I’ve seen this assertion in several threads over the last few days, but I’ve never seen anyone offer up any proof. Have there been any studies on this?
I know, for me personally, local mom-and-pop businesses fall into two camps. Either they’re a great store/restaurant/whatever and they’ll have no problem weathering the Wal-Mart juggernaut (or some other major chain) because they’re just better. Or they’ll be a pathetic little store that only continues to limp along because there’s no competition.
I guess GD might not be the perfect place for this, but I imagine a thread saying “tell me how much Wal-Mart fucks over the little guy” will eventually get debatey.
The reality is that people who aren’t SDMB members shop with their wallets.
Sure, Bob’s House Of Hardware & Pet Supplies might be a successful “local” business and Bob himself beloved by the entire community for his community involvement and generally being an all-round nice guy, but if customers can get what they perceive to be “identical” products (let’s face it, a tape measure is a tape measure to most people) for much less at Wal-Mart, then that’s where they’ll go.
And once they’re in Wal-Mart for that cheap tape measure, that’s when they start seeing all sorts of other (allegedly) useful or desirable stuff and cheap prices… and then going there becomes a habit, because it’s cheap and has everything and is open all the time. And then a few years later everyone is wondering why Bob’s House Of Hardware closed down when Bob was such a nice chap who was a pillar of the community.
Walmart’s also apparently been shutting down thousands of mom and pop shops offering payday loans and cash checking services, by charging an order of magnitude less in fees to people on the margin who can’t afford traditional banking options.
I remember when my buddy Jim one day had to give up his loan shark business. You really had to see it to believe it how broken up he was. Corporate behemoth, indeed.
I believe it came up here before with regard to successful “Mom & Pop” stores, some have thin enough margins and something like Wal-Mart can have enough of an effect to tip them into failure. You could keep 80% or more of your customer base and still have to close. I don’t think this is Wal-Mart’s fault, just the way the cookie crumbles.
Not sure if this is true, but my wife says Wal-mart will open a store in a town and then go around and find the lowest prices for common items and charge less for them until the competitors go out of business. At which point Wal-mart raises the prices back up. Sort of a dicky move, but what are you going to do?
Hopefully, the movement towards sustainability and “buying local” will help mitigate the Wal-mart affect…
While I have no love for Walmart at all, I think those who are the most vocal about the damage that Walmart does to small business need to blame their fellow citizens, who clearly don’t love Mom & Pop enough to shop there after Walmart gets to town.
As was mentioned before, people vote with their wallets. The “not in my backyard” Walmart haters should focus their efforts on a buy-local campaign, spinning it as “simply the right thing to do.” But that never happens. The anti-Walmart crowd protests, their claims come true because enough of their fellow citizens really don’t care about driving out Mom & Pop, and then there’s more fuel for the fire.
Oh, I understand that and that part isn’t Walmart’s fault. The locals do get goods at cheaper prices, for a while. The problem IMO is that Walmart bases their business model on driving out other stores and then using their 500-pound gorilla status to change the market to whatever they find most profitable.
It’s not really evil, but it drives away small business in local downtowns, and I like those businesses. As a result, I’ll spend my dollars there. No real malice, just putting my money in the hands of the people I want to stay in business.
Of course they do. It’s a logical deduction from their business model. But there is zero evidence that this is a Bad Thing.
The closest parallel would be the American beer industry. Pre-WW2, there were thousands of local breweries producing local, varigated beers. Then the mega-breweries started nationwide marketing of cheaper beer. American voted with their wallets and the local breweries went out of business. There was a period of Despair, when all that was available was mega-swill. Then craft brewers took a chance on there being a niche market for taste. Result - 40 years later there are more craft breweries in America than there ever were before WW2, and they produce and sell tons more (and better) beer.
It’s all cyclical. Mom & Pop will go out of business, but Grandson & Granddaughter will found a thriving business down the road.
IIRC There has been evidence, or at least news stories of ‘dumping’ or something along those lines where Walmart will move in and set prices below cost, using revenue from other stores to support the loss, this means that the local shops can not compete.
If it did happen, is it a bad thing, and why? My village is held hostage by local shops. Poor choice, rubbish opening hours, high prices, bad customer service and attempts at price fixing. There’s rumours a Tesco Express may be opening (the same accusations are leveled against Tesco in the UK as they are against Walmart in America), and everybody is praying for it to happen.
The only people who mourn the loss of the local shop are those who’ve never had to experience them.
That’s funny…my fiance and I watched that episode two days ago and both thought it was the worst episode of Bullshit Penn and Teller have ever done.
Specifically their mention of the woman who was unemployed until Wal-Mart was built and is now supporting her family without welfare because of the job. While what they said was true, they didn’t do too much math before they put that on the show. They mentioned that her salary was $8.50 per hour and that she was the bread winner for her family. Based on that information there is no way her family of 4 lives without some kind of government assistance in Chicago, and while that subsidy may not be welfare any longer they simply can’t be getting by without Section 8 housing or SNAP or something of that nature. There is nothing wrong with using the benefits she has available to her but to parade her around as a paragon of Wal-Mart because she is off of welfare now is disingenuous at best.
We both also thought it was sick that they had someone there defending child labor because the kids in third world countries need to work to support their families. To justify sweatshops because every family member has to work in the third world rather than raising the pay of each of the adults working in that area for Wal-Mart so that their children can go to school instead of sewing t-shirts for 12 hours per day is really disgusting.
Has anyone here heard of a free market? And how it’s a good thing? You know, the competition between businesses forces them to offer their customers better service.
That’s the whole point. It’s not a good thing when Mom and Pop run the only store in town. But it’s a not a good thing when WalMart is the only store in town either.
Not saying this is not possible, but I have not noticed WM prices varying from one location to another. TMK sales fliers aren’t produced strictly for one store location. I guess the local store may have some leeway to run a “bluelight special” for an overstocked item but that’s just a guess on my part based on my knowledge of other retail business processes.
What about the Wal-Mart locations that are surrounded by a sea of small businesses? One of the Wal-Marts near me is surrounded by small businesses including a hair salon, various restaurants, a nail salon, and a myriad of small specialty shops.
To me, this is the most telling fact. Every state and county and some places, cities have some sort of law against price discrimination, bait and switch, and all those other underhanded tactics.
Given the small-ness of the locale, these laws can be written to be very anti-business, very pro-status quo. But, the lack of litigation along these lines demonstrates that Wal-Mart is just beating down competition the old-fashioned way.
Granted, though, there is always litigation started against them, but they are almost always routinely dismissed. I have seen some litigation settle undisclosed. But, after going through litigation to open a data center, I see now that it doesn’t automatically that the undisclosed litigation settled against them. In my case, we saw where the decision was going, and we threatened to keep appealing, and keep going and in doing so, it would become apparent that the local law was written so poorly, it would be overturned. This would have a flood gate effect of past litigants seeking recourse, and new people seeking to flout the law as well. Besides, I’m sure there are a gaggle of reporters just waiting to break the story that Wal-Mart competes unfairly. Enough stories emphasizing the innuendo of anti-competitive practices happens already.
One of my friends is all about Wal-Mart culture, but he hates the organization the more he studies it, ironically. Corporate administration and operations are centered in Arkansas. They don’t like to travel, and when they do, they do so very cheaply. I can’t remember if they share rooms or not. Their per diem for the day is what I get for lunch. I also travel business class when I can (though I do travel a lot for a lawyer), especially internationally. Apparently, people work there for the experience. It sounds like a low-paid internship to me, but if you’re a business with a proven methodology, then almost any sort of labor plugs into it. Unfortunately, not every business works that way.
The problem is with the verb “force”. The customers and the business model determine which stores stay open or close. If customers prefer Walmart then the customers are the ones closing the competition. If Walmart is really pricing merchandise under cost in order to force out competition, they are being really stupid. The barriers to entry in retail are relatively small. If Walmart is able to charge monopoly prices in one area during the period after the Mom and Pop business has closed, then that would attract competition, forcing them to set the prices back under cost. That is a great way to lose alot of money.
Anti-Walmart bias is a form of class snobbery. Those with enough money to pay extra for quaint shopping experiences are trying to deprive the poorer people the option of buying inexpensive goods and raising their standard of living.
