[ncallaway]

WalMart wasn’t doing it globally, they were doing it regionally or even city by city.

So, a store would open in a new city with very cheap prices. That individual store might be running at break even, or even at a loss. Once the various other local competitors have been driven out of business, they start to raise the prices, and become more profitable.

When competitors start coming back to town, they lower their prices and repeat.

Different individual stores would be in different stages of this at any time, so you wouldn’t really see the strategy by comparing various profit margins from different years, unless they were changing the rate at which they were in the expand phase.