The End of an Era at Walmart
(MENAFN- ProactiveInvestors - UK) Fuller Treacy Money Fri
The End of an Era at Walmart
Here is the opening of this article from Bloomberg Gadfly:
Not every milestone is worth celebrating.
For the first time ever -- or at least since the company went public some 45 years ago -- Walmart's revenues shrank from the year before according to its annual financial filing released Wednesday.
Walmart is clearly having trouble adapting its gigantic stores to the Internet age. To be sure it is a retail juggernaut that brings in half a trillion dollars (yes that's right trillion) in sales every year. And with more than 11500 stores in 28 countries there's no way it will disappear anytime soon.
Still Walmart might have just hit its growth limit.
A New Low For Walmart
Walmart's annual sales in 2015 shrank for the first time since it went public 45 years ago.
And the sales dip comes despite the fact that Walmart spent $11.5 billion (roughly matching what J.C. Penney made in sales last year) to build more than 400 new stores remodel old locations and revamp its website and other technology to better serve its customers.
Though Walmart shares were a safe haven in the rocky start of 2016 investors are pricing in more weakness. The stock has fallen behind retail competitors and the broader market.
In February Walmart lowered its annual net sales growth forecast to "relatively flat" from earlier guidance that called for an increase of as much as 4 percent (the company has pointed out that previous guidance didn't account for currency changes which have stung the global retailer).
David Fuller's view
Personally I don't like huge stores. They remind me of casinos in that it can be difficult to find your way out.
However Walmart's 45 years before a downturn in sales is amazing in the incredibly competitive retail sector. All of Walmart's management skills will be required I suspect to prevent further downturns in this not only competitive but also disruptive environment led by Amazon.
I do not doubt that Walmart will maintain a competitive online system but will most of their customers be comfortable shopping online? Also will active online shoppers turn to Walmart?
Note: for additional market comments please listen to the Audio.
Great Leap Upward: Behind China $100 Billion Shopping Spree
Here is an early section of this informative article from Bloomberg:
Chinese firms have announced $113 billion in overseas deals since the start of the year led by China National Chemical Corp.'s $46 billion takeover of Syngenta AG a worldwide player in pesticides and genetically-modified seeds. That tops the total of all deals in 2014 and is close to last year's record $121 billion tally.
The shopping spree reflects an effort by President Xi Jinping's government to encourage Chinese companies to gain know-how and market share through foreign transactions as the country's $10.4 trillion economy continues to decelerate. It's a potential boon for investment bankers -- and a source of worry for corporate chieftains in the U.S. and Europe who may soon face new Chinese competitors.
'What we're seeing is the coming-of-age of corporate China. It's being driven by a deliberate strategy to invest in the needs of the growing Chinese middle class and to acquire additional expertise' said Hernan Cristerna the global co-head of mergers and acquisitions at JPMorgan Chase & Co. 'There's a real opportunity for China to emerge as a partner of choice all over the world if acquirers prove themselves to be responsible constructive owners.'
Hardly a week passes without news of another Chinese cross-border deal. On March 22 Bang & Olufsen A/S the maker of luxury electronics including $31000 flat-screen TVs announced talks to be bought by the Chinese businessman who controls luxury-car dealer Sparkle Roll Group Ltd.
The Chinese government has been encouraging the acquisitions either through direct involvement with government-controlled companies or increased levels of financing from state-owned banks. The nation's cabinet has made at least a dozen official pronouncements encouraging foreign deals since the beginning of last year.
David Fuller's view
This form of international capitalism albeit with a demand element from the Chinese government behind it would have been unthinkable thirty-five to fifty years ago. I think it is another example of exceptionally good news for the long-term outlook of global economic growth although it may not be generally perceived that way for some time.
That is because we are living through a very interesting but also highly disruptive period of global economic development. Accelerated technological innovation is creating new materials and products often faster than they can be readily and profitable utilised. It is empowering many more companies and individuals while also creating rapid obsolescence for businesses and also people who find themselves unable to adapt sufficiently quickly.
Over the longer term global GDP growth will benefit considerably from the capitalistic economic policies of most countries in multinational market places catering to the world's growing middle classes. This environment is highly competitive but globalisation ensures that positive opportunities are increasing faster than they are decreasing.
Globalisation also reduces risks of serious military conflicts between leading nations. This has not always happened previously. There is far more to gain from multinational commerce than another world war. The latter could only reverse economic progress and wipe out many of the best and brightest as it has always done in previous centuries.
Five Ways Republican Bloodbath Could End
Here is the opening of this assessment by Anthony Zurcher for BBC News:
Donald Trump has a commanding lead in the race for the Republican presidential nomination and is the only candidate with a realistic shot of clinching the prize without a convention fight.
Still his path to the magic number of 1237 delegates is a narrow one that requires victories in winner-take-all states like Delaware and New Jersey and strong showings in delegate-rich states like California New York Indiana and Pennsylvania.
For Mr Trump to secure the nomination he'll have to win 53% of the remaining delegates. That number rises to 56% if he is convincingly beaten in Wisconsin on Tuesday.
He could fall slightly short of that number and still cross the finish line before the Republican convention's opening gavel if he can pick up the support of enough of the hundred-plus unpledged delegates which include those from candidates who already dropped out or from states that don't holding nominating contests as well as party officials.
If Mr Trump continues to see his head-to-head match-up numbers against potential Democratic candidates tank while he is buffeted by controversies and conflagrations however such a consolidation of support grows less likely.
David Fuller's view
'Democracy is the worst form of Government except for all the others.'
Attributed to Winston Churchill
Here is another of several Churchill quotes on democracy:
'How is that word 'democracy' to be interpreted? My idea of it is that the plain humble common man just the ordinary man who keeps a wife and family who goes off to fight for his country when it is in trouble goes to the poll at the appropriate time and puts his cross on the ballot paper showing the candidate he wishes to be elected to Parliamentthat he is the foundation of democracy. And it is also essential to this foundation that this man or woman should do this without fear and without any form of intimidation or victimization. He marks his ballot paper in strict secrecy and then elected representatives and together decide what government or even in times of stress what form of government they wish to have in their country. If that is democracy I salute it. I espouse it. I would work for it.' House of Commons 8 December 1944
Erdogan Attempt to Suppress German Satire Has the Opposite Effect
Here is the opening of Melissa Eddy's report published by The New York Times:
BERLIN If President Recep Tayyip Erdogan of Turkey had hoped that summoning the German ambassador would get a video poking fun at him by a German satire program removed from the Internet he was wrong.
Instead the move had any number of consequences including provoking a diplomatic dust-up with Germany and a fresh round of ridicule of Mr. Erdogan for playing to type.
After all the video by the comedy show 'extra3' was a song satirizing the Turkish president as a thin-skinned authoritarian who cracks down on journalists the news media and opponents he does not like.
Not least Mr. Erdogan's move spurred a surge of online interest in the video which by Thursday had attracted more than four million views tenfold the program's usual audience.
David Fuller's view
Recep Tayyip Erdogan has betrayed Mustafa Kemal Ataturk's vision of democracy for Turkey.
Thomas L Friedman: When the Necessary Is Impossible
Here is the opening of this sobering column by Friedman published by The New York Times:
Sulaimaniya Iraq Being back in Iraq after two years' absence has helped me to put my finger on the central question bedeviling U.S. foreign policy in the Middle East today: What do you do when the necessary is impossible but the impossible is impossible to ignore and your key allies are also impossible?
Crushing the Islamic State or ISIS is necessary for stabilizing Iraq and Syria but it is impossible as long as Shiites and Sunnis there refuse to truly share power and yet ignoring the ISIS cancer and its ability to metastasize is impossible as well. See: Belgium.
And if all that isn't impossible enough our trying to make Iraq safe for democracy is requiring us to turn a blind eye to the fact that our most important NATO 'ally' in the region Turkey is being converted from a democracy into a dictatorship by its president Recep Tayyip Erdogan who should now be called 'Sultan Erdogan' for the way he is closing opposition newspapers and putting journalists on trial. But because we need Turkey's air bases and cooperation to foster a modicum of democracy in Iraq tomorrow we are silent on Erdogan destroying democracy in Turkey today. Go figure.
And to think that in America we have all these people competing to become president to get a chance to take responsibility for this problem! Has no one told them this is absolutely the worst time in 70 years to be managing U.S. foreign policy?
Obama has my sympathies. If you think there is a simple answer to this problem you ought to come out here for a week. Just trying to figure out the differences among the Kurdish parties and militias in Syria and Iraq the Y.P.G. P.Y.D. P.U.K. K.D.P. and P.K.K. took me a day.
Let's go back to the future of Iraq. 'The problem in Iraq is not ISIS' Najmaldin Karim the wise governor of Kirkuk Province which is partly occupied by ISIS remarked to me. 'ISIS is the symptom of mismanagement and sectarianism.' So even if ISIS is evicted from its stronghold in Mosul he noted if the infighting and mismanagement in Baghdad and sectarian tensions between Shiites and Sunnis are not diffused 'the situation in Iraq could be even worse after' ISIS is toppled.
David Fuller's view
Thank heavens for technology which is greatly diminishing our dependence on Middle Eastern oil. Much of this troubled region is destroying itself and if it had happened a little more than a decade earlier the potential consequences for the global economy would have been much worse.
Fuller Treacy Money