The Day is Coming When Walmart Stores Close in Idaho and Utah

When was the last time you shopped at Kmart, F.W. Woolworth, or Sears?  Some online shopping options use the brand names, but it’s not the same experience.  I bring this up because I was doing an online search for DVDs of a TV show I would like to purchase as Christmas gifts.  Among the ordering options I had were Walmart and Amazon.  Walmart wiped out a lot of its retail competitors by the 1990s.  I lunched one afternoon at one of the last Woolworth stores in 1992.  It closed shortly thereafter.  It had once been the behemoth that Walmart became.  About the same time I had my lunch, I also judged some entries for an Associated Press awards ceremony.  One was about how Walmart wiped out all in its path.

The Old Business Model is Crashing Down

Then came Amazon, and it upended the old retail model, and every year, online shopping grows.  Walmart aggressively got into the cyber world a few years ago.  When it happened, I wrote a piece about how we would eventually see the big box Walmart stores fade away.  A woman responded by calling me an idiot, because she had been to a very crowded Walmart a few days before.  I didn’t say it was going to happen overnight, but the idiots are the ones who don’t understand how business works, and is subject to shareholder demands.

What do you suppose it costs to operate a big store?  You need to light it, heat it, cool it, limit theft, wash the floors, repair the roof, pay liability insurance, and, of course, pay the staff.  And a lot more.  What do you suppose it costs to ship a package from the warehouse directly to your home?

Some Modes Bring More Profit than Others

If I’m making 20 cents on the dollar selling products in a store (80 cents goes to overhead, and I’m just using these figures to make a point), and I make 60 cents on the dollar shipping to your home, and that business is growing, will a massive store be in my business plan in 10 years?  Especially when the overwhelming majority of people are buying over the Internet?  About the only thing people will still be buying from a store is fresh produce, and that doesn’t require the space of a current Walmart Supercenter.  It won’t matter that a handful of people still want to buy clothes from a rack.  There won’t be enough of you to justify the overhead.