business news in context, analysis with attitude

• The New York Times this morning reports that Wal-Mart “doesn’t believe just in lower prices — it believes in lower property taxes, too. The big discount chain has sought to reduce the property taxes it pays on 35 percent of its stores and 40 percent of its distribution centers, according to a report to be released today by Good Jobs First, a group that is critical of Wal-Mart.” And, Wal-Mart wines the battle for lower taxes in half the cases that it files, according to the report.

Business Week reports that Wal-Mart is going back to its roots.

Chastened after various frustrating efforts to restyle itself as a retailer that could appeal to more affluent and urban consumers, Wal-Mart seems to have decided that it might make more sense to simply sell more and different stuff to its core shopper base.

The strategy, according to the magazine, is “based not just on price cuts, but on a more holistic approach with deeper and broader services aimed at its core customers. The latest offer is high-speed Internet access, a costly proposition in many remote corners of the country. On Oct. 9, Hughes Network Systems announced it will sell satellite broadband at Wal-Mart stores. The satellite broadband offering at 2,800 stores is just the latest in a litany of services the retail giant has rolled out this year … The Web initiative follows others—check-cashing for the ‘unbanked,’ inexpensive medical care at in-store clinics—in which Wal-Mart has boosted its services in a bid to regain customer allegiance.”
KC's View:
Key to whether this will work, it seems to me, will be whether Wal-Mart and the investor class accept the notion that these shifts will not change the company’s sales and profit numbers overnight. There is no magic bullet, especially when you are a company the size of Wal-Mart.

It is easy for me to say, but Wal-Mart has to stop worrying about hitting growth targets that simply may be unreasonable. It is time to make sure that its existing store fleet and personnel do a better job taking care of business.

This isn’t easy. I was chatting with a regional retailer this week who advertised on the Internet for a store manager, and fully one-third of the applications he got were from Wal-Mart store managers and department managers who told him that they were fed up with being micromanaged by Bentonville, and that the culture has changed – and not for the better – over the past few years.