Scott Galloway

And the market cap as of late was $1 trillion.

So that's roughly one and a half times revenue or 34 times operating income, which is actually pretty rich for a retailer.

Walmart's operating margin has climbed from 3.3% in fiscal 2023 to 4.3%.

Walmart is just a different business.

Walmart operates on the notion that their scale and their operational excellence, they can pass the savings on to a consumer.

There are only three things that matter or lines that matter around shareholder value.

There's the top line, which is perceived value.

The next line, the middle line, is the price you charge.

And then the line below that is the cost to deliver that service.

And all shareholder value is a function of the ratio between or relative distance between those lines.

So Walmart is in the business of constantly pushing down the cost line.

And then once you do that, some wonderful things happen.

You can either pass along the savings and pull down the price line that you're charging consumers, which is what Walmart does, and then the gap between the price you charge consumers and perceived value broadens, and the value proposition goes up, and you should expand share.

And that's been Walmart's strategy the whole time, is they don't—if they cut costs on operations such that they can ship a pallet of ginger ale to Arkansas—

more efficiently than someone else, they immediately pass those savings on to the consumer, and the value proposition of Walmart goes up.

There's an old saying that starting a shop at Walmart is like getting a promotion in terms of the change in the quality of your life because you can now afford to buy imported beer versus domestic beer if that's what you want to do.

Other companies such as Tiffany or Hermes, they're in the job of pushing

the perceived value lineup as much as possible through innovation and scarcity and branding.

And then that's wonderful because then the gap between the perceived value and the price they charge goes up, which should expand share.

But typically what they do is as they push the perceived value lineup, they raise the price.