deaverb

Costco, Wal-Mart Lead a Consumer Revolution

You miss the dollar chains--the growth is even stronger there.

Big Lots, Wal-Mart and Costco: 3 Musketeers of the Pooring of America

As a supplier to Target, Best Buy, and other high end folks, as well as grocers like Kroger, drug chains such as Walgreen, and our core growth area--dollar, Dollar Tree (growing 700% faster in US than Wal-Mart, with more stores), Big Lots, DG, and 99 cent stores, we see things outside of the charts.

1. They buy great stuff. Our software/audiobooks sell for $1 to $1.99 in these outlets; same stuff at $4.99 or higher in the high end folks. Same for many others.

2. The Ames, Zayre, Kmart junk of old is gone. The value retailers only buy solid reliable products (of course an error occurs here and there, but my experience is Target and BBY has more of them).

3. Cost control. N 30; FOB; no returns; clean. That means people price to the penny.

4. Simple systems: emailed or faxed orders; scan goods on back of truck. No invoices allowed as a rule. No expensive EDI. Clean.

That's a formula for growth.

Costco: The Enigma

Costco is solid because it has a clear mission: suppliers (we sell software at $1 to $2 by and large, up to $9.99 at high end outlets; therefore, Costco doesn't offer enough value discounting these kinds of items so leaves them to the Target, grocery, drug, and dollar chains); consumers (they know the deal); employees (not a complicated store for people to navigate).

They are both "high" end (great values in bulk and big ticket items) and "low" end (great value on cereals, food, essentials). And, of course, most consumers buy some "high" end and some "low" end at the same time or different occasions.


Continually impressive on all fronts. Awesome performance.

Retailers Employ Share Buybacks to Beat the Street

Share Buybacks are a double win for investors. First, as with Dollar Tree, earnings per share improve. Secondly, management stays focused on the business not "deworsification" to quote Peter Lynch, thorugh diversification.

Author does not comment on the strong leadership each buyback company has in their field: DTLR # 1 in dollar business in most metrics--totally number one in dollar only; Wal-Mart, Kohls, Costco and Kohls. Quite a group.

Great article. Great to draw attention to this. And the last reason, stock buybacks not subject to double taxation as dividends are.