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Yellowdog's avatar

Why did some of the early big-box retailers that were similar to Walmart, not make it -- when Walmart did?

Asked by Yellowdog (12216points) April 12th, 2020

If you are as old as me, you remember some big stores that were similar in many ways to Walmart and Target and even Kohls.

K-mart was around until fairly recently. I also remember Woolco, which was a brainchild of Woolworth— and The Treasury, which is an offspring of J.C. Penny—and Zayer, J.B. Hunter, and others.

Some of these stores, such as K-mart and Woolco, Zayer and The Treasury, were very similar to Walmart and some even were arranged/laid out in a similar fashion.

These early big-box retailers were way ahead of their time. They had more attractive buildings, and were similar in a lot of ways. So why did they fall by the wayside when Walmart became a mega empire?

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8 Answers

elbanditoroso's avatar

Size and distribution.

Most of the early ones were regional – Giant Tiger, Uncle Bills, even Zayres were not national. And the margins are so small (when you are having to stock 100K items or more) that regional sales aren’t enough.

WalMart and Target went national early.

Tropical_Willie's avatar

Walmart also instituted an inventory control system and integrated purchasing system that used the point of sale bar readers (at the cash registers) to send a notice to pull inventory or purchase more.

stanleybmanly's avatar

Walmart has more mass, but just as with the other mega stores, the writing’s on the wall. It is merely the last of the dinosaurs staring at looming extinction thanks to the internet. In 2019 Walmart closed down 23 of its stores, and this trend will only accelerate at the behest of AMAZON. Costco is another possible holdout, but the monster that was once Walmart is in for a struggle as the economics of brick and mortar retail succumb to internet efficiencies. Sears and Penney’s, Macy’s, all of the chains have been distinguished for the smell of imminent death for better than a decade now.

JLeslie's avatar

Meijer superstore was before Walmart, and still exists today. I’d venture to guess Meijer actually invented the idea not Walmart, but Walmart succeeded in expanding across larger portions of the US and eventually nationwide. Maybe Meijer never desired such a large expansion, I don’t know.

What differentiated Walmart from Kmart in my mind was Walmart also had groceries, the stores were larger because of it, so you could do one stop shopping. I think timing mattered too. The time in history. The first time I ever went in a Kmart I was in my late teens. There wasn’t one anywhere near my house in the two places I grew up. Same with Walmart, my first time was when I was in my mid 20’s! The places I lived had more local shops, and we were accustomed to shopping in them.

Target was a different customer. Target has more attractive stores than Walmart. Also, Target didn’t have grocery sections initially. I don’t think it has certain around the home things still. Does target sell guns, paint, and the breadth of inventory that Walmart does for camping? I don’t think so, but I might be wrong about that. Target went after the moderate department store shopper, but had a lot of items cheaper with some sacrifice to quality, but not drastic, eventually adding food to some stores. Target was more of the JC Penney customer I would say.

ARE_you_kidding_me's avatar

Walmart also negotiated (bullied) prices down and offered more variety than the others. The last Kmart closed here a few years ago. The few times we went I did not see anything I would buy. I also remember as a kid what Kmart carried was noticeably lower in quality that the other big box retailers. I remember Rose’s too, a few of those are still around, probably not much longer though.
Rural King is one I see popping up all over. It’s like your co-op meets Walmart.

Darth_Algar's avatar

Simple: adapt or die. They failed to adapt.

zenvelo's avatar

Walmart srtaed in Arkansas, and saw that serving areas that had no competition for it would capture the market. So Walmart avoided the expansion pattern of the more traditional chains like K Mart, they did not go into the suburbs. They went rural America.

The biggest footprint of Walmart in the 1980s was in the foyer country from Texas up to the Dakotas. We did not ge a Walmart in Northern California until the late 1990s, by then they were a behemoth.

The other strategy was cost control and using their purchasing power to undercut. Instead of store buyrers going to a vendor and buying, a vendor had to go to Benton Arkansas and give Walmart the best price. Walmart was ruthless in not carrying a product unless they got monopsony pricing.

Walmart is going head to head with amazon both in online retail and delivery, and also grocery delivery.

JLeslie's avatar

@ARE_you_kidding_me is right about the pricing. Walmart had a philosophy of making money by volume rather than high margins on a particular good.

Also, Walmart focused initially on rural America. Places that had nothing. They didn’t have big shopping malls, they had limited access to a lot of goods, because we didn’t have internet back when Walmart was building it’s brand. Brand recognition became very important as Walmart expanded. Great timing regarding the technology available at the time. Their buyers seemed very in tune with their customer.

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