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WRT to depreciation and maintenance costs, its telling that the worlds most successful retailer with enormous experience and information about their former stor
by VLM 10y ago
WRT to depreciation and maintenance costs, its telling that the worlds most successful retailer with enormous experience and information about their former stores, tends to demolish and rebuild rather than remodel. I mean they do HGTV style remodels where they throw a coat of paint up and rearrange the shelves and pat themselves on the back, but after two decades of deteriorating roof and obsolete HVAC and inefficient lighting and the parking lot needs a total replacement, its just time to demolish and start over.
Walmart likes money. If they could remodel an old store into ... anything ... at a profit, they would. They don't. That says something about the anticipated lifetime of most of the schemes. Also explains why the contemporary examples are new or recent but walmart is an old company. All the alternative ideas tried a decade ago have long since failed so there's nothing to talk about except the more recent experiments that haven't run out of money yet.
Remember a failed walmart is where the worlds most successful retailer could not or could no longer make a buck, for whatever reason. "I'm gonna outdo walmart at running a retail operation" is very unlikely for any value of retail operation.
A side issue is the architecture and design of the building fixes in concrete and steel a certain minimum annual revenue per sq ft below which the structure and system has to fail sooner or later due to lack of income. Its easier to make a small store that generates a higher rate per sq but is limited in size, or a large market that generates a low per sq rate. That would imply whatever the newly built building looks like, its not going to look like a walmart because its already determined that doesn't work at that location.
- coredog64 10y ago6 or 8 years ago the closest Costco to us moved locations. The old location had been there for maybe 8 years before that. At the time, it was in a good location for a Costco, but I can see how much better the new location is (closer to a newly built freeway, near a mall and other businesses). That's not to say that the old location is awful, as there are still thriving businesses (including a newly remodeled WalMart) nearby. We tend to think of WalMart as this cash flush behemoth, but the reality is that grocery is a very low margin business (on the order of 3%). They might squeeze a little more out of less efficient competitors, but it's possible that the location could work for a higher margin business or something that's not retail.