Skip to main content

Decline and Fall of Walmart?

It is a Rip van Winkle experience to live a car-free existence for three years and then start traveling again. For one thing it makes you realize how much inflation there has been, despite what the government statisticians tell us. But I was even more shocked to discover that our local Walmart just doesn't sell many of the things it used to. The employees are surly. Apparently the space has been allocated to clothes, cheap household stuff, wider aisles, and other things that I don't care about.


In a year from now, after traveling and visiting more Walmart stores, I could be more confident that this isn't just anecdotal and impressionistic. The trouble is that I will gradually become used to the new Walmart, and will forget how much better it used to be.

Sigh. Over the years when Walmart kept getting bigger and better I used to wonder when Bigness would get the best of them. Everything reaches its limit, and then declines. This has been wondered at, before. In the final chapter of the abridged edition of Gibbon's Decline and Fall of the Roman Empire, we have:

The rise of a city which swelled into an empire may deserve, as a singular prodigy, the reflection of a philosophic mind. But the decline of Rome was the natural and inevitable effect of immoderate greatness. Prosperity ripened the principle of decay...

...the stupendous fabric yielded to the pressure of its own weight. The story of its ruin is simple and obvious; and instead of inquiring why the Roman empire was destroyed, we should rather be surprised that it had subsisted so long.
These words might apply to Walmart as well. How did Walmart become so big and successful for so many years, while its competitors just sat there? It is easy to believe that a remarkable founder of a company can get the "empire" off on the right foot. He is fanatically devoted to his work; his seriousness of purpose trickles down to the rest of the corporation. But it seems as though this effect would wear out rather soon, say, by the time there are three or four levels of management. How did it last so long at Walmart?

As a big company grows, it gradually fills up with mediocre managers who were taught the same things at the standard business schools; or the managers come from mediocre management cultures of different corporations. Eventually upper management is dominated by "financial engineers" who think that success is just a matter of juggling numbers and resources from one row of the spreadsheet to the next in order to obtain the best short-term results. Financial engineers have no real interest in the business, its products, employees, or customers. Gone is the fanatical Sense of Purpose that employees and management had in the early days.

Comments

Ted said…
Yes, WalMart had reduced their variety over the years. Then, in the past year or so, realized their error and now they're in the process of filling the stores with the proper amount of variety once more.

Or so I've read.
Anonymous said…
I think Boonie nailed it pretty well. Walmart's success is based on just a very few fundamentals, and I always thought that Sam Walton's Saturday morning sessions that were successfully replicated as Walmart grew was one of the key elements of their success.

It seems that they've floundered a bit, not always having the best price and the Dollar Stores have come in, selling in smaller quantities at reasonable prices has hurt as well.
Aldi's kicked their butt in Germany as well.

Tom in Orlando
Boonie said…
Ted, I hope you're right about Walmart starting to restock. They don't even sell Sterilite Ultra #1804 sliding storage boxes or all three sizes of Rubbermaid's Roughneck lidded boxes. My whole lifestyle was based on these two products!

Tom, I agree about the Dollar Stores coming up in the world. The are mini-Walmart replacements, to some extent.