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Sun May 18, 2014, 02:14 PM

Walmart Is Falling Apart Before Our Eyes

Wal-Mart's high returns are falling like a rock
The most startling evidence of Wal-Mart's decline comes from Wal-Mart itself. Each year, the company provides a return on investment calculation for investors, which measures the profit Wal-Mart makes from the money it invests in stores, inventory, and other infrastructure.

You can see below that Wal-Mart's ROI is dropping rapidly since 2010, despite the broader economy recovering over that time.

If ROI continues to decline, Wal-Mart could become unprofitable very rapidly. Falling same-store sales and plummeting returns are how Sears, Kmart, or Montgomery Ward, became former retail icons that were eventually overtaken by competitors. These two trends can only last so long before something has to be done.

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Arrow 121 replies Author Time Post
Reply Walmart Is Falling Apart Before Our Eyes (Original post)
yortsed snacilbuper May 2014 OP
Wounded Bear May 2014 #1
truedelphi May 2014 #26
No Vested Interest May 2014 #38
oldandhappy May 2014 #40
No Vested Interest May 2014 #70
oldandhappy May 2014 #86
villager May 2014 #101
oldandhappy May 2014 #117
villager May 2014 #118
demigoddess May 2014 #45
mucifer May 2014 #49
PotatoChip May 2014 #75
No Vested Interest May 2014 #96
Hekate May 2014 #56
demigoddess May 2014 #114
Swede Atlanta May 2014 #27
busterbrown May 2014 #31
demigoddess May 2014 #115
busterbrown May 2014 #121
Lex May 2014 #97
RoverSuswade May 2014 #2
djean111 May 2014 #5
kmlisle May 2014 #13
erronis May 2014 #37
RoverSuswade May 2014 #66
Springslips May 2014 #82
Skidmore May 2014 #9
murielm99 May 2014 #16
passiveporcupine May 2014 #20
A Simple Game May 2014 #28
Skidmore May 2014 #107
A Simple Game May 2014 #108
Skidmore May 2014 #109
A Simple Game May 2014 #110
Skidmore May 2014 #119
NickB79 May 2014 #111
surrealAmerican May 2014 #3
cascadiance May 2014 #15
Thor_MN May 2014 #18
Bigmack May 2014 #33
calimary May 2014 #29
n2doc May 2014 #4
DJ13 May 2014 #6
Louisiana1976 May 2014 #53
Wellstone ruled May 2014 #7
knitter4democracy May 2014 #58
Ilsa May 2014 #8
GeorgeGist May 2014 #14
JCMach1 May 2014 #23
Fla Dem May 2014 #116
Nye Bevan May 2014 #10
99Forever May 2014 #11
Post removed May 2014 #12
aggiesal May 2014 #17
Botany May 2014 #25
SansACause May 2014 #19
rurallib May 2014 #21
hatrack May 2014 #22
truedelphi May 2014 #30
Rod Beauvex May 2014 #32
Botany May 2014 #24
cascadiance May 2014 #48
truebluegreen May 2014 #99
obxhead May 2014 #34
Fumesucker May 2014 #41
Louisiana1976 May 2014 #55
laundry_queen May 2014 #35
Populist_Prole May 2014 #44
laundry_queen May 2014 #51
Populist_Prole May 2014 #67
laundry_queen May 2014 #69
cascadiance May 2014 #47
laundry_queen May 2014 #52
jeff47 May 2014 #59
laundry_queen May 2014 #61
jeff47 May 2014 #62
laundry_queen May 2014 #65
Niceguy1 May 2014 #84
Playinghardball May 2014 #36
Skittles May 2014 #39
IDemo May 2014 #42
Scuba May 2014 #43
theHandpuppet May 2014 #46
rupertps8or28 May 2014 #50
renate May 2014 #112
1000words May 2014 #54
SammyWinstonJack May 2014 #80
Warpy May 2014 #57
theHandpuppet May 2014 #60
callous taoboy May 2014 #63
ejpoeta May 2014 #78
Glitterati May 2014 #87
truebluegreen May 2014 #100
Glitterati May 2014 #104
Lex May 2014 #105
Glitterati May 2014 #106
renate May 2014 #113
Glitterati May 2014 #120
colsohlibgal May 2014 #64
taught_me_patience May 2014 #68
Savannahmann May 2014 #71
ecstatic May 2014 #72
haele May 2014 #91
ecstatic May 2014 #95
ecstatic May 2014 #94
Recursion May 2014 #73
djean111 May 2014 #76
Recursion May 2014 #77
djean111 May 2014 #79
MelungeonWoman May 2014 #102
eridani May 2014 #74
ProfessorGAC May 2014 #81
fredamae May 2014 #83
dawg May 2014 #85
Sunlei May 2014 #88
Heywood J May 2014 #92
Sunlei May 2014 #93
randome May 2014 #89
madville May 2014 #90
Lex May 2014 #98
KamaAina May 2014 #103

Response to yortsed snacilbuper (Original post)

Sun May 18, 2014, 02:17 PM

1. Worrisome...

Sure, I can't help but feel some schadenfreude over this, but I worry about how this will destroy what little good they do.

In many areas, Wally-world has squeezed local economies to such an extant that should they fail, so will the surrounding communities.

Much pain ahead, I fear.

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Response to Wounded Bear (Reply #1)

Sun May 18, 2014, 04:28 PM

26. Our community is already talking about getting a CostCo here,

As they pay their workers much better, and are easier to deal with.

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Response to truedelphi (Reply #26)

Sun May 18, 2014, 05:10 PM

38. While I hear good things about Costco,

aren't they geared to bulk sales, more like Sam's Club than Walmart?
Households are getting smaller, not larger, with more singles as well as retirees living alone.

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Response to No Vested Interest (Reply #38)

Sun May 18, 2014, 05:17 PM

40. costco

I get my rewards check and go in the Spring and buy (yes, in bulk) everything I need for the house for the year -- toilet paper, dish soap, toothpaste, etc. Sometimes (toothpaste) the bulk last several years. Sometimes I can get food items that freeze. Vitamins last well. I appreciate Costco and have not darkened the door of a WalMart for years. If you have a chance, give it a try, smile.

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Response to oldandhappy (Reply #40)

Mon May 19, 2014, 02:10 AM

70. If a Costco was located nearby, I'd at least give it

a looksee.

AFAIK, the nearest Costco is located on the north side of my large urban area; I'm in the East-central of the city.
Truth to tell, my senior status and bad knees have me going to a local mid-size grocery with wide aisles, pleasant staff and some good sales.
I also use coupons, which the store doubles up to .50. I especially buy toothpaste on sale throughout the year, building up a reserve, which I dole out to my (adult) kids at appropriate times. Toilet paper is bought on sale combined with coupon, though I boycott all Georgia-Pacific products (Dixie paper products, Brawny towels, Vanity Fair napkins, etc. - all Koch Bros. owned.)

Simplicity is the name of the game now.

Walmart is fairly close, but I don't like it on ideological grounds especially, and it's too large for my taste, not do I find the prices any cheaper than my more local groceries.

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Response to No Vested Interest (Reply #70)

Mon May 19, 2014, 10:54 AM

86. Sounds good

I think you have found a peaceful place for yourself re shopping. Take care of those knees. Knees are tricky. And yes, pleasant staff. ha ha I stopped going to an Albertsons that was forcing us to use automated check out and went to Stater Bros with 1/3rd cheaper prices and smiling folk to check you out. Amazing. Our connections to each other are vastly more important than machines.

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Response to oldandhappy (Reply #86)

Mon May 19, 2014, 01:11 PM

101. Stater Bros.! You must be in SoCal...

 

I'm in L.A. proper, and would go to Stater Bros. a lot if one was nearby...

As it is, I like stopping in if I pass one heading into, or out of, town...

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Response to villager (Reply #101)

Mon May 19, 2014, 05:08 PM

117. San Marcos, fire central!

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Response to oldandhappy (Reply #117)

Mon May 19, 2014, 05:19 PM

118. Well, then -- stay un-singed!

 


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Response to No Vested Interest (Reply #38)

Sun May 18, 2014, 06:58 PM

45. a lot of things aren't really

that massive. Example, their toilet paper is like buying 4 packages at a grocery store. There frozen chicken breasts-about 11 or 12 half breasts per package, frozen individually. I like to buy a little larger to save on trips to the store, especially on staple items.

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Response to No Vested Interest (Reply #38)

Sun May 18, 2014, 07:56 PM

49. You can share the membership with someone. Lots of people have roommates

when the economy is bad.

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Response to No Vested Interest (Reply #38)

Mon May 19, 2014, 05:26 AM

75. I looked it up. We have no Costcos in my state.

So I then checked for Target, since I hear people on DU talk about them... There are only 3 Targets, all of which are a distance from me.

All of the KMarts that I know of are long gone, too. Yet, I rarely go to WalMart... Maybe 2 or 3 times a year- tops.

But heck... I am someone who had never stepped foot in a Starbucks until 2 years ago, when visiting my daughter in NYC, even though I think we have some here. Just not sure where they are located.

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Response to PotatoChip (Reply #75)

Mon May 19, 2014, 12:49 PM

96. I have never been to Starbucks -

I only drink coffee at breakfast, and am not interested in lattes, etc.

Really, there's a whole world out there of other choices in all manner of buying, tasting, eating, etc.
Follow the trends when it suits you, go your own way as well.

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Response to truedelphi (Reply #26)

Sun May 18, 2014, 09:10 PM

56. We've been very pleased with our local Costco, and with careful planning...

...you'll learn to refrain from over-shopping. They're good corporate neighbors; their returns policy is amazing; and they have no trouble with you shopping for someone else. They have a sign at the registers that says every customer is entitled to one receipt, but if you want to you can send one batch through and ask for a subtotal, then send the rest through.

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Response to Hekate (Reply #56)

Mon May 19, 2014, 04:45 PM

114. AND they check your receipt

on the way out. Once they found I had been charged for three of something when I bought two and I was given an revised receipt and a refund within about 2 minutes. Instead of getting all the way home and having to come back and demand a refund. LOVE that!

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Response to Wounded Bear (Reply #1)

Sun May 18, 2014, 04:30 PM

27. Given the tight credit market and overall sluggishness of the economy I.....

 

don't believe that local investors would have a fighting chance of filling the gap.

That said, seeing WalMart significantly shrink and struggle to survive would bring a big smile to my face.

I detest them and what they have done to small local retailers all over the WORLD. I have shopped there a handful of times when I was traveling and needed something quick.

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Response to Wounded Bear (Reply #1)

Sun May 18, 2014, 04:41 PM

31. Walmart goes down.. Rents will become cheaper...more reasonable.

Opportunities for smaller independents to open up..with good intentions..making money but contributing to the community as well..

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Response to busterbrown (Reply #31)

Mon May 19, 2014, 04:48 PM

115. our city gave Walmart

a tax free promise for something like 3 years. I doubt if they give that to small independent shop owners!!

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Response to demigoddess (Reply #115)

Wed May 21, 2014, 02:53 AM

121. Small independents do not have corporate boards and stockholders to feed..

They just need to make enough money for the owners to live comfortably on..

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Response to Wounded Bear (Reply #1)

Mon May 19, 2014, 12:54 PM

97. Other stores will pop up in its place.

But it will take time. I feel sorry for communities that allowed Walmart to be the only choice in town by refusing to shop at the mom and pop local places.

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Response to yortsed snacilbuper (Original post)

Sun May 18, 2014, 02:18 PM

2. Can you imagine - 2018 -

all those big box stores setting empty in America's suburbs - unsellable, unsightly, weed-infested rotting corpses - the result of corporate greed

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Response to RoverSuswade (Reply #2)

Sun May 18, 2014, 02:26 PM

5. Corporate greed and a failed economy.

 

It is not people who make money on stocks who shop at Walmart - it is the people who are being given less and less in wages.
This, I think, has had a steady and gradual effect on retailers. Personally, I have been making do on less than a third of what I was making when I was working. And now - I don't need all that stuff I used to buy. Refreshing, really.

Down here in Florida, Walmart's attempt to advertise itself as better and cheaper than Publix is laughable.

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Response to djean111 (Reply #5)

Sun May 18, 2014, 03:38 PM

13. Must be why in Florida Publix employs more workers that Walmart

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Response to djean111 (Reply #5)

Sun May 18, 2014, 05:09 PM

37. Many/most of these big box pirates got tax breaks

To build their stip malls of greed and consumerism.

Most of them will end up as weeded parking lots with no customers and the taxpayers who gave them the breaks still paying.

Meanwhile, the stockholders and corporates are off to the next big party.

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Response to djean111 (Reply #5)

Sun May 18, 2014, 11:54 PM

66. When I vacation in Florida I always

look forward to shopping in a Publix. They are so clean and cheery.

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Response to djean111 (Reply #5)

Mon May 19, 2014, 08:38 AM

82. No stock holders and shoppers too...

If someone makes dividends, or shops because the product is cheaper, knowing full well that they are making money, or saving money on the backs of poverty wages than the corruption goes straight through them. They are just as corrupt as Wal Marts brass and the Walton's themselves.

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Response to RoverSuswade (Reply #2)

Sun May 18, 2014, 03:26 PM

9. We've had some big box stores and a mall

nearby be abandoned. The University and a community college took over them to replace buildings destroyed by the big flood in 2008.

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Response to Skidmore (Reply #9)

Sun May 18, 2014, 03:40 PM

16. I am glad to hear this.

As those buildings are abandoned, other uses will be found for them. They can be used as schools, living facilities for the poor and homeless, and as clinics. We have one in our area that is a clinic.

Many of you do not like mega-churches, but in our area, a mega-church rehabbed an old shopping mall and saved the area. I would rather see that than a weed-infested, dangerous eyesore and a decaying neighborhood.

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Response to murielm99 (Reply #16)

Sun May 18, 2014, 03:55 PM

20. Let Costco buy some out

I wish Costco would buy out Wal-Mart here.

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Response to Skidmore (Reply #9)

Sun May 18, 2014, 04:31 PM

28. Near where I live someone took over an old factory building and started

growing hydroponic herbs. I would love to have locally grown tomatoes, peppers, and cukes all year long and employ local people to do so. The way California is going with the drought and Florida is going with the rising ocean we need to start diversifying our food sources, this could be a good way to start.

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Response to A Simple Game (Reply #28)

Mon May 19, 2014, 01:59 PM

107. I read an article about some venture like this somewhere.

Not sure if it is the one you refer to but I'm recalling that this indoor farm was supplying homeless shelters and schools in the area where it was located. We need to have vegetable horticulture like this become ubiquitous even in areas that have traditionally been considered food producers because drought has become more frequent and the growing seasons are unreliable in length now.

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Response to Skidmore (Reply #107)

Mon May 19, 2014, 02:09 PM

108. This type of job would also be full time not seasonal. Crops would not be

destroyed by hail, wind, or freezes and soil would not be depleted and could be used for other purposes.

As more and more states legalize marijuana this would be a secure way to meet demand.

I could go on and on with the positives for this type of agriculture.

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Response to A Simple Game (Reply #108)

Mon May 19, 2014, 02:13 PM

109. Would be nice if some of the organic farmer groups could network to set up a system

because it takes some organization to get something like this off of the ground. Big Ag needs to be beaten to the game.

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Response to Skidmore (Reply #109)

Mon May 19, 2014, 03:46 PM

110. Yes it would take a few to supply the bigger store chains. And speaking of organic

the need for pest and weed control would be almost completely eliminated.

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Response to A Simple Game (Reply #110)

Mon May 19, 2014, 05:44 PM

119. Thought you might be interested in this article too.

http://www.nytimes.com/2014/05/18/opinion/sunday/what-farm-to-table-got-wrong.html?smid=fb-share&_r=0

This points to some of the problems with land crops which could also be eliminated by indoor farming. I had another item from a few weeks ago which I will have to retrieve. Goin' diggin'...

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Response to A Simple Game (Reply #28)

Mon May 19, 2014, 04:14 PM

111. Sounds like what happened here in Minnesota, but we have tilapia too :-)

http://blogs.citypages.com/food/2014/04/aquaponic_farm.php

Urban Organics, one of the nation's largest aquaponic farms, has opened for business in the former Hamm's Brewery building in St. Paul.

All six floors of the building will eventually be utilized by Urban Organics's aquaponic system and 18 3,500-gallon tilapia tanks will be scattered throughout. At peak production, the Urban Organics farming system is projected to yield 720,000 pounds of greens and 150,000 pounds of fish per year. As of now, only one floor is fully operational.

The produce -- which currently includes 100% organic certified kale, Swiss chard, Italian parsley, and cilantro -- is already being sold at select Lunds and Byerly's locations in the Twin Cities.

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Response to yortsed snacilbuper (Original post)

Sun May 18, 2014, 02:21 PM

3. It's like a parasite that's killing its host.

It would appear there are limits to how much a retail company can grow.

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Response to surrealAmerican (Reply #3)

Sun May 18, 2014, 03:40 PM

15. Walmart will become a poster child on why big companies shouldn't be "inherited"...

 

... by the absolute STUPID and GREEDY ASS bums of the Walton family that only care about themselves and not the legacy that Sam Walton left who during his run of the company prided himself in selling AMERICAN made products that has been thrown out in the pursuit of self serving greed and profit.

Walton understood like Henry Ford that your company succeeds if your employees and your customers can all enjoy the products of it.

http://www.thedailybeast.com/articles/2014/01/06/henry-ford-understood-that-raising-wages-would-bring-him-more-profit.html

The Walton family that were given his fortune and company don't understand it, and should never have had control over it. Imagine if different ownership that reflected more business sense like Sam Walton and Henry Ford could have been running this company the last decade or so instead. Our country's economy might not be near in the bind it is in now.

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Response to cascadiance (Reply #15)

Sun May 18, 2014, 03:50 PM

18. That is the prime reason for an estate tax.

 

We as a nation do not want an Aristocracy to form. Power (in the form of wealth) should be limited in ability to pass on to scions that didn't lift a finger to acquire it.

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Response to Thor_MN (Reply #18)

Sun May 18, 2014, 04:47 PM

33. Teddy Roosevelt...

 

Republican president... said:

"The really big fortune, the swollen fortune, by the mere fact of its size, acquires qualities which differentiate it in kind as well as in degree from what is possessed by men of relatively small means. Therefore, I believe in a graduated income tax on big fortunes, and … a graduated inheritance tax on big fortunes, properly safeguarded against evasion, and increasing rapidly in amount with the size of the estate."

Shows us how far the Teapublicans have evolved into the Oligarchy Party since Teddy.

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Response to surrealAmerican (Reply #3)

Sun May 18, 2014, 04:31 PM

29. Many parasites do just that.

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Response to yortsed snacilbuper (Original post)

Sun May 18, 2014, 02:24 PM

4. Perhaps they should tell their politicians to support a min wage increase

And unemployment extensions, food stamp increases……

Their customer base is not doing well at all.

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Response to n2doc (Reply #4)

Sun May 18, 2014, 03:15 PM

6. +1

They're choking off their own customer base.

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Response to n2doc (Reply #4)

Sun May 18, 2014, 08:58 PM

53. Well said.

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Response to yortsed snacilbuper (Original post)

Sun May 18, 2014, 03:22 PM

7. Wal-Mart will need to restructure their

 

operations soon. This puppy is one sick mess,shelves look like crap,employees are just beat to death by their managers,no one gives a shit about their jobs it's just a paycheck all be it starvation levels. Stores are dark and dirty,lousy inventory replacement program restocking done during high sales impact hours,hey,they do have some people who try to care,you can only beat your head against the wall just so long then you say F--- it and just look busy.

Target has started to look more and more like the same model. Try to stay away from both and go there only in a emergency.

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Response to Wellstone ruled (Reply #7)

Sun May 18, 2014, 09:18 PM

58. I went in one for an emergency family gift, and it was awful.

It made our Meijers look even more amazing than I'd thought it was already. Produce was limited and crappy, very few choices in the cheese aisle (though it looked like it with doubles and triples hanging up next to each other), and the prices weren't good. Screw that!

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Response to yortsed snacilbuper (Original post)

Sun May 18, 2014, 03:23 PM

8. From 19.25% to 17%.

It's significant, but not the end, not if the stabilize their position.
But we can hope!

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Response to Ilsa (Reply #8)

Sun May 18, 2014, 03:39 PM

14. I too noticed they used the Fix News ...

Graphics Dept.

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Response to Ilsa (Reply #8)

Sun May 18, 2014, 04:24 PM

23. And how much have (%) Repugs around the country cut SNAP benefits...

seems like a close match...

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Response to Ilsa (Reply #8)

Mon May 19, 2014, 05:01 PM

116. My thought too, 2.25% drop over 4 years. But can only hope it continues. nt

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Response to yortsed snacilbuper (Original post)

Sun May 18, 2014, 03:26 PM

10. Tough to compete against Amazon (nt)

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Response to yortsed snacilbuper (Original post)

Sun May 18, 2014, 03:27 PM

11. Nice to see some good news on DU. n/t

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Response to yortsed snacilbuper (Original post)


Response to yortsed snacilbuper (Original post)

Sun May 18, 2014, 03:48 PM

17. Their customer base are their own employees ...

and since they don't pay their employees well,
the base can't afford to purchase what Wally World is selling,
thus their profits are dropping like a stone in a pond.

This is a making of their own doing, and I don't feel the least bit sorry for Walmart.

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Response to aggiesal (Reply #17)

Sun May 18, 2014, 04:27 PM

25. + 1

n/t

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Response to yortsed snacilbuper (Original post)

Sun May 18, 2014, 03:53 PM

19. The GOP is putting them out of business

Cutting food stamps, unemployment, and Medicaid means the Walmart shoppers have no money to spend.

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Response to SansACause (Reply #19)

Sun May 18, 2014, 04:01 PM

21. Way to go GOP

Keep it up. I promise to help you out.

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Response to yortsed snacilbuper (Original post)

Sun May 18, 2014, 04:02 PM

22. Reminds me of Lynn Townsend at Chrysler in the early 1970s. . . .

The company was in serious trouble (like Detroit in general at that time) and Chrysler was building tens of thousands of cars that no one was buying. They'd go in the "sales bank" - a giant parking lot from which they'd be sent to dealers - eventually. Chrysler estimated that it took about $100 - $200 per car to get them ready for sale.

Townsend's response to falling sales and declining quality? "Ah, hell, all the public wants is their splits". That is their stock splits, since "the public" in his mind by that point consisted solely of shareholders. Ten years and lots of federal money later, Chrysler finally began to pull itself out of the mud into which he'd driven it.

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Response to hatrack (Reply #22)

Sun May 18, 2014, 04:32 PM

30. During the late 1970's, I sat in a commercial jet, in

"Business class" and this exec from Gm spent the whole time telling me how the country was going to go back to big cars, that small, higher mileage autos were a mere phase.

Well, eventually the public did, with the SUV fad that hit in the 1990's. But in the meantime, American car manufacturers really suffered.

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Response to hatrack (Reply #22)

Sun May 18, 2014, 04:41 PM

32. And they haven't learned a thing.

None of the big three did. They just ignored two fuel crises, declining wages, and chaper imports that ran forever, held together and used little gas. Only in the last five years have I stopped seeing those 80's era Nissans and Toyotas disappear form the roads, and I strongly suspect that was only because of Cash for Clunkers. (CFC being a rant of its own for another time)

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Response to yortsed snacilbuper (Original post)

Sun May 18, 2014, 04:26 PM

24. Meanwhile Costco is doing just fine

paying your employees shit and sticking a lot of their expenses to the government
is not good business.

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Response to Botany (Reply #24)

Sun May 18, 2014, 07:39 PM

48. Only thing we need to help Costco with is their book selection...

 

They get WAY too many wingnut book titles from publishers that don't care about making money on those titles when they offer them to Costco more at wholesale rates but promote them to promote corporate agenda.

Next time you go in to Costco, make sure to buy a copy of the Flash Boys, one of the few decent non-fiction books they have now, to help encourage them business-wise to improve this selection. And its at a decent price there too.

Tell them to get copies of Elizabeth Warren's new book as well as Thomas Piketty's as suggestions to improve what they have.

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Response to cascadiance (Reply #48)

Mon May 19, 2014, 12:59 PM

99. Every time I shop at Costco I make a point

 

of circling the book table and turning the wingnut-welfare titles upside down. I know this makes me a bad person, and makes more work for the employees, but what the hay...lower sales of those books might mean the management will buy fewer of them. Besides, it does my heart good.

And for several years I've noticed that I am not the only one who does it.

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Response to yortsed snacilbuper (Original post)

Sun May 18, 2014, 04:52 PM

34. I see this as more evidence that the recovery is a complete myth.

 

Sure, Wall street is doing great, but the overall economy is still in shambles. Other than a few select housing markets little has changed for the commoner since the crash in 08.

If the economy were improving, Walmart sales would still be going up. Employment is still down and salaries have yet to rebound from their fall (due to cuts or loss of hours) in 08.

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Response to obxhead (Reply #34)

Sun May 18, 2014, 05:22 PM

41. I agree with you on this

The "Main Street" economy is still a mess.

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Response to obxhead (Reply #34)

Sun May 18, 2014, 09:03 PM

55. +1 million

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Response to yortsed snacilbuper (Original post)

Sun May 18, 2014, 05:08 PM

35. Several things wrong with their business model

First, squeezing their suppliers until the suppliers go bankrupt, so that those suppliers can no longer either supply them, or supply them at the prices Walmart demands.

Then, paying their employees so terribly that the employees can hardly even afford to shop at Walmart.

Then, expanding so quickly that their 'superior supply chain model' cannot keep up (as well as their now bankrupt suppliers) so there are empty shelves everywhere, so the people that DO shop at Walmart get frustrated and go somewhere else.

Also, keeping the min amount of cashiers so people have to wait 20 min to get through a line also drives shoppers elsewhere. I'll pay an extra $0.03 for a jug of juice if it means I can get out of the store in 5 minutes instead of 20.

Having your "brand" associated (fairly or not) with really shitty quality means that when you do raise prices even slightly, people won't buy your goods. For example, Walmart clothing is really not that horrible for quality, when compared with other stores. But they have the reputation of crappy, cheap clothes, so no one will buy a t-shirt there for $20 when they can get an equally crappy, but 'brand name' one for $22. Walmart's marketing campaigns, from the beginning, should've concentrated more on value. They should've also not been so cut throat with their suppliers in exchange for better quality, even if it meant a small difference in margin. Their supplier practices is what gave them shitty quality goods and gave them this reputation. Now that their prices are NOT the lowest around, since everyone else has caught on and is doing the same thing, they have this perception problem. Bad decision making from the top - not considering all the consequences of their practices. That's what happens when management has tunnel vision.

And finally, outsourcing nearly all manufacturing, or only buying from suppliers that do in order to get rock bottom prices, means they destroy domestic jobs, which means people buy less overall. Also, by paying their own employees less, as the country's largest employer they set the wages and lower wages all over the country means less money for sales.

For years, Walmart profited off of the lag of their practices. What I mean is, all of their practices worked for short term increases in profits, but destroyed the economy of the entire country in the long term. Unfortunately, their executives were not long-term thinkers. Well, unfortunately for them. I don't think the rest of us are all broken up about it, lol.

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Response to laundry_queen (Reply #35)

Sun May 18, 2014, 06:52 PM

44. First class analysis

And your last paragraph is the most condensed and concise description of what's wrong with corporate america.

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Response to Populist_Prole (Reply #44)

Sun May 18, 2014, 08:42 PM

51. And it's really unbelieveable to me.

I'm nearly done a business degree. In my school at least, they spend a lot of time teaching you the pitfalls of short-term profit thinking and management tunnel vision issues related to remuneration because in the long run it means less money for everyone. How could these high level executives not know this if *I* know this? I mean, if they want money so bad, wouldn't they want MORE money in the long run? Boggles the mind.

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Response to laundry_queen (Reply #51)

Mon May 19, 2014, 01:25 AM

67. I've run into this same dynamic at a smaller level many times in the workplace

Make things look good now now now, at the expense of later: With the (usually ) false hope of it being someone else's problem down the road. Mostly it's borne out of management by intimidation, or by the desire to be seen as a "can do" or go-getter type. I swear there are some that if given the offer to spend five grand now to purchase equipment that would save 500K, they would pass...just to show they "saved" 5 grand. Anyone that speaks against such madness is deemed as a trouble maker.





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Response to Populist_Prole (Reply #67)

Mon May 19, 2014, 02:06 AM

69. That is why

in my school we were taught about how important it is to spread the profits around as much as possible - it cuts down significantly on people doing things like that to look good in the short term because they are also invested in the company doing well long term.

My mom works for a large employee owned company - meaning ALL of the share owners in the company are also employees - and holy moly, are they doing well. It's really incredible. Because every time a decision is made, it's carefully weighed and measured to ensure that the decision is what's best for the company in the long run...because all employees are tied to the company itself and how well it does, instead of only being tied to performance bonuses.

What you see when management is making those idiotic $5000 vs $500,000 decisions is an imbalance in how they are paid...basically, there's more in it for them to boost profits short term and nothing in it for them if they instead choose a long term outlook. What these companies have to realize is that they need to make it so that their management benefits more from choosing the long term outlook. But that is what I mean about high level executives - most of them have some kind of business degree, how can they not know the pitfalls of improperly compensating management? I agree with you - it happens far too often and yes, anyone who speaks out is called a trouble maker. Totally idiotic, IMO. I think there are some prominent business schools that are failing at teaching business and are instead teaching 'how to get rich quick'.

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Response to laundry_queen (Reply #35)

Sun May 18, 2014, 07:35 PM

47. And THEY increase our national debt by not paying their employees enough that forces...

 

... them to go on to many government programs that they shouldn't be on if they are working for a living.

The Walmart heirs and their stockholders should bear the burden of paying for their employee's health care and other bills if the companies they compete against pay their employees enough to not depend on government stipends. The taxpayer is being stolen from by these assholes to allow for their employees to live since they don't want to pay a "living wage". As noted earlier Teddy Roosevelt would condemn their practice of not paying a living wage to take that money away from workers, consumers, and taxpayers instead of EARNING that money.

The fact that they actually encourage their employees to apply for and get access to these government programs makes them that much more insidious and culpable!

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Response to cascadiance (Reply #47)

Sun May 18, 2014, 08:45 PM

52. Oh, absolutely. It's corporate welfare on the backs of the citizens.

Which means the government has less money for things like infrastructure and education which are net investments in the long term. Instead, the gov't is busy trying to keep their citizens from starving while these corporations rake in record profits for years until, as in Walmart's case, everyone is all tapped out and the whole scheme collapses.

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Response to laundry_queen (Reply #35)

Sun May 18, 2014, 09:34 PM

59. There's another cause of the empty shelves

They don't have enough workers working enough hours to keep their shelves properly stocked. They're so desperate to ensure everyone is part-time that they just aren't getting the product on the floor.

Warehouses are full. Shelves are empty.

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Response to jeff47 (Reply #59)

Sun May 18, 2014, 09:50 PM

61. I'm sure that's part of it.

Not so sure they have full warehouses though, but I will agree that they constantly keep as many workers off the floor as they can to save a buck, which leads to not enough workers putting out product.

I still think it's more on the supplier side though...my particular size in underwear (LOL, I know TMI) has been out of stock at my local Walmart for 3 fucking YEARS. I've been to 3 different Walmarts in the area and they don't have that size in that brand either. WTF? I'm pretty certain my size isn't just sitting in the back of the store waiting for some worker to put them out for 3 years - I think they are having problems with their supply chain.

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Response to laundry_queen (Reply #61)

Sun May 18, 2014, 09:54 PM

62. Specific items are going to have specific problems

But there's lots of people who have been complaining that the loading dock at the stores are packed to the rafters while the shelves are empty, and management isn't allowed to give any more hours to correct that situation.

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Response to jeff47 (Reply #62)

Sun May 18, 2014, 11:26 PM

65. That was just one example

of the things on my list of things I regularly buy that have been out of stock for months upon months at Walmart. Another one was a specific halogen lightbulb for my bathroom. Like the underwear, the other sizes and styles from the same manufacturer were being restocked, just not that particular one. The root cause is likely more than just one thing.

So I did a little reading to see if I could figure out what specifically is going on with Walmart's supply chain and the one problem I've found that Walmart is having issues with their real time inventory systems. Basically, things are showing up as being in stock, when they aren't so the reordering of that out of stock item never happens, and because there's nothing on the shelf, it's showing up as not selling either, so continuously perpetuating the lack of reordering. Walmart isn't doing enough inventory counts to reconcile the differences, or the results aren't being entered into the system. Makes sense. Another article mentioned that Walmart hasn't been paying as close attention to their stores as they normally should because of concentrating on setting up and streamlining their online business, which means they've let the bricks and mortar stores fall into disrepair. Some interesting stuff out there, anyway. I'm sure much of it ties back to having employees who are under qualified for their jobs because they pay so terribly, and understaffing at all levels seems to be a Walmart given.

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Response to jeff47 (Reply #62)

Mon May 19, 2014, 10:03 AM

84. the walmart in my area

Is always sell stocked and clean... the only empty shelves I have se err n is on the holiday section..easter candy, where you wouldn't restock on Easter day.

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Response to yortsed snacilbuper (Original post)

Sun May 18, 2014, 05:09 PM

36. Good...

 

I hate Wally World...

Love Costco!!

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Response to yortsed snacilbuper (Original post)

Sun May 18, 2014, 05:15 PM

39. people know their cheap garbage has a short shelf life

they're on to their game

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Response to yortsed snacilbuper (Original post)

Sun May 18, 2014, 05:34 PM

42. At first glance, they're plunging toward zero !!11!!

Until you mentally correct their chart for a 0 at the Y axis.

Are they trying to scare their num-brained congress-pets into avoiding the minimum wage issue?

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Response to yortsed snacilbuper (Original post)

Sun May 18, 2014, 06:00 PM

43. Slave labor doesn't have the cash to buy a lot of goods, not even crap.

 

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Response to yortsed snacilbuper (Original post)

Sun May 18, 2014, 07:00 PM

46. How many of you knew about this Wal Mart practice?

I didn't until today. It seems that until 2008 Wally World was paying its Mexican workers in company scrip and stopped only when they were forced to do so by the courts.

http://jurist.law.pitt.edu/paperchase/2008/09/mexico-supreme-court-orders-wal-mart-to.php
JURIST
Friday, September 05, 2008
Mexico Supreme Court orders Wal-Mart to stop paying workers in store vouchers
Joe Shaulis

The Mexican Supreme Court of Justice on Thursday ruled that Wal-Mart de Mexico may not pay employees in part with vouchers redeemable only at its stores. The court nullified the employment contract of a worker who challenged the voucher payments, finding that they violated Article 123 of the Mexican Constitution, which guarantees the right to "dignified and socially useful work." The court likened the arrangement, which Wal-Mart called the Plan of Social Welfare, to a practice that prevailed during the dictatorship of Porfirio Diaz, who ruled Mexico in the late 19th and early 20th centuries. Until the practice was abolished by the current constitution in 1917, workers could be forced to buy exorbitantly priced goods at company stores....

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Response to yortsed snacilbuper (Original post)

Sun May 18, 2014, 08:33 PM

50. No real loss to me. I haven't shopped at Wally World for years now

 

I find their labor practices to be utterly reprehensible, and believe that it has contributed to the destruction of many small businesses throughout the country.

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Response to rupertps8or28 (Reply #50)

Mon May 19, 2014, 04:17 PM

112. welcome to DU!

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Response to yortsed snacilbuper (Original post)

Sun May 18, 2014, 09:00 PM

54. Perhaps Hillary could return to their Board

 

Too big to fail, baby!

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Response to 1000words (Reply #54)

Mon May 19, 2014, 08:25 AM

80. heheheh

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Response to yortsed snacilbuper (Original post)

Sun May 18, 2014, 09:12 PM

57. If they want to rescue their plummeting sales, they need to get behind a substantial wage increase

Around here, and this is a poor neighborhood in a very poor state, I see people doing most of their shopping at the Dollar Store and Big Lots then crossing the street to WalMart to fill in the gaps. With purchasing power continuing to drop on wages that were at starvation level already, of course all retailers are seeing their sales drop. Nobody can afford to shop.

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Response to Warpy (Reply #57)

Sun May 18, 2014, 09:42 PM

60. "Nobody can afford to shop"

That's it in a nutshell. The greedmongers drove wages to low they finally reached the point where even their workers couldn't afford to buy.

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Response to yortsed snacilbuper (Original post)

Sun May 18, 2014, 10:37 PM

63. The cashier I dealt with last time I went was rude rude rude...

And while I am aware of how miserable it must be to work there, still, does it give one license to be a big turd to the customers?

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Response to callous taoboy (Reply #63)

Mon May 19, 2014, 06:32 AM

78. I have that experience a lot if i go there.

I cut them some slack because I know they get treated like shit. But it doesn't make me too enthusiastic about going there. I avoid walmart when I can. I love the rare opportunity I get to go to wegmans. such a nice experience. The workers there are always o nice, the aisles are clean and clear. It's a 40 minute drive for me, so I don't get there much.

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Response to ejpoeta (Reply #78)

Mon May 19, 2014, 11:06 AM

87. As a Walmart cashier, can I just say....

 

that a lot of the "cashiers" you might see if the store is busy are stock clerks recruited to a cash register to clear the lines.

As for "rude," not in defense of Walmart, but in defense of cashiers, have you ever seen what some (most) of the Walmart customers are like? The other day, I asked a customer to please allow me to take my arm home with ME instead of in his bag when he attempted to cut it off! I was TRYING to do my job and bag his groceries while he kept spinning the damned bag holder. With my ARMS IN THE BAGS. He stood there and waited until I had my hands in a bag to spin it - just to torture me.

Then there was the woman who could do my job better than me and reminded me she was spending $300.00! Of course, SHE wasn't spending a dime, as her SNAP benefits paid every penny. The taxpayers were spending $300.00, not her. She was spending the taxes taken out of my lousy $7.90/hour.

The result of the customer screeching that there were "only 4 cashiers in the whole store" was that all our morning breaks were canceled.



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Response to Glitterati (Reply #87)

Mon May 19, 2014, 01:07 PM

100. Excellent points about rude customers

 

but don't blame "customer screeching" for your cancelled morning breaks. Blame the (mis-)management.

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Response to truebluegreen (Reply #100)

Mon May 19, 2014, 01:17 PM

104. Of course, but the point is simply

 

that it's the CASHIERS who pay. Because, of course, we just weren't slinging groceries fast enough.

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Response to Glitterati (Reply #87)

Mon May 19, 2014, 01:19 PM

105. Quit bitching about people using SNAP benefits.

It sounds like a fucking tea-bagger. The people SCREWING YOU at your $7.90 an hour wage are NOT the SNAP benefits users. Wise up.

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Response to Lex (Reply #105)

Mon May 19, 2014, 01:29 PM

106. OK

 

I wasn't bitching about SNAP benefits, I was bitching about self entitled assholes.

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Response to Glitterati (Reply #87)

Mon May 19, 2014, 04:20 PM

113. Oh my gosh. Being a cashier would suck anywhere, I'm sure

(I worked at a drugstore in a college town and always used to wonder, "Who raised these people? Bigfoot?"

But in a place like Walmart, where the employees are treated like cattle and morale must be below zero, it must be excruciating. I'm genuinely sorry.

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Response to renate (Reply #113)

Mon May 19, 2014, 06:19 PM

120. Thanks, but

 

I won't be there long. COSTCO opens in August and my application will go in the moment they start accepting them.

But, you're right, morale sucks because employees are treated like shit.

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Response to yortsed snacilbuper (Original post)

Sun May 18, 2014, 10:45 PM

64. Great News!

The Wal-Mart heirs and other big shots there make me sick, greed is not good. I haven't been in one for more than a decade.

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Response to yortsed snacilbuper (Original post)

Mon May 19, 2014, 01:38 AM

68. Wal-mart is going nowhere

 

they are still one of the best run retail companies in the world. Sales growth is probably topped out, but they'll be profitable for a long time to come.

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Response to yortsed snacilbuper (Original post)

Mon May 19, 2014, 04:44 AM

71. Question

 

What economic recovery? 92 million people are not employed, that is half again as many before the recession struck. The rich are doing well since we bailed them out. But the middle class is shrinking and losing ground.

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Response to yortsed snacilbuper (Original post)

Mon May 19, 2014, 04:53 AM

72. they've spent so much time and energy trying to tax ecommerce, not realizing

that people are avoiding their stores because it's a very unpleasant shopping experience.

Edited to add, their lower returns could be a temporary thing due to their massive entry into the "local supermarket" market. I think there are at least 3 brand new "neighborhood grocery" Wal-Marts within a 5 mile radius from my house. Still not interested in shopping there, as their stores still have a circus like atmosphere.

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Response to ecstatic (Reply #72)

Mon May 19, 2014, 11:37 AM

91. National "Neighborhood supermarkets" chains are far more difficult to manage than the box stores.

What happened to Tesco US/Fresh and Easy is a good example of what not to do; while it seemed that it would be profitable to put a mid-sized grocery/supermarket that had reasonably healthy food at a price a household making $35K a year could afford in areas where the primary competition are a couple corner bodegas/liquor stores and maybe one sad IGA, the problem was that the stores were too expensive to maintain.

Most neighborhoods that would benefit from a Fresh and Easy with its national grocery supply chain could not support a store that was high-end grocery products at the minimum price-point Fresh and Easy needed to charge to break even. Their primary competition in selection and quality is Trader Joe's or a boutique grocer, not "Save-A-Lot" or Family Dollar/99 cent Stores. When at least a quarter of the residents in those neighborhoods are on low fixed incomes and another quarter are on government subsidies, neither group can afford what might seem like reasonable/low prices for fresh produce and meats. These are neighborhoods where the only places most residents can afford to shop at are the clearance stores that sell seconds, left-overs, and end of shelf-life products from the local or regional major groceries and produce providers at just enough mark-up to break even with minimal distribution costs.

We had about ten, maybe twelve open in San Diego County in "food desert" locations about 5 years ago. Only four remain open today, because those stores were located in neighborhoods that had 50% + employment and had other higher -end grocery stores/supermarkets in the area that Fresh and Easy could compete with.

The same will happen to Walmart "local groceries". Unless they franchise the operations where the franchisee manages (or eats) the local costs, very few local communities will agree to subsidize a national chain the same way they do the big box anchor stores, and the costs to operate will eat up pretty much most of the revenue that smaller store can provide the national company.

Haele

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Response to haele (Reply #91)

Mon May 19, 2014, 12:48 PM

95. Great point. There's an article that addresses

some of those issues. It was written last year, and I actually think Wal-Mart went way beyond their 500 stores goal. I think Simon might be fudging the truth a little.

Additionally, "Walmart Express," its smallest concept with store sizes, on average, around 15,000 square feet, has 19 units. Simon says the pilot phase for Walmart Express is "performing very well" with double-digit comparable sales.

However, as Wal-Mart builds more small stores, it's learning that large-store efficiency isn't necessarily compatible with a small store.

Simon said the returns from its "Neighborhood Market" stores are approaching 'Supercenter' returns, however he acknowledged the company had to refine its business model for the smaller stores to create operating efficiency. That included smaller assortments, changes to delivery frequency, even changes to its point-of-sale system and adding a district supervisor specifically for the smaller stores, among other things, he noted.
We're "learning a lot about servicing and constructing smaller stores to become more efficient," he said. "The capital now -- as we start to roll these out -- has now started to come down."


http://www.thestreet.com/story/12034290/1/wal-mart-plans-500-us-neighborhood-market-stores.html

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Response to ecstatic (Reply #72)


Response to yortsed snacilbuper (Original post)

Mon May 19, 2014, 04:56 AM

73. It's a long way from 17% to "unprofitable"

But, still, anything that signals decentralization is good news...

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Response to Recursion (Reply #73)

Mon May 19, 2014, 06:24 AM

76. That's true, but the thing to watch now is will the stockholders demand draconian measures, since

 

it seems profits must RISE quarterly now, for a lot of companies.
Will they lay off people and/or raise prices?
That "better than Publix" ad campaign, in addition to having their steaks featured on Top Chef and whatever must be a little costly, too.
That being said, others have mentioned Costco. Costco is a completely different business model, I think. Their membership fees go a good way to ensuring profitability. Plus a lot of the time poorer people just cannot afford economies of scale - I know that buying all those chicken breasts at once is cheaper, but sometimes that is half of what my total food budget is.

It is any continued downward movement AT ALL which will frighten the heirs and the stockholders. And the people who work there likely have not been picking and choosing jobs, they are just taking available jobs.

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Response to djean111 (Reply #76)

Mon May 19, 2014, 06:27 AM

77. How the fuck more draconian can Walmart get?

I really do think we've hit peak Wal~Mart.

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Response to Recursion (Reply #77)

Mon May 19, 2014, 07:47 AM

79. They can still cut staff, not give increases, give even less benefits.

 

Increase prices for shoddier goods. We'll see.

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Response to djean111 (Reply #76)

Mon May 19, 2014, 01:14 PM

102. To answer your question

They are moving warehouse employees (who start at $17.00 per hour) out of centerpoints and replacing them with $10.00 temps. They have already switched 2 and are switching the one in Grove City (which serves central Ohio) in September.

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Response to yortsed snacilbuper (Original post)

Mon May 19, 2014, 05:08 AM

74. That's what happens when you make your employees so poor they can't afford to shop there

They freely admit that food stamp cuts have negatively impacted their bottom line.

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Response to yortsed snacilbuper (Original post)

Mon May 19, 2014, 08:30 AM

81. We Sure This Isn't Accounting Tricks to Reduce Tax Bills?

Not saying it is, but this seems to be awfully premature.

They use Sears, KMart and Wards as examples, but those chains took DECADES to collapse under their own weight.

This data set goes back 3 full fiscal years.

There could be some accounting smoke and mirrors here that explain this more than failure of the chain.

Now, same store sales would be hard to fake, but ROIC is quite a different metric.

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Response to yortsed snacilbuper (Original post)

Mon May 19, 2014, 09:20 AM

83. Greed is Caught Up

with the failing of the middle class-have we (they) reached the "saturation point"?

http://www.businessinsider.com/decline-of-theus-middle-class-2013-10

They have stolen our money via Privatization, Decreasing our wages, Tax Breaks, Deregulation, NAFTA/CAFTA, Bank Bailouts, Ag/Oil/Sugar, Ethanol, Banks and other Wall Street Subsidies..etc, etc, etc--WTF did they think was gonna happen?
We (Americans) are no longer the "target consumer"-they've even moved that overseas. Now they move on to other countries and will do the same to them?

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Response to yortsed snacilbuper (Original post)

Mon May 19, 2014, 10:03 AM

85. I'd love to see Walmart get their comeuppance, too ....

but their ROI is strong, even if not quite as strong as in 2010. That is probably indicative of the fact that ordinary people have seen their purchasing power continue to decline despite the "recovery".

I don't have ROI figures, but based on ROE (return on equity), Costco, Target, and Amazon are all doing worse. (Amazon does worse by choice; they are trying to kill other retailers off by selling items barely above cost)

Again, Walmart sucks and deserves a little karma. But this ain't it.

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Response to yortsed snacilbuper (Original post)

Mon May 19, 2014, 11:18 AM

88. They do very well in Mexico & several other countries where they are new & push out small businesses

Perhaps in the USA they started the decline because they used to be the number1 gun sellers online, until 2010. And Cosco and the Dollar stores started many, many, many stores.

I'm sure Amazon ate up a big chunk of sales too.

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Response to Sunlei (Reply #88)

Mon May 19, 2014, 11:48 AM

92. The other reason they did well in Mexico...

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Response to Heywood J (Reply #92)

Mon May 19, 2014, 11:54 AM

93. Well yes in Mexico there was never much of a 'middle class' , much like the USA will be soon.

Although Mexico is growing a middle class as their gov. helps when Walmart pays in store credit instead of cash.

Anyway their citizens also have healthcare, so that won't be a cost worry to Walmart mexico profits. Though Walmart can't sell guns there.

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Response to yortsed snacilbuper (Original post)

Mon May 19, 2014, 11:22 AM

89. Like dinosaurs, they've become too big to function well.

 

[hr][font color="blue"][center]There is nothing you can't do if you put your mind to it.
Nothing.
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Response to yortsed snacilbuper (Original post)

Mon May 19, 2014, 11:31 AM

90. The decline in their numbers is largely attributed to

The decline in their numbers is largely attributed to the reduction of food assistance and unemployment benefits. Their customers get pinched, they get pinched.

They are throwing more weight behind the Neighborhood Market grocery stores they have been opening lately. The one near me is nice, and their prices are about 75% of the ones at the Publix across the street on the same items. I mainly shop at Publix though and hit their weekly BOGO offers, very good deals.

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Response to madville (Reply #90)

Mon May 19, 2014, 12:56 PM

98. Living wages to employees

would help every business, even fucking Walmart.

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Response to yortsed snacilbuper (Original post)

Mon May 19, 2014, 01:14 PM

103. Better call them a

 

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