Posted on 04/11/2005 7:08:56 AM PDT by Rhoades
"I'm writing this column in West Virginia, USA having just come back from shopping in Wal-Mart, the extraordinarily successful supermarket chain that makes our own look slow and tiny -- not to mention expensive! I had to keep blinking at the price labels. With my notion of prices tied to British expectations, Wal-Mart's just look as though the staff can't do their sums."
- John Blundell in the New Scotsman
Wal-Mart is rarely the object of such praise. To be the best is usually to be the object of scorn. Wal-Mart knows this well. They are the best, and their critics would have you believe that the mammoth retail chain earned its laurels through unfair competition, civic destruction, even third world exploitation. The stories are familiar: In order to offer such low prices (always), Wal-Mart:
- Puts Mom-n-Pop shops out of business.
- Contributes to the burgeoning of third world sweatshops.
- Degrades communities by introducing a big box aesthetic.
- Makes the Walton family and shareholders even richer.
But it's time we looked a little deeper into what can only be called the "Wal-Mart effect."
Boone, North Carolina (named for the famous Dan'l) is a college town nestled in the rustic mountains of Appalachia. The population is divided roughly among groups of students, locals, and the academic elite. Such a microcosm of American diversity works in its own way. The locals realize how much money the university brings in. The students love the Smoky Mountain amenities and the bluegrass music. Academics find the local folkways charming and complementary to their status as, well, elites. But when Wal-Mart decided to come along in the 90s, locals, students, and academics also had a common purpose to bind them: to keep Wal-Mart out.
As it often does, Wal-Mart won. And since then, Boone has experienced the Wal-Mart effect. First, some Mom-n-Pop shops in Boone may have gone out of business due to the intense competition. But something interesting has happened: many new businesses have sprung up and they're cooler, more interesting, and more highly specialized than most of the old ones were. Mom-n-Pop have decided to move into more boutique-style businesses -- and not even Wal-Mart can compete with that.
For example, Hands Gallery -- formed c. 1998 -- is an interesting fixture for visitors to the downtown King Street area, offering indigenous art and sculpture for more refined tastes. While taking in the spring verdancy or autumn foliage of the high country, visitors can take jaunts through nearby Blowing Rock and Banner Elk for the utterly zoned and picturesque experience (and, of course, denizens of these planned towns take advantage of Boone's big boxes along highway 321).
But big boxes and all, downtown Boone offers its own home-grown order, complete with quirky restaurants and shops one might have found on the corner of Haight and Ashbury. An eclectic mix of businesses line the main thoroughfare. Earth Fare, an organic foods store, has come to King Street. Older fixtures such as the Appalachian Antique Mall and Mast General Store (retail) have enjoyed continued success and remain favorite establishments for shoppers. You'll even find "Josh," a vagrant everyone in Boone knows, selling poetry and beaded jewelry to passers by.
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.
The Wal-Mart effect is happening all over the country, allowing many municipalities to renew their town centers. In fact, residents able to reduce their day-to-day shopping budgets at Wal-Mart have more money left to spend on the things that make life great and towns charming -- whether it's hand-blown glass or delicious roadside produce grown by local farmers. (Take it from me, no big box can do Silver Queen corn like North Carolina farmers on the side of the road.)
Wal-Mart has also made concerted efforts to work with communities to stylize their stores, especially in cases where such is desired by the locals. The result is that the big box look is not always battleship blue corrugated metal with plastic letters. Wal-Marts come in all manner of brick, stone and Mediterranean styles.
The Wal-Mart effect may be destructive from time to time, but it's also profoundly creative. Wal-Mart has inadvertently hastened the pace of specialization and municipal renewal. As consumers, of course, we only benefit from the presence of Wal-Mart and other big box retailers. People in developing countries and at home are being lifted from squalor because Wal-Mart seeks out the great, low-cost products they offer. Wal-Mart is also giving a lot of people opportunities to earn a living -- including retirees who want to stay active as well as immigrants prepared to accept the wages Wal-Mart offers. Don Boudreaux puts it succinctly here:
"And because Wal-Mart indisputably keeps prices to consumers low, by far the most plausible conclusion is that Wal-Mart promotes the economic prosperity of the places it which it operates -- it creates better jobs and increases the availability of goods and services. In short, Wal-Mart makes its workers and its customers (and, yes, its stockholders) wealthier."
The Wal-Mart effect is overwhelmingly beneficial.
As prices continue to fall and quality continues to improve, critics of Wal-Mart will have a tougher time resisting the temptation to shop there. In the meantime, I'll be enjoying shorter lines, lower prices, quality products, and smiley-face stickers.
Max Borders is a writer and Wal-Mart shopper in the Washington, DC area.
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.
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.
Blame Congress. They could shut off trade with China tomorrow, if they wanted to.
Don't blame Wal-Mart for engaging in lawful business.
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?
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.
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.
That is correct, who knows some store will overtake Walmart.. When I don't know...
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
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.
or look at the Personal Computer Industry when it first came out..
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?
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.
I'm certainly not advocating them.
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.
I can't believe you wrote that without a sarcasm tag.
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.
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