhood groups like Responsible Growth for Northcross are the least of Wal-Mart’s problems.

Between its underperforming stock and flatlining sales growth, the world’s largest retailer is steadily losing ground to more appealing stores like Target and JCPenney. They are beginning to look more like the bloated, pre-bankruptcy K-Mart every day, and we all remember what Rain Man had to say about those guys.

Wal-Mart has a huge image problem on its hands. People don’t feel good about shopping there. Aside from the company’s remarkably screwy ethics, consumers have gotten wise to the fact that Wal-Mart doesn’t “always” have the lowest prices. When you do find a bargain there, it’s often a piece of crap. What good is a $40 DVD player if it breaks in two months?

I can deal with huge crowds and messy stores if I can get a good buy, but if Wal-Mart can’t consistently win the price/quality point after all that, why should I subject myself to everything else that sucks about them?

Cramer has some common sense suggestions for how Wal-Mart might right itself:

First, it has to acknowledge that the wheels have fallen off the Bentonville Bus. Then it has to bring in some savvy merchants from the outside and give them a real chance to improve the quality of the stores—the atmosphere, the merchandise, the service, everything—without raising prices. (And it wouldn’t hurt if Wal-Mart would create, if not a Starbucks pro-labor feel, at least something that makes shoppers feel that it’s not a global retailing bully and its workers aren’t all desperate retired folks.)

The biggest enemies of Wal-Mart are the people running the company who ignore such advice.