Yet another reason to hate Wal-Mart; they are a lousy business model

[blondeatlast]

From Sojourners:
http://www.sojo.net/index.cfm?action=sojomail.display&issue=041216#3

(snip)
Nearly a century ago, Henry Ford planned for his employees to be his best customers. Challenging the conventional wisdom that the best way to maximize profits was to tailor your product to the wealthiest segment of society, Ford decided to market his black Model T as "America's Everyman car."

For Ford, mass production went hand-in-hand with mass consumption. He established a simple benchmark for worker compensation: His workers should be able to buy the product they were making. Ford promised a $5-a-day minimum wage for all his workers - twice the prevailing automobile industry average.

Doing so, Ford created a virtuous circle. Workers flocked to his factory to apply for positions. If they managed to secure a coveted job, then in time they too would be able to afford one of his cars. The company flourished on these twin pillars - a desirable product and a highly motivated employee base. By the time production of the Model T ceased in 1927, Ford had sold more than 15 million cars - half the world's output.

Compare Ford's virtuous cycle with Wal-Mart's dual strategy of ruthless cost-cutting and "Everyday low prices." On the surface, the goal is the same - produce goods that consumers want and can afford to buy. The result in implementation, however, is vastly different.
(more)

[Name removed]

1. Deleted message

Message removed by moderator. Click here to review the message board rules.

[Andy_Stephenson]

2. Hmmmm.

Do you like slave labor as well?

:eyes:

[Dora]

4. Could care less? Hmmm.

So, please, go shop there. Just don't tell anyone here about it.

You'll find that DUers in general are not big on Wal Mart.

Welcome, newbie!

[Blue Gardener]

5. I don't think you're going to find much support here

Wal Mart sucks, and everyone else here knows it.

[DrWeird]

8. Hey, if you want to pay more money for crap, go right ahead.

nt

[rurallib]

11. Welcome

As you walk down the aisle, pick something up and look at the package. It will probably say "Made in China". Then think of all the Mom and Pop stores that are no longer in business in your area thanks to Walmart. Then ask some of the happy employees how much they make an hour, are they union members, do they 'give' hours to Walmart.
Then look real close at the prices and go to a competitor if there are any left. You'll find Walmart is only low on selected items.
I could go on to the suppliers and truckers and ..... but I think you are starting to get the picture.

[blondeatlast]

12. Care to elaborate? Plese do so QUICKLY...

:evilgrin:

Edit: guess it's me who needs to speed up.

Oh, golly darn.

[mcscajun]

13. Employees locked in at night...working overtime for no $$...

...given seminars on how to apply for food stamps and other public assistance 'cause they're not paid a living wage...folks working 28 hours a week called "full-time" employees...many employees unable to afford the Wal-Mart health benefits?

Please...care more.

[Nobody]

18. I heard about the seminars

In this way Wal Mart makes taxpayers pay its operating costs. This is what I say to all the tax hating Libertarians I know when asked why I won't shop at Wal Mart.

Not only should a company that is hugely profitable like Wal Mart pay its people a living wage, they should not try to make the taxpayers pay their operating costs.

The needy family on welfare barely surviving gets more resentment from the well off than the Kenneth Lays who gut their companies, cause massive unemployment, and waltz away with their former employees' 401k plans and life savings. Which costs society more?

Wal Mart is coming to a neighborhood near me and there was an article about Wal Mart not paying their people and not giving bennies to their workers. The Wal Mart spokesperson was quoted as saying that over 90% of their employees have health care coverage from Wal Mart's benefits package, a spouse's coverage, or Medicare. The reporter, not being much of a journalist, didn't ask the spokesperson to break this out in any way. (Minneapolis Star Tribune, last March or April I forget which)

[wicket]

16. TOMBSTONED

MUAHAHAHAHAHAHAHA!!!

[baldguy]

17. So then, you support the Communist dictatorship in China.

More importantly, you DON'T support employing AMERICANS to do the jobs Walmart exports.

[RoeBear]

3. I don't follow your logic...

...Ford paid his workers enough to buy his product
and Walmart pays it's workers enough to buy their crap.

[Vincardog]

6. The problem with this story is that Henry Ford could not keep any workers

on his line at the going rate. People got tired of doing the same thing over and over so they quit. Henry had to pay double the going rate to get people to stay on the job. Pretending it was some Philanthropic design is just so much industrial legend.

[MadHound]

7. Actually the WalMart business model is a classic

Vertical integration, gets around all of those pesky anti monopoly laws and such. Sam Walton was a genius, an evil genius, but a genius nonetheless. His model of vertical intergration has been followed by many other big box stores like Target and Home Depot.

My wife is an economist, and I pay attention.

[Wilber_Stool]

9. Ford did follow the prevailing model

of providing to the wealthiest but soon saturated the market. In order to sell more cars he had to lower the price and raised the wage so employees could afford them. But he worked them like slaves and they had to meet rigorous character standards (no drinking, go to church) to keep their jobs and company housing. They were inspected regulrly by company goons to make sure they toed the line.

[blue neen]

10. Excellent article.

"The popular interpretation of anti-trust law today holds that large companies are only a threat to the community if ther dominance results in rising prices for consumers. Hence, Wal-Mart excapes regulation because the company's domination of the retail sector delivers lower prices, across the board. LITTLE LONG-TERM THOUGHT IS GIVEN TO THE WIDER IMPLICATIONS OF THE METHODS THE COMPANY USES TO PRODUCE THOSE LOWER PRICES."

[Sydnie]

14. A few Walmart horror stories

The story of two employees --

One employee, we'll call her "Mel", worked at Walmart for years and years. Worked her way up through the ranks to a senior level position in middle management. Not on the level of store manager or anything but highly positioned where the physical money counting was concerned. Mel appeared to be making a good living, getting by, buying a second house, caring for her ill husband and even treating friends to lunch at very nice places several times a week. Everything appeared that she was a happily employeed Walmart worker. Then the truth came out. She was actually running a scam and a very profitable one at that. She would often worked the breaks of the hourly people that worked the service desk. During that time, she would arrange for "return slips" for product that had not actually been purchased in order to return it for the cash. She would "snip" a price tag here or there and just "return" the product. She would keep a running tab in her pocket of the dollar amount that she had "returned" that day in order to retreive the cash later when she would not be detected. Her habit grew to an approximate $300 a day of "returns". When they went back through the records for a few years they discovered that her total was well above $300,000! Yeah, she was living alright on her Walmart salary, wasn't she? Mel's picture and her story become front page news for all to see.

Employee number 2 - We'll call her "Madge". Madge works two jobs, has for years. Madge loves animals and works in a Vet's office full time. She loves animals so much that she needed a second job to help support her growing group of pets (most abandoned and rescued by her) so she gets a night job at Walmart. Madge works in the Pets department, a match made in heaven for her and for the customers. She works for years without a problem. Then, after Mels' problems, all the employees are being "watched" for strange behaviors that might tip them off that something is about to go down that might effect their bottom line profit again. Madge goes to work one night and while walking through the store she places a few items in a cart (toilet paper and coffee) and walks them back to her department. She leaves her cart there and goes about her work. She plans to purchase those things after her shift ends. She then gets called down to the office and gets fired for "understocking". Even though she has done the exact same thing for years, they now tell her that she can't hold those things for herself... she might be depriving a full price paying customer from buying them! She is let go right away. Now, it's not like there was a run on toilet paper or coffee that day (or any day) nor was she planning on "stealing" the items. It appears that "understocking" is against the rules at Walmart now.

You would think that would be where the story ends, but it's not. Madge's story was then relayed to all the employees of the store the next morning. It was stated that Madge was fired because she was stealing. Well, Walmart is all a flutter with gossip over what happened. This one tells that one and before you know it, it has spread to all the stores in the region that she was fired for stealing and the amount of the offense grows with each telling of the tale.

Madge's reputation is now in the toilet not to mention her self esteem. She knows she didn't steal any product from the store and must find a way to defend herself. Rumors have a funny way of coming back full circle and when management at Madge's store realized the damage they were doing by not telling the whole story, they changed their story and stated that "Madge was let go because of understocking which translates to the stealing of TIME from Walmart since she put the things in a carriage while she was on the clock." WE all know that it doesn't take that much TIME to walk from the back of the store where she clocked in through the department where she nabbed the toilet paper and the coffee to her department which was directly on the other end of the store. Let go for stealing TIME!!

Yeah, Walmart is a GREAT place to work and an even greater place to shop... if you want to add to the "slave" mentality that they subject their workers to. Doesn't matter that Madge was honest and Mel wasn't. They were both treated to the same experience. How fair is that?

[davis_islander]

15. I hate WalMart but...

Firing an employee for stealing money or time is not unusual in retail.

Loss prevention is critical in retail.

Who is to say that Mel stole the money because of financial problems? Some people get a "high" out of theft, you know, getting away with something. My ex-sister-in-law embezzled $40k from her church "for the hell of it", she didn't need the money, she bought junk with it. Did Mel really need two houses?

As far as Madge goes, it is a terrible shame, but sometimes you have to set an example and enforce policy. Personal shopping on company time is against policy with most retailers. If others see Madge doing it, then why can't they? Pretty soon nobody is working, everyone is shopping.

Where I disagree with WalMart is how they use their political power ($$$) to obtain real estate that is not even on the market. They are able to get zoning changed, have properties condemned, anything it takes to get the spot they want. Plus, just like Home Depot, they completely bury the small business competition. Remember the SERVICE you used to get in retail at the smaller stores (hardware, appliance, etc.) No longer. The big box companies drive out the small business competition and we are left with shoddy product and TERRIBLE service.

[tsuki]

19. I object to Walmarts and the big box stores because they steal from

their customers.

Example: When we built our house 20 years ago, we purchase shop lights (fluorescents) from our electrician who purchased them from a lighting wholesaler. They were $24.00 a piece.

Three years later, I purchase another from a big box for $19.99. With inflation & all, a savings.

The Big Box light worked only 2 years. The ballast burned out. Cost of replacement of ballast $24.00 + UPS.

That did not make sense to me. I wanted to know why the shop light burned out (BTW same company.)

The ballast came in and it was from some place in Ohio. The OEM for the big box item was the Philippines. Hmmm.

To make a long story short, after I called the company, altho they would never admit no matter how I pressed them, (is that too many commas, never mind,) for this shop light, there were two OEMs, one for the box stores; one for the lighting wholesalers. But in the case of replacement parts, the only OEM part was the American part.

I talked to my electrician at a party later (about a year or so) and he told me that soon the only OEM part would be the Philippines part because companies lost so much at the box stores that they were having to cheapen the wholesale market to make a profit.

They are stealing from their customers because they work on a planned obsolescence. Sell an item every two years for $19.99.

Now I only buy light bulbs from lighting stores, and guess what. I have not bought a light bulb in over a year.

The Spanish have a saying...the poor go to the store many times, the rich once. I can relate.

[Silverhair]

20. Shoddy Product? Same brands as the other stores.

Besides, the other stores aren't Mom & Pop stores anyways. The other stores are chains too. So for me the choice is between one chain and another chain. I go for the lowest prices.

[Dora]

22. Is the water cold, Silverhair?

Because it sure looks like you are swimming in the River Denial.

You're flat-out wrong about "the other stores aren't Mom & Pop stores anyways."

Point 1) Because of Wal Mart's arrival in their area, my mother's cousin and her husband had to close their Coast-to-Coast hardware and general store, a business they owned and operated profitably for years, earning enough of an income that they could raise their three children to adulthood in a small Kansas town. This was twenty years ago.

Point 2) All of my in-laws live in the same small town in Iowa. This community has a downtown that's all of two blocks long. 25 years ago, there was a pharmacy, a florist, a card and gift shop, a hardware store, a market, a clothing store, a dry cleaner/alterations shop, etc. Today, the pharmacy, florist, and card shop all share one small storefront, and nearly all the other businesses have closed, their owners out of business and their employees gone. What happened? Wal-Mart opened in Burlington, 45 minutes away.

Point 3) Despite the national recognizability of their corporate logo, Ace hardware stores ARE individually owned. We have three in our town that we like to patronize - two are upscale and trendy gift-shop, nursery, and hardware stores, and one is a down-home dust-in-the-corners cobwebs-in-the-inventory hardware store with a cranky coot in a feed cap running the register.

Point 4) Brands don't dictate quality. The original post on this thread illustrates that perfectly. Manufacturing dictates quality, and standards vary from manufacturer to manufacturer. The Big Boxes demand the cheapest product for the lowest price (quality be damned) because they want us to buy the same product over and over.

I have a song in my head now, "chain chain chain... chain of fools." A fool and his money are soon parted, and I encourage you to look at each dollar you spend, and who's pocket you're directing it to. Saving yourself thirty-seven cents today might well cost you $10 next year, or maybe even an election in fifteen years.

[Silverhair]

23. Depends on the product.

The savings are NOT merely 37 cents. Since we get our groceries at WM, and I have compared the prices, we save about $1,500 per year on groceries alone. If you are not shopping there, it means you have the money to be able to afford the higher prices elsewhere. By the time other things are considered, the savings are about $3,000 to $4,000 per year. Don't try to tell me the prices are not lower as I have compared the prices locally.

And the product is NOT shoddy. A can of Campbells is a can of Campbells is a can of Campbells. My copy of Return of the King, Extended Edition was made by the same corporation that your copy was made by.

Somewhere in all of this, I get to think about me and my budget too.

[Dora]

24. I guess it all comes down to values vs. "value"

You value how much you get to keep.

I value who gets how much of what I spend.

See, to me, choosing not to spend my money at Wal Mart is a reflection of my Moral Values. The formation of these values can be seen in the first and second points of my original argument.

($1500 in savings? Great Scott! How many people are you buying groceries for? The entire militia?)

[Silverhair]

25. Here are the figures.

The savings average 20%. The $1,500 divided by 20% = $7,500 annually. Divided that by 12 and you get $625 per month for groceries for the our house. That's a reasonable monthly grocery amount for one household.

That you are forego said 20% savings shows that you are able to afford it. Many people have more restrictive budgets.

[Dora]

28. Afford your budget? In a very wealthy dream, I'm afraid.

I do admit that there are only two in our household right now, and the imminent third won't be eating a significant amount for a couple of years yet.

Your assumption about what our household can or cannot "afford," is wrong.

I'm not "forgoing" $1500 in what you call savings, because even after those savings your budget is still over our limit. If we had $500 a month to spend on groceries, well, I couldn't keep it all in our fridge. The way things are for us right now, $400 on groceries is extravagant. I guess our budget is a bit more restrictive than yours.

As well, I don't purchase what I consider luxury items. These are items like soda, as well as most prepared and snack foods. Neither of us drink, so there are no beer/wine/liquor expenses. However, this month is an "extravagant" one. We just laid out $80 bucks on booze for a party we're hosting this weekend, and I've probably spent another $50-75 on food for just for the event. It'll be a skinny Christmas for us on the gifting side of the holiday, but we're happy to be spending it together in our home, and I'll roast one hell of an organic free-range turkey for our dinner.

I think we spend quite a bit on the food we do buy - I do nearly all the shopping and cooking, and I select primarily whole foods, organics, natural & free range meats. There are exceptions, of course; we're no dietary puritans. My husband and I have talked about this "tradeoff," and we decided that putting the best food we could afford into our bodies was an investment in our health. This meant excluding junk foods and including the pricier organics. We don't eat out much, and when we do, we rarely spend more than $15, including tip (we don't eat at national chains). I take my lunch to the office, and he eats lunch at home. He makes breakfast for us each morning (egg & can. bacon sandwiches to go), and I prepare dinner and we sit down and eat together 4-5 nights a week. Actions like these have reduced our food costs and brought us closer together.

I think you and I are very different people. I think Wal Mart's savings are a myth, and I think you will continue shopping there.

I'm sure Wal Mart appreciates your business, and that they'll be happily warming their hands over each dollar of yours that they burn in China this holiday season and throughout the New Year.

Added on Edit: P.S. We don't own a copy of "Return of the King." That would be categorized as a luxury item (if not a frivolous one). We don't own a television.

[jmowreader]

26. Ace is a neat network

Home Channel News did a piece on Ace, discussing all of the different permutations of Ace stores. One of my favorites was the Drive-Thru Lumberyard. They have cantilever racking running down both sides of a long metal building with 16-foot commercial roll-up doors at both ends. You get an associate to help you pull merchandise, drive your truck through the building loading as you go, and at the end you pay for what you pulled.

[Dora]

29. Now THAT'S an IDEA!

Jeez, I remember lumberyards...

[newyawker99]

21. Hi davis_islander!!

Welcome to DU!! :toast:

[BlueJazz]

27. I wouldn't give a shit if Wal-Mart sold their stuff for half of what they

...do and I (and apparently a lot of DU'ers) do not and will not support an organization that treats it's employees like cattle. I was raised to care for the other citizens on the earth and frankly, I have absolutely no respect for others who don't. IF you want to sell your character for the few dollars that you save at Fuck-Mart then you don't have much character to lose....