Fortunately, you can make solid investment decisions if you know how to measure indicators of strength in specific businesses. Some of these include real or perceived weakness in the economy, changes in labor laws, and competitive challenges presented by e-commerce.Ī shift in the political climate can dramatically affect retail stock value, as new policies impact profits and consumers rethink their willingness to spend. However, the value of retail stocks may still decline as a result of other factors. Consumers will always spend money, at least for essentials, so you can count on solid demand for product. The Pros and Cons of Investing in Retail StocksĪs a group, retail stocks present an interesting paradox. Below, we compare two of the most popular big box options: Costco ( NASDAQ: COST) and Walmart ( NYSE: WMT). Deciding where to invest depends on your investment strategy, risk tolerance, and even sensitivity to social issues. Massive supermarkets and big box stores dominate this section of the retail market. For better or for worse, the days of mom and pop grocers are an endangered species. Other companies have followed Walmart’s lead by mirroring the big box store design and offering a huge product selection under a single roof. Since then, Walmart has since become nothing short of a retail empire, with more than 11,700 locations in 28 countries. Menino has declared that the retailer should first deal with its social issues before they enter Boston and pour cash around like its sewer covers.Costco vs Walmart Stock: Sam Walton started his retail business in 1950, launching a single location that he named Walton’s 5 & 10. He has accused it of wanting to buy the way into the town. Thomas Menino, Boston’s mayor, has refused to allow the retailer to contribute to giving summer jobs to kids in the state. Local protesters work against these efforts to expand their reach to the big cities. As the retailer tries to get into the urban areas this reputation haunts it. Walmart is accused of growing and spoiling it for the Mom and Pop stores. As the United States market is saturated, the retailer was reported in 2012 by The New York Times as having attempted to bribe officials, as they wanted to build on some ancient ruins in Mexico. International expansion is and has been a challenge for Walmart. Reuters has reported that the retailer may bid for ParknShop, which is a Chinese grocer. Their business model has produced its problems Where people had few options for shopping, now there are companies that are giving good bargains and are tidier.Ģ. Sloppy shelves and dirty stores show lack of respect and are an insult to customers. Walmart has earned a reputation for having mislabeled and empty shelves and poor displays. Walmart’s cost control focus has often meant that basic upkeep is often neglected. Keeping a space that stands on more than 4 acres in top shape is a challenge.
Produce sections, clothing racks and aisles and sections need constant attention. Retail stores have to be constantly maintained. There are three signs that Walmart is collapsing: Walmart, like many empires before it, is rotting from the inside. Some of these allegations are justified, while others are just criticism against the retailer’s success. Local merchants also have been pushed out of rural areas.
The once too-happy-to-supply vendors now continually complain that Walmart has a monopoly-like power over them. Many charges of supposed abuse, such as employees locked in stores throughout the night to clean, have been made.Īs the retailer has grown, so has the resentment against it. The company has faced lawsuits against it, mainly for unfair labor practices. There are two million-plus Walmart employees.īut, they are not all happy. In 2012, the retailer realized $470 billion in revenues. In the a little over half a century that the retail giant has been in existence, it has become the largest force in terms of the retail business that the world has seen. This massive retail chain has sold itself as one that sells merchandise at low prices, but what it has really done is control costs.
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