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Sunday, April 25, 2004

Wal-Mart Rant

It's fun to cheer for the demise of Wal-Mart. Heck, their stores are crowded and their arrogance is imcomporable compared to any other large mega corporation. Recently, the Denver City Council is being pressured heavily not to allow Wal-Mart to move into a West Denver neighborhood on Alameda. Recently, Englewood California voters gave a proposed Wal-Mart mega development a thumbs down vote in a public referendum. But the bigger news and news that makes no sense in some regards is Wall Street's reaction to news coming from Wal-Mart's biggest rival, Costco. Costco pays its employees more than Wal-Mart. Costco gives its employees benefits and full time hours and has a commitment to be a good employer. And it posted higher than anticipated profit margins. In fact is a some categories and in some markets, Costco has out performed the Benton Arkansas retail giant. And what was Wall Street's reaction? They have down graded Costco's stock, citing its costs could spiral out of control. Basically the street was saying "Hey. Costco, get with the program. We don't want no stinking well paid middle class." But the joke could be on the Street. If Costco continues to post high numbers, they will be the winners of the big retail game and we consumers could once again see a reshuffling of the retail puzzle. Wal-Mart can't stay on top forever. Sears fell once upon time, as did Woolworth's. (remember Woolworth's?) And soon the market may reward the better player who is controlling its costs by rewarding its employees loyalty with wages, benefits and security.

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