walmartThe Associated Press has a story on Wal-Mart’s decision to close a number of its stores. Mashable has chosen to run it with the headline “Amazon wins again as Walmart cuts 10,000 jobs and 269 stores all over the world.” But there actually doesn’t seem to be much in the story itself to support the alarmist headline. Even the story itself notes:

The stores being shuttered account for a fraction of the company’s 11,000 stores worldwide and less than 1% of its global revenue.

The closures aren’t exactly “all over the world,” either. More than half, 154, are in the US, and the rest are largely in South America, especially Brazil. Asbury Park Press has a list of exactly which US stores are closing. Most of them are the smaller-format Wal-Mart Express or Wal-Mart Neighborhood Market stores. Time pegs their failure on Wal-Mart’s unsuccessful attempt to replicate the supercenter shopping experience in a smaller store. Wal-Mart’s supply chain is optimized to support larger format stores, but the same strategies don’t work for mini-markets.

There’s nothing in that to indict Amazon, except perhaps indirectly. Amazon, after all, doesn’t have to worry about what kind of selection it can pack into a retail store, because it can sell you anything in its warehouses—and it can deliver its electronic goods, such as e-books, music, or movies, right away. Wal-Mart isn’t in the same position, and its own attempt to run a digital music store effectively fizzled. It’s probably just as well it never tried getting into e-books!

The reason Mashable chose to call out Amazon in the headline is, of course, that Amazon is seen as Wal-Mart’s chief competitor these days when it comes to carrying everything and selling at discount prices—so, when Wal-Mart “loses,” naturally Amazon has to “win.” It’s the same sort of thinking that accounts for big publishers and various interest groups associated with them being so scared of Amazon these days—Amazon is “winning,” therefore, they must be “losing.” Didn’t you know, commerce is a zero-sum game?

This kind of alarmist thinking really does explain a lot about the current publishing market, and perhaps other markets Amazon is involved in as well. Any time some company has any trouble, it’s second nature to look around for some convenient scapegoat. And the company that’s doing well in those markets is a natural fit.

The funny thing is, aside from the fact that most of the stores being closed weren’t of a format Wal-Mart was properly equipped to exploit, the store closures make up a little over 2% of Wal-Mart’s total global storefronts, and as stated, less than 1% of its global revenue. Wal-Mart could have closed that many stores at any time for any reason, even without Amazon—it’s just a statistical hiccup compared to its total infrastructure. But it’s something people can blame on Amazon, or at least call out Amazon for benefiting from.

This is the way it goes when a company is successful—everyone looks to blame their failures on it. And while it’s true some of those failures are its fault, not everyone who places blame is careful to sort just those bits out.

1 COMMENT

  1. You’re right that these stories say nothing about the competition between two very different retailers, Amazon and Walmart. They makes no more sense that claiming that when Amazon abandons a scheme it means that some competitor is winning. Every time I go in either of my local Walmarts, it is crowded. Walmart is simply dropping unprofitable stores or, in the case of those planned in D.C., abandoning a few that stood little chance of success. Like Amazon, Walmart didn’t become a retail giant by being stupid.

    Reporters do this all the time. Most stories are ho-hum, at best barely worth publishing or reading. To get attention they either hype (i.e. self-driving cars) or turn hysterical (i.e. global warming). In the end, they just look silly.

    In retail, nothing lasts forever. I recall the retail market when I was a kid. It was dominated in food by A&P and in most other consumer items by Sears. Now both are has-beens. A&P kept their stores small when everyone else was super-sizing. Sears adopted bad business ethics, thinking consumers wouldn’t find out. I abandoned it when I got bit by their deceptive advertising. As I walked back to my car, I promised myself I’d never buy from them again. That was the late 1970s. I haven’t.

    I’ve got numerous gripes with Amazon, as most Teleread visitors may know. My main gripe with Walmart is that their enormous stores rarely have the speciality items I’m looking for. I can find a dozen brands of laundry soap, all virtually the same. But I can’t find some sewing item I need to fix a coat even though it would take up only a few inches of shelf space. If an item doesn’t move fast enough, Walmart abandons it for something that moves faster. It doesn’t seem to realize that, if a customer doesn’t find something they need, they come less often. As a result, I only go there when I’m looking for an item I know they will have. And where I live, the competition is intense enough their prices are that impressive.