To say that Walmart is “just too big” is like saying that Apple or InBev are “just too big.” Scale matters, but so does the execution of a successful strategy. It’s ironic that yesterday’s stock-price meltdown is caused by the rollout of the very strategy that Walmart investors have been asking for: Cleaner stores, better customer service and a more robust omnichannel model.

Long-term investors need to judge Walmart not on the results in a given quarter (when most general merchandise chains are lagging) but on the outcomes of investment spending in three to five years. Judge Walmart by its long-term market share gains and operating efficiencies, not by yesterday’s news.

Like many other stocks with a solid brand name, such as McDonald’s, Harley-Davidson and Whole Foods, it was Walmart’s turn to get back to reality. Walmart is fine, they just needed to return to a fair and normal level.

I think this is exactly right: “There is no way they can continue to grow, they are just too big,” Ivan Feinseth, chief investment officer at Tigress Financial Partners, told Bloomberg. “They do $500 billion worth of revenue how are you going to grow that?”

I don’t understand why companies continue to proceed as though markets are infinite. They’re just not. And Walmart has shoehorned, forced, slithered and rejoiced its way into every city and hamlet that is willing to have it.

Plus, I am not sure Millennials are all that enamored with über-big box stores.

And finally, the more food a retailer sells, the lower its earnings as a percentage of sales are going to be.

None of this is rocket science. The street is right, Walmart is in denial.

I think they do. This statement stands out as reflecting how Walmart will differentiate itself in the retail landscape:

“We will be the first to build a seamless customer experience at scale to save our customers not only money but also time.”

That’s not hyperbole. I heard a representative from Walmart’s data science organization earlier this year speak at conference, saying their mission was to remove the cognitive load off of their shoppers to make it as easy as possible to make a purchase. Walmart’s application of analytics to its treasure trove of consumer and shopper data should help the company differentiate its customer experience and grow no matter what Wall Street thinks in my view. Market share is up for grabs.

Sometimes you have to take a step back before you move forward again. If you look at the history of companies, those that just keep doing the same thing (especially in retail) because they fear that in the short-term they will lose money, in the long-term fail. They failed to change their practices and more important they failed to make investments that pay out over the long-term.

Walmart’s growth in their core U.S. business is finished. An annualized 2 percent growth would be astounding. They must grow in online, they must grow internationally. That is where the markets are. It also takes investment and it also takes time.

Sometimes Wall Street amazes me on how much they don’t understand about companies.

I like what Paula had to say. Some companies get so big there is limited forward movement they can make. In this case, the Street is bringing Walmart back to a more realistic position in today’s scheme of things.

While The Street’s expectations that Walmart will continually be able to grow at the pace it has in the past is pure fantasy, there are other elements of their business that investors should be concerned about.

First, market saturation. The thirst for big discount stores is evaporating as markets are overloaded with retail footprints from Costco, Target, Meijer and others. Secondly, Walmart’s once highly-touted distribution system is rapidly becoming antiquated. Inventory costs, out-of-stocks and improvement in distribution practices of both their traditional and new online competitors continue to loom large. The advantage they once had in this area is turning into a liability.

Finally, many of the new stated goals of the company are heavily dependent upon improving the quality of their store associates in terms of product knowledge, customer engagement and e-commerce expertise. It remains to be seen if Walmart can weather the financial impact of investing in and training people without significantly impacting their profitability.

Walmart has not grown too big. And who didn’t see a drop in profits coming with the wage increases they announced? Yes, worse than they expected but Wall Street probably over-reacted. I believe they have plenty of room to grow, both their U.S. business as well as internationally.

I like what David said. A lot of big companies are going through the cycle where they have to re-evaluate how to continue to do business. You hope after the re-evaulation that the investments made will translate into increased sales. Walmart is not down and out, they have to find a way to steer the ship and make small course changes to get back on the right path.

How much bigger does Walmart need to get?

Walmart is doing many things right, and in ways that others aren’t, including investing in its stores even as it plows ahead with digital innovation. Walmart is playing an expensive long game that won’t always cheer Wall Street. Even so, Walmart does seem to have gotten a bit too literal about its business as of late. Lots of block and tackle “things” going on but without an overarching vision to frame and guide them (“Save money, live better” doesn’t fulfill that tall order). Vision matters.

There are so many resourced and influences within Walmart’s control that it’s hard to imagine the company not growing. The biggest risk would be if those in management begins to feel that they are in good place and stop innovating and embracing change. It looks like that’s not the case, however.

While many are of the opinion that investment and market economy analysts a depend largely on crystal balls, tarot cards and tea leaves to make judgment, this simply is not the case. These men and women apply a proven set of principles and formulas to the returns on investments, profit dollars, cash flow, long term debt market health, money supply and so on and so forth. The information result derived from this testing is then open to speculation for investors of all sizes and with or without the needed experience and expertise to us it successfully. In short, surprises are few and far between from retrospective perspective and re analysis. That said, few can argue with the financial difficulties the company and its major investments are struggling with. Big decisions that effect the whole company carry bigger risks as in siphoning from the healthy part(s) of the company to aid with the nonperforming profit centers. For instance, increases in pay should be a follow on to increasing output and not performance or employee longevity. Likewise… Read more »

Amazon’s revenue has increased over $70 billion since 2010. Who suffers? General merchandise companies with stores. Who’s in the center of that bullseye? Walmart.

Until stores become more “necessary,” the notion that they’re NOT necessary to go to will continue to grow and consumers will continue to gravitate to online shopping. Will Walmart figure out how to make it more necessary to go to their stores? I’d say, yeah, they are relentless and they will (Wall St. only thinks short term). Will there be pain in between now and then? You bet.

It’s going to be a very interesting decade for retail coming up. Get ready for the wave to hit (we don’t have to go to stores—we have to WANT to go to stores).

As a long time fan of Walmart, I am sad that the company appears to have lost its way. It appears to me that Doug McMillon does not have a winning strategy to meet the challenges of the rapid changes that are occurring in retail. The next generation views Walmart as out of date and boring low priced stores. The shopping experience at the average Walmart is bland and offers little excitement versus the more nimble specialty retailers. It is only the price and one-stop convenience that gets them to visit. In addition, They do not even think of Walmart.com when shopping online. While raising the wages of the store associates is admirable and probably the “right thing to do” it does not raise the morale of the stores’ associates, or increase productivity over the long term. It seems that the company is reacting to the union threat of “Our Walmart” more than using these wage increases as a core strategy, since they continue to use the $1.2 billion price tag as an excuse for… Read more »

The plan is fairly solid, but the execution of it is not. There is a serious lack of non-Walmart experience at the middle to senior middle management level that slows change and improvements down to the store level. The issue is so pervasive that they do not even recognize that they lack the diversity of thought, expectations, or experience.

That said, improvements have been made in Fresh product quality, market share, and cleanliness. The sustainability of these improvements is always a challenge, as the stores chase a barrage of operational systems and process changes. It is a “shiny balls” chase ….

Right plan? “Our investments in our people, our stores and our digital capabilities and e-commerce business are the right ones. We will be the first to build a seamless customer experience at scale to save our customers not only money, but also time.” Sure seems like the right approach. Can WMT execute the plan? Probably not. Due to the deeply ingrained culture and limited vision at WMT, it is not sufficiently agile to perform the feat in the current marketplace. Too big? Perhaps the core business has maxed out share. But what other allied opportunities does WMT have to help its customers save time? Or said another way, what businesses can WMT create to increase shareholder value? WMT is certainly able to activate its customer contacts, data and relationships to create innovative ancillary businesses that could be relevant to its base. To date, WMT has not replaced Sam Walton. Sears enjoyed a series of visionary leaders that extended the business to grow the brand. Some of them took their eye off the core franchise too.… Read more »

Of course there’s still room for growth. Walmart can always get their existing customers to buy more and get new shoppers into their stores/onto their websites. I’m sure their focus on staff and eCommerce will help improve their market share.

The appeal of a one-dimensional retailer like WMT is limited, as are its growth prospects. There are other factors driving value for many other (current, declining and former) customers.

A senior director of IT at Walmart once told me that “in order to keep up this pace, we have to ‘grow a new Sears’ this year.” In addition to that, you can’t expect the market to grow when the earnings of middle-income people are in decline. The gravy train’s got to stop somewhere.