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Re: Lowes and Home Depot
Old 08-25-2006, 06:33 PM   #21
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Re: Lowes and Home Depot

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Originally Posted by lazyday
How do you think the markets or models have changed on WalMart or Lowes, in ways they haven't yet adapted to?
I've been watching Wal-Mart get the crap beat out of their attempt to export American merchandise & business practices in Germany and Japan. Back home, they're heavily pressured by the unions and legislated against by the communities (for example in Kapolei) and struggling to adapt from fast growth to incremental efficiency gains. Heck, retail sucks so badly that they're entering banking & healthcare!

Lowes and Home Depot are both going to get hurt in the housing downturn. When the new homes stop going up, they'll stop selling plants & yard equipment and kitchen improvements to millions of new homeowners. When the contractors aren't building those thousands of new homes, they'll be fighting each other for the smaller jobs and chewing away at the home-improvement store's margins.

I'm not saying that both industries are dead, only that they've reached the end of the hockey stick for growth and are contemplating the grim futures of commodity businesses with nowhere left to expand. It's hard to make their stocks look as attractive as other large-caps paying 2-3% dividends.

I know Lowes stores vary all over the bell curve, but I watched them take over a local chain (Eagle Hardware), drive off all the employees who actually knew anything or gave a darn, and spend untold sums reorganizing the store to make sure that the rest of us couldn't find anything. Then they had to raise prices to improve margins, but they couldn't figure out why no one wanted to shop there anymore.

Luckily Nardelli is busy saving Lowes from a grim fate... as long as he doesn't take Home Depot down with him!
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Re: Lowes and Home Depot
Old 08-25-2006, 06:49 PM   #22
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Re: Lowes and Home Depot

im in the electrical distribution business...we had a home depot open in a shopping center across the street,,..we thought they would hurt us bad.....actually the brought tons of traffic to the area and while they carried maybe 2500 electrical items we carried 16,000..........business was fabulous for us....with their limited knowledge and lines customers flocked to us for the higher margin more technical items.....
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Re: Lowes and Home Depot
Old 08-26-2006, 10:07 AM   #23
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Re: Lowes and Home Depot

I think WMT has room for growth.

They still have under 50% share in U.S. for their main biz, don't they? (I haven't checked recently)

And, they could always expand into midscale or upscale like Whole Foods' business for example, or as you say banking, healthcare, insurance, the world.

Or perhaps it would be better to slow down the investment a little, and turn into a big profitable cash cow?
Their growth numbers aren't that bad even without reaching into new markets.

Some of the overseas ventures were unfortunate. If expansion is necessary, I'd have thought would make more sense in U.S. where may have cannibalism to control, but already have infrastructure in place.

For example, as a consumer, I'd love to see WMT offer an alternative to Holier-Than-Thou Whole Foods, which pretends to be a health food store, but sells overpriced, saturated fat packed, high calorie, often poor nutrition, ofen overly processed foods, from some of the same manufacturers that supply to Walmart. And they don't do as good a job of keeping their stock fresh!
I actually think it's already easier to eat healthy on $100 at Walmart than $150 at Whole Foods. (Though with unlimited funds, you would be able to eat healthier at Whole Foods. Today...)

It could be hard for WMT to do the marketing job on customers that Whole Foods has though.

Or is that even needed? Maybe enough people are pragmatic, that they don't have to believe the company is some great fluffy do-gooder? They just have to care about the health of their family and pocketbook.

(wow, I hijacked my own post)
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Re: Lowes and Home Depot
Old 08-26-2006, 02:32 PM   #24
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Re: Lowes and Home Depot

I think WMT is in for a world of hurt when (not if) China allows the Yuan to appreciate against the USD.
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Re: Lowes and Home Depot
Old 08-26-2006, 02:45 PM   #25
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Re: Lowes and Home Depot

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Originally Posted by brewer12345
I think WMT is in for a world of hurt when (not if) China allows the Yuan to appreciate against the USD.
Along those lines, I'd like to know more about Wal-Mart's sale of McLane to Berkshire Hathaway a few years back. I suspect there were more problems at Wal-Mart than appeared in the press releases, and I wonder if McLane is still doing as much business with Wal-Mart...
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