Thread regarding Walmart layoffs

If the guy from Loupe Ventures is right and Amazon acquires Target, they'll have food and consumables. Too, think of the goldmine they will have with Target's CEO, who was on the inside at Walmart/Sams. Plus, he's a longtime CPG guy with a PepsiCo pedigree, dude gets it when it comes to CPG. His insights would be unbelievably helpful to Amazon.

Target has needed help in the food category, they're working on shoring that business up, and working with Amazon could provide the extra focus to make it stronger. Sometimes the greatest learning comes when one is teaching.

Walmart US IS the company’s cash cow. It’s where most of the profit dollars come from. Read the financial releases. It’s plain to see in black and white.

The problem is they are about to strangle the golden goose. It feels like they are strip mining that portion of the company in order to fund their ecommerce goals.

Walmart has a big problem, too. It is too structurally bloated to be efficient at store level. Those mega boxes just cost more to operate. Walmart will never be able to have an SG&A as cheap as Aldi. And anymore Walmart’s softlines and general merchandise areas aren’t what they used to be. The quality of merchandise in those areas just isn’t good in my opinion. I also have to believe that the neighborhood markets took traffic out of the super centers, which would make any margin mix problem worse.

Flip over to Amazon. Jeff Bezos learned from Sam Walton. Instead of mixing his margins out with apparel and general merchandise, Bezos uses Amazon Web Services.

Now think ahead. Amazon has a huge network of warehouses built all over the country to service its ecommerce business. But what if it figured out the grocery and consumables business? And then what if it built that out? They can use AWS to keep prices low. They already have an efficient logistics network. And they can augment that with a best in class online endless aisle that can have products to your door in two days.

If I were Jeff Bezos, I would get serious about figuring out food and consumables in store by using Whole Foods as my testing ground. Right now it’s like he’s got a Walmart killer missile in the bazooka that he just hasn’t bothered to inspect it closely yet.

If Bezos ever does more than try to dabble in food and consumables, I think Walmart is in a heap of trouble.

Samsclub.com is a night mare. We had all sorts of gift cards brought in that could not be activated. So much trouble with returns being credited back to credit cards. Makes me not want to ever place an online order with Sams Club.

WM US is the company cash cow but that’s starting to get strained. I’ve seen what I consider to be some shady business practices go down lately to fund margin goals.

That cow is about tapped out. Top leadership doesn’t want to hear it though. They are going to be angry when they realize they can’t keep funding the ecommerce spending spree.

Also WM will never compete with AWS. They can’t even get their own website to work. And half the internal systems are constantly breaking. It’s a mess.

The WMT US Division is Walmart’s Cash Cow. The financial statements clearly demonstrate this, and the Division delivers the lion’s share of the company’s operating profit $. With WMT’s EDLP/EDLC business model, operating margins should be thin, and are. Additionally, the effort to adjust payment terms via vendor negotiations in WMT US in FY17 improved working capital performance, and helped fund the Jet.com acquisition. This is clearly demostrated in the FY17 results.

FY18 Q3 YTD Cash Flow from Operations declines are due to expense payment timing and higher bonus payouts versus the prior year. WMT is also lapping the working capital improvements from FY17 this year.

@jzq Walmart US isn’t a cash cow, it’s razor thin margins like the rest of retail. Look at free cash flow downward movement over past quarters. Amazon can afford a price war, we can’t.

@jzq maybe I misread your reply but I don’t think OP meant literally develop a cloud computing solution. More that WM needs a non-retail income stream. Maybe they build/acquire a great ad network, or a great ecommerce/account security fraud detection model, first and best cashier-less tech that can be licensed to other stores. Something B2B, that deep-pockets companies will shell out for.

Walmart already has a cash cow. It is the Walmart US Division.

I don’t believe Walmart is in a good position to build an AWS business. Amazon is at it’s core a technology company that enables ecommerce. Walmart is a retail business that leverages technology. Additionally, WMT does not have a B2B selling capability in the enterprise in the technology space, and the WMT ways of working would probably place restrictions on interactions with potential customers. An AWS business is also a departure from the current set of strategic choices and will divert capital from current efforts that are not fully realized. Additionally, a cloud computing business places Walmart in direct competition with several of the organization’s strategic IT vendors.

Yes, wmt can’t compete effectively with amazon without a cash cow. Aws has allowed amazon to trade like a tech company, it doesn’t need to be profitable to sell its stock. No retailer can compete with amazon while they have aws profits propping up their retail sector. Going to result in a race to the bottom. As a non tech company wmt needs to keep its figures up to sell stock thus we will forever be cutting sga and obsessing over margin.