I have written on several occasions about my belief that bricks and mortar retailing is in bigger trouble than we know. Simply put, on line retailers like Amazon are growing at the expense of bricks and mortar retailers.
According to a piece by Douglas McIntyre in Daily Finance, Wal-Mart is hemorrhaging customers. Here is how he puts it:
A confidential memo obtained by Bloomberg reveals some big concerns at Walmart (WMT) — its U.S. sales, particularly at stores open at least a year, are in big trouble. "Those Wal-Mart stores had 82.8 million fewer visits through the first five months of the company's fiscal year than a year earlier, says the memo," Bloomberg reports.
Wal-Mart’s sales have been flat. That is certainly not the story at Amazon. According to a July 28, 2011 Retailing Today article, entitled “Walmart on Amazon alert as sales explode at online rival,” Amazon’s unique visitors are up three times those of Walmart.com. That’s not all; the same article points out that Amazon had an incredible 51% increase in sales during the second quarter.
As the article puts it: “The sales growth was broad based across geographies and categories, with worldwide electronics and other general merchandise sales growing the fastest at 69… Worldwide sales in the media category grew 27%…”
Wal-Mart will have to reverse these trends if it is to be able to maintain its brick and mortar infrastructure. If they don’t, look for store downsizings, closings and smaller new store footprints. As to Amazon, they just have to keep doing whatever they have been doing.