No need to guess about foodservice: http://www.ers.usda.gov/briefing/foodmarketstructures/wholesaling.htm
You see, retail grocery is not foodservice.
The problem here, in case you haven’t figured it out, is that the “retail sales” category used in that chainstoreage.com cite of yours does not define what is and what is not included in “retail sales.” It does not say whether “automobiles” includes tires and batteries, and it does not say whether “foodservice” includes retail grocery or just restaurants.
And even if you’re completely correct, and that Wal-Mart has 30% of the “overall” (there’s that word again :rolleyes: ) retail sales market . . . so fucking what?
OK, $3.6 trillion - 340 billion new car sales - ??? used car - 360 billion food service - ??? fuel. Sounds reasonable that it works out to $2.5 trillion? If you want to say that groceries and car parts aren’t in the 2.5 trillion, that means that you think:
3.6 trillion = 2.5 trillion + new cars + used cars + car parts + fuel + groceries + food services
Sub a few numbers into here, you have:
3600 = 2500 + 340 + used cars + car parts + fuel + 360 + 420
Solving for unknowns, you have:
used cars + car parts + fuel = -20
Wow, that’s cool, I never knew that the sum total of all used cars + car parts + fuel sold in the US every year was minus 20 billion dollars. :rolleyes: Maybe, just maybe, foodservices (i.e. food to hotels, restaurants, airlines, hospitals, stadiums, etc, etc) is not retail grocery. I have my doubts about car parts being classed as automobiles (they generally are counted separtely). Of course, if you knew anything at all about retail (and I admit, I don’t know much - I’m a programmer, but some of my clients have been retailers and suppliers), you’d know that these are separate categories.
So back to the original point, 50-some-odd posts ago. The theory is that, if you are a supplier of a product walmart sells, you can’t ignore walmart, because they are your biggest customer, by far. It is obviously true in diapers (unless you think there is another retailer with anywhere close to 30% market share). It seems pretty clear in toys (21%? 25%?).
I have personal knowledge of another sector where, 5 years ago, walmart’s share was 25%. I know that because higher-ups in a supplier told me, and you could read their annual report and see for yourself. I can’t verify what that level is today (I’ve switched jobs, they’ve gone through chapter 11, I don’t know anybody there anymore, and they are now a private company so I can’t lookup their financial info), but judging from how things have progressed in the past 5 years, I’d have to guess (yes, I know, that’s your forte) that the market share for walmart in that sector has gone up considerably. In particular, KMart was their 2nd biggest customer, and now KMart doesn’t seem to have much of their stuff (or anything else) in stock. Maybe the share is 40%? Maybe it is 50%? Maybe it is 60%? I highly doubt it is below 35%, or above 70%. Hence I picked 50% as a guess.
You can argue whether or not one store having all this clout with suppliers is a good thing or not. However, it is disingenious to argue that the situation does not exist, as it clearly does.
Well, I was going to respond to minty but looks like some other folks beat me to it. Well, I’m going to respond anyway. The reason Wally World has not raised their prices is because, well, the two Wal-Marts closest to me are within walking distance of Target stores. The prices there are not that much higher, and the selection and service are much better. My mom is the main shopper in the household, and, unless she’s grocery shopping, she goes to Target or Ross.
If Wal-Mart figured they could afford to operate at complete loss until they drove other discount chains such as Target and Meijer out of business, you betcher ass they would start raising the prices- probably to the level of Montgomery Wards before they went under. They would still have to compete with Sears, Mervyn’s (which actually has good quailty products at fairly reasonable prices, and if you keep your eyes peeled for the ads, they have great sales).
Also, please to explain how the consumer benefits over the long haul when clothing becomes a perishable item. A $20 pair of jeans looks good, but if it falls apart in less than a year, I have to buy another pair, it falls apart… I’ll end up buying four pair of jeans in under four years. OTOH, I could buy a $40 pair of jeans that would last me four of five years. Now, add that pair of jeans to any other potential clothing items I would buy- blouses, underwear, etc., and you’re talking about some real money.
Then there’s the recyclability factor. I have a pair of jeans that just fell apart after three years of wear. I bought it at Savers, and they had some wear showing, so I’m guessing that the previous owner had it for at least a year or two. Even assuming the cheap Wal-Mart crap does make it to the thrift stores (and people do donate stuff that is in such bad shape that I would just throw it in the trash rather than donate it), the buyer is maybe going to get a couple of months of wear out of the item before it has to be thrown out and replaced. So ultimately, the consumer is spending more. Most people probably don’t think these things through- they just see the low price tag and think they’re getting a deal
Also, another way Wal-Mart boosts profitablity is through “workforce reduction”- I saw this happen at the store I work at last summer. The place was already severely understaffed- customers waiting in line for a half hour or more at the checkstand, then complaining that they couldn’t find sales help in the various departments when they got to the register. They laid off over 100 people. About a month later, they replaced these people with new hires. So, they dumped some long-term workers who had been there long enough to qualify for health insurance, as well as probably having gotten a raise or two, and brought in new people at new hire pay and no benefits. Several stores in the Las Vegas area did this.
They’re planning another “workforce reduction” in January or February.
I’m already looking for a new job. Even if I don’t get laid off (which I probably will, I have a lot of absences due to some physical problems, and, after six months of begging, management still refuses to transfer me to a department where my job wouldn’t exacerbate my problems, so I’m a pretty big target), it will just make Wally World that much more of a stressful environment to work in.
Given the current trends, in a few years there won’t be any bike stores to buy from. In 1998, there were about 7000 specialty bicycle retailers. A year later, in 1999, approximately 6000. Today, about 5000.
cite: http://www.bicycleretailer.com/bicycleretailer/images/pdf/statistics.pdf
http://nbda.com/site/page.cfm?PageID=34
Read into the numbers to get the whole story. The bottom is falling out of the specialty market. Average unit price at department stores in 1998 was $100, now it is $65. Market share, in terms of unit volume, rose from 60% to 75%. Over the same time, average at specialty shops rose from $350 to $387, and market shared dropped from 30% to 16%. “in between” shops (like Sport Authority, etc) have been stagnant, in both market share and unit price. At the same time, total market in terms of units sold is stagnant.
Given current price and market share trends, things don’t look so good for specialty retailers. Around here, the only ones that are doing well are the ones that deal in high-end (i.e. $2000+) exclusively. The rest are teetering on the edge. If current trends continue, if you want a decent quality $250 to $500 bike, you might have a hard time finding one. $50 or $2000 will be easy to find, though.
As I wrote before, I don’t blame Walmart for this. It is the will of society. Americans, in general, buy on price. If that’s what you want, that’s what you get.
For just another example, try to find furniture that is of better quality than, say, $500 bedroom sets at furniture superstores. Next step up is $5000 sets at Arhaus/Ethan Allan/etc.
To repeat my point: So fucking what?
And how does this explain why Wal-Mart has not raised its prices in those rural communities and small towns where there is not any serious retail competition for miles and miles around? Surely, if they are as evil and monopolistic as you seem to indicate, they would not eschew those extra profits if they didn’t have to?
Simple. Not everyone needs a pair of jeans that is going to last forever. I only get to wear jeans on the weekends anymore, and only do so during colder months. Except for the fact that I happen to like Levis on general principle, I could easily get by in $20 jeans.
Last time I checked, by the way, it was quite possible to get name-brand jeans at Wal-Mart. Good quality stuff. Cheaper than the department stores (except Mervyn’s when they’re having one of their really good jeans sales).
I strongly disagree. First, there are darned few brands sold at Wal-Mart that aren’t sold elsewhere, so any short-sightedness on the part of consumers is hardly attributable to Wal-Mart. Second, I’m amazed you think so little of your fellow consumers that they can’t tell the difference between first-rate merchandise and poorly-made crap. I assure you, the folks who buy the cheap stuff by and large know that it’s of questionable quality–they either don’t care, or can’t scrape together the cash for the better goods.
Welcome to the modern labor market. That story is the same all over, Thea.
That’s fine, that’s your opinion on the matter, and quite eloquently stated I might add. However, shooting down others opinions by sticking by some fictitious version of reality, even when presented with hard facts, is at best disingeneous.
Merry Christmas.
I just recognized another bad assumption on your part: Wal-Mart’s “total revenue” almost certainly includes its 1,300 foreign stores.
Wal-Mart’s CEO recently said his company’s market share was 10%. Just so you know.
http://www.massmarketretailers.com/articles/Walmarts_way.html
Minty to hazard a guess, I would say that Wal-Mart hasn’t raised their prices in rural areas where they’re the “only game in town” because they want to keep their prices relatively homogenous (with some variation- stores in more upscale areas actually do have somewhat higer prices). Also, in a lot of rural areas, a much higher percentage of the population is low-income. If they raised their prices too much, a high percentage of the customer base would not be able to afford to shop there. People can, and do, drive fifty miles or more to seek bargains- before the Pahrump store opened, I had people on a daily basis tell me that they had driven in from Pahrump. Every couple of months they would make the trip to Vegas with a long list of items for purchase that they couldn’t get for comparable prices in Pahrump. If prices went up beyond a certain level, people would simply, instead of shopping every couple of weeks, picking up a pair of pants now, shoes then, a couple of sweaters when it got nippy, would simply make buying trips to another town every few months, and likely end up making their purchases at another Wal-Mart. As long as there are other discount stores around, Wal-Mart has to keep their prices low, otherwise raising them would be counterproductive. BTW, another favorite tactic of Wal-Marts is to open two stores in the space of a year, in a small town, then, once there was no place else to shop, close one of the stores, throwing hundreds of people out of work. Then the customers who shopped at the store that closed have to go to the remaining Wal-Mart. Thus, they have the same number of customers purchasing the same number of products, but with the upkeep and overhead costs of one store instead of two, plus the tax writeoff from the depreciation on the empty building.
Oh, and I love that bit of selective quotage with the “workforce reduction” comment. They aren’t actually reducing the workforce, they’re turning it over in order to replace employees who qualify for benefits and have earned raises with new hires on whom they don’t have to kick in for the bennies, at the $8.00 rather than $8.50. Something to think apart while you’re singing the praises of a corporation that keeps its costs low at least in part by screwing the very employees who help keep that cash coming into the registers.
[QUOTE]
*Originally posted by minty green *
I just recognized another bad assumption on your part: Wal-Mart’s “total revenue” almost certainly includes its 1,300 foreign stores.
Whoops, my bad. There goes $40B in revenue. Knock another $160B off and Walmart will be as inconsequential, as, say, Target.
Since I am a simpleton, please 'splain to me how this changes the 21% (or is it 25%) market share in toys, or 30% in diapers?
Glad to see he’s doing his job. It’s called “spin”.
If you were the CEO of PetuniaParadise and you had cornered 90% of the market in Petunias, it sounds a whole lot nicer to say “gee, we’re only 0.0001% of the total retail market”. It’s true, but irrelevant.
Did you notice this in your cite?
Lookee here, he admits walmart abuses suppliers. Sounds like he personally doesn’t think its a good idea. Glad to hear it (assuming, of course, it’s not just “spin”).
Thanks for posting a cite confirming the thesis in this thread. Straight from the horse’s mouth, as it were.
Since when have I claimed that Wal-Mart did not squeeze its suppliers? To the contrary, I have argued that doing so is beneficial to consumers and a driving force of economic efficiency. To hell with Vlasic Pickles.
What’s interesting here is that there is so little (if any) discussion about the law. Let’s face it, every company in the world would love to drive out all of its competitors. Walmart just happens to be a bit better at competition game. There is a set of laws on the books to prohibit monopolies and monopolistic practices.
For those anit-Walmart posters, can you site specific laws that you think Walmart is breaking and why?
John Mace I personally wouldn’t argue that what Wal-Mart is doing is illegal. Just unethical.
Putting the squeeze to a company and forcing it to become more efficient is one thing. It’s another to do it to the point where (like Levi Strauss) they have to close down plants and import their products from Asian countries where workers are only paid a pittance for their labor.
A pittance? By our standards, sure. But those jobs represent a significant step up for the people who take them.
[QUOTE]
*Originally posted by Thea Logica *
**John Mace I personally wouldn’t argue that what Wal-Mart is doing is illegal. Just unethical.
Putting the squeeze to a company and forcing it to become more efficient is one thing. It’s another to do it to the point where (like Levi Strauss) they have to close down plants and import their products from Asian countries where workers are only paid a pittance for their labor. **[/QUOTE
So, giving jobs to poor folks in Asia is unethical? Do you think they should be liberated from those jobs? I suppose working in a rice paddy ain’t all that bad, right?
So what will be the consequences of businesses and corporations maximizing profits by taking advantage of cheap labor, few if any regulations concerning health and safety of workers, and environmental concerns?
Government and organized labor has forced business to take measures that protect workers and the environment here in the U.S. Obviously, this has been a successful plan. The U.S. economy has for the most part, grown and the standard of living has increased. Will this trend of exporting jobs harm the economy in the long run?
Putting people in your own country out of work to boost your own company’s profits isn’t unethical?
BTW, a lot of those Asian countries don’t have the workplace safety standards that we do here…
So what? You can’t extrapolate that data 10 years from now and say that there will be zero stores. If there is a market for mid-range bikes, someone will be in business to sell them. And if the market won’t support those stores, well, that’s a shame, but as they say, that’s business.
You can’t blame people for shopping on price. 90% of people don’t need a quality bike. They want a cheap, reliable bike that their kid can ride for a few years until he either outgrows it or starts to drive a car.
No.
Is it ethical to run my company in to the ground because my employees have a fair-weather sense of nationalism when it comes to their paychecks but not their purchases?
People care about 2 things - how much money they earn and how much stuff costs. You either adapt your business in a way that meets the demands of your custmers in terms of price, quality and selection, or your can sit back and complain about the Japanese or Chinese or Big Business or whoever you think is responsible.
What is “business ethics” anyway? If you run a business, you have a responsibility to your shareholders and employees to try and make that business as profitable as possible so you stay in business. You don’t conceded an advantage to your competition because it’s the “right” or “fair” thing to do.