Yes, globalization is taking over but couldn't the worlds largest retailer afford to take a small hit? By buying abroad instead of at home, I don't see how this helps the U.S. at all. Remember, my main point was that they do more bad than good for their home base. Sure they are not a monopoly overall but what about small, local markets? There are 2 towns near the city I live in where Supercenters have opened and now they are the only places in these small markets where people can get basic needs. This is the case in hundreds of other places too. Sure they generate lots of sales tax but a lot of that goes back into Wal-Mart through corporate welfare. They receive incentives totaling over a billion dollars and I also remember that employees of Wal-Mart cost California taxpayers alone around $90 million a year because most of them qualify and use government assistance programs. $90 million and that is just California alone!
hhmmm I see an aweful lot of America products in Walmart in fact. . I rarely see stuff there that I don't see in other store of the same style. . .so are those stores helping foreign countries more than america too . . if that is the case. . what does it matter if it is them or walmart? As for Wages. . . As long as they in the minimum wage . .can't do anything about it. I serious MOM and POPS or any other Grocer pays more My point is what makes WALMART Unique beyond its size cause what your pointed out. . . all those type stores do Rocket River
Loss leaders are very common in retail and I would expect that Wal-Mart uses them, but all retail companies do. Sony and Microsoft sell consoles at a loss because they can make it back with the games, Gillette sells razors at a loss because they can make it back with the replaceable blades. The point is that Wal-Mart is not selling all (or most) of its products below cost. If that was the case the company would have a negative gross margin. Now, the gross margin for Wal-Mart is lower than most companies, but I think that is attributed to the strategy of low margins, but high volume.
Why should a company pay more for something when it doesn't have to? If I was a shareholder of Wal-Mart and it was doing this I would be furious. Now there are some noble companies, like JetBlue for example who employs Utah housewives to handle all of the flight arrangements, and they should be commended for what they do. But companies who choose not to do this should not be criticized. I hate to break it to you, but most companies outsource a lot of services to India. If you want to read a good book about this growing trend read "The World is Flat". Is amazon.com evil or Dell evil because both use Indian call centers instead of employing hard working Americans? If not, what is the difference between both of these companies outsourcing customer service and Wal-Mart buying goods from Asia?
If I remember correctly, the thing is the discounted or "store-brand" items. Sam's Choice and Great Value brands and generic toys, tools, etc. under other names such as Mainstays etc. These items are made in China and consumers usually buy these because they are cheaper, even cheaper than other store-brands or generics such Best Choice and Always-Save. Costco provides healthcare for over 90% of its employees. Why doesn't Wal-Mart do the same? They are bigger, worth more, CAN do it. So, why don't they? It's like they are using government funded programs like Medicaid for their healthcare system. Hell, my cousin was associate in a local supermarket's (Wallace & Owens) dairy section and received health insurance after working there 6 weeks. Wal-Mart receives incentives that other stores do not. As I said, they receive over $1 billion in incentives per year when the majority of small stores are turned down for similar incentives. Why can't these smaller stores receive these?
Yes companies outsource a lot and plenty of them do that but outsourcing has come under criticism itself. I am pretty sure the practice doesn't help our economy. That was my point.
The state of California did a huge study on the impact of WalMart on government services and programs. They concluded that WalMart was functionally getting a public subsidy from the state government. Because WalMart basically pays its workers nothing and doesn't really give them any benefits, most people end up relying on the state for health care and other types of services. So as WalMart keeps avoiding payment for traditional benefits, the state and taxpayers keep getting stuck with the bill.
you people do realize that if employees were so concerned about such things they wouldnt work at wall mart? there is freedom of choice where you can and cant work. from an economic standpoint there really isnt much that will supports anti-walmart'ers
Exactly, Wal-Mart employees aren't slaves and don't sign non-compete clauses. Wal-Mart is not going to win any best companies to work for awards anytime soon, but it's not as bad as some are making it out to be.
i understand the point of treating employees better but until they feel the pressure from more fierce competition in terms of employees, then they will/should respond to be more attractive to potential employees. But their business model is low prices and to do that costs must be kept down where it can be. Right now, they can keep costs down people people are still lining up at the door to work there. wal-mart is the big kid on the block and everyone wants a piece of him one way or another.
Didn't Walmart start off as a "mom and pop" store? And what would happen to all the people who work at those huge supercenters (especially in the small towns) if they were to go away? Where else would all of those people work? Don't get me wrong, I won't go anywhere NEAR my neighborhood Walmart. I'll drive the extra 5 miles to Target.
The typical gross margin they shoot for is around 45 to 55%. Nothing is sold below cost. The diferrence is they don't have to go through wholesalers, they can go direct to the manufacturing facility. That is how they can come in less then wholesale.
While not conclusive, the below suggests the opposite. Criticism of Wal-Mart Allegations of predatory pricing and supplier issues Wal-Mart has faced several accusations of "predatory pricing" (intentionally selling a product below cost in order to drive competitors out of the market). In 1995, in the case of Wal-Mart Stores, Inc. v. American Drugs, Inc., American Drugs accused Wal-Mart of intentionally selling individual items below cost for the purpose of injuring competitors and destroying competition. While the lower court ruled in favor of American Drug, the Supreme Court of Arkansas ruled in favor of Wal-Mart, saying that their pricing strategies, including the use of loss leaders, did not constitute predatory pricing.[17] In 2000, the Wisconsin Department of Agriculture, Trade, and Consumer Protection accused Wal-Mart of selling butter, milk, laundry detergent, and other staple goods below cost, with the intention of forcing competitors out of business and gaining a monopoly in local markets.[44] Crest Foods filed a similar lawsuit in Oklahoma, accusing Wal-Mart of predatory pricing on several of its products, in an effort to drive their own company-owned store in Edmond, Oklahoma out of business.[45] Both cases were settled out of court, with no fine and no admission of wrongdoing. But there was a stipulation in the Wisconsin case that Wal-Mart would face double or triple fines for any future violations.[44] In 2003, Mexico's antitrust agency, the Federal Competition Commission, investigated Wal-Mart for "monopolistic practices", prompted by various charges that the retailer has abused its market power by pressuring suppliers to sell goods below cost or at prices significantly less than those available to other stores.[46] Later, in 2003, the German High Court ruled that Wal-Mart's below cost pricing strategy undermined competition and violated the country's antitrust laws.[19]
I can believe that suppliers would be pressured to sell cheaper to Wal-Mart. than to other stores. That is the power economy of scale gives you. Conversely, they don't have to do business with Wal-Mart, and if the suppliers weren't making money on the deals they wouldn't. I worked for a company that declined a supply deal with Wal-Mart because the margins were not enough to make a profit. Target is the largest direct competitor to Wal-Mart, and as long as they are doing as well as they are, it will be tough to claim Wal-Mart is any sort of monopoly.
Wal Mart is a unique business on how they treat vendors. Ever notice how easy it is to do a return to Wal Mart? There is a reason for that. A good friend works for a food company that sell a very high quality product made in the USA. It is in high demand and competitivly priced. In order for him to put it on WalMart's shelf- they had to " front" the product- set up promotional displays, and do a "trial run" to test the performance. None of this is unusual-until you get to scale and payment terms. Wal Mart required his firm to set up a large number of stores with product to prove it would sell. The payment terms were based on a 30 day cycle after more than 50% of the goods were sold. The payment then commences for those products sold. By the end of the 1st 30 days of the products being on the shelf-all the original products were gone. The vendor replenished the products weekly- as they sold more volume than expected. Wal Mart demands a 1% discount because -1) the products are not moving fast enough 2) So much inventory is moving that Wal Mart is entitled to a dicount for volume. There are no options here and WalMart is very heavy handed in dealing with vendors.. For me personally - I shop there for paper towels, toilet paper, and some dry goods. I will buy some groceries there- like cereal, canned goods, milk and yogurt. I will never buy meat there. they can say it is the highest quality - but the meat I bought there had been cut an packaged some place else far away and had no flavor. You could not cut that pork chop with a sharp knife. I expect WalMart will improve on groceries and has the resources to invent themselves as a competitve grocer. Right now WalMart is not a real grocery store IMHO - HEB is. I am very confident WalMart will adapt and improve on groceries. The NLRB- dept of labor-Justice would probably have not moved on "Peasant life insurance policies" had WalMart not been so innovative and a leader in creating a new business. Oh yeah - those returns. Wal Mart treats those a deductions from vendors payments -it is up to the vendor to fix it or else lose the shelf space. Wal Mart is never out any dollars on returns. When return levels for a product get high enough - WalMart demands further discounts from the vendor in the form of rebates, or out right cuts in pricesI am free market conservative- but WalMart cuts new ground in how vendors get treated. Does anyone know if true that WalMart provides start up seed money to vendors setting up in China or 3rd world to manufacture products to sell to WalMart?
If the employees aren't getting paid enough, they should quit. If the vendors don't like the deal they get from Wal-Mart, they should sell to another retailer. If you don't like Wal-Mart's practices, don't shop there. Vote with your wallet people, because in capitalism it is the only thing a company is listening to. For me, my local Target is more conveniently located. When I was in another area I had no problem shopping at Wal-Mart. When I want groceries I shop at a grocery store. This is a market economy. The consumer is supposed to pay as little for a product as they can. The worker is supposed to get the best paying job they can. The retailer is supposed to maximize their profit by paying the least they can to their suppliers and workers, finding the optimal price to move their product and make the most money, and in general minimize expenditures while maximizing income. If enough people prefer the mom and pop shops and dislike the big chains, they won't stick around. That is obviously not the case. The people that b**** about every town becoming the same need to understand that the vast majority would rather pay less for the same product.
Strange- but I actually agree with you. I am free market- limited to no government advocate. I -like most people use Wal Mart to my benefit -cheap institutional goods-now that they sell lap tops - i would probably buy from Wal Mart. It's not like you get any customer support at the electronic dept. Stores. For important things - I will pay more for quality groceries for example. If Wal mart sold plywood I would shop there instead of Home Depot or Lowe's. I would buy a used car or appliance at Wal Mart. I do not find Target really competitive with Wal Mart on "everyday items" like detergent and paper towels. Wal Mart does what they are supposed to do- bring maximum return to shareholders.
Quick question....how many poor/lower income folks do you know that hate Walmart? All of the folks I know struggling from paycheck to paycheck only care about where they can get quality items for the least amount of money. Also, what other types of jobs would the Walmart employees get if Walmart wasn't around?
and thats the point. The amount of utility people get by saving money would, in my opinion, vastly outweigh that of and negatives associated with subpar health care for some of its employees.
