Walmart "Saves The Average Family $2,500 A Year," But You Don't Actually Have To Shop There

Walmart’s new ad campaign says that the store saves the average American family $2,500 a year. What is doesn’t say is that you don’t actually have to shop at Walmart to take advantage of the savings.

The study that Walmart is citing in their ad showed that competition from Walmart lowered prices and saved the average family some serious money, regardless of where they actually shopped. Also, Walmart isn’t mentioning that after wage depression, the net increase in purchasing power averages only $1,122 annually.

Still, the way the ad is presented may lead consumers and even major media outlets to believe that in order to save money you need to shop at Walmart.

From Ad Age:

“The report does talk about the impact of Wal-Mart on the communities where the retailer is located,” a Wal-Mart spokeswoman said.

She said the ads and Wal-Mart press releases do not specify that people need to shop at Wal-Mart to get all of the savings. That’s a distinction that has been lost, however, in much of the news coverage of the campaign. Media outlets including ABC’s “Good Morning America,” The Washington Post, Advertising Age and The Honolulu Advertiser all have reported in recent months that the report said shopping at Wal-Mart saves the average family $2,500.

In an e-mail, a Wal-Mart spokesman said it is “ridiculous” to believe it’s “some kind of surprise” that people don’t need to shop at Wal-Mart to realize the $2,500 in savings. “In 2005 we held an economic-impact conference in Washington to air these very issues,” the spokesman said. “Just the very presence of Wal-Mart saves Americans an average of $2,500 a year whether they’re Wal-Mart shoppers or not. We’re very proud of that. But of course, the more you shop with us, the more you save.”

What Wal-Mart Savings Claim Doesn’t Tell You [Advertising Age]

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  1. Bladefist says:

    I’d prefer to not save and not have walmart.

  2. MsClear says:

    Just don’t buy very much stuff. That way you’ll REALLY save money and still not have to shop at Wal-Mart. It’s not cool that slave-like labor produces all those things. It’s just wrong. The end. I’ll keep my money and buy only what I really have to.

  3. ironchef says:

    I saved $10,000 last year not buying so much crap.

  4. I’d be willing to pay $2500 not to have Wal-Mart in the world. Creepy.

  5. Instigator says:

    Is anyone not surprised that American journalists failed to do their job and merely regurgitated what Wal-Mart fed them?

  6. mopar_man says:

    I don’t shop at Wal-Mart and I save money. You see, I look for stuff on sale at other stores and shop there instead. Even if the item isn’t on sale at the other store, it’s usually only a few cents more and I’ll happily pay that store the extra. I’d be willing to pitch into Serenefengshui’s fund to rid the world of Wal-Mart too.

  7. vaxman says:

    In order to destroy walmart, first, you must find the heart of walmart. It’s in the back, near the TV’s.

  8. Sonnymooks says:

    If I was really poor $1,200 a year on savings (after wage depression) might look good to me, but then again I am not poor.

    To be cruel, and mean, wal-marts so called “slave labor” saves money for people who shop there, who themselves are looking to save money, its an easy conclusion that consumers, especially ones looking to save money or who are poor themselves depress other wages voluntarily, by looking out for themselves.

    FWIW, I like costco better anyway, but I prefer to save money by just not spending at much.

  9. Stan LS says:

    @Serenefengshui:
    Then you are a fool.

  10. Munsoned says:

    @vaxman: Nice.

    Wal-Mart greeter: “All are welcome, all are welcome…”

  11. boandmichele says:

    @vaxman: lol yes, look for the mirror.

  12. boandmichele says:

    @Stan LS: id say he’s a fool in the king lear sense only.

    i too, would pay to get rid of walmart.

  13. etinterrapax says:

    Yeah, that campaign annoys the crap out of me. It’s not the amount of money or the question of where the money’s spent; it’s the old saw about saving money by buying stuff. Wal-Mart’s goal is not to save people money. It’s to enable them to use the same amount of money to buy more crap. Preferably from them. If people really started saving, it would not make Wal-Mart happy. Fortunately for them, most people don’t know how to live Depression-style, and wouldn’t if they did. Let’s hope it never becomes an actual necessity.

  14. Stan LS says:

    @boandmichele: And what would the benefit be?

  15. MsClear says:

    Just to clarify, by slave-like conditions, I meant the people overseas who produce the goods in sweatshops. Wal-Mart sucks as an employer I’m sure, but I do try and avoid hyperbole when possible.

    I know I can’t avoid all products in this globalized world, but I can reduce my consumption and increase my total assets.

  16. balthisar says:

    Groceries and travel and a pair of iMacs aside, I can’t think of what I’d’ve spent over $2,500 on, and so, no savings. Wal-Mart’s not a grocery competitor yet, so I can’t imagine they’ve influenced prices much, especially at the two places I shop: the ghetto in SW Detroit and the fancy-pants place in Clinton Township.

    Hell, I don’t think I’ve even spent $2,500 on gasoline.

  17. saltmine says:

    @balthisar: Super Wal-Marts do have groceries.

  18. emilymarion333 says:

    I think I save that much every year by just not shopping at walmart ever!!!

  19. lostsynapse says:

    Can anyone think of a way of to tie this story with the Jimmy Dean story? I’m stumped.

  20. bohemian says:

    We used to shop at Walmart when they first opened up here, this was before many of the other big box retailers opened up and before Target expanded.

    If I took hubby and kids with to buy basics at Walmart we always came out with a bunch of impulse crap someone just had to have.

    We quit shopping at Walmart and I go by myself to get basics for the house (food, house cleaning stuff etc. )
    If someone wants something they have to make a special trip and that makes them think twice about really needing it.

    This has saved us a ton of money.

  21. Stan LS says:

    @bohemian:

    “we always came out with a bunch of impulse crap someone just had to have.”

    Doesn’t sound like the problem is Walmart, does it?

  22. liquisoft says:

    I hate adspeak. I really do. I have been asked so many times to make some copy I wrote more “adspeaky,” which essentially means to add an emotional twist that overrides the honest truth. It’s painful to do so.

  23. Stan LS says:

    @liquisoft: Welcome to marketing.

  24. warf0x0r says:

    I knew it! I saw that commercial last night and I couldn’t believe that it was costing me 2500 bucks not to shop at Wal-Mart.

    Thanks!

  25. spinachdip says:

    @Stan LS: You might have missed the point there, a bit.

  26. Consumer-X says:

    Basic Capitalism folks. Competition from Walmart drives all prices down. It works the same as when a corner gas station at an intersection lowers its prices and the other stations on the other corners follow suit. This is not a bad thing. It merely saves consumers money and drives increases in service, productivity, and ingenuity. Those who are against Walmart are simply elitists who care nothing for the common consumer.

  27. Stan LS says:

    @spinachdip: Which is what? That a store that supposedly everybody hates is some how (magic?) is still successful?

  28. spinachdip says:

    @Consumer-X: If you looked at the $2,500 figure in a vacuum, you’re absolutely right.

    But that figure is offset, not just by depressed wages as mentioned above, but also infrastructure improvements and maintenance that a big box store would necessitate. Then there’s the not-exactly-easy-to-measure, but inevitable effect of price wars at several levels, including vendors operating at lower margins, outsourcing manufacturing and/or sacrificing quality for volume.

    Sure, at a very basic level, the $2,500 saving looks good, but you’re paying for those lower prices somewhere else.

  29. Nelsormensch says:

    I wonder how much Wal-Mart “saves” if one factors in the cost to taxpayers Wal-Mart creates. By keeping many employees part-time only, paying meager wages and encouraging employees to sign up for welfare and other public assistance, Wal-Mart actually costs taxpayers millions annually.

  30. Stan LS says:

    @spinachdip: Uh, if you bothered to read the post it clearly states that “after wage depression, the net increase in purchasing power averages only $1,122 annually”. That’s still a net positive.

    “also infrastructure improvements and maintenance”

    How’s that a bad thing? As for “operating at lower margins”, why do I, as a consumer, care that they operating at lower margins? I hope they do, cause then I pay less! As for sacrificing quality, if the quality is not up to par (at their specific pricepoint, ofcourse) – I’ll go else where. But it’s my choice, isn’t it?

  31. SpecialEd says:

    Why is WalMart singled out when Mcdonalds, Sears, Kmart, etc… have the same hiring practices. The fact is that Wal Mart provides low-cost necessities to millions of consumers everyday an millions of jobs to those that need employment. It’s easy to talk about how you wouldn’t shop at Wal Mart, but I would bet that most of you are full of it.

  32. czarandy says:

    @Nelsormensch: From your link the cost of each Walmart store to taxpayers is about $400,000. There are 3,800 stores in the US, so in total that costs an extra $1.5 billion. But since there are about 300 million people in the US that’s about $5/person. It hardly offsets the $1,122/yr benefit.

  33. Javert says:

    I find it odd in that many (most) posters on the consumerist are anti-walmart b/c of their labour practices, etc. Yet on other posting, these people bash a store like Starbucks for being too expensive for coffee when it is expensive b/c the employees are not paid slave wages and they get insurance. I apologize in that this is not about the article but I could not resist in light of the walmart bashing.

  34. spinachdip says:

    @Stan LS: Please try to read my comment more carefully. I never said the wage depression negated the savings completely, but it takes away a good chunk.

    And no, infrastructure improvements and maintenance are *not* bad things per se, but someone has to pay for those extra lanes and new exit ramps and traffic lights. Guess who foots the bill?

    And lower margins mean less spent on R&D, and lower quality means lead paint in toys and tainted foods. Of course you have a choice – by choosing manufacturers that don’t sacrifice quality control to maintain the tight margins – which of course is counter to Wal-Mart’s business model.

  35. spinachdip says:

    @Stan LS: No, keep trying. Other posters have pointed it out.

  36. Stan LS says:

    @spinachdip: It’s still a net gain. Better infrastructure is a bad thing now? As for your other point, again, its up to the consumer and judging by Wallmart’s success that choice is crystal clear.

    @spinachdip: I like the points made by the posters in the second half of the thread.

  37. FrankTheTank says:

    I hope to soon see an article pointing out that when groups say Wal-Mart COSTS people $2000 a year, it doesn’t include the consumer surplus created by its lower prices.

    I mean for every health care/welfare $ Wal-Mart costs a county/city, the tax revenues and lower prices for consumers offset a big part of that…

    (I don’t love Wal-Mart or anything, it’s just a little discouraging to see people so easily embrace statistics with out questioning, no matter what side you’re on…)

  38. cef21 says:

    @bladefist: When I lost my job a few years ago and went back to school, buying groceries at Walmart was one of the ways we managed to keep out of bankruptcy.

    I am the anti-walmart-hater. Sure, there are some negative effects, but I am unconvinced that low margins, low prices and economies of scale are a bad thing.

  39. Consumer-X says:

    @spinachdip: That’s what Capitalism is all about. Capitalism can be harsh sometimes but it drives innovation and productivity. Besides the alternative, Socialism, has failed everywhere it has been tried and is responsible for the deaths of over 100 million people over the past century. When the two systems are compared, Capitalism is the only choice.

  40. Scuba Steve says:

    It’s not Walmart’s fault our economy is in the crapper. It’s our government, combined with our lack of producing things of value.

  41. spinachdip says:

    @Stan LS: More infrastructure isn’t necessarily better, if the quality of life remains the same or goes down (sorry, should have said “increased”, not “improved”). My point is that Wal-Mart and the like pass on a good chunk of the cost of doing business to taxpayers, which is true for all businesses, but the impact is especially great with big box stores that do require infrastructure investments.

    As for that point you’re searching for, the magical $2,500 figure requires the assumption that consumer behavior stays the same with or without the presence of Wal-Mart. And as the linked article mentions, the dip in consumer confidence will most likely lower that savings figure.

    But even if the study did have an adequate control group, saving $2,500 requires a family to spend a great deal more than that. It reminds me of a post a while back about people who “save” hundreds with coupons who end up spending more than otherwise.

  42. spinachdip says:

    @Consumer-X: I didn’t realize I had to make a choice. I’ll inform Sweden.

  43. Consumer-X says:

    @spinachdip: “I didn’t realize I had to make a choice. I’ll inform Sweden.” You are proffering an economic point of view and I am proffering an opposing point of view. We as a society must debate both sides and we will all have to chose which economic system is best for our country.
    Let me continue this enlightening discussion with the following:
    Try going to any Walmart on the 1st or 2nd day of any month when the government public assistance payments get distributed. Try adding up the cost to taxpayers for each of those full shopping carts. Multiply that number by 12 payments per year and compare that figure to the alleged social cost of a Walmart store. This issue gets more complex the deeper we dig…

  44. girly says:

    I find it hard to believe you ‘save even more’ by shopping at Walmart because if you did–wouldn’t Walmart be all over that?

  45. Stan LS says:

    @Scuba Steve: Our economy is in the crapper? LOL!@spinachdip: Regardless of the consumer behaviour, the bottom line here is that the dollar goes further.

  46. Sonnymooks says:

    Just a question to ask?

    Why does wal-mart get the blame for all of its perceived negatives, and yet the consumers who drive Wal-Mart and reward them (greatly, I may add) and thus are the main contributing factors, get the free pass?

    If Wal-Mart opens a store, and the consumers, for whatever reason, chose not to reward wal-mart, or not shop there, or give their business somewhere else, then does not wal-mart fail?

    Please note that Wal-Mart is not undefeated in the global marketplace, they have failed in various regions of different countries.

    It seems the real gripe, is that consumers refuse to punish and instead reward (via voting with their wallets or pocketbooks) the practises that those who hate wall-mart abhor, and thus the critics want to reduce the consumers choice in the matter.

    I.E. you have voted wrongly, and thus your choice must be taken away, but we won’t blame you, we will blame the choice itself instead.

    Then again, I do know many folks who think democracy needs to be limited, so I guess I do understand it.

  47. JAYEONE says:

    hmmm…so, hate the Wal-Mart lovers?

    (confused look)

  48. yahonza says:

    @Sonnymooks:

    Democracy DOES need to be limited, hence the constitution, which does just that.

  49. JiminyChristmas says:

    But of course, the more you shop with us, the more you save.

    Uh, no, the more you shop, the more you spend.

    I think the word ugly pretty much sums up everything unlikable about Wal-Mart. The stores. The products. The corporation. And the Waltons themselves.

  50. Sonnymooks says:

    @JAY1937:

    Maybe, lets be honest here, Wal-Mart critics can hate Wal-Mart all they want, they hate them till the cows come home, go to bed, wake up the next morning, and as long as the wal-mart “lovers” support wal-mart, spend at wal-mart, and support and reward wal-mart, wal-mart would be wise to just ignore its critics or consider them nothing more then a nuisance.

    A funny thought just popped into my head, “Love overpowers hate”, I’m laughing now, but that might explain why Wal-Mart is still so dominant….though when wal-mart fails, hate is usually NOT the reason (go figure).

  51. Sonnymooks says:

    @yahonza:

    Then I should have used the phrase further limited.

    Alot of people I have encounted would like to see “more” limits places, from everything from who is allowed to run, to who can vote, and to reasons why someone can or can not vote, etc.

  52. uricmu says:

    That’s so much BS. Competition in general and the availability of online goods all save a lot of money to everyone. Walmart didn’t great competition. Perhaps target and price choppers did ?

  53. yahonza says:

    Neither one of these numbers make much sense to me. How does Walmart know that IT is responsible for saving $3500 per family per year. I have no doubt that competition and efficiencies have driven the price of consumer goods down over time, which is a good thing, but could you possibly know how much to attribute to Walmart?

  54. mthrndr says:

    @Scuba Steve: WTF? Did you wake up this morning in 1931 or something? Get some perspective.

  55. synergy says:

    How hard is it to believe that people don’t shop at Wal-Mart? I don’t. I can think of one time I stopped there and that was because my husband and I had been at a park where we got scraped up and were in real need of Band-Aids and Wal-Mart was our only option. If we hadn’t been bleeding, we wouldn’t have gone there. That was a few years ago, though.

  56. catsup says:

    @sonnymooks: but, wait, I’m confused. Isn’t the problem that the people who get taken in by these obviously not wildly intelligent or challenging marketing campaigns are the type of people who don’t have the ability to think for themselves. If someone tells them WalMart will save them money, they shop at WalMart. Is that democracy?! Really?

  57. spinachdip says:

    @Stan LS: Let me see if I can explain in more simple terms.

    I happen to use a brand of electronics that many mock for being overpriced, but actually outperforms other brands in Total Cost of Ownership comparisons. So I’m willing to pay more initially, because it means that I will ultimately pay less than if I’d bought a cheaper competing product.

    It’s sort of the same concept – all good things have associated costs, some quantifiable, like wages and infrastructure, others less immediate or quantifiable, like shorter obsolence cycles, compromised safety and quality standards, etc.

    Look, this isn’t an anti-Wal-Mart screed. I concede that the $2,500 savings are nothing to sneeze at. But once you factor in the quantifiable costs, and depending on what you value, and how you value some of the intangibles, the net value of the $2,500 savings is diminished to some degree.

    You clearly value pricetag savings above all else, and that’s fine. But is it that hard to see how a rational person can disagree and think that $2,500 number isn’t as shiny as Wal-Mart wants us to believe?

  58. boxjockey68 says:

    You couldn’t PAY me to set foot into a walmart. Yuck, yuck, double yuck. No lead or nasty skin burning chemical filled items for me or my family thanks!

  59. It’s easy to talk about how you wouldn’t shop at Wal Mart, but I would bet that most of you are full of it.

    @SpecialEd: Seriously? You honestly can’t believe that there are people that don’t shop at Wal-mart? Why not?

    Unless you live someplace where Wal-Mart has little to no competition it isn’t impossible to avoid Wal-Mart. They don’t have anything I’ve needed that I couldn’t get someplace else. They’re not even closer to where I live. For me it isn’t even about avoiding Wal-Mart, it’s why would I bother going out of my way to shop at Wal-Mart.

  60. MeOhMy says:

    @Consumer-X:

    Capitalism can be harsh sometimes but it drives innovation and productivity.

    On paper it drives innovation and productivity. Just as on paper socialism makes everyone happy and secure.

    But in actual practice this is not always the case. The destructive competition that Walmart leads forces innovation primarily in cutting costs which often results in poor quality (how much of the savings is lost to having to replace once-durable items every year?). They drive everyone to reduce production costs which lately means sending production overseas and plays a part in the waning US economy. Wal-Mart has the financial power to sell products at a loss just to get people in their doors and to stay out of their competitors’ doors.

    In both straight capitalism and straight socialism you are hamstrung by the fact that humans have to be involved. Humans that are sometimes evil and/or greedy and sometimes need to be checked.

    I’m not so much anti-Wal-Mart as I am Pro-Keeping-The-Other-Guys-Around. Whether the “other guy” is Target, or my local butcher. If everyone shopped at Wal-Mart, all we would hae is Wal-Mart and that’s far from what capitalism should be.

  61. FLConsumer says:

    Just HOW does Mal-Wart save the average family $2500? Which families spend enough on the type of crap Mal-Wart sells to save $2500? Lower prices, in Mal-Wart’s case, = lower quality, which requires consumers purchase more crap because it’s wearing out sooner.

    @SpecialEd: I haven’t bought a single thing from a Mal-Wart in well over a year and don’t miss the dehumanizing treatment by demoralized employees and inept managers, nor the filthy stores and trashy people Mal-Warts tend to attract.

    I’ve long commented on this blog that I want good service and am willing to pay for it — and I really do. In the long-run, it’s cheaper. The stores which focus on service depend upon repeat customers, not volume, to keep them in business. Therefore, they can’t afford to offer poorly-made sweatshop crap, nor can they afford to have unhappy (underpaid/mistreated) employees. The benefit to me is that I get goods which are of high quality and will last far longer than some cheap discount-store product, so I’m getting more for my money and spending less. It’s no secret that manufacturers have a different (cheaper) line of products they send to Mal-Wart, because that’s how Mal-Wart wants it.

  62. thenino85 says:

    Walmart has its advantages.

    It’s pretty much the only place open after 10 p.m. Also, if you live in a college town, there’s usually a lot of cute chicks walking around inside. Along with the mandatory 500 pound woman on a scooter. I think that Walmart keeps them in the back. Considering the way some of those college girls behave, I can’t help but wonder if the scooter lady is meant to be a warning, like a Ghost of Partying Past. Anyway, maybe it’s just that the Walmart here is nice compared to most, but I don’t see what the big deal is about the place.

    Oh, I forgot, gotta be cool. Walmart sucks! I’d much rather pay more for all the things I buy on a college student budget in order to stick it to The Man! I’d much rather give all my money to another The Man who pays the same wages to all his employees and also imports all his good from psuedo slave labor in China as well!

  63. Shred says:

    Um, unless the parents in the family happen to work at Walmart and depend upon Walmart wages. Or unless the parents happen to work at a store that Walmart put out of business with their “low, low prices”. Or unless you got pregnant because the Walmart pharmacy was the only pharmacy in your small town and refused to dispense birth control and now you have to have an expensive abortion or an expensive baby.

    This number takes into account Walmart’s effect on prices, but not Walmart’s overall effect on local economies.

    Thenino85, catch a clue. Dissatisfaction towards Walmart isn’t about “being cool”. It’s about giving a shit about human rights and dignity. And while Walmart shoppers do save money in the short term, they also participate in devastating local economies.

  64. joebloe says:

    THANK YOU Walmart. They saved me at least $2000 a year on prescription medications alone. Pravastatin and Lipitor costs $160/month at CVS/RiteAid/Walgreen but goes for only $4 at Walmart.

  65. LucyInTheSky says:

    strangely, i would prefer to have walmart scraped off the face of the earth and not save that money. they are just too evil.

  66. Consumer-X says:

    @Shred: “while Walmart shoppers do save money in the short term, they also participate in devastating local economies.”
    Funny, every Wal Mart I have ever seen has been surrounded by other businesses. Please point out where those Wal Mart stores are that are surrounded by smoking craters. Urban legends are fun and entertaining but facts are more important in serious discussions.

  67. techforumz says:

    @Consumer-X: Innovation and quality don’t arrive from wal-mart, dell, micro$oft, or iPods, they contribute the other way, to REDUCE Innovation, quality etc…

  68. techforumz says:

    Walmart is the UGLIEST corp ANYWHERE. I particularly REFUSE to buiy anything from wal-mart unless I can’t find it elsewhere.