The Ledger
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Munger says Walmart made a terrible mistake letting Costco win wealthy suburbs
“So it offended them to go against the rich suburbs and to have to pay up for the good locations, and Costco just specialized in the good locations where the rich people live. And Walmart just let them do it year after year. It was a terrible mistake.”
Rosenthal: Walmart was the first applied technology company in America
“I still think that they were the first applied technology company in America.”
Walmart's relentless pricing pressure was a major contributor to offshoring US manufacturing
“Ultimately that leads to a couple of things that led to offshoring of American manufacturing. Walmart was a huge contributor.”
Walmart, not Amazon, was the primary cause of Sears and Kmart's collapse
“And I thought like, oh, well, duh, Amazon killed them all. No, Walmart killed them. There's no way that Kmart or God forbid Sears at that point could compete against Walmart.”
Gilbert: Amazon will inevitably surpass Walmart in total global revenue
“If you look at the gap that Amazon closed in total revenue since the time they were founded to Walmart, they're going to catch them.
No doubt about it.”
Costco is the largest buyer for most of its suppliers, ahead of Walmart
“For most if not all of their suppliers, they are by far the biggest buyer of their goods. Even bigger than Walmart, because they have so many fewer SKUs in the store.”
Walmart single-handedly created the modern retail wave that Amazon digitized
“Walmart was really the company that single-handedly created the wave of the modern store period, which then Amazon could take digital.”
Gilbert: Walmart should win same-day grocery delivery via Supercenters
“In my bull case, there's, they kind of should win same-day grocery delivery since they have these super centers everywhere.”
Walmart was arguably America's first corporation built around computing
“Reading the story is how much Walmart embraced technology and Sam embraced technology, and I think they were arguably the first corporation in America to embrace computing as a business paradigm.”
Walmart's partnership model is psychologically superior to modern tech stock options
“I actually think this is super brilliant. I was thinking about this with regard to tech companies today and everything. And like, even though employees of tech companies get much better economic deals with stock options, I think psychologically, this is a bett…”
Gilbert: Rural consumers want the same retail experience as urban shoppers
“It's that insight that people far out from cities want the same thing as people in cities, and so they're just as bright, they want the same things in life, they just happen to not live in cities, and so let's not be pejorative, let's serve them with high qual…”
Rosenthal: Amazon will soon pass Walmart in total revenue
“The only larger one being Walmart, which Amazon will almost assuredly pass very soon.”
Costco pays an average hourly wage of $26 versus Walmart's $19.50
“Costco's average hourly wage is 26 dollars, and Walmart's is nineteen-fifty.”
Costco generates approximately ten times more revenue per SKU than Walmart
“The average revenue per product, because of the SKU count, at Costco is about 10 times Walmart.”
Costco generates $1,800 per square foot versus Walmart's $600 and Target's $450
“Target's about 450 dollars per square foot of revenue. Walmart's about 600 dollars. Costco is 1800 dollars per square foot of revenue.”
92% of Costco's merchandise is cross-docked compared to 10% for Walmart
“92% of Costco's merchandise is cross-stocked. Only 10% of Walmart has cross-stocked merchandise on a pallet system like this.”
Gilbert: Amazon counter-positioned against brick-and-mortar retail distribution models
“There's counter-positioning in the era that we're talking about, Barnes & Noble, and subsequently Walmart, because those folks would have to invest so much and did, well Walmart did at least, to completely reinvent the way that they do distribution and all the…”
Rosenthal: Walmart's 1998 Amazon trade-secret lawsuit settled with no damages
“In late 1998, Walmart sues Amazon for trying to steal trade secrets. The case settles with no damages, but there was damage. It happened. That DNA came right out of Walmart and right into Amazon.”
Rosenthal: Walmart ended handgun sales in 1990s and assault rifles in 2015
“They stopped selling handguns in the nineties. And now after the shooting in the store, they don't sell guns to people under 21. In 2015, they stopped selling assault rifles.”
Walmart controls over 20% of the US grocery market
“So Walmart has over 20% market share of us groceries. Kroger has under 10% and then Albertsons and Costco are tied at five percent each.”
Rosenthal: Walmart connects the Rockefeller industrial era to Amazon's tech era
“Sam and the Walmart story is like the bridge between the business America that was John Rockefeller and Standard Oil and Amazon and Jeff Bezos. Like, this is the connective bridge between those two realities.”
Rosenthal: Grocery accounts for 55% and over $300B of Walmart revenue
“In the last most recent fiscal year, grocery accounted for 55% of Walmart's total revenue, which is over three hundred billion dollars alone just from grocery.”
Rosenthal: Walmart is the single best example of scale economies
“Hamilton uses Netflix in the book, which is another great example, but this is the single best example of scale economies in the world. They can price lower because they have the power of scale and the distribution and logistics network and the operations that…”
The Walton family retains over 50% ownership of Walmart 60 years later
“It is still controlled by the Walton family, who owns just over 50% of the business a full 60 years after it was founded.”
Gilbert: Price competitors must ruthlessly refuse to absorb supplier inefficiencies
“If you're gonna compete on price, you must avoid buying anyone else's inefficiency at all costs, and it means having often very contentious relationships with your suppliers.”
Mauboussin: Walmart Had Negative Free Cash Flow for Its First 15 Years
“Walmart for the first 15 years that it was public had negative free cashflow for each of those years. Walmart was profitable on the income statement, but they were investing like crazy.”
Rosenthal: Trader Joe's stores average 15,000 square feet versus Walmart's 150,000
“Trader Joe's today average about, call it 15 thousand-ish, maybe a little less square feet per store. The average supermarket is like 50,000 square feet, and the average Walmart is like a 150,000 square feet.”
Ben Gilbert: Apple and Tiffany lead retail with $5,500 and $3,000 sales per foot
“Costco is 1800 dollars a foot. They are trying to maximize their dollar per foot. Walmart is about 600. Target is about 450 dollars. And then these, like, crazy businesses, just to compare it to the all-time greatest, Tiffany is 3000 dollars a foot for jewelry…”
Costco turns its inventory 12.4 times yearly compared to Walmart's 8
“Costco actually turns their inventory 12.4 times per year. And just for comparison, Walmart turns their inventory eight times per year. Home Depot is more like five times per year.”
Walmart and Kmart carried around 50,000 SKUs during Price Club's launch
“So at the time, Walmarts and Kmarts had on the order of about 50,000 SKUs and even FedMart had Probably close to that many at the time.”
Costco is the third-largest retailer in the US behind Amazon and Walmart
“And you're the third biggest player in the largest market, you know, America, behind Amazon and Walmart.”
The typical Costco shopper earns $125,000, roughly 70% above the US median
“There was an independent research firm that found that the typical Costco consumer makes about a 125,000 dollars a year in household income and has a four-year degree. Walmart, by comparison, has a median income of about 80,000 dollars. And keep in mind, the m…”
Khosrowshahi: Walmart uses Uber's fulfillment services without joining its marketplace
“So for example, Walmart, Isn't in our marketplace because they're Walmart, they have an incredible brand, et cetera, but they use our fulfillment services”
Linkabit's First Commercial Project Was Walmart's Satellite Network
“Linkovitz first project is doing the satellite communication system.
For Walmart.”
Gilbert: Walmart ran private satellite network for 12 years by 1997
“At this point, they had been the largest computerized logistics distribution company in the world and operated their own private satellite network to communicate amongst all their stores and had been doing that for a dozen years.”
Rosenthal: Amazon pitched running Walmart's website, but Walmart declined
“They even go pitch the idea to Walmart to do the same thing with Walmart. Walmart is they're like, Yeah. No, thanks guys. No, nice try.”
Rosenthal: Walton Enterprises partnership structure prevented unilateral stock sales and takeovers
“And this is why, because the family were all partners in Walton Enterprises. They couldn't just sell their stock. The partnership, the family as a whole had to decide to sell, and that allowed them to keep majority control of Walmart all through the history.”
Rosenthal: Walmart is the largest US commercial producer of solar power
“So like Walmart, I think is now the largest U S commercial producer of solar power.”
Early Walmart managers held equity in their own and their peers' stores
“And remember all these managers were equity owners in their own stores and in most cases in the stores of all the other managers too.”
Gilbert: Walmart reached Washington in 1993, one year before Amazon was founded
“The first store opened in Washington in 1993 and Amazon was founded in 1994.”
Gilbert: Walmart's playbook relies on rapid small-scale experimentation and scaling
“So much of Walmart is trying something, doing an experiment, watching it fail on some small scale, choosing not to roll it out, or watching it succeed, and then choosing to rapidly roll it out across as many stores as possible.”
Rosenthal: Home Depot modeled its employee stock purchase program on Walmart's
“Home Depot modeled their employee stock program purchase program after Walmart's, and it's brilliant. It's the same thing. You put up your own money, but you can do it pre-tax dollars out of your paycheck at a 15% discount to the stock price.”
US e-commerce retailers two through nine combined trail Amazon by 50%
“If you add up two through nine in e-commerce, and Walmart is second place to Amazon, it is still not equivalent to Amazon's total sales in a year. And in fact, I think it's something like two through nine added together are still 50% shy of Amazon's e-commerce…”
The Waltons are the world's wealthiest family with multi-hundred-billion-dollar net worth
“The Walton family goes on to be the wealthiest family in the world. All of Sam's future generations are worth a few hundred billion dollars, depending on the day that you look at Walmart's market cap, since it's nearly all invested in Walmart, but it's a multi…”
Gilbert: Kmart operated at a much larger scale than Walmart for a long time
“I didn't realize that Kmart for a very long time was much, much larger than Walmart. They were kind of Walmart's big brother incumbent.”
Rosenthal: Walmart Supercenter grocery prices are on average 15% cheaper
“So most items by and large, on average, across the board, the grocery items in a Walmart super center are 15% cheaper than a comparable grocery store, which if you're like a middle or lower income family, that's hundreds of dollars a month that you're saving, …”