Warren Buffett is the Chief Executive Officer of Berkshire Hathaway, a firm he gained controlling interest in because he held the majority of the company’s stocks. After acquiring controlling interest in the company, the financially strapped company, then a textile company, was converted to an investment brokerage firm. Today, Buffett is the second wealthiest person in the United States.
Warren Buffett Sells All OF Hillshire/Hathaway’s WalMart Stock
This past February Hillshire/Hathaway sold $900 million dollars of WalMart stock. This leaves Hillshire/Hathaway with hardly any stock in Wal Mart. Buffett has discussed lately the troubles that “brick and mortar” type retailers are experiencing. Currently, Wal Mart market valve is down to $298 billion, compared to Amazon’s stock value of $356 billion. Since 2014, Wal Mart shares have dropped 21% and Amazon’s shares have increased 119% since 2017.
Even though Wal Mart has invested billions in E-commerce, it barely has dented the e-commerce market. In 2015, Wal Mart online sales totaled $13.7 billion, and Amazon’s online sales totaled $107 billion. Coompetivtely, Wal Mart is still the retail giant in-store sales totaling $482 billion.
Warren Buffett Predictions on Other Retailers
Warren Buffett predicted the demise of K Mart and Sears in 2005. Other major retailers such as Macy’s and J.C. Penny have shut down hundreds of stores due to declining sales. Compared to other areas, the United States still has too many retail stores. The United States has 23.5 square of retail space per person. Comparatively, Cands has 16.4 square feet of retail space per person and Australia has 11.1 square feet of retail space per person.
As Buffett has recently asked in press interviews, has any major retailers failing brought the retailer back to growth and higher profits? If you stop and think about it, again, Buffett is right. Once a major retailer sales fly south, there is no turning back!