Big Box stores - beneficiaries so far?

Waterthrush

Many of the long-time thinkers on the subject of Peak Oil have suggested that it will destroy the US system of big box stores. So far, though, some have been big beneficiaries from Peak Oil.

Those selling necessities - food, household goods, and fuel - have seen large gains. You know the names - Costco, Walmart, Sam's Club. They have economies of size and, for all their prevalence, probably less of a distribution cost per square foot than smaller chain grocery stores. They can also force their customers to bear more of the cost of driving - at least for now.

My question is whether you think this situation will continue? One of my adaptations so far has been to gradually restrict my food purchases to a local chain grocery store on the way home from work and an every-three-weeks-or-so trip to Costco. I used to shop more widely.

There is also the issue of the other big box stores - the Home Depots, the Old Navys, the Bed, Bath, and Beyonds. On the one hand, these are doing poorly right now, but it's not necessarily because of their Big Box status, it's that customers are cutting back in all these areas at the moment - home goods sales in malls are faring no better than at big box stores. On the other, many of these stores are combined with a Costco or Wamart and thus can benefit from being across the parking lot from one of those stores.

What do you think - will the economies of scale of the big box stores continue to divert customer flow to them, or is this a temporary situation, with small, very localized stores replacing them as fuel becomes more expensive?

Hagakure_Leofman

Any business based on cheap transportation is finished. Big box stores are completely based on the notion of moving goods around with fossil fuels. Their entire system, manufacturing, employees and customers require cheap energy to complete that business equation.

Big box is finished. It doesn't matter that they sell food.

edit: spelling

hope_full · Heavy Crude Joined: May 27, 2008 Posts: 173

I loathe Mall-Wart and almost NEVER pass through their double doors, but lately...

In their grocery department, they have massive quantities of everything on their voluminous shelves and aisles. In my area, the stock appears to be fresh and new. Someone else here mentioned old expiration dates at Mall-Wart. I haven't seen that, but in fact, I've seen the contrary.

I've given them more money in the last 30 days than I've given them in the previous five years - all put together.

HF

cube · Fusion Joined: Mar 12, 2005 Posts: 3374

dinopello

If they can adapt to a new role, they may survive. Not sure what form that new role will be. Maybe the warehouses/distribution centers of the future. Also, they would have to deal with less volume of sales and mix of products will be changing and can they adapt to that ? As companies it seems they have few durable assets. Their stores are basically cheaply constructed shells (suitable for warehouses though) and there are plenty of those around as cubes retail space graph shows. But, perhaps their core problem is that their customers are going to have less and less disposable income.

Where I live, there isn't any room for big box and the land is so expensive, it's unlikely their model would work. What does seem to be thriving and expanding is drug stores. CVS and Walgreens seem like they are trying to get a store every half mile radius or so.

NeoPeasant

I wouldn't be surprised, as we decline towards more of a subsistance economy , if the wal-marts started more to resemble country stores with a greatly reduced variety of food and consumer products and the freed space taken up by farming, gardening, canning, and animal care supplies.
Wal-mart is not just going to die when their business model changes. They will have the resources and sense to change with the times.
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The battle to preserve our lifestyle has already been lost. The battle to preserve our lives is just beginning.

vision-master

But how will the peasants get to work? Razz

Waterthrush

The same way illegal aliens get to work? People will collect on corners to be picked up by private van services.

Someone with capital and nerve could make money planning for that business now. I would consider using such a service - if it didn't increase my current commute time by more than ten minutes and if it costs no more than $2/day, the cost of my current commute.

Or maybe the many current van services serving the illegal alien community could expand their range?

emersonbiggins

Ironically enough, Wal-Mart has the potential to evolve back into its humble beginnings, as a 5-and-dime on Main Street in Bentonville, and outwards toward every other Main Street in America. That's the model that tends to work for small towns, at least in the absence of cheap and plentiful oil.
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"It's called the American Dream because you'd have to be asleep to believe it."

George Carlin

NeoPeasant

vision-master