Walmart Is Starting To Worry

Previously exuberant Walmart is getting a little worried about the economy, according to CNNMoney.

“No one has a crystal ball to look into the economic future, but we know the economy will be a critical factor this year,” Wal-Mart CEO Lee Scott said in a recorded call discussing the retailer’s results…”Some customers were a little more cautious about their spending in January,” Scott said. “That is why we will continue to be diligent in improving our business in every way.”

This non-statement is quite a change from the previously excited predictions Lee Scott shared before the Holidays:

“I feel we are well positioned for an economic downturn,” Scott said. “Our low prices and low-cost business model should give us an advantage over other retailers if things get more difficult for consumers.”


Wary of economy, Wal-Mart cautions on ’08
[CNNMoney]
(Photo:RowJimmy)

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  1. darkclawsofchaos says:

    … the fall has begun, more people will need the walmart low prices, which screws the economy even more causing more people to turn to walmart in a vicious cycle til Walmart start having doctors and pharmacists working there, no wait, they already have pharmacists! And they are planning on employing doctors in their clinics, uh oh…

  2. bbbici says:

    Hmmm, seeing as Walmart ruined the economy…

  3. hhole says:

    Walmart is the best example of business entropy. My guess is that historians will look back on Walmart 100 years from now and discuss the demise of a giant retailer that was addicted to cheap oil.

    Regardless if you love, hate or are meh to Walmart…there is no denying that the basis of Walmart’s staggering growth and success was cheap oil. Moving those products from China and elsewhere around the world was almost singularly placed on cheap oil and all those cheap inputs derived from oil products. True, cheap labor can be found all around the world but only cheap oil moves those products across the oceans, loads them on semis and delivers them to local shop.

    Of course there are lot of other companies that do exactly the same thing as Walmart. Let’s be honest though, all the retailers in the field are just imitators. Walmart just set the standard for everyone else to mimic.

    Here’s to Walmart, the new future dinosaur before our very eyes.

  4. jchabotte says:

    @darkclawsofchaos:

    then soon, perhaps Costco will have a law school?

  5. Rando says:

    The sad part is…the only person worried about the economy is a fucking retailer. If only our own government would open their eyes.

  6. stevegoz says:

    @hhole: So word. Totally.

    Of course, the same can be said of how cheap oil accounted for the housing boom, the city with no tall buildings and no life after dark and the latest round of commuter-rail-free suburban sprawl….

  7. scoopy says:

    @Rando: Yeah, boo-hoo we need some one to step in and help us. Of course, we’ll complain they we do. Boo-hoo two.

  8. Snarkysnake says:

    @darkclawsofchaos:

    “more people will need the walmart low prices, which screws the economy even more”

    Mr. Claws , Could you ‘splain that for me,please ? If I can buy something for less money , I’m almost certain that that will leave me more than I would have had otherwise to spend on other things…Like feeding my ankle biting , crumb crunching curtain climbers. Or should I pay more and have less ? Don’t really get that. Do you not believe that in a world without a Walmart -type leviathan , that when the economy turned down , other retailers would try to keep their profits up for their shareholders by squeezing the only source of revenue that they have (you and me,brother) ? Indeed , this is happening in another business right now. Scroll up to see the story about how Bank of America is putting the screws to their customers to make up for their subprime stupidity. But first, please, justify me paying more for stuff…

  9. BlazerUnit says:

    @Snarkysnake: Since you asked nicely:
    [www.fastcompany.com]

    Take notice that the source isn’t some left-leaning protest site.

  10. kimsama says:

    @Snarkysnake: He’s saying that Wal-Mart is so large that it impacts the economy on a large scale — for example, when Wal-Mart demands its suppliers lower their prices, they are forced to (because it’s such a large retailer, they can’t afford not to do business with them). Then, because the price drop they’ve offered to Wal-Mart eats into their margin, they must turn to other ways to save money (off-shore labor, purchasing materials/goods from overseas companies). This leads to Americans losing their jobs (generally in sectors wherein the people do not have a high degree of education, like manufacturing or textile work). Those people, now unemployed or underemployed, must now shop at Wal-Mart, because they have no money. But because they have very little money, maybe they aren’t buying as much as Wal-Mart wants them to buy, so Wal-Mart’s not making enough money. So Wal-Mart demands its suppliers lower their prices, they are forced to (because it’s such a large retailer, they can’t afford not to do business with them). Then, because the price drop they’ve offered to Wal-Mart eats into their margin …

    Repeat ad infinitum.

  11. Snarkysnake says:

    @kimsama:
    Then these people that you mention that have no money should go to places that charge them more ?

  12. savdavid says:

    Wal-mart is going down and taking a large chunk of the economy and people with them.

  13. kimsama says:

    @Snarkysnake: No, that’s a straw man argument. The real issue is that Wal-Mart should stop trying to make its billions of dollars by undercutting every supplier so much that it creates a race to the bottom that will eventually consume the foundation of the U.S. — its middle class. By slowing eroding the incomes of the working masses, they are creating a situation in which you can’t shop anywhere else, because you don’t earn enough money. Then and only then will the necessary condition for your question (i.e. everyone lacks the money to shop anywhere else) exist. I am stating that we need to prevent that precondition. Perhaps by allowing Wal-Mart workers to unionize? Or by forcing it to pay larger corporate taxes to offset its negative externalities? There are possibly many ways to fix the problem.

  14. bohemian says:

    Walmart, SUVs, McCastles, ARM & interest only mortgages. It is like a giant ship slowly tipping over before it goes upside down.

    The translation for Walmart’s recent comment is that their strategy that everyone was going to shop at Walmart when times got tough didn’t happen. Instead everyone scaled back on spending.

  15. hi says:

    @kimsama: well said

  16. Kendra says:

    Maybe runaway inflation will finally decrease.

  17. cmdr.sass says:

    @savdavid: No it isn’t.

  18. Snarkysnake says:

    @kimsama:

    So, What retailers DO you approve of ?
    And what should WalMart do with it’s billions of dollars ? Since they belong to the owners,it’s only fair that we give them to…The UFCW ? The Catholic Church ? Who ?
    What business ,or company meets your criteria ?

    BTW- WalMart workers can unionize now,but it’s awfully hard when they don’t stay there very long and see no need to pay union dues for benefits that they will never collect. I would have NO PROBLEM with their unionizing . None. But their new found prosperity and long term job security has to come from somewhere. Since you already admit that WallyWorld is not a charity, I guess that the ones paying for it will be…You and I.This will have the happy result of raising their price umbrella so high that another company (with a non union workforce) will be able to come in under them and undercut their prices. Will this unnamed company then need to be punished for their “negative externalities “?
    See, folks. This is just WalMart hate.This is taking an economic problem and making it a political issue.These people want more money and benefits for a class of people (Union workers)and they would pay for it by having customers pay higher prices. It really is that simple. I don’t shop at WalMart much (hate the long lines ) but would it be any better for anyone if it was union ? Would the workers suddenly be any more cheerful and efficient ,or would the atmosphere of mutual suspicion and mistrust between workers and management poison everything ? (Hint – it ain’t working for GM) Would ironclad job security make them more responsive to your needs or less ? Would the union bosses become models of propriety or would they be a law unto themselves ? And thats no straw man…

  19. Trai_Dep says:

    Translating Wal-Mart’s PR speak into English:

    “Our low prices and low-cost business model should give us an advantage over other retailers if things get more difficult for consumers.”

    to:

    “Our bait-and-switch low-cost loss leaders will lure foolish customers to our store, where they will find themselves paying more than shopping elsewhere. We’ll keep the difference but whine poverty to our suppliers, forcing them to off-shore more middle-class jobs and destroy the our middle class. And whichever locally-owned stores we can crush under our hob-nailed boots.”

    “Killing their pets, poisoning their children and dressing them in Nazi-emblazoned clothing? That we do simply for the giggles.”

  20. Trai_Dep says:

    @Snarkysnake: Costco and your locally-owned retail outlets (they hire more, pay more and recirculate more money to your local economy. They also eschew hiring legions of gov’t lobbyists, instead focusing on providing great service at a sustainable price.

    Failing that, Target. Only because they’re less evil, of the biggies.

    If neither of these work for your location: shop the internet for the above kinds of establishments.

  21. Jeff Foxworthy says: You know your economy is in the shitter when… rednecks is too poor to shop at Wal*mart.
    In all seriousness, is it possible that American cost shoppers have awaken to the high cost of low prices at Wal*Mart? My Grandma, a real big business republican, is very worried about job export to China and oddly blames Wal*Mart. I say oddly, because she’s very unlikely to blame a big business for anything.

  22. Snarkysnake says:

    @Trai_Dep:

    I shop there too…But it’s because they do a damned good job at what they do- not because I approve or disapprove of the way they spend the money that they earn or how they treat their workers (they must treat them pretty well because they are really nice at Costco). But Costco is not union either.Nobody is writing any boring books about how to “control” Costco. Nobody is organizing a “Costco Project” to force their social values on it’s shoppers.I’ll bet that there are more than a few Costco and Target employees that get some public health assistance or other tax suppported benefits. Nobody is demanding that Costco’s and Target’s shareholders pick up that tab.No, Walmart is a convenient sump for all of the anger that some people have against…Business in general.

  23. @Snarkysnake: Once upon a time, General Motors was the largest employer in the US and the world. The folks at General Motors made an actual product. Inputs come in, value is added, and they go out. The economy is enhanced as Capital (with a K) meets Labor (with an L).
    Currently, (ignoring the Federal Government), Wal*Mart is the largest company in the world. Some of this is WalMart’s manifest destiny. Some of it is a comic series of CEOs at GM all of whom lacked vision of anything accurate. Wal*Mart’s business model is a little different. Kapital is spent on goods made by other firms, and resold at a higher price. They do not add much value to the value chain, other than being a one stop shop for all of your needs. They actually steal value from other companies. How? Lemme ‘splain.

    You make pickles. Pickles are a value added product. You (labor) brine you up some cucumbers (kapital), and ideally your pickle is worth more than the cucumber, the junk in your brine, and the labor it took to move all that kaptial into a finished product. You MUST sell through WalMart. You don’t make a fancy pickle. And you need to sell a lot of pickles to repay your investors for their investment. WalMart, holding something like 40% share of the grocery market, is really the only way you can make your volume. Or rather, without WalMart in your mix of retailers, you CANNOT make your volume. WalMart alone doesn’t do it, but considering the concentration in the industry, you can’t make it without them.

    So, with hat in hand, you go to WalMart. They tell you some things.
    #1- Your price for pickles is too high.
    #2- Your pickle jars are too small.
    #3- You have too much overhead in your cost structure.
    #4- You need to match your logistics chain to ours if you want to be in here.
    Remember, you need these guys, otherwise, it’s back to your pickle drawing board. Luckily, they have some suggestions on how you can lower your overhead, match their log. chain, and cut your price.

    “You have to dump your fat, lazy, overpaid american workers, and get some lean mean Banglideshis, Myanmarese, or Rural Chinese workers. Easy Peasy, you move your operation to China. The money you save on labor is larger than the cost of setting up and shipping. In fact, you can deliver them right to us in China, and our logistics system will take over. Oh, and bigger jars.”

    What has happened:
    1- Jobs are gone, and your former employees have to go find jobs in other industries, like maybe retail greeting. Obviously, there will be a wage decrease. There aren’t a lot of industrial pickle brining jobs around.
    2- You’ve moved the value creation out of the country.
    3- This might work very well for you and other large stockholders.
    4- It works very well for Wal*Mart.

    A little value has been destroyed through our pickle journey. But a lot of value has been moved from low class Americans to rural Chinese, SnarkSnake Pickle Co. shareholders, and to Walmart shareholders. A little value has moved to Walmart customers.

    This is the invisible hand. The thing is, your factory workers probably caused it by shopping at Walmart in the first place.

    FWIW: I don’t shop at Walmart, never have, never will. It’s not about the economics and it’s not even about the ethics of patronizing a company that routinely cheats workers out of overtime, health benefits, and has epidemic sexual harassment. It’s that I’m an urban sophisticate and I’m willing to pay a little more for wider aisles, nicer product, and not to have to shop with people who shop at Walmart. I self select out. Might make me a bit of a turd (in my MBA class, I think I turned off a lot of people by saying I don’t shop at WalMart because I’m an urbanite and I hate being there, and this is a self selection thing that works for everyone.), but so be it. I can handle being a turd and spending a little more to do so.

  24. @Snarkysnake: [www.costco.com]
    vs.
    [www.walmartstores.com]

    The reasons no one is forcing their values on Costco are:
    1- Costco already pays more than Walmart, and has good benefits compared with the package most grocery workers have.
    2- Costco is generally more profitable than Sam’s Club, the equivalent arm of Wal*Mart. (It’s hard to tell, as their statement’s don’t disambiguate Sam’s from general Wal*mart, but by most readers, Costco is a better buy than a theoretical Sam’s Club stock offering).
    3- Few people are big enough jerks to clamor for lower benefits standards when the business is very profitable for the sector. Few, not none.

    When you’re better to your people, make more money anyway, and actually have values while having low prices, no one is gonna nag you.

    FWIW: I don’t shop at walmart as discussed above. I do like Costco. I feel like I belong and they cater to my niche.

  25. Snarkysnake says:

    @PotKettleBlack:

    Next time,go to an accredited school…

    WalMart caters to the needs of the price shopper. If you had paid attention in class, you would know that WalMart’s advantage is logistics,inventory control and information systems. Nobody makes the poor pickle packers do business with WalMart. Invisibe hand ,my ass. If they signed a disastrous deal with a sharper group of businessmen than themselves,they deserve what they got.Make higher end pickles with different flavors (jalapeno pickles-yummy). Make gourmet pickles so that you don’t have to sell them to schlubs that go in Walmart for a deal on pickles.Put pickles in small packages for kids lunch. With MBA’s like you out there,it’s no fucking wonder that businesses can’t compete. WalMart is a business , not a social services agency. They exist to make a profit. If you consciously pay more than need be for stuff, you need to check into your business school’s refund policy.

    BTW- A 40 % market share figure for groceries in a country the size of the U.S. is absurd.Do some research . Its really more like 15-17%

  26. hwyengr says:

    @Snarkysnake: It’s not that people think Wal-Mart should give their money away, it’s that they should make less money by not destroying the economy to strip every penny they can.

  27. @Snarkysnake: Excellent points. A lot of times we forget the upsides to corporations. Thousands of folks trying to figure out the most efficient logistics system to move goods is an incredible asset which yields a lot of answers as to why Walmart has low prices even when shipping costs are through the roof.

  28. B1663R says:

    @hwyengr: Why? there is no profit in charity.

  29. CumaeanSibyl says:

    @PotKettleBlack: Your explanations are great.

  30. richtaur says:

    Wasn’t their CEO recently the richest man in the world, just beating out Bill Gates? I think that changed quickly, but still, they’ll be fine.

  31. Trai_Dep says:

    @PotKettleBlack: I recall reading a Slate (?) story on Vlasik’s experiences with Wal-Mart.

    Basically, Wal-Mart thought it would be “cute”, and a loss-leader to draw in the rubes, for Vlasik to offer some huge amount of pickles for $1. Five or ten gallons. Vlasik rightly was concerned it’d dilute their brand, commoditize it, make even their most fanatical customers so woefully sick of pickles by the time they’d eaten their 1,499th pickle that they wouldn’t buy Vlasik – or any pickle – for years. They knew this was a horrible idea for their product, customers and industry.

    Never mind, Wal-Mart was set, and told them if they didn’t do this, they’d clear their shelves of ALL Vlasik products, and replace it with a no-name Chinese mfr’s. So Wal-Mark forced them into it.

    Sure enough, less than a couple years later, the 5-gal Vlasik pickle jar lost it’s novelty factor, didn’t sell, and was removed from the shelves.

    Of course, by then, there were no other sizes of Vlasik pickles (who’d buy a 1/2 quart jar when $1 5-gal ones were sitting next to them?)

    So Vlasik found its market – one that it’d struggled for 100 years to build, destroyed by some swarmy Wal-Mart executive’s whimsical promotion. And all those US workers. And all the benefits of the value-added happening within our borders. And the Wal-Mart rubes that were fooled by this bait-and-switch.

    That’s why Wal-Mart is evil. That, and the fact that this sad tale is repeated on a daily basis.

    Costco, et al. don’t do this, since they’re concerned with the long-term health of their vendors and the long-term value provided to their customers.

  32. forever_knight says:

    @Snarkysnake: riiiight. walmart does well because of “logistics” wink wink (their workers are on public assistance because of the shitty conditions!) wink.

  33. FredTheGreat says:

    @kimsama: Are you a carpenter? Cause you hit the nail on the head with this. It’s a viscous cycle that Wal-Mart started and will eventually take them down, but only after they have raped the American public of all their assets. They could single handedly throw this country into another depression only I could see this one being much worse. I don’t want to sound like a Dooms day type person but if something doesn’t happen to rein this in it could very well destroy the country. I’m not an expert it’s just my opinion.

  34. girly says:

    “I feel we are well positioned for an economic downturn,” Scott said. “Our low prices and low-cost business model should give us an advantage over other retailers if things get more difficult for consumers.”

    Almost sounds like they planned a downturn for the sake of their business. ^_-

  35. @Snarkysnake: Uhm, piss on my school (top 20 MBA program) and I will buy and sell you. Your logic was clearly bought at WalMart, and made in China. With lead and nickel cadmium.

    Walmart’s value is in their logistics chain. That’s why they rule the world. I read the case too. It’s the one during discussion of which, I pissed off everyone from the south by making a snarky comment about how a glorious person of intelligence such as I would never shop at Walmart and how that was likely fine with everyone.

    The thing is, they really do not add very much to the value chain of any given product. There’s no value add to superior logistics. It’s cost reduction. And where does cost reduction get you in the long run:
    a- undercut by someone who does it better
    b- into a price war that drives all the value out of the market.

    40% may be an exaggeration. But considering the margins in common groceries, 15% of the market is not a segment any given mass manufacturer (who is making their profit on high volume * small margin) can pass on. And it’s not exactly like Heinz or Vlassic is likely to abandon their market and move upscale. Those are the companies that are being pushed to lower margins, foreign workers and general value usurpation by Walmart.

    Here’s the thing. I work in a service industry. Not a retail service, but a high level, consulting type of service. I will be well paid as long as I am employed and there’s not much chance of Walmart’s policies moving my job overseas. So, if I were as mercenary as some people, I really wouldn’t care if Walmart’s business model of value appropriation sends low wage manufacturing jobs away and makes everyone walmart poor. It’s not going to be me (I have a job, stable company, high value education, service industry, and adaptable skills). So, I shouldn’t care. But if I were employed as a pickle pickler, I might think twice about shopping for the lowest price. Why? The invisible hand.

    Since you didn’t see it, lemme explain.
    You, me and everyone on every gawker media site are self concerned individuals. We seek to maximize our value grab. We shop at walmart, because they have the lowest prices, maximizing our value. Meanwhile, the dark side of low prices is that it requires cheaper workers. If we are those people most concerned with price, we are most likely to be those workers without big sets of generalizable skills. Pickle picklers. Spot welders. Cola plant quality control guys. We shop at walmart because it maximizes our paychecks. But, it also forces our employers to run leaner ships. Some of us might get laid off. Our income goes down. Our reaction, to Walmart. Wash, rinse repeat.

    Remember, your Adam Smith style invisible hand moves for the common betterment because everyone acts in their own self interest. It needs revision, because people generally act in their own, short term self interest, which frequently mortgages their future. That’s essentially the WalMart effect. Low prices now, and low prices later when you really can’t afford anything.

    Again, I have a big fancy degree and a big fancy job that is unlikely to move overseas, at least by any effect of WalMart. So, I don’t have skin in the game. I just hate shopping at walmart.

    Last thing: On the consciously paying more for things:
    #1- Is Walmart really cheaper? For the SAME things?
    #2- Assume I like premium goods. The kind of thing they don’t sell at Walmart. I’m not stupid for paying more for a better value.
    #3- Assume I have values (I don’t have to to not shop at Walmart). Perhaps I get some value from paying a few pennies more for the same thing at some place other than Walmart. Say it’s worth a dime to me not to have to enter a walmart for something. As long as I’m not paying more than that dime, I’m appropriating the same value.

    When you actually attend an accredited school, we’ll measure up and find you still wanting.

  36. Gann says:

    Boiled down I see the problem as:

    As a successful nation we (as an American company, Wallyworld is included in my ‘we’) outsourced many of the less desireable jobs so that we could maintain a certain standard of living at the lowest price possible. This becomes a problem when the requisite lowest price possible comes at the cost of quality. That aside, the real problem occurs when the whole bubble bursts. Whether it comes from the US’s addiction to credit and innate laziness, WWIII, or $10/gal. gas prices, eventually there will be a tipping point after which it will no longer be profitable to import goods to the US on a scale that would make them nearly as affordable. Then the large corporations will start building factories in our cities where people are once again desperate enough to work for the wages they offer.

  37. MyCokesBiggerThanYours says:

    Funny thing is that Walmart reported good news this morning that drove the stock market up.

  38. girly says:

    @Gann: It does almost seem like outsourcing was a chemotherapy-type tactic to kill the ‘cancer’ of a high-paid working class.

  39. B1663R says:

    and potkettleblack whips out his dick with a massive thud…

    Snarkysnake looks in awe and then snarkysnake says….

  40. shadow735 says:

    “Momma says Walmart is of the Devil!!”
    “Let the Sin Begin!”

  41. B1663R says:

    on a sidenote with the recession and all, we’re suppose to help the economy and “buy American” but the tag on my shirt says “Made in China”

    is anything made here anymore? (deep i know)

    Now back to the story.

    Snarkysnake swore he would never don the blue vest ever again but, times are tough and he has just been called to the dancefloor. “time for some justice Wal*mart style”

    he reaches into his shirt pocket and pulls out his favorite smile, places it on his proud face. looks at Potkettleblack with a sinister glint in his eye. takes a final sip from his half-full can of diet coke which he paid fifty cents for, suddenly a word escapes his lips, faint at first, barely audible. Potkettleblack could bairly make it out.

    “Welcome to Pain*mart.”

  42. Snarkysnake says:

    @PotKettleBlack:

    Okay. Fair enough. Go to your company tomorrow morning and suggest that they pay “a few more pennies” for everything they buy because it will protect their values.Should put you in line for an even more elite job. While you are at it tell them that everyone there should be making a LOT more money. That will make you popular with the non management types.
    Adam Smith (as per your suggestion) needs revision ONLY if we were going to live forever. Otherwise,some people work hard and save money so that they can have a slightly better life in their short time here.Hell yes we act in our short term ineterest because thats the only one we have. (Not a spiritual argument here- just referencing man’s natural lifespan). MBA’s may not have to worry about getting the most out of their dollars,but the people that shop at WalMart do. Their life is clearly better than it was and they have more choices than they did before WalMart came along.
    You completely ignore the fact that your beloved Vlasic Foods was a spin off from a larger company and was burdened with way too much debt when it was spun off from Campbell’s in 1998. It never had a chance and was eventually acquired by other companies. That’s why they went “hat in hand” to WalMart to pick up business. They cut a suicidal deal that almost wrecked the company.Is that WalMart’s fault ? If I offer to sell you gas for your elite urban car below cost are you going to turn me down because it will hurt me ?
    Apparently common sense is not common knowledge. Please identify your company so that I can short it when the market opens in the morning.

  43. B1663R says:

    Snarkysnake blew the smoke from the end of his barrel. holstered his trusted sidearm. looked down at a mortally wounded Potkettleblack. smiled, and with a grin spoke the immortal words that will go down in history. “Did you find everything you were lookin’ for?”

    Potkettleblack clutching his beloved MBA from his prestigious institution looked up, smiled, and said…

  44. Snarkysnake says:

    @B1663R:

    With a crooked grin that exposed his tooth, Snarkysnake said “Send more MBA’s”…

    That’s funny as hell,what you wrote.

  45. darkclawsofchaos says:

    Ok, snarkysnake has a point, a bit narrow minded but it makes sense to a right wing capitalist, from a business point of view, your goal is money, not people, but what me and potkettleblack is arguing is the state of Americans, to oversimplify this for snarky:

    More money leaves US, moremoney trickles into undeveloped nation, that means less money in US, now that means a gap will occur with dirt poor Americans and filthy rich one, one where stability is threatened, in the end, Walmart may not be the sole blame, but they do it so well that they are accelerating this pattern faster than it should

  46. darkclawsofchaos says:

    remember, the government was made to protect property and balance property flow, if people are discontented, they will replace it, it is the American way, the rich must pay more since they have more to protect, just like raising sheep, the more you have, the more you have to spend to protect your assets, if you don’t, wolves see to that you lose more for gimping on expenses

  47. pigeonpenelope says:

    @PotKettleBlack: well said. i can’t agree more with everything you’ve discussed.

    @snarky snake: the excuse of “well its cheap and i’m poor” or “i want to stretch my paycheck so i can save money” is kinda… well… flat out ignorant. i started from the bottom of the bottom and worked my ass off to a place quite far from the bottom and a little less far from the top. i never needed to rely on walmart even when i was on a poor college student’s wage (and i should say i never had a college fund from the parents or living support). i still spent my money on local organic produce and higher-end products. it meant i had to be smart with my money and not throw money on cheap products that break or get ruined quickly. i eat quality food because i don’t want to spend my money on doctor bills when i have diabetes, heart disease or cancer. not to mention the lowered mental health state when i eat refined sugars as found in most food walmart sells. i’m not dumb, i found employers that gave benefits and i put money in a 401k, stock options, and mutual funds. i have money for the future.

    my point, you can be successful, live well, and save money for the future without relying on walmart’s “low prices”

    i think you’re too defensive snarkysnake. you tried to hit below the belly on potkettleblack by attacking his education and understanding of the economy. then he owned you and found you wanting. before he did that, he was very respectful and didn’t talk down to you. i suggest that when you find yourself losing a debate that you avoid attacks. you’re showing your lack class when you do.

  48. B1663R says:

    @darkclawsofchaos: so, in normalspeek, what you’re saying is that the rich will keep getting richer and the poor will be swept under the rug and the middle-class will just shrug their shoulders?

    unfortunately our society is very materialistic. we love showing off to people and live in a perpetual state of one-ups-manship.

    i can’t think of a way to combat this. political methods fail because they oppress too many people, a revolution will mean leader-less poor and anarchy.

    what else is left? capitalism, and consumerism. which, are two things i’m quite fond of at this time.

    (good thing i shop at Costco)

  49. B1663R says:

    @pigeonpenelope: i think Snarkysnake is more concerned about the “outsourced America” than “low prices”

    this is a guy whom i’m going to assume was taught by his parents to “Buy American” Wal mart is the ultimate symbol of a typical American mentality of “buy it now, I’ll figure out what to do with it later.” it’s in our nature to want the best, (not that Wal*Mart has the best) but for people in a lower income bracket, it’s an opportunity to buy neat things of little use to impress their coworkers on how much they saved.

    how many times do you hear the old “i got it at Wal*mart and saved 10 bucks”

    it’s true that wal mart will eventually choke themselves to death with their mantra of “lower prices everyday!”

    their merchandise will become more substandard until they will not be able to maintain a client base. and then game over.

    the world is not stupid, that’s why we have malls, people like one stop shopping and variety. it’s just in more rual area’s malls are called Wal*mart.

  50. darkclawsofchaos says:

    @B1663R: thats why I mention that this may lead to general unhappiness and possible revolution, and there won’t be a middleclass as potkettleblack has very well illustrated, capitalism needs to control itself, or it will crash, as of now, its burning, if the fire is not taken cared of, it will blow up

  51. Trai_Dep says:

    @PotKettleBlack: Perhaps you got the 40% figure from the Vlasik case. I recall that at the point that Wal-Mart pointed their gun at Vlasik’s head and made them commit marketing suicide, Wal-Mart was responsible for around 40% of Vlasik’s gross sales.

    Then again, it could be any number of individual companies that Wal-Mart has eviscerated so it could trumpet its loss-leaders. It’s one of their favorite tactics (well, that and forcing localities to give them huge tax breaks, they then use to destroy the local retailers, before pulling up stakes, leaving then repeating).

  52. Snarkysnake says:

    @Trai_Dep:
    What gun ? Do the executives of these companies lack free will ?
    I swear , you people must exist in some parallel universe where stupid business decisions are the fault of the winning party. Can you people be that stupid ?
    Back in the 20th century , we invented the word “no” .The companies that WalMart “eviscerated” could have used that word and called the company’s bluff and said ,”fine,we’ll highlight the quality of our products and paint yours as cheap” . “We’ll not let you sell any of our products and work hard to build up your competitors” Nah. That would have involved hard work. Sacrifice. Long term investment.They saw a huge retailer and took the easy way out. Anyone who’s ever been on the other side of the table from WalMart in a negotiation knows that they look out for themselves first and last. This was well known when all of these companies signed ruinous deals with them in the 80’s and 90’s and it’s even more well known today. But you know what ? It will be hard to get a motel room in Bentonville tonight because of all of the vendors that are in town to pitch their products to WalMart buyers. Explain that to me. If they are a serial “eviscerator” why do companies walk over broken glass to get in their stores ?
    Since you people are so ignorant of business ,let me outline a little story for you . Have you ever seen Stihl chain saws in a big box ? No . They said “No” when Home Depot , Lowes and even Walmart (eviscerator of companies) wanted their product at a knockdown price in their stores. They knew that they would kill their image of quality and become just another loss leader when it suited corporate purposes. They are sold by independents and they are doing fine.THEY MADE THE HARD DECISIONS THAT VLASIC AND OTHER COMPANIES ARE TOO WEAK TO MAKE. God bless ‘em, they fought back and even made a virtue of their exclusivity. Damn. This isn’t hard. You people just need to get over your plastic banana MBA -speak and learn how to compete.

  53. kimsama says:

    @Snarkysnake: There’s a big difference between a high-end power tool and a jar of pickles. High-end markets don’t work like value markets (now if Vlasic made high-end heirloom organic pickles, you may have an analogy, but they don’t).

    The big problem with all of your arguments is that you are so focused on the consumer getting a low price at all costs that you are neglecting the negative externalities that Wal-Mart has created with its business model.

    How in-depth did you study economics? It’s too simplistic to give Wal-Mart a pass because they offer low prices on shoddy goods. So do centrally-planned economies, but they aren’t a good idea, either. You can’t take one benefit out of context and say that there’s nothing wrong with a company that offers X, because X is good.

  54. pigeonpenelope says:

    @kimsama: quite right KIMSAMA

  55. Snarkysnake says:

    I call bullshit. “Negative externalities” is just lazy shorthand for your paternalistic attitude that people don’t know what they want or what is good for them. Only the enlightened elite (like yourself,of course) know what’s good for people spending their own money. Wal Mart is not the be all,end all for value shoppers ,but it gives them something they want – choice. You want two of the three parties to every sale (the manufacturer and the retailer) to conspire against the third (the consumer) so that those two make an agreed upon margin of profit. WalMart is disruptive to that and thats why elites like yourself find it so upsetting.Then, you want to tell that disruptive,successful business that it has to provide stuff that you find desireable to its employees and anybody else that you feel generous toward , like dumbass vendors that sell their goods at a loss. Fortunately for everyone , this is not taking place inside a classroom. WalMart is not some theory that you elites can poo-poo. It’s happening right now just about everywhere and the verdict is in. Wild success. Free men and women are making their decisions to shop there not because people like these jackasses tell them to,but because they want what they offer. It’s almost too easy destroying you haters transparent crackpot theories (like hunting dairy cattle with baited traps) , but wherever there is ignorance,wherever there is stupidity and overpriced pickles (and chainsaws)…Snarkysnake will be there. You’re welcome.

  56. kimsama says:

    @Snarkysnake: Thanks for thinking I’m an elite (I’m actually firmly in the middle class but I guess I’m just eloquent ^_^).

    I’m not sure that dismissing the concept of negative externalities as “lazy shorthand” for a paternalistic attitude is right. Perhaps some of the solutions dreamt up to deal with negative externalities could be seen as such, but the concept itself is pretty philosophically sound and not paternalistic at all — it is merely an acknowledgment of the fact that negative consequences will be paid for, and if not by the perpetrator, by external agents.

    Failure to properly address negative externalities can lead to market failure (when an individual or organization enriches itself at the detriment of society as a whole), which is clearly the issue being raised against Wal-mart here. Or maybe you don’t believe in the concept of market failure either?

    You can keep posting about the “haters” and how the concept of negative externalities and market failure are “crackpot theories” now. The people who read the comments can decide whose argument they agree with (or have they already?).

  57. pigeonpenelope says:

    @Snarkysnake: i think you’re confusing elite with educated.

  58. CumaeanSibyl says:

    @pigeonpenelope: Didn’t you know, anyone who went to college is an ivory-tower limousine liberal who lives off of Starbucks and the tears of the working class.

  59. fredramsey says:

    Economics 101:

    People without jobs do not buy goods.

    Read it a few times, let it sink in.

    Economics 102:

    People who make minimum wage can’t afford to buy goods.

    Here endeth the lesson.