Summary
In aggregate, shoppers will not stay overly thrifty when times are better, but Walmart is using this time to improve their merchandising and their place in customers' lives. They have a strong hand. Many of their competitors are not moving ahead in merchandising during this recession. Walmart is. Walmart's performance outside the US is more important than the US in terms of contribution to their long term growth.
Analysis
Both observers seem to miss the strides that Walmart is making nationally. They have used this period of strong performance and customer traffic to upgrade their offerings, edging closer to Best Buy in electronics, Target in home goods and apparel, etc. I am a Target fan but am concerned that Walmart has taken away some of their oomph, and will retain those customers coming out of the recession. In addition, every day Walmart makes more inroads in the grocery business, giving customers more reasons to make Walmart their principal shopping stop. Lastly, the real long term value of the company rests on their success in places like China and Latin America; they have a relatively mature operation in the United States. But their stores make clear that they are a learning organization, and at $300B in sales have less hubris than GM and IBM had at $3B or $30B.
