Posted on 02/17/2007 1:06:21 PM PST by Congressman Billybob
Nope, in our household that is not the equivalent of Payton Manning saying after the Superbowl that he’s going to Disney World. It has nothing to do with Disney World. It has everything to do with Sam Walton.
Sam Walton’s creation, WalMart, initially flew below the radar of Wall Street and the national press. It did so in part because of its business model. Beginning in Bentonville, Arkansas, its stores were located in small towns, where no one in his right mind would deliberately locate a chain of stores. And by doing that, and succeeding at that, WalMart created the largest, most successful business in the history of the human race.
But that’s not what I came to talk about. I’m looking at this from the other end of the scale, as a retail customer.
There are two Super WalMarts within easy driving distance of our home. The “Supers” are the newer, larger ones with full grocery departments and pharmacies built in. One is in Clayton, Georgia; the other is in Sylva, North Carolina. Which one we go to depends on whether we intent to buy a tank of gas – NC gas taxes are the highest in the region at 17 cents a gallon – or whether we intent to have lunch during the trip – a Sonic “soda” shop is across the street from the one in Sylva.
We live in a very small town, Highlands, North Carolina, population about 1,000. It has two and a half grocery stores, a couple gas stations, etc.. Everything for sale here has to come up an hour’s drive on winding mountain roads from any direction. Everything here costs more. So we do our occasional shopping here, but “go off the mountain” for major shopping.
That means a trip to Wally-World First, we buy an Atlanta Journal-Constitution for its coupons, and throw the rest away as journalistic trash. Then, we head off to WalMart for a two-cart raid on all its departments. What we do illustrate why Sam Walton was right.
At the beginning of my checkered career, I worked for a company that produced brochures for the Rouse Company, which was then developing the first closed mall shopping centers in the US. At the heart of each brochure was a map showing hundreds of thousands of potential customers within a 20-minute, or 40-minute, drive of the location of the mall. What Sam Walton realized was that folks would come from an even longer distance, and buy even more stuff per trip, if you gave them the opportunity and incentive to do that.
We spend about $500 to $600 a trip. That multiplies out to roughly $6,600 per year. Multiply us by the 100 million Americans who regularly shop at Wally-World, and the key to its billion-dollar success is apparent.
Why do people come to Wally-World? For the same reason that millions of people come to McDonalds. The name on the door is the guarantee you will get a decent product at the lowest possible price. Always. Only in Wally-World, you find not just a handful of products, but tens of thousands of products.
So, why is WalMart under attack in some jurisdictions? The enemies come from two different camps. One is the steadily dwindling union movement which wants to get its hands in the pockets of the most successful business in history. The other enemies are those who neither understand nor respect a free-market economy. They think, against all evidence, that life gets better when the government runs things. WalMart is the primary example that they could not be more wrong.
If WalMart was so bad for communities, why would most communities welcome and appreciate a new WalMart? If WalMart was so bad to its employees, why would people line up around the block for a chance to work there, whenever they open a new store? If WalMart was such a failure for ordinary citizens, why would millions of us be planning our shopping habits around our visits to Wally-World?
Success speaks for itself. Only those who resent success, or seek to mooch off it, falsely deny it.
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About the Author: John Armor is a lawyer specializing in constitutional law, who may again be a candidate for Congress in the 11th District of North Carolina. John_Armor@aya.yale.edu
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John / Billybob
Wallyworld=Chinaworld.
I like Wal-Mart, but their prices aren't always the lowest. I usually have to shop at three different stores to get the products I want.
Um, its Peyton, not Payton.
Thanks for posting this Congressman Billybob and a pingaroo to my friend Gabz.
I don't really like Wal*Mart just because I don't like downscale, dull, mainstream type places.
Still, for the better part of a year i've shopped at Wal*Mart because the local grocery chain, Giant Eagle, was no better.
Then Giant Eagle came out with its Market District stores, which are its slightly clueless attempt to attract the upscale shopper.
Now I drive 15 miles each way to go to Market District because it sells the stuff I want, even though there is a Wal*Mart within a few miles of me.
This shows a couple of interesting things:
First, if you're inferior to Wal*Mart in every way, people will go to Wal*Mart -- even people who really don't like the place.
Second, it IS possible to compete with Wal*Mart if you know what people really need, even if you charge higher prices for it.
Incidentally, Giant Eagle is a union shop that pays minimum wage. I think they will have to pay Market District employees more in the end, since they need people who actually understand what they are selling to make the shopping experience good and upsell people to the more expensive products.
A typical minimum wage Giant Eagle employee does not have the skill to do this. I have noticed Market District has a 50/50 split of employees who "get it" and those who don't.
Whole Foods still regins supreme in that department, but it's more than 30 miles away from me. I'm very glad I have Market District as a decent compromise alternative.
Of course Publix in Florida still blows away any Giant Eagle. Pennsylvania is just not a very competitive market, and it shows. Wal*Mart prospers, an does a lot of good, by setting up in states where nobody really cares about customer service.
D
Good post.
My WW is about 5 minutes away. I have pretty much quit driving "into town".
Why bother?
My family first came to Bentonville in 1835. I was an Army brat, so I didn't grow up there, but did return for vacations and would invariably head to Sam Walton's store on the square for licorice and the like. Back then, Bentonville was a dusty little town that had seen its best days in the Twenties when my dad was growing up. Sam didn't show up until after the war, but the place hasn't been the same since. The remarkable economic boom that has transformed Northwest Arkansas can be largely attributed to the economic activity that Walmart brought to bear.
Something I rarely see mentioned but to me is significant is the fact that Wal-Mart employs what many might consider unemployable, the physically and mentally handicapped, they are the cart chasers, stockers, floor cleaners and other such jobs. People who might otherwise be another drain on the social services and tax payers.
Wal-Mart may not have pioneered this policy but they sure hire their share or more.
I don't know about the rest of their merchandise but in groceries, if you produce a coupon or an ad showing the item cheaper somewhere else, Wal-Mart will match the price.
I had a lady ahead of me at a checkout counter who had a list of items and prices on notebook paper and the clerk accepted it and gave her the items at the cost listed on the paper. I asked the clerk why they would allow that and she told me it's better to lose a dollar or two on a sale than to lose a customer.
I also like Wal-Mart's return policy. You don't need any excuses or explanations, Wal-Mart will take it back and refund your money. They have such an upper hand over the manufacturers that they can demand them to take an item back or run the risk losing Wal-Mart's business for their product.
Walmart is a religion for some people.
If memory serves, there were a few Wegman's in PA. Some yrs ago that chain was written up in WSJ as the best supermarket chain in the country for consumer ambience, at least in its larger stores.
I guess maybe a different "China" than my New Balance shoes (bought at a New Balance store in the mall) came from.
No matter where you shop, you'll find merchandise from China.
You for got to genuflect and say "amen".
You must be a renegade from the notorious K-mart sect.
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I hear it makes good mulch too.
I wish we had a Super closer by. We have to drive a whole 25 miles or so to Gilroy.. within 10 miles or so are a few Costcos. ;-)
Shopping there allows me to piss off people in this college town that I can't stand. So, that's why I shop there.
And hating it is a religion for others.
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