Salad Days Are Over for Walmart. Now What?

Same-store sales at Target and Walmart just haven't been on track since gas prices increased. Image: CNBC via Strong Towns
Same-store sales at Target and Walmart have stagnated as gas gets more expensive. Image: CNBC via Strong Towns

The business model for big box stores like Walmart just doesn’t seem to be holding up quite like it did for so long. Wall Street analysts are suggesting some sweeping changes for the retail giant with the enormous parking lots. Chuck Marohn at Strong Towns points us to this snippet from CBS News:

The big-box discounter is in need of a bricks-and-mortar makeover, analysts said. To resonate with today’s shopper, Wal-Mart needs to move its stores closer to major population centers, shrink the square footage of its superstores and shutter about 100 underperforming U.S. locations, they suggest.

“High sustained transportation costs and broader consumables distribution appear to be reshaping consumer shopping behavior,” Credit Suisse analyst Michael Exstein said in a research note on Wednesday. “Wal-Mart and Target have been slow to react thus far, but we think the broader trend will call for the rollout of smaller ‘big boxes.’ “

So, what about all that public infrastructure and funding that got sunk into those outdated suburban big boxes? Marohn adds:

Unfortunately, the joke’s ultimately on us, or at least our local governments. The big box development model — build on cheap land on the edge of the community with taxpayers subsidizing your hard infrastructure/transportation costs, tilting the competitive landscape in your favor in the process — is designed to be transitory. These buildings are, unlike the miles of public pipe and asphalt that serve them, quite disposable…

I wonder if planners, engineers and economic development advocates will embrace public support of downtown, boutique Wal-Marts and the systems they need to thrive the way they did the big box model.

Elsewhere on the Network today: Greater Greater Washington explains why residents of Loudoun County, Virginia, don’t want their roads to be paved. Architect’s Newspaper carries the recommendations of a transportation expert on rising to meet the challenge of Houston’s rapid growth. And Rebuilding Place in the Urban Space lays out what could be a snow clearance agenda for advocates of safe, accessible city sidewalks in cities.

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