It seems that same store sales have dropped in Wal-Mart. Quoting here: "One gripe is Wal-Mart's unslakeable thirst for growth. It has 4,022 shops in America. More than half of all Americans live within a ten-minute drive of one of its stores. … Yet Wal-Mart continues to open stores at the same pace despite this saturation. That leaves new shops cannibalising sales at old ones and falling sales per square foot."
From an agility theory perspective, this is an example of a lack of agility in reconfigurability. Agile reconfigurability is the products and services produced and continuously delivered without wholesale business changes in business delivery. Decision analytics might help with WalMart's placement of stores. As populations in areas grow, Wal-Mart's strategy has been a continuous growth of stores and floor space. I would image that this is a metric somewhere in the corporate focus. There are economic and gaming-theory analysis that optimize store placement in a consumer service area. For this press criticism there are three possibilities:
- The analysis is not done, which is difficult to believe given Wal-Mart's remarkable history of using data for business intelligence.
- The analysis was done; however, the results were ignored by managers. This could be an example of Bower and Gilbert's "How Managers' Everyday Decisions Create or Destroy Your Company's Strategy" circumstance described in the last Harvard Business Review (February 2007).
- Wal-Mart knows something we do not know. My partner Peter Skangos wondered if Wal-Mart was adopting a Star Bucks strategy of placing stores on every corner. This is a possibility, yet the company has not advanced this.
War-Mart continues to report falling same-store sales.
If you are wondering what the word unslakeable means, then look here . One reason I love the writers at the economist is the verve of their words (especially adjectives).