Monday, July 14, 2008


I got sucked into another blog post by someone who commented on Wal-mart suggesting among many other things they were the 'enemy of business'. Here is my reply...

While I cant say much about the lines, the little old lady or where they stock their stuff, I did have thoughts on the 'enemy of business' comment. I am going with good ole' fashion economic principals leading to my general assertion that you are talking about one of America's greatest companies and a symbol of what makes our nation so amazing.

Wal-mart has absolutely revolutionized the way companies handle warehousing, shipping, merchandizing, supply chain, pricing & transportation of goods in this country. They have EXPLOITED all that is great about the American way and made it better translating to lots of choice and with great prices. Guess who else exploits the American way? Every company in America! It just so happens that Wal-mart has done it better than anyone else so they reign supreme for now but someone is always trying to take them down. How do they do this? It’s a long discussion but it started with a guy named Sam who went around interviewing executives of his competitors who freely talked to him (not knowing what might come of the conversations) & who took buying trips to NYC where he required he and his other buyers to share rooms, eat at inexpensive restaurants and spend cautiously while other executives lived large, wined and dined clients, spent shareholder money etc.

There is story after story after story of this…. This guy was all about store efficiency, frugality, profit squeezing, and getting the best possible price for his customers. His headquarters as you know are in no-wheres-ville Arkansas (Bentonville) for a reason- It was inexpensive to build there. They aren’t in a fancy building in NYC for that very reason despite the fact many buying trips are there.

So lets go after the usual arguments: slave labor wages, the people who shop there, the long lines, putting mom & pop out of business, the vendors who are forced out of business due to global buying (China), no benefits, & alien abductions (I am sure that’s coming). Walmart has gone into small towns all across America and SAVED THEM. They have brought jobs, much greater variety of choice, and strong prices. There is likely very few in Payson or Prescott that hasn’t shopped there and hasn’t been thankful in one way or another for the savings and variety. Millions of Americans have been affected in a positive way. The money they have saved have gone to other purchases which strengthens the economy. I love the commercial that suggests the average family that shops at Wal-mart regularly have saved around $2500 a year.

There are likely those (Mom & Pop) that have been affected negatively as well. This is the Mom & Pop (M/P) selling commodity goods with little variety and high prices. You may have fond recollections of M/P but guess what- they were gouging you or were paying high prices themselves because they couldn’t buy in volume. You were stuck with their choices, prices, and service like it or not. In economics as you know if M/P had a monopoly or didn’t do a great job then their neighbor would open up a shop next door and do a better job at lower prices- competition. Competition is ALL GOOD. It’s what keeps the sellers on their toes and makes them better. Its what gives us decent prices. Walmart started as a M/P. Now there are also M/P’s that have THRIVED next to Wal-mart. It’s because they offer value add in the form of better service, specialty goods, shorter lines, less rednecks… Walmart loses that business.

Walmart sells groceries much cheaper. How? They don’t pay union wages. Unions have been trying to break into Walmarts for years. Unions are about Unions. They suck the life out of a company & I don’t want to pay inflated Union wages to any company when I shop if I can avoid it. I dont pay them at Starbucks, the restaurant I go to, the tire store I use or the mall. I don’t get paid on a Union scale personally either so why should I pay them at the grocery store? Its like paying a guy $40 an hour to build my car? This is why Toyota is now the top selling car in the US. . What happens when money is tight? Where do I go? .

Wages- I have never met a single employee of Walmart that’s forced to work there. Every one of them had a choice to go elsewhere but chose to work there despite no Unions (see above). Walmart starts at $8 an hour in Gilbert for mostly unskilled labor. It’s more than every store in the mall down the street yet people protest them?? They offer benefits to both p/t and f/t workers. It’s an 80/20 plan that costs the worker around $70 p/mnth for medical, dental, & life insurance. Their plan isn’t great but what company’s plans are these days? Walmart pays exactly the same as every company in America pays its employs- it pays them no more or no less than what is required to hire them and keep them. It pays whatever the economy dictates. If it paid them any more you would pay more for your stuff, shop there less as a result, and they would then be a smaller company employing less or possibly even out of business. If an employee wants to improve their pay or status they can further their education or work hard to advance. That’s how this country works.

China- Wal-mart out-sources and buys from other countries like China. Thousands of companies have been doing this for years. It’s a global economy. If I owned a business I would go wherever I needed to get the best price or I go out of business plain and simple. Hopefully there are no sweatshops for 12 year olds these days! Outsourcing and buying globally is a GOOD THING for America. There is a great book called ‘The World is Flat’ about how and why its all good but in short- its about better prices for you, better prices for the outsourced work which means more money for the US company to invest and hire more folks doing potentially higher wage work and stay competitive. The alternative is they close. Thats no good for anyone. We can not put a wall around the country anymore and we wouldn’t want to.

You want to be mad at a company girls? Go to the mall and look at what you are paying for those shoes and that dress? Ask yourself if the exec's at that company are sleeping two to a room? Ask yourselves if they are pinching every penny and passing it on to you? Ask them about the rent in their swanky NY digs. YOU are paying that rent!

Wal-mart is a company that has other companies looking at them and using them as a model to be better. There is a term used in manufacturing called Lean which is about making things in the most efficient way possible. They are constantly perfecting their model and processes and who benefits? YOU.

Regarding corporate givers-

From Fox “the fake” News,2933,261580,00.html

When you are the biggest retail store on the planet then you set yourself up to vilified. People often hate hugely successful companies particularly when those companies are a family run business and that family is filthy rich (most of it on paper). Its easy to hate a company that is chaotic, full of skeevy people, filled parking lots, long lines and possibly near your home. They clearly don’t do everything right though… They want your business and they aren’t getting it. They don’t want people going to Target when they could go there. I suspect they will find a way as that’s what business is designed to do. Grow or die.I tried to make this short but its just not in my nature. Now lets talk about the weasles we call Ticketmaster!John L

1 comment:

ORSprueills said...

You don't post for five months and this is the best you can do!!!!!
I didn't read the blog you are referring to, this is my view, without doing hours of research :)
Although I am proud that I haven't shopped at Wal-Mart since leaving Arizona, it has more to do with the mindless, useless things I bought there in the past. How many times do we go in with a list but get sucked into the "other" stuff and are tempted by the cheap prices. Not Wal-Mart's fault but it happens.
Also, is it the goal of every business owner to become the top company in their business? Maybe some m/p want to stay small, run a business in their hometown to support their family, and stay that way. Unfortunate for them if a Wal-Mart opens in town because most families assume Wal-Mart has the cheaper price and don't have the time or gas to shop around.
Since we don't have a Wal-mart here, we have found many m/p that are not over priced, and we enjoying knowing they are our neighbors and we are supporting their family. I like seeing the local appliance company making a delivery instead of Lowes, Sears, or Wal-Mart.
Lastly, during my experiences at Wal-Mart, they may offer benefits to their employees but I have never encountered one that deserved them!