The ITT List
Wednesday Feb 27, 2008 3:56 pm
Survivng the recession, one bulk item at a time
Interesting stuff from Slate's Daniel Gross on Wal-Mart's recent success, surprising given the instability of the economy. While retail sales have stalled across the country, Wal-Mart's are rising, along with its stock price. What gives? Well, it's actually pretty intuitive. For one, Wal-Mart isn't in the luxury goods market.
The overwhelming majority of its sales are not impulse buys. Even in a recession, most people don't drastically reduce their spending on staple groceries, light bulbs, or diapers.Also important is the company's brand identity -- if people's pay checks are getting smaller, they are more likely to turn to the store with everyday low values -- and its international growth. On a larger scale, it's important to understand Wal-Mart's resiliency, especially if labor and its allies are to reform some of the company's more heinous business practices.