Understanding the Wal-Mart Effect

TechCentralStation.com ^ | 04-11-05 | Max Borders

[The Great Yazoo]

Now he is almost identical to Ralph Nader or Dennis Kucinich on economic issues.

Not to mention Greenpeace, Oxfam, AFL-CIO, the Greens, and socialists of every other stripe known to man.

[ran15]

That is exactly why I like to tell socialists.. then don't shop there.

Because I know in the end their greed will overcome them, and they will go to Walmart even to save a couple pennies.

[Modernman]

Also note this: Pay attention to the "boutique" businesses that pop up to differentiate themselves. Wal-Mart does. And the moment those niches start to become widely accepted and dependably profitable, Wal-Mart will step in and take them, too.

There are some areas Wal-Mart really can't compete in because their business model doesn't allow for it. Around the DC area, we have Wal-Mart, but we also have a very succesful high-end food chain called Whole Foods. The type of people who shop at Whole Foods aren't going to go shopping at Wal-Mart for their organic food needs.

Wal-Mart can beat anyone on price, true, but price isn't everything.

[Modernman]

Nevertheless you still cannot avoid knowing that multiple Chicom missiles are still aimed at us, thanks to the billions per year that W-M et al send along to China with nary a worry about how that mega-money is used.

Blame Congress. They could shut off trade with China tomorrow, if they wanted to.

Don't blame Wal-Mart for engaging in lawful business.

[Modernman]

what i don't understand is why folks like you don't see anything wrong with grossly UNDERPAYING average working people

In a free market system, no one is overpaid or underpaid. Your labor is worth exactly the rate you and your employer agree upon.

i want to see average working people of america treated more fairly in regards to wages and benefits. what on earth is wrong with wanting to preserve the american middle class?

Other than government mandated wages or letting the free-market determine wages, how would you suggest that this come about?

[Modernman]

i chose wal-mart. wal-mart's ahead at this time at 16%.

I voted for Lloyd's of London, but only because they've been around for so much longer and will probably be around when Wal-Mart disappears.

[The Great Yazoo]

What is it that causes usually rationally thinking people to propose all kinds of government restrictions aimed at Wal-Mart and abrigations of our rights to do what we want to do that they wouldn't tolerate when directed at anyone else? I'd just like to know.

[Modernman]

What is it that causes usually rationally thinking people to propose all kinds of government restrictions aimed at Wal-Mart and abrigations of our rights to do what we want to do that they wouldn't tolerate when directed at anyone else?

Envy. Deep down inside, many people don't like to see others do well.

Wal-Mart is VERY good at its business model. It has killed, or nearly killed, a whole bunch of other retailers that weren't as good at figuring out how to make the low-cost/high volume retail business model work. On the other hand, Wal-Mart's success has forced other surviving retailers to innovate and come up with new business models and it has encouraged the creation of new companies that can cover areas outside of Wal-Mart's business model (such as high-cost/high-quality retail).

That being said, there have been a lot of companies that were very good at their business model but that went extinct when the world changed around them. A century from now, Wal-Mart might only exist in history books.

[KevinDavis]

That is correct, who knows some store will overtake Walmart.. When I don't know...

[MississippiMan]

There are some areas Wal-Mart really can't compete in because their business model doesn't allow for it. Around the DC area, we have Wal-Mart, but we also have a very succesful high-end food chain called Whole Foods. The type of people who shop at Whole Foods aren't going to go shopping at Wal-Mart for their organic food needs.

Wal-Mart can beat anyone on price, true, but price isn't everything.

The crowd to whom price isn't everything is a tiny percentage. In a large metro area, sure, the ultra-specialized businesses that are run right can make it because even a small percentage of the whole still constitutes a large enough customer base. Not in small towns.

Just keep an eye on the ever-expanding Wal-Mart selection. Twenty years ago, if you wanted a nice TV, you went to a consumer electronics store. Ten years ago, you went to Circuit City as the indies were by and large fading into the sunset. Now you can buy HDTV plasma at Wal-Mart, and for the vast majority of people, those models are good enough. And that is of course just one category of merchandise. The trend applies to many others.

MM

[Modernman]

That is correct, who knows some store will overtake Walmart.. When I don't know...

Maybe Wal-Mart will get broken off into several companies by anti-trust suits. Or Wal-Mart executives will decide, some day, that the company has expanded into too many areas to remain manageable and they will spin-off certain businesses. Or the "internet revolution" will really happen and someone will figure out a way to apply the Amazon model to regular retail.

No company is forever. Look at the auto industry, for example.

[KevinDavis]

or look at the Personal Computer Industry when it first came out..

[70times7]

i admit that i hate Walmart with a passion and i think it is truly evil with a capital E - so i have my own bias. but i think there are a lot of "conservatives" out there who really do only look at the rosy picture because anything that makes money is okay with them. i just don't believe money is the be all and end all of life, or the only value that we should regard, maintain, uphold or encourage. after all, jesus whipped the money lenders out of the temple. hope he does that again when he comes back.

So, I take it that you are in agreement with the saying that "money is the root of all evil" and that Walmart is evil, at least partly because of that?

[The Great Yazoo]

Wal-Mart might only exist in history books.

The Great Atlantic and Pacific Tea Company (A&P) and Montgomery Ward come to mind. Each of Sears, J.C. Penney, and Big K has approached meeting its eternal demise.

[The Great Yazoo]

Wal-Mart will get broken off into several companies by anti-trust suits.

Spare us dubious antitrust suits! Please!

[Modernman]

The Great Atlantic and Pacific Tea Company (A&P) and Montgomery Ward come to mind.

Funny you should mention A&P. I was involved with some of their desperation financing a few years back. Hard to imagine that A&P used to be the biggest grocery chain in the US at one time.

They started going downhill when their management in the 50's decided against expanding their stores to also sell non-grocery items (such as lightbulbs and cleaning supplies). By the time they realized their mistake, it was too late.

[Modernman]

Spare us dubious antitrust suits! Please!

I'm certainly not advocating them.

[Guvmint_Cheese]

I left Vermont right as Wal-Mart's last push for the Williston store began. I was kinda hoping it wouldn't fly, but if there's a market for it, so be it. I figured if people really didn't want it there, they would drive it out of business by not shopping there!

I don't know if it was a direct casualty, but I noticed on a visit a couple years ago that the Woolworth's in downtown Burlington closed. Something about the "five & dime" mystique and the lunch counter I found very comforting in an Americana way.

[LowOiL]

We should just make a law that forces Walmart to pay its workers 50 an hour. That would solve all these problems.

I can't believe you wrote that without a sarcasm tag.

[TChris]

The question becomes: do we really need small, inefficient and expensive shops to supply us with our shaving cream and plastic laundry baskets? How vibrant is a downtown where such items are being hocked? Since Wal-Mart consolidates these kinds of goods into "big boxes," we, like John Blundell, can get them for dirt cheap all in one place. Charming downtown areas can then evolve into gorgeous window-shopping and restaurant-hopping districts for both locals and tourists. In the meantime, everyone knows where to go to get the bare necessities quickly and at a lower cost.

This sums it up pretty well. Other stores can still compete effectively with Wal-Mart, by not taking them head-on. WM really doesn't have a huge selection in any particular area. They just have a lot of areas, and ensure low prices in those areas. If a competing store just specializes a little, catering to the more specific needs/tastes of local customers, for example, they will get business.