The announcement that Wal-Mart Stores Inc would begin accepting the cryptocurrency, Litecoin, sent the bitcoin-like token’s price shooting up. The crypto’s value skyrocketed from $3.69 to $33, due to the news. Although the program to which Wal-Mart announced the new program will begin in select markets soon, including, the US, Wal-Mart has announced that it hopes to roll out the program worldwide in the future.
Wal-Mart’s stock is in trouble. At this moment, the Dow Jones industrial average, has lost nearly 3,000 points since December, reflecting investor unease with its increasing costs and slow growth. It is no surprise that hedge funds are beginning to bet on the company falling, so they can capitalize on its drop. This means that the shareholders of Wal-Mart will have to pay higher prices to buy Wal-Mart stock, because higher prices will increase the value of hedge funds’ bets.
Wal-Mart celebrates its bicentennial in style by making workers work an extra eight hours Read more
To escape from this problem, Wal-Mart plans to increase the number of suppliers that make consumer products with cheap labor costs. For example, Wal-Mart introduced a program to encourage brands to bring their production facilities to Mexico. In a recent report, the New York Times describes the massive food and apparel factory complex that has appeared in Juarez, Mexico, bringing thousands of workers to work. Once the factories opened up there, the owners got new workers, these factories’ costs plummeted, and Wal-Mart was able to offer deals to sell clothes and food in its stores.
Wal-Mart has also grown by acquiring smaller food and drug stores. “Wal-Mart is turning small stores into small businesses,” wrote Morningstar analyst R.J. Hottovy. According to Hottovy, Wal-Mart is acquiring more than 40,000 locations that cater to lower-income customers, who tend to spend money more slowly. By acquiring them, Wal-Mart can compete in the grocery market, and offer low prices.
Wal-Mart executives and investors are betting that that those food and drug stores, which go under the name of Neighborhood Market or “Dollar” store, will attract lower-income customers, who typically spend more money than wealthier shoppers. Hottovy notes that the target customer for these stores is “very much reliant on the access to public transportation, such as public transportation and bus services. This is a large population that still requires public transportation to get to these locations. So, in terms of the retail profits, it would make very little sense for them to pull the plug on these sales locations.”
From 2016 to 2018, Whole Foods operated 105 stores, which sell groceries only. They focus primarily on selling organic products – which Wal-Mart also sells – and have recently opened their first location in New York City. It is anticipated that the locations will open in more cities, similar to Wal-Mart’s plans.
Wal-Mart’s target customers and its grocery stores are not consumer friendly at all. Those priced below $600 for food and $100 for goods – which is what Wal-Mart considers low-income – are still forced to stand in lines at their local grocery stores waiting for the employees to line up their check out. When those customers get into the front door, they try to browse through the merchandise, to go home and forget about it for several days.
Like all retail companies, Wal-Mart has an investment section, where customers can learn about the products sold. Some of those products, such as music CDs, are so old that they are no longer available from its stores. This is due to the rise of streaming services such as Spotify and Amazon Prime Music, which can play a song for free, without ever requiring the customer to pay.
Even with Wal-Mart’s expansion plans, it is unlikely that it will ever be able to offer everything that consumers want. Wal-Mart would like to reduce the time that it takes to browse through products, and connect them with the products. Most likely, this means that it would stop stocking some of its products, including CDs, DVDs, and baby items.
For this reason, it is likely that they will aim to increase the stock price of its stock by selling some of the products that it sells. Wal-Mart customers would like to see lower prices, and if the company is successful, they will buy more goods and stock up on those goods. But investors will not. Investors are what keep Wal-Mart’s stock price high. If investors lose confidence in the company, then the stock price will decline.