Retail Wars

This week, a merge between Sears and KMart has been completed. The new company, to be called Sears Holding Corp, has a lot of goals. At the top of the list: Take down Wal-Mart! The battle against Wal-Mart will start by creating a more efficient supply chain, lowering prices, and promoting Sears and KMart owned brands. All this will result in a larger consumer surplus among that American people. They help out consumers and manage to diminish the control that Wal-Mart seems to have over retail. Sears and KMart hope to cut their combined costs by $300 million and increase their profit by about $200 million. However, Wal-Mart, and other stores like Target, will not simply sit in their chairs and watch. This will ultimately start a price war resulting in a constant battle for lower prices. Sears and KMart may not 'beat' Wal-Mart, but for the time being, their merger will certainly have a large affect on the retail industry.