Rotating out of WMT/TGT, doubling down into AMZN/COST/HD: Is the "Big Box" model breaking?

AI Summary

Author rotated out of Walmart and Target into Amazon, Costco, and Home Depot, arguing traditional big-box retail margins are squeezed by shrink and security costs while e-commerce and membership models have stronger moats.

WMT — AVOID The author closed their Walmart position because the traditional big-box footprint is a liability. Rising organized retail theft (shrink) and higher security costs squeeze margins in a way e-commerce and membership models do not face. The author frames this as a structural moat problem for traditional big-box retailers.

Recently closed my Walmart and Target positions (minus 401k/etf) to double down into Amazon, Costco, and Home Depot. The primary thought is that the traditional big-box footprint is a liability.

TGT — AVOID The author closed their Target position because the traditional big-box footprint is a liability. Rising organized retail theft (shrink) and higher security costs squeeze margins in a way e-commerce and membership models do not face. The author frames this as a structural moat problem for traditional big-box retailers.

Recently closed my Walmart and Target positions (minus 401k/etf) to double down into Amazon, Costco, and Home Depot. The primary thought is that the traditional big-box footprint is a liability.

AMZN — LONG The author doubled down into Amazon, arguing e-commerce does not face the shrink and security cost pressures of traditional big-box retail. This gives Amazon a stronger moat against those specific issues. The author is rotating capital toward companies with stronger moats.

to double down into Amazon, Costco, and Home Depot

COST — LONG The author doubled down into Costco, arguing membership-only models do not have to deal with the shrink and security cost pressures of traditional big-box retail. This gives Costco a stronger moat against those specific issues. The author is rotating capital toward companies with stronger moats.

to double down into Amazon, Costco, and Home Depot

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u/yellowirish Reddit r/investing

Big-box shrink and security squeeze margins

The author closed their Walmart position because the traditional big-box footprint is a liability. Rising organized retail theft (shrink) and higher security costs squeeze margins in a way e-commerce and membership models do not face. The author frames this as a structural moat problem for traditional big-box retailers.

u/yellowirish Reddit r/investing

Big-box shrink and security squeeze margins

The author closed their Target position because the traditional big-box footprint is a liability. Rising organized retail theft (shrink) and higher security costs squeeze margins in a way e-commerce and membership models do not face. The author frames this as a structural moat problem for traditional big-box retailers.

u/yellowirish Reddit r/investing

E-commerce moat avoids shrink costs

The author doubled down into Amazon, arguing e-commerce does not face the shrink and security cost pressures of traditional big-box retail. This gives Amazon a stronger moat against those specific issues. The author is rotating capital toward companies with stronger moats.

u/yellowirish Reddit r/investing

Membership model moat avoids shrink costs

The author doubled down into Costco, arguing membership-only models do not have to deal with the shrink and security cost pressures of traditional big-box retail. This gives Costco a stronger moat against those specific issues. The author is rotating capital toward companies with stronger moats.

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Ideas

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