The Wal-Mart You Don't Know (Shades of A&P and Sears historic practices)

Fast Company ^ | December 2003 (Vlasic,etc), January 2006 (Snapper) | Charles Fishman

[dickmc]

The Wal-Mart You Don't Know

The giant retailer's low prices often come with a high cost. Wal-Mart's relentless pressure can crush the companies it does business with and force them to send jobs overseas. Are we shopping our way straight to the unemployment line?

[operation clinton cleanup]

It does more business than Target, Sears, Kmart, J.C. Penney, Safeway, and Kroger combined. "Clearly," says Edward Fox, head of Southern Methodist University's J.C. Penney Center for Retailing Excellence

You have got to be kidding me! Has anyone bought anything from a J.C. Penney in the last 10 years?

[donmeaker]

I buy a lot of things at Wal-Mart.

Anatole Rapoport did a study of the economies of Europe at the eve of the first world war.

Germany: spend more on military spending than in trade with France. For that reason, they were less afraid of war with France, than cutting their military budget.

France had more trade with Serbia than Germany.

England had more trade with France than Germany. Despite the fact that the Kaiser was a grandson of Queen Victoria, England allied with France, rather than with Germany.

Italy had an alliance with Germany and Austria. Still, they went to war with France.

Rational people rarely go to war with their trading partners. Hitler was an exception, making war against the Soviet Union, one of its allies, and major suppliers.

So, having trade with China is not all that bad a thing. As for expanding the Chinese economy, making it a bigger threat: The US, in the last 4 years, grew the US economy by the amount of the entire economy of China.

I sure agree though that you have to decide what share of the market you want to go after. WalMart is a bottom feeder. Always has been. If you want that market, fine, if you don't want to service that market, you do business with someone else, or have a line below which you will not go. If Vlasic (have you seen their learjet?) simply refused, explained their marketing, and noted that they wouldn't change their marketing, but they would give WalMart a chance to offer their normal size jar of "top shelf" pickles on the top shelf (higher prices are normally displayed on the top shelf in WalMart). Or not.

Ya got to be willing to say no in business.

[operation clinton cleanup]

Wal-Mart sold 245 billion worth of goods, but only 12 billion came from China?

[Tinian]

So is this Vlasic's excuse for reportedly* hiring so much illegal labor and helping the illegals hide from police, while competitor Mt. Olive made sure their immigrant labor was legal, and helped police when they came to the camps? How about an exposé on how Mt. Olive can't compete with Vlasic because of this, and how it all goes back to eeeeevil Wal-Mart?

Wow. Thanks for pointing this out (I couldn't stomach reading the entire article).

My local grocery stopped stocking all Mt. Olive products a couple of years ago--after some sort of union dispute, IIRC. It really angered me because Mt. Olive makes the *best* hot cherry peppers and even though their pickles aren't crunchy, their flavor is excellent.

So now I know it was Vlasic who whored themselves out for market share (taking Mt. Olive product off of my grocer's shelves) and Wal-Mart gets blamed for it!

[gogeo]

Thank you.

[operation clinton cleanup]

Not long after that, in January 2001, Vlasic filed for bankruptcy--although the gallon jar of pickles, everyone agrees, wasn't a critical factor.

A small point that negates the whole premise of the article.

[dickmc]

"Nobody is forced to sell to Wal-Mart and nobody but a fool would sell to Wal-Mart if it killed their profits.
You have to be an idiot to believe this stuff."

I am not taking sides either way. However, those of us from the 40's remember Sears and A&P practices. Not a lot has changed except that the foreign and job downside issue is now much larger!

As a more recent example, WAL-MART WARNS STUDIOS OVER DVD DOWNLOADS in the N Y Post yesterday. Tough to tell who to root for there!

[demsux]

Is that when Hillary was on the Board of Directors?

I still don't shop there due to her past tenure on their Board...thankfully I can afford to shop elsewhere.

[operation clinton cleanup]

Here, for example, is an executive at Dial: "We are one of Wal-Mart's biggest suppliers, and they are our biggest customer by far. We have a great relationship. That's all I can say. Are we done now?" Goaded a bit, the executive responds with an almost hysterical edge: "Are you meshuga? Why in the world would we talk about Wal-Mart? Ask me about anything else, we'll talk. But not Wal-Mart."

Are you meshuga? Sounds like a made up quote to me.

[SoldierDad]

"The Wal-Mart bashers' job is to make the rest of us feel miserable that we're not spending our money buying $100 napkin sets with your initials stitched in them and platinum toilet paper at downtown boutique stores."

And since I have two family members employed by Wal-Mart we enjoy an extra discount for all that we buy there on top of the already low prices.

And, is anyone bashing all the other box stores for also selling items from China, India, Taiwan, Korea, Japan, Mexico, etc. etc. etc.

[Harmless Teddy Bear]

Has anyone bought anything from a J.C. Penney in the last 10 years?

I go to Penny's about twice a year for the sales. I generally spend about $50.00 per trip.

That is about the same amount I spend at Wal-Mart per trip, except I go there about once a month.

[operation clinton cleanup]

The pressure on Levi goes back 25 years--well before Wal-Mart was an influence. Between 1981 and 1990, Levi closed 58 U.S. manufacturing plants, sending 25% of its sewing overseas.

Sounds like Wal-Mart is giving failing brands a second chance.

[Swiss]

No everyone needs to keep shopping at Walmart so they stay out of the less expensive stores I shop at.

[conservative in nyc]

To find the heart of Wall*Mart, one must first ask oneself, "Who is it that asked the question?"

[operation clinton cleanup]

That is about the same amount I spend at Wal-Mart per trip, except I go there about once a month.

The "progressive" party seems to want to stop progress. My Grandparents used to get milk delivered from the dairy and went to a butcher to get their meat.

[Harmless Teddy Bear]

There is a disturbing number of people who want you to drive a tiny car, have a tiny house and not own much of anything if you are below the mean income level.

That today the number of tv's out number the number of residents per household drives them wild.

[ozzymandus]

So don't shop there. It's always too crowded anyway.

[JoeGar]

According to John Kerry, Wal-Mart has "disgraceful" and "unconscionable" practices. Does anyone really believe that Kerry has ever been in a Wal-Mart?

[Ben Ficklin]

Somebody needs to start a thread on Wa-Ma store brand pork and beans.

[IronJack]

it is, in fact, so big and so furtively powerful as to have become an entirely different order of corporate being.

And it did so by following Sam Walton's basic philosophy: buy your goods as cheaply as you can, then you can sell them cheaper than your competitors. By taking their volume away, you can make up in quantity what you lack in per-unit profit.

The entire Wal-Mart empire is built on that philosophy. It is the classic better mousetrap.

Walton used to encourage his store managers to come up with crazy schemes to move huge volumes of weird products: hula hoops, detergent, lawn mowers. A gallon of pickles is just oddball enough to have delighted the Old Man.