End of an Era? (Editorial)

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An article in The Wall Street Journal in October reminds us that nothing remains the same forever.

The article looked at Wal-Mart Stores Inc.’s influence in America and said its time is drawing to a close.

Certainly, Wal-Mart is not invincible. Someday, some retailer will overtake Wal-Mart, just as Wal-Mart overtook Sears.

We still believe Wal-Mart to be a great business and, apparently, so do most Americans. A reader poll in the WSJ shows 56 percent believe Wal-Mart has been good for the economy.

“Sam Walton taught Americans to demand ever-lower prices and instructed businesses on running a lean company,” the article by Gary McWilliams said. “His company helped boost America’s overall productivity, lowered the inflation rate, and strengthened the buying power for millions of people. Over time, it also accelerated the drive to manufacture products in Asia, drove countless small shops out of business, and sped the decline of Main Street. Those changes are permanent.”

Yes, many of the old mom-and-pop stores are gone. But just what was so great about small shops that offered less selection and higher prices?

“Today, though, Wal-Mart’s influence over the retail universe is slipping,” the article continued. “In fact, the industry’s titan is scrambling to keep up with swifter rivals that are redefining the business all around it.

“Rival retailers lured Americans away from Wal-Mart’s low-price promise by offering greater convenience, more selection, higher quality, or better service.”

McWilliams says Wal-Mart’s “unquenchable thirst for scale … is now a weakness, for the world has changed on Wal-Mart. The big-box retailing formula that drove Wal-Mart’s success is making it difficult for the retailer to evolve. Consumers are demanding more freshness and choice, which means that foods and new clothing designs must appear on shelves more frequently. They are also demanding more personalized service. Making such changes is difficult for Wal-Mart’s Supercenters, which ascended to the top of retailing by superior efficiency, uniformity and scale.”

Again, McWilliams is on the mark.

We still believe Wal-Mart has been good for America. Yes, some businesses are hurt by Wal-Mart. That’s competition, and it slices both ways.

Wal-Mart certainly isn’t a monopoly. No one is forced to work there or shop there, but consumers and even businesses that never darken a Wal-Mart door have benefited from its downward pressure on prices.

The company’s bread and butter is to carry the staples, so it will be interesting to see if the predicted slowdown in consumer spending will aid Wal-Mart as people look for lower prices.

Wal-Mart is not the pioneering retailer it was when Sam Walton built it, but we don’t count it out yet.