EXPENDITURE STRATEGY - WAL-MART

Old Ways:
1. Founded in 1962, Wal-Mart built a cutting-edge distribution system capable of moving goods from factory loading dock to store cash register faster and cheaper by far than any competitor.
2. It added to its cost advantage by refusing to acquiesce to routine increases in wholesale prices, continually pressing suppliers to charge less.
3. It also pinched pennies in every other facet of business, from wages and perks (there were none) to fixtures and furnishings.

New Ways:
1. By tightening controls over the stores, it has halved the growth rate of inventories to 5.6% from 11.5% two years ago.
2. Wal-Mart also has squeezed more productivity out of its 1.3 million store employees for eight consecutive quarters by capping wages for most hourly positions, converting full-time jobs to part-time ones, and installing a sophisticated scheduling system to adjust staffing levels to fluctuations in customer traffic.
3. Wal-Mart is cutting out middlemen to do more contract manufacturing overseas.
4. It withdrew its application for a Utah bank charter just before a congressional committee was set to convene hearings. The retreat marks an apparent end to its decade-long campaign to diversify into consumer banking.
5. It is considering spinning off Sam's Club, the warehouse club division that is a perennial also-ran to Costco.
6. In 2006 it took a $863 million loss in exiting Germany.

Old habits die hard - sometimes for the benefit of many, if not all.

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