Return to Retailing Roots

For fourth quarter 2007, Wal-Mart ditched its George label, its attempt to widen the aisles, and its push to offer fashions that are more contemporary. Instead, the Bettonville Behemoth did what it does best: ever day low pricing. The move paid off as Wal-Mart reported strong stales.

For the next two years, this strategy will work. After that period, though, all bets are off.

Happy days are here again

Wal-Mart’s stock last traded above $50 nearly two decades ago. As the American economy slows down and with household debt rising, Wal-Mart again becomes an attractive place to shop because of its EDLP strategy. Americans will spend increasingly more of their declining discretionary income.

Expect this trend to last two years at most as the American economy dries itself out from the sloshing credit markets. Look for Wal-Mart’s stock to break the $50 barrier.

The New York Times article points out a portent of problems. Wal-Mart’s same store sales of clothing and house wares remain flat for the fourth quarter. If Wal-Mart cannot sell pots and pans in a deep recession, then it can never sell pots and pans, periods.