# Questions about Wal-Mart's business practices **URL:** \ **Category:** Great Debates\ **Created:** [August 15, 2010, 2:06pm UTC](https://boards.straightdope.com/t/questions-about-wal-marts-business-practices/550326 "2010-08-15T14:06:02Z")\ **Posts on this page:** 20\ **Page:** 4
**Author:** ![Lynn\_Bodoni](https://avatars.discourse-cdn.com/v4/letter/l/e47c2d/32.png) [@Lynn\_Bodoni](https://boards.straightdope.com/u/Lynn_Bodoni)\ **Post date:** [August 18, 2010, 8:49pm UTC](https://boards.straightdope.com/t/questions-about-wal-marts-business-practices/550326/61 "2010-08-18T20:49:07Z")
> [@](#): > > The issue I have with the Walmarts, Targets, Barnes and Noble, etc. is this - in the days of mom and pop stores, they were stocked (badly) from a plethora (love that word) of different sources. The choice was large, you just had to travel a circuit of the area or go on a journey to hopefully find exactly what you wanted. Today, there is one superstore with a large selection - but only that selection. If some buyer in one big city decides they will not carry that item in the big box store then odds are you will never find it. > > This is the “monoculture” aspect of large retailers. Instead of 100 stores in the area who each carry some 3 to 5 brands of a range of 20 different brands of kitchen appliances for example, we will likely find only 2 or 5 brands in your choice of 2 or 3 box stores. How much of this is the stores and buyers fault, how much is competition, and how much is just a sign of the how the world works today, I don’t know. This is one of the biggest problems I have with the Big Boxes. If I want something that’s a Today’s Big Seller, yeah, I can find it. And probably it will be at a low price, but of low quality and made by (essentially) slave labor. I’m not going to find Better quality, only Poor and sometimes Acceptable at most big boxes. If I want Last Year’s Big Seller, it’s probably gone. If I want Today’s merchandise, but it’s not something that the Big Box buyers think that will sell in massive quantities, I’m probably going to have to look for it online. And I resent this. While I’m perfectly willing to buy Acceptable quality in a lot of goods, there are some goods that I’d prefer to buy in Good or Better quality. And I wish that I had a much larger selection of goods available in B&M stores, because in some cases it’s hard to tell whether or not a kitchen appliance is what I want. ---
**Author:** ![Gary\_Robson](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/gary_robson/32/3448_2.png) [@Gary\_Robson](https://boards.straightdope.com/u/Gary_Robson)\ **Post date:** [August 18, 2010, 9:06pm UTC](https://boards.straightdope.com/t/questions-about-wal-marts-business-practices/550326/62 "2010-08-18T21:06:31Z")
> [@SurveyorAlpha](#): > > [quote=“Gary “Wombat” Robson, post:51, topic:550326”] > > The insidious thing is that they’ll base initial prices on competition. As opposed to other business doing the exact same thing? My wife and I have both worked for various retail outlets (including WalMart) and in every store, we were encouraged to keep an eye on competitors prices, in an attempt to undercut, or at least meet, their best price. That is what competition is all about. [/QUOTE] Of course it is. But (to the best of my knowledge) Wal\*Mart is the only major chain that bases its business model on the destruction of historic shopping areas and independent stores. How does it help consumers when there’s a store in town with reasonable prices, Wal_Mart comes in cheaper and kills the store, and then Wal_Mart raises its prices back to what the old store was charging? Consumers end up with a smaller selection, locals lose their jobs, newspapers & radio stations lose an advertiser, and there’s an empty storefront downtown. Nobody wins except Bentonville – which is where the money ends up. > [@Huerta88](#): > > Does this really happen? Any evidence? Because I’ve never really seen anything at WalMart that I would class as expensive or price-gouging. I’ve read three books on Wal\*Mart’s business practices, and this was mentioned in all three. If you’d like, I’d be happy to post the names of the books when I get home to look them up. ETA: It was also a theme in the video mentioned in the OP. ---
**Author:** ![Balthisar](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/balthisar/32/2825_2.png) [@Balthisar](https://boards.straightdope.com/u/Balthisar)\ **Post date:** [August 18, 2010, 10:36pm UTC](https://boards.straightdope.com/t/questions-about-wal-marts-business-practices/550326/63 "2010-08-18T22:36:41Z")
[quote=“Gary “Wombat” Robson, post:62, topic:550326”] How does it help consumers when there’s a store in town with reasonable prices, Wal_Mart comes in cheaper and kills the store, and then Wal_Mart raises its prices back to what the old store was charging? Consumers end up with a smaller selection, locals lose their jobs, newspapers & radio stations lose an advertiser, and there’s an empty storefront downtown. Nobody wins except Bentonville – which is where the money ends up. [/QUOTE] It doesn’t “end up” there. It’s then spent in other locations to build more buildings, improve roads (where the communities require it), and then paid as dividends to stock holders. (Why don’t people understand what publicly traded corporations are any more?) ---
**Author:** ![Gary\_Robson](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/gary_robson/32/3448_2.png) [@Gary\_Robson](https://boards.straightdope.com/u/Gary_Robson)\ **Post date:** [August 18, 2010, 11:03pm UTC](https://boards.straightdope.com/t/questions-about-wal-marts-business-practices/550326/64 "2010-08-18T23:03:28Z")
> [@Balthisar](#): > > (Why don’t people understand what publicly traded corporations are any more?) I do, indeed, understand public corporations. I also understand that my point of view is different than most Americans. I live in a small town, surrounded by other small towns. I live here because I like it here, and I go out of my way to support the local economy so that it will stay the wonderful place that it is. There are people who live here that never spend a dime in town. They’ll blow $20 on gas to drive to the nearest big town and save $10 on something. When people who live here spend money at a local store, all of the salaries it pays are local. All of the real estate is local. Some of the products are local. If there are any managers or owners making big bucks, they’re spending those big bucks here. Spend that money at Wal\*Mart, and it’s covering a few local salaries, but the big bucks are going to the corporate folks in Bentonville. Virtually none of the products are local. Those new buildings you mention are going in somewhere else. The stock dividends are being paid to people somewhere else. ---
**Author:** ![Gary\_Robson](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/gary_robson/32/3448_2.png) [@Gary\_Robson](https://boards.straightdope.com/u/Gary_Robson)\ **Post date:** [August 18, 2010, 11:05pm UTC](https://boards.straightdope.com/t/questions-about-wal-marts-business-practices/550326/65 "2010-08-18T23:05:10Z")
[moderating] I would like to note for the record that this thread has departed from what GQ is supposed to be and wandered deeply into GD territory. I’m one of the reasons it did so. _Bad moderator! Bad!_ Let’s get back on the GQ track, and if someone wishes to keep a Wal\*Mart debate going, start a thread in GD and post a link to it here. [moderating] ---
**Author:** ![Cheshire\_Human](https://avatars.discourse-cdn.com/v4/letter/c/5f8ce5/32.png) [@Cheshire\_Human](https://boards.straightdope.com/u/Cheshire_Human)\ **Post date:** [August 19, 2010, 2:17am UTC](https://boards.straightdope.com/t/questions-about-wal-marts-business-practices/550326/66 "2010-08-19T02:17:55Z")
[QUOTE=Gary “Wombat” Robson] [moderating] … _Bad moderator! Bad!_ … [/QUOTE] Who should we report you to? Can you warn yourself? Maybe you could be the first ever moderator to ban himself… 😃 ---
**Author:** ![needscoffee](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/needscoffee/32/1076_2.png) [@needscoffee](https://boards.straightdope.com/u/needscoffee)\ **Post date:** [August 19, 2010, 6:25am UTC](https://boards.straightdope.com/t/questions-about-wal-marts-business-practices/550326/67 "2010-08-19T06:25:16Z")
[quote=“Gary “Wombat” Robson, post:62, topic:550326”] How does it help consumers when there’s a store in town with reasonable prices, Wal_Mart comes in cheaper and kills the store, and then Wal_Mart raises its prices back to what the old store was charging? [/quote] I do not think this is accurate. Walmart cannot raise its prices back to what the old store was charging unless it’s the price that other Walmarts are charging. Everything that Walmart sells is available at their website, with prices the same no matter where you live. They can’t charge more at the store than they do online, and the price is right there on the internet for everyone to see. Walmart can’t jack up the prices at just one particular store once they’ve put the local competition out of business. ---
**Author:** ![Mr.Slant](https://avatars.discourse-cdn.com/v4/letter/m/c57346/32.png) [@Mr.Slant](https://boards.straightdope.com/u/Mr.Slant)\ **Post date:** [August 19, 2010, 1:47pm UTC](https://boards.straightdope.com/t/questions-about-wal-marts-business-practices/550326/68 "2010-08-19T13:47:06Z")
> [@needscoffee](#): > > [quote=“Gary “Wombat” Robson, post:62, topic:550326”] > > SNIP Walmart can’t jack up the prices at just one particular store once they’ve put the local competition out of business. You’re thinking about it backwards. They’re not being accused of - showing up - discounting to substantially beneath fair market value (FMV) for a product - waiting for their competition to fail - raising prices to above FMV They don’t generally raise prices above FMV. IME, if they do, it’s generally by no more than about 15%, which is pretty much margin of error on some products. They’re being accused of: - showing up - discounting to substantially beneath fair market value (FMV) for a product - waiting for their competition to fail - raising prices to Fair Market Value The difference is in the last step there. Incidentally, their stores are NOT uniformly priced. I used to participate in a message board that followed the prices of motor oil, among other things. I noted that prices were almost always higher at this store: > **[Robot or human?](https://www.walmart.com/store-finder?sfsearch_zip=&rx_dest=%2Findex.gsp&rx_title=com.wm.www.apps.storelocator.page.serviceLink.title.default&sfsearch_city=akron&edit_object_id=2361&sfsearch_state=OH)** than at this one: > **[Robot or human?](https://www.walmart.com/blocked?url=L3N0b3JlLWZpbmRlcj9zZnNlYXJjaF96aXA9JnJ4X2Rlc3Q9L2luZGV4LmdzcCZyeF90aXRsZT1jb20ud20ud3d3LmFwcHMuc3RvcmVsb2NhdG9yLnBhZ2Uuc2VydmljZUxpbmsudGl0bGUuZGVmYXVsdCZzZnNlYXJjaF9jaXR5PWFrcm9uJmVkaXRfb2JqZWN0X2lkPTE5MTEmc2ZzZWFyY2hfc3RhdGU9T0g=&uuid=1befe150-c3e5-11f0-9d88-5141940763f3&vid=&g=b)** The variance was usually from 25c to 1 USD per quart of oil. ---
**Author:** ![cmkeller](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/cmkeller/32/118_2.png) [@cmkeller](https://boards.straightdope.com/u/cmkeller)\ **Post date:** [August 19, 2010, 2:28pm UTC](https://boards.straightdope.com/t/questions-about-wal-marts-business-practices/550326/69 "2010-08-19T14:28:13Z")
SurveyorAlpha: > [@](#): > > and, hell, I met my wife while working there! Wow, they really do have everything! ---
**Author:** ![Gary\_Robson](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/gary_robson/32/3448_2.png) [@Gary\_Robson](https://boards.straightdope.com/u/Gary_Robson)\ **Post date:** [August 19, 2010, 2:41pm UTC](https://boards.straightdope.com/t/questions-about-wal-marts-business-practices/550326/70 "2010-08-19T14:41:33Z")
> [@Mr.Slant](#): > > - raising prices to Fair Market Value > > The difference is in the last step there. > > Incidentally, their stores are NOT uniformly priced. I never said they raised prices above fair market value. I said they raised prices back to (or above) what the store they killed used to charge. And they are _definitely_ not uniformly priced. ---
**Author:** ![tim-n-va](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/tim-n-va/32/3001_2.png) [@tim-n-va](https://boards.straightdope.com/u/tim-n-va)\ **Post date:** [August 19, 2010, 2:47pm UTC](https://boards.straightdope.com/t/questions-about-wal-marts-business-practices/550326/71 "2010-08-19T14:47:32Z")
For the sake of discussion, assume that Wal-Mart does hurt the small business in a town. Why does that happen? It is because people choose to shop at Wal-Mart. Bad for the existing small business, good for the customers who now are going to Wal-Mart. I’m not sure why the existing small business has interests that trump the potential Wal-Mart customer, regardless of what Wal-Mart is doing? It is easy to take a side in the corporate “golliath” versus the small business “david” but there is another large pool of stakeholders involved who want to make their choices with their money. ---
**Author:** ![Mr.Slant](https://avatars.discourse-cdn.com/v4/letter/m/c57346/32.png) [@Mr.Slant](https://boards.straightdope.com/u/Mr.Slant)\ **Post date:** [August 19, 2010, 3:14pm UTC](https://boards.straightdope.com/t/questions-about-wal-marts-business-practices/550326/72 "2010-08-19T15:14:13Z")
My fault. I must have misread your post. ---
**Author:** ![Troy\_McClure\_SF](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/troy_mcclure_sf/32/4150_2.png) [@Troy\_McClure\_SF](https://boards.straightdope.com/u/Troy_McClure_SF)\ **Post date:** [August 19, 2010, 4:11pm UTC](https://boards.straightdope.com/t/questions-about-wal-marts-business-practices/550326/73 "2010-08-19T16:11:27Z")
> [@needscoffee](#): > > Everything that Walmart sells is available at their website, with prices the same no matter where you live. They can’t charge more at the store than they do online, and the price is right there on the internet for everyone to see. Walmart can’t jack up the prices at just one particular store once they’ve put the local competition out of business. No necessarily true. There are plenty of “on-line only specials” or what-have-you. A friend of mine went to Best Buy once, and found what he was looking for priced at $50. He went to [bestbuy.com](http://bestbuy.com) on his smartphone and found in for $40. So he bought it on his smartphone, selected “in-store pickup,” walked forty feet, and saved ten bucks. Prices on the online store don’t necessarily match those on the shelves. > [@tim-n-va](#): > > It is because people choose to shop at Wal-Mart. Bad for the existing small business, good for the customers who now are going to Wal-Mart. The argument- not that I necessarily agree with it- is that it may be good in the short term to get a Walmart widget for a buck when you were previously paying $1.50-$2.25 before, but when the more expensive, local places go under, suddenly you’re stuck with exactly one source for widgets, and if they decide to stop carrying widgets, or they start carrying shittier widgets, well, you’re shit out of luck. ---
**Author:** ![Czarcasm](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/czarcasm/32/4050_2.png) [@Czarcasm](https://boards.straightdope.com/u/Czarcasm)\ **Post date:** [August 19, 2010, 4:17pm UTC](https://boards.straightdope.com/t/questions-about-wal-marts-business-practices/550326/74 "2010-08-19T16:17:28Z")
[quote=“Gary “Wombat” Robson, post:70, topic:550326”] I never said they raised prices above fair market value. I said they raised prices back to (or above) what the store they killed used to charge. [/QUOTE] Is there an example you can point to, where Wal-Mart dropped the price on a certain item until a local business died, then raised the price of the item back up? ---
**Author:** ![tim-n-va](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/tim-n-va/32/3001_2.png) [@tim-n-va](https://boards.straightdope.com/u/tim-n-va)\ **Post date:** [August 19, 2010, 5:19pm UTC](https://boards.straightdope.com/t/questions-about-wal-marts-business-practices/550326/75 "2010-08-19T17:19:43Z")
[quote=“Troy\_McClure\_SF, post:73, topic:550326”] > [@needscoffee](#): > > > [@tim-n-va](#): > > > > It is because people choose to shop at Wal-Mart. Bad for the existing small business, good for the customers who now are going to Wal-Mart. > > The argument- not that I necessarily agree with it- is that it may be good in the short term to get a Walmart widget for a buck when you were previously paying $1.50-$2.25 before, but when the more expensive, local places go under, suddenly you’re stuck with exactly one source for widgets, and if they decide to stop carrying widgets, or they start carrying shittier widgets, well, you’re shit out of luck. People make poor decisions every day. Some people might think that short term good is better than what might happen long term. I guess this is close to a hijack into a “nanny state” discussion. ---
**Author:** ![Lynn\_Bodoni](https://avatars.discourse-cdn.com/v4/letter/l/e47c2d/32.png) [@Lynn\_Bodoni](https://boards.straightdope.com/u/Lynn_Bodoni)\ **Post date:** [August 19, 2010, 5:52pm UTC](https://boards.straightdope.com/t/questions-about-wal-marts-business-practices/550326/76 "2010-08-19T17:52:13Z")
> [@tim-n-va](#): > > For the sake of discussion, assume that Wal-Mart does hurt the small business in a town. Why does that happen? It is because people choose to shop at Wal-Mart. Bad for the existing small business, good for the customers who now are going to Wal-Mart. I’m not sure why the existing small business has interests that trump the potential Wal-Mart customer, regardless of what Wal-Mart is doing? > > It is easy to take a side in the corporate “golliath” versus the small business “david” but there is another large pool of stakeholders involved who want to make their choices with their money. As noted above, when the local independent store sells a widget, the owner/manager spends most of that money in the local area. But if the local Big Box store sells that widget, only part of it stays in the local area. Some of that money goes to corporate headquarters, which generally ISN’T in the local area. ---
**Author:** ![md2000](https://avatars.discourse-cdn.com/v4/letter/m/73ab20/32.png) [@md2000](https://boards.straightdope.com/u/md2000)\ **Post date:** [August 19, 2010, 6:23pm UTC](https://boards.straightdope.com/t/questions-about-wal-marts-business-practices/550326/77 "2010-08-19T18:23:56Z")
As an example of big-box vs. small town, I recall a few years ago checking out furniture (admittedly not what WalMart specializes in). The small town store had a very few items, and “if you want to know more we can get you brochures too…” Drive a few hours to the big city, and there are several mass retailers who have a huge selection and much better delivery options. Still, furniture decor is a very personal thing - like women’s wear, only you can’t buy multiple outfits. In the end we went to one of a half-dozen higher end specialty stores and bought something we really liked, paying substantially more than the standard mac-tac-on-pressboard furniture prices. this is where mom-and-pop stores fail in small towns. While some may actually be good enough to be or transition to higher-end niche marketing, a small general merchandiser cannot compete on price or selection with a big box store. Walmart does not seek to put the M&P or Main Street out of business. They locate on the outskirts because main street does not have the parking space or building space. They compete on price because a small M&P is too ineffcient in buying power, sales volume, or overhead to match a big store. People buy there because it’s a deal. They are called box stores as much for the boxes they sell as for the shape of the store. If what you sell is in a box and requires no expertise, and everyone has the same box, then all you can compete on is price. Car dealers could at least talk about the service they offer. Tailors could be knowledgeable about cut and material. Bakers could whip up tasty creations, if someone cared to pay the premium for handmade. However many items - books, kitchen appliances, jeans and running shoes - come off an assembly line and are the same at every store. Why would anyone pay 20% or 50% more? Walmart isn’t evil or setting out to destroy America or small towns; they are just very good in exploiting the business climate that exists today. ---
**Author:** ![Lynn\_Bodoni](https://avatars.discourse-cdn.com/v4/letter/l/e47c2d/32.png) [@Lynn\_Bodoni](https://boards.straightdope.com/u/Lynn_Bodoni)\ **Post date:** [August 19, 2010, 6:31pm UTC](https://boards.straightdope.com/t/questions-about-wal-marts-business-practices/550326/78 "2010-08-19T18:31:22Z")
> [@](#): > > However many items - books, kitchen appliances, jeans and running shoes - come off an assembly line and are the same at every store. Why would anyone pay 20% or 50% more? I go to an independent comic book/gaming shop because the guy there knows me, knows my tastes, and can recommend something that I’ll like with about a 95% accuracy rate. I used to go to an independent used book store because the manager also knew me and my tastes and could recommend stuff to me. That store has now closed. Half Price books is a great used book store…but I don’t have any sort of relationship with any of the workers there. Well, not since my daughter quit working there. While the books are the same at all the book shops, the people working there have various degrees of knowledge both about the books and the customers. I go to the independents because they know what I liked in the past, and what I’m likely to enjoy. Yeah, I’ll pay a bit more, but I’m HAPPIER with my experience. ---
**Author:** ![kushiel](https://avatars.discourse-cdn.com/v4/letter/k/bbce88/32.png) [@kushiel](https://boards.straightdope.com/u/kushiel)\ **Post date:** [August 19, 2010, 6:49pm UTC](https://boards.straightdope.com/t/questions-about-wal-marts-business-practices/550326/79 "2010-08-19T18:49:56Z")
Walmart can also enrich a community and not drive competitors out of business. In Canada, a lot of the initial Walmart locations were former Woolworth locations (they bought Woolworth’s out). Most of the previous staff was kept. They employ many seniors who could not otherwise get a part time job because of their age (and no, they aren’t stocking heavy junk in the middle of the night, they are doing customer service usually). Plus the Walmart in the nearest city for the reserves up north in Saskatchewan makes an absolute killing. Every time you go there you see huge pickup trucks stocking up on everything. But Walmart doesn’t do bulk goods, so they also shop at the bulk retailers, spreading cash around. I’m pretty sure many of the mom-and-pop shops _couldn’t_ stock enough goods to provide for that demographic. And I joked about this in another thread - once Walmart leaves a mall to build its own store, a Zellers will inevitably move in and become the new anchor tenant. ---
**Author:** ![tim-n-va](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/tim-n-va/32/3001_2.png) [@tim-n-va](https://boards.straightdope.com/u/tim-n-va)\ **Post date:** [August 19, 2010, 6:53pm UTC](https://boards.straightdope.com/t/questions-about-wal-marts-business-practices/550326/80 "2010-08-19T18:53:05Z")
> [@Lynn\_Bodoni](#): > > > [@tim-n-va](#): > > > > For the sake of discussion, assume that Wal-Mart does hurt the small business in a town. Why does that happen? It is because people choose to shop at Wal-Mart. Bad for the existing small business, good for the customers who now are going to Wal-Mart. I’m not sure why the existing small business has interests that trump the potential Wal-Mart customer, regardless of what Wal-Mart is doing? > > > > It is easy to take a side in the corporate “golliath” versus the small business “david” but there is another large pool of stakeholders involved who want to make their choices with their money. > > As noted above, when the local independent store sells a widget, the owner/manager spends most of that money in the local area. But if the local Big Box store sells that widget, only part of it stays in the local area. Some of that money goes to corporate headquarters, which generally ISN’T in the local area. First, I’m on a budget and trying to make it to payday. I want to buy at a low price, I don’t care who gets the money. Second, how do we decide how big of a circle to draw to define “local”. If I live near Wal-Mart HQs is it okay to shop there? Third, many of the box stores do give to local charities for the PR. Maybe even more than that local store owner who has a tight margin. There seems to be an unspoken assumption that the interests of the small business trumps the interest of the person on a tight budget. [Previous page](https://boards.straightdope.com/t/questions-about-wal-marts-business-practices/550326.md?page=3) [Next page](https://boards.straightdope.com/t/questions-about-wal-marts-business-practices/550326.md?page=5)