Friday, February 22, 2008

Recession and Wal mart

I like the way Allen thinks.

Allen Questrom Q & A How does that affect a retailer like Wal-Mart?

Questrom: Wal-Mart benefits dramatically in a couple ways. One, there is nobody who has lower cost-of-operation, so if, as a customer, I’m pressed in terms of my own spending ability, I’m going to Wal-Mart. In addition to that, Wal-Mart has a very big presence in the food industry, and that part of the economy has gone up. Food prices have gone up I would say probably in the range of 4 to 6 percent, and Wal-Mart is enjoying big increases. When you’re looking at retailing and other retailers, most people think of Wal-Mart in terms of Target and Sears, but they usually don’t put Wal-Mart in the supermarket category. Wal-Mart has the biggest piece of the supermarket business, and all supermarkets have done quite well and are still doing quite well.