Poor people running out of money, Wal-Mart suffering

[kpete]

MON JUL 18, 2011 AT 10:59 AM PDT
Poor people running out of money, Wal-Mart suffering
byDante Atkins
http://www.dailykos.com/story/2011/07/18/995172/-Poor-people-running-out-of-money,-Wal-Mart-suffering?via=siderec

The problem with unfettered laissez-faire Friedmanism, however, is that eventually the rich run out of poor people's money. And major advocates of the model are beginning to feel the pinch. Case in point? Wal-Mart, which is in the midst of a sales slump during which it has experienced eight consecutive quarters of falling sales at U.S. stores that have been open for at least a year. This is an often-used model because it measures a company's sustained profitability without the distorted effect of sales from new store openings. The reason? Poor people just don't have the money they used to. As Numerian at Agonist writes:

The core of the problem rests with Wal-Mart’s customer base – middle class and poor Americans. This is a huge and growing segment of the American population, since wealth in the US is increasingly being concentrated in a small segment of the population which certainly doesn’t shop at Wal-Mart. Furthermore, within Wal-Mart’s customer base, there has been a shrinkage of the middle class and an expansion of the poor class since the depression hit in 2008. Depression is the right word to use for Wal-Mart’s customers, over one-third of whom are on food stamps. Mike Duke, the CEO of Wal-Mart, describes his customers as “broke” at the end of every month, when they cease to shop at his stores even for essentials until their next government support check comes in. These are “average” Americans, which means they have $10,000 or less in savings to their name, they clearly live paycheck to paycheck, they are burdened with debt, they have absorbed the bulk of the enormous job losses that have occurred in this depression, and if they have a job they haven’t see a real pay increase in over a decade.

the rhttp://agonist.org/numerian/20110714/wal_mart_the_latest_victim_of_global_labor_arbitrageest:

[ecstatic]

1. They also raised their prices. So that could be

part of it. There's plenty of competition--especially Amazon.com which matches or beats their prices and has free shipping.

[dkf]

3. Yup Amazon has the best prices.

[CatWoman]

4. yup

:)

[cutlassmama]

38. yup. there are five other stores in my immediate area that have lower prices

that's why I don't shop there.

[Sherman A1]

73. There is never just one answer

as you said they raised prices and that is true, many others did as well as commodity costs went up. The OP has a valid point in that the distribution of income is a significant factor also included would be high unemployment (which we all know is above the numbers stated by the government) we need also factor in underemployment and the loss of income from cutbacks, wage freezes, benefit cuts, etc, etc. Yet another reason is the boomers arriving at or heading towards retirement and simply not needing as much "stuff". I know I only need so many TV's, sets of dishes, kitchen plasticware, bedroom sheets and alike. Yes, these items wear out & need to be replaced, but how often on durable or semi-durable items. I don't want my home looking like "American Hoarders" and a portion of the boomer generation is looking to downsize their households and get rid of the "stuff".

This is one reason why Wal-Mart, K-Mart, Target, etc all have headed into the grocery business (everyone thinks they can be a grocery store) in order to generate regular repeat traffic with hopes that you will pick up more of their "hard goods" when you do your grocery shopping.

[onethatcares]

2. I find it hard to feel sorry for those bentonarkansasassholes

once upon a time there were signs in there stores telling how many American jobs were made providing their products. Once they became too big to care, those signs disappeared, the employees began being treated like crap and cheap ass chinese shit began showing up on their shelves.

They just couldn't see the end result of their greed.

May the kids of Sam Walton rot in hell because they sure as hell have it nice here on earth.

[rhett o rick]

5. This is just capitalism. Dont expect capitalist to have morals. The two dont mix. nm

[RaleighNCDUer]

10. It's not about morals - it is about a sustainable business model.

They first fucked the country, and then themselves, when they turned to overseas producers. People have to have money to spend before they buy anything, and Walmart shipped MILLIONS of jobs overseas.

Fuck em.

[rhett o rick]

11. Sustainable business model isnt capitalistic. We must regulate capitalism before it

destroys us all.

[RaleighNCDUer]

14. Of course a sustainable business model is capitalistic. The base idea of

capitalism is to maximize profits. You don't maximize profits if you put yourself out of business. You think these banks that go back 150 years are not capitalistic?

But I do agree with your second statement - it MUST be heavily regulated. And, besides that, IMO the business schools need to preach a new gospel of looking beyond the next quarters' profits. Most the problems with modern American capitalism are founded in the inability to look at what today's policies will do to the business in 5 years - it's more important to get that extra 1/4 cent/share to show off at the next stockholders meeting.

I swear, MBAs can be some of the dumbest people on the planet.

[rhett o rick]

17. I think you will find that as the end-game of capitalism approaches, more and more

corps will cut down their time period for maximizing their profits. Get while the getting is good.

[izquierdista]

27. MBAs

What they lack in smarts, they make up for in greed.

[Hydra]

36. It's end stage capitalism

Where nobody wants to invest or take a risk for less than 20% guaranteed return every year.

That ain't sustainable, in any fashion, so the best thing to do is to start or buy out company, push it as high and fast as you can or strip anything of value out of it and then sell it to some poor sap. Rinse, repeat.

Long term thinking? If we were doing that, we'd have had a green revolution 20+ years ago.

[Alcibiades]

69. But capitalism of what sort?

You have to make a distinction between the Fordist model that grew this economy and the corporate model that is destroying it.

Ford himself was a problematic figure, not least because of his labor relations and his antisemitism, but he understood that a mass consumer economy required that workers be paid a living wage, so that there would be mass consumers there to consume the products of mass production. Also, companies of his era had a home address. They were closely-held, with families and individuals in charge.

Today, we have created the era of the transnational corporation that cares about nothing but profit, and stock value. This has led to an emphasis on perverse incentives for executives, who are not owners but managers, and there is no home address. Responsibility is diffuse. If Carnegie Steel did something bad, blame could be laid at the doorstep of one man: today, there is the CEO, but, as we have seen, the CEO can claim ignorance if called to account, as Ken Lay and others have done, and they can also weasel out by claiming that they sought to maximize shareholder value. Also, individuals can be moral, but corporations cannot. A Carnegie or a Bill Gates can leave bequests for charitable works: corporations are immortal and don't worry about the afterlife, so they do no such thing.

There's much to be done, such as eliminating corporate personhood and putting labor on the boards of corporations. But I wouldn't hold my breath.

[TBF]

51. Regulate? How do you "regulate" a tiger?

If we're lucky we'll destroy it before it destroys us ... and the entire planet.

[rhett o rick]

52. We had the tiger caged for almost 50 years. Reagan opened the cage. nm

[Enthusiast]

65. Too late.....nt

[coalition_unwilling]

42. A capitalist will sell you the rope with which to hang him -- attributed

to V.I. Lenin

[Dept of Beer]

28. Yup. Cheap Chinese plastic crap.

[jmowreader]

43. It was the signs themselves that killed THAT program

The specific sign that did it was for some kind of cheap plastic crap most stores import from China--a measuring cup, I think. Anyway, this was a sign the size of a half-sheet of plywood that said Walmart had saved...


6 jobs.

[LuvNewcastle]

6. I encourage people to shop at Wal-Mart.

Buy their loss-leaders. People used to say that they were shopping themselves out of jobs and pay increases by shopping at the big box stores like Wal-Mart. Maybe they were right. But now it's time to shop Wal-Mart out of business. They have unbeatable deals on some things, like canned goods. Buy those items there, buy other things, like meat, at your local markets. People began going to Wal-Mart because they were not only cheaper, but they offered one-stop shopping for their food and sundries. Now that we don't have jobs, however, we all have plenty of time to shop around.

[mmonk]

7. Excellent piece. Thanks for posting. Recommended.

[RaleighNCDUer]

8. And there is the fatal flaw in their business model.

Back when Sam Walton ran the place they made a point of "buying American". They sold merchandise that was produced by American workers, and those American workers spent their paychecks at Walmart.

When the Walton Evil Brood took over, they starting selling stuff made in China (and other places). The Americans who patronised Walmart now shopped there becasue they were losing their jobs and could not afford to shop anywhere else. Eventually, the unemployment, the part/time wages don't cut it anymore, and there is no longer a customer base for Walmart.

They put themselves out of business, just as they put local stores across the country out of business. And none too soon.

[glinda]

9. Another clueless Repub Corporation shows their greed and stupidity .

[rhett o rick]

15. This is capitalism. Nothing personal. You either regulate it or die by it. nm

[tblue]

12. Awww... Poor Walmart!

:nopity:

[patrice]

13. Talking to a local hauling service for stuff I'm getting rid of, he says no one is garage selling

anymore, because they can't get anything for their stuff, since there is a glut on the market. Brokers are going around and buying it all up and giving the less desirable stuff to charity and selling the good stuff either to other sellers or selling it themselves.

Wal Mart has competition from those whom they pulled the rug out from under.

[patrice]

18. The fact that a lot of Boomers are doing this also means that there's some good stuff going into thi

s merchandise stream, because a lot of us Boomers are down-sizing, which means getting rid of lots of accumulated small appliances, dishes, high class career clothing, housewares, nice nic nacs . . .

[onethatcares]

19. well thanks for that kick in the nuts

I was hopin to do a sale soon and was thinking along the same lines because I see people having sales everyday of the week and my garage is chock full of stuff that needs to be gone. but I guess with no jobs in the construction industry no one needs nail guns, saws, and all that debris.

on a side note I've been looking for an electric guitar and am seeing the dollar figures fall on that.

I guess our country has run outa gas and we'll be lucky to get this bus pushed up the hill again.

good luck, hope you make it to the other side

:hi:

[patrice]

23. Specialized stuff like that ought to do okay. I'm thinking about Craig's List or even Ebay. nt

[dkf]

29. I went to check out a local garage sale...

The woman wanted $1600 for her Louis Vuitton, regular price $1,900. I walked out thinking she was crazy.

[Autumn Colors]

64. Don't throw away !!!! Free-cycle to someone who needs it!!!

If you can't sell something and are just going to throw it away, please check out:

http://www.freecycle.org/

There are local groups all over the US and other countries. Find one in your area, sign up on their group site (it will be a Yahoo group) and then start posting OFFER listings. Usually, the moderators want your first post to be an OFFER. Later, you can also post WANTED listings.

[formercia]

80. The Chamber of Commerce doesn't agree

They say to buy new cheap, Chinese made crap.

Sometimes, the only place to find items of good quality that were once made in the USA, is at Garage Sales and other used item venues.

[L0oniX]

16. Why doesn't Walmart pay off congress like everyone else does...

and then maybe they will create jobs ....when pigs fly and hell freezes over.

[patrice]

20. uh . . . isn't that Hell freezing under?

:hi:

[patrice]

22. Damn gnat!!

[Skidmore]

21. In the meantime, Walmart dropping a contract to local Roberts Dairy

has put them out of business and those jobs are lost here.

[patrice]

26. :-(((((( Roberts are good products!

[CoffeeCat]

47. Oh wow...

I noticed that they quit selling Roberts milk. I liked to get milk at Walmart, because
the price was cheap and I usually had a Robert's 50 cent coupon.

That's terrible.

However, we're off milk now due to the possible radioactive isotopes from Fukushima. But
I guess that's another subject entirely...

[KansDem]

63. Yeah, if Walmart doesn't get you, the isotopes will!

}(

As one DUer put it recently: "Some days it just doesn't seem worth chewing through the straps."

[Starry Messenger]

24. That's why capitalism is often called the vampire squid.

The squid doesn't like to advertize the fact that it kills its host and then dies itself, though.

[patrice]

25. Hi Starry Messenger!!! : - ))))) Here's a little hope, from Duke & Harvard no less:

http://www.addictinginfo.org/2011/07/16/92-of-americans-are-socialists-they-just-don%E2%80%99t-know-it/

[russspeakeasy]

30. We're living in a damned Cormack McCarthy novel.

[kenny blankenship]

32. So, I'm shopping on Amazon for a *meat grinder* recently

http://www.amazon.com/LEM-Stainless-Steel-Manual-Grinder/dp/B002L84GJU/ref=pd_sbs_k_1

Check out what "Customers who bought this item (hand cranked meat grinder) also bought"

[indurancevile]

41. brother, that is sad.

[hunter]

56. OMFG!

Seriously.

:wow:

[kenny blankenship]

59. I'd say somebody's gettin ready for the Long Pig Chili Cook-Off

And what do I want a hand cranked meat grinder for? Oh, I was just wanting.. uh... to expand my batterie de cuisine a little.

[florida08]

66. holey socks

Am beginning to think that's why these storage places have sprung up all over my area.

[florida08]

67. well there's a high cost for low prices

if you've seen the Walmart movie. I hope they have to eat that huge ship they had made just for chinese imports.
That line is great.

"eventually the rich run out of poor people's money."

[Arugula Latte]

57. I hope you have your cart ready.

Oh, and a mental map of canned food stashes.

:(

[KT2000]

31. Boo hoo

I used to go in there for fabric notions after they ran off the small fabric stores. Now they have kileld the fabric dept. I used to pick up a couple other things while there but no more. No reason to go there now.

[L. Coyote]

33. If only this meant that the Sheeple are getting smarter and smarter!

[reformist2]

37. Experience is an expensive school, but fools will learn in no other.

The middle class will have to learn the hard way what laissez-faire has in store for them. If only they had read their history books....

[Melinda]

54. +10.000.000...

Nailed it.

Melinda

[999998th word]

34. 'Emerging markets' await

Wal-Mart will not be suffering long,if at all.No doubt, they have prepared for the inevitable.
They are/will go to the countries that have an economy to support them,after they suck us dry.
The greedy bass-turds that inherited that company show absolutely no loyalty to the U.S. economy, consumers or interest,in keeping unprofitable stores open.
It's all about the $$$-nothing else.The stores are all leased or are on leased land.
After those stores close,pack up,and move,all we will be left with a hulking empty ugly shell-kinda like what them and their ilk have done with this country.





update:punctuation

[madrchsod]

35. my town averages 20-25 garage sales a week during the summer

two towns 10 minutes away average 50 a week. the local thrift store is open three days a week and sells more goods and profit per square foot than the walmart. the other two towns have a goodwill and 6 thrift stores. 85% of my families clothes and other hard goods purchases are from these stores. family dollar and dollar general make up another 10%. there`s some items that we can not buy any where else but walmart.

never, ever buy the walmart house brand...

[NCcoast]

39. Oh boy, this is rich

Couldn't see this one coming? Killed off the goose that laid the golden egg again did you? Republicans crave money too much to be trusted with it.

[indurancevile]

40. Nah, the whole point of walmart was to kill off the competition and force businesses

that resisted outsourcing to do so.

to get capital assets out of the hands of smallholders.

mission accomplished, now walmart can die.

[tavalon]

44. That's the thing that boggles me

Don't the rich realize that when we can no longer afford food, we're going to eat them? It's not rocket science.

[maddiemom]

45. Walmart

I keep thinking I won't shop Walmart, then pressed economically, with increasingly less local sources,I end up going in and stocking up while I still have some food stamp money along with my meager SS. I took a number of years off at a certain point to be a full time Mom. I've always worked part time since officially retired, but currently have some personal/family problems needing my time. Being totally dependent on SS and a very small (under 10dollars) royalty requires a lot of economic juggling. I was a couple of courses and a dissertation short of a PhD when I gave it up ,JOB

[CoffeeCat]

46. People are penny pinching like crazy...

So many local grocery stores offer loss leders--great prices on a few items that get
you into their stores. So many people are getting the loss leders at their local grocery
stores--and shopping at multiple stores for the best deals.

Stores must have these sale items to get people into their stores and to compete with Walmart.

The cost of groceries has completely skyrocketed. I would say that my grocery bill has gone up
at least 30 percent in the past 3 years. No one talks about this in the media, but families are
feeling pain at the grocery store and they're shopping differently.

I know so many people who shop at 3-4 stores and purchase mainly the loss leders.

[HopeHoops]

48. Fuck WalMart

[the_chinuk]

49. So now WalMart has to live in the world WalMart created along with the rest of us. Cool. n/t

[queenjane]

50. Mall-Wart just isn't all that cheap anymore

In the late 80s, I worked for them for about 3 years as what was then known as a "UPC Clerk". I made sure all the merchandise scanned correctly, put markdown prices & sales in the system, etc. (A heinous job, but it fit the bill at the time--EVERYONE should work retail at least once, but that's a rant for another day.) Anyway, we had REAL sales and deep clearance prices, particularly the day after a holiday. I never got the day after Christmas off because I had to be there at 5 am to make sure all the holiday markdowns scanned correctly. All holiday items started at 50% off, and in about a week were 75% off. Not much was left because people scooped it up.

Flash forward to now: my local MegaScrew never marks anything down. I waited about 6 weeks past this last Christmas to buy LED lights for 50% off. The garden merchandise (hose nozzles, trellises, border fencing, etc) wasn't marked down at all last fall. Items that are clearanced are usually only marked down 10%, and stay on the shelves forever. As for sales, other than the Black Friday ones, there aren't any.

I can buy most of what I use cheaper elsewhere, either on sale with coupons, or just regular prices. Heck, Whole Foods carries much of what I eat cheaper than the Squiggle Hell. WF store brand tofu is a DOLLAR cheaper than WM's.

Part of their problem is a poor customer base, but another factor is people are finally getting wise to that "Everyday Low Price" bullshit. Because bullshit it surely is.

[glowing]

53. They aren't that cheap anymore. I went to the mall and got quality clothes for cheaper prices.

And during the summer the local produce and farmer markets have cheaper veggies. And a lot of other grocery stores are beating prices with their buy one, get the second free. So if Plan ur route well; u can save better. I try not to go to walmart all that much maybe 10-12 trips a year. And that's normally to stick up in detergent or cleaners or shampoo... Things like that are cheaper at walmart. But I don't buy from clothes or the food dept.. Maybe pick up just a couple if items like water or cereal.

[jwirr]

55. The element that has always been left out of the trickle down theory

is that you need customers. Henry Ford understood that very well. It will not work for the corporations to keep everyone at serf level and then try to sell them their products. It has not worked anywhere in the world. And it will not here.

Poor wall mart!:sarcasm:

[mntleo2]

58. Shopping local is better and cheaper

...as a low income person I have found that the expense of GETTING to those places is usually not worth it by the time I drive to them, spending gas and wear on my old car only to find that what they have is no less expensive than what I could buy locally. Whatever they have that is a bargain is replaced by something else far more expensive or comparable to something I can walk to and buy locally. Plsu *no* money they make comes back into the community, it is sent out of state and/or overseas, so it does little for the community where they are.

Whenever I patronize a local business, I make sure to tell them I am coming to them because I want to support my community and point out to them where their prices are comparable and how appreciative I am that they are supporting my community economically and with important services. They are always appreciative.

For instance my local pharmacy is a place that not only supplies prescriptions, but their store is FULL of local artists' wares, hand made kitchen gadgets, and locally grown apothecary herbs. Their pharmacists are not only good at dispensing the "traditional" prescriptions, but they are quite knowledgeable about how to process and use herbs (Bastyr University is nearby, a Naturalpathic college that trains medical personnel including doctors and pharmacists, as well as does nationally recognized scientific research on naturalpathic medicine and herbs ). Yet they are as comparable as any national pharmacy in cost.

Maybe all communities will not have a pharmacy like this but surely they have something like a bike shop with knowledgeable mechanics, a farm that produces brown eggs, or whatever. No, shopping at the local "little store" is not always more affordable (except maybe something like their milk delivered by a local dairy or something).

I have to shop on a budget that includes not only the price of food but the price of storing, transportation and availability. Sometimes it IS more affordable after considering the cost of gas to run to a store 3 miles away vs the little guy down the street.

Hope this helps ...

Cat in Seattle

[Lorien]

61. +1,000. nt

[Lorien]

60. Could be that more and more people have figured out that there's a VERY high

cost to Walmart's "low prices" and they've joined the boycott.

[FreeBillClinton]

62. It's the demand side, stupid

http://marketplace.publicradio.org/display/web/2011/06/29/pm-its-the-demand-side-stupid-commentary/?refid=0

[Saxon]

68. Changes in thrift store.

There's a very large Disabled Veteran thrift store 3 blocks from my apartment.
I go there probably once every two weeks.
They have a small section for books but in the past but they only had romance novels, celeberity tell alls,
and other books you wouldn't be able to give away.
So I quite looking in the book section.
Last week I gave it another shot.
OMG, what a change. Now ten times more books and mostly hardbacks.
All were $2.50 each.
I bought:

Poland, Michnener
Eat the rich, O'rourke
Empire, Gore Vidal
Descartes Meditions, Objections, and Replies, Hackett
The Handmaid's Tale, Margaret Atwood
Dubliners, James Joyce
Hooking Up, Tom Wolfe

What the hell is going on?
These books were more the rule then the exception.
These are books read by educated people.
I live in a lower and working class neighorhood and trust me nobody
here is reading James Joyce.

Unemployment here is 16%.

The educated middle class is being wiped out.

[Reader Rabbit]

70. Sounds like karma.

Couldn't have happened to a nicer corporation.

[louis-t]

71. Couldn't happen to a nicer bunch of

fucks. BoA keeps pissing people off daily and wonders why their customer base is declining. Treating employees and customers like crap is NOT a business model.

[WinkyDink]

72. Awful irony: poor people WORK at Walmarts.

[Twostones]

74. Remember when Sam Walton said

"If it is made in America we will carry it if we can get it.

[Blue_In_AK]

75. Oh, I'm so sad for Wal-Mart.

NOT.

[valerief]

76. Rich people are just gonna have to shop at Wal-Mart!

:rofl:

Good thing all those massive tax breaks are bringing jobs to Americans.
:sarcasm:

[moondust]

77. And "shrinkage of the middle class" should mean more Wal-Mart customers.

They are "suffering" with presumably more customers than ever?

[southernyankeebelle]

78. Yep WalMart should look at their own employees. They are having hard

times also. The cost of their healthcare is outrageous. Yet these companies like WalMart are hurting people. The only way these people will finally realize the middle class and working poor can't buy much but what they need. Then when they really start losing their business then and only then they will try to help the people. Until then they don't care.

[sce56]

79. I have not been into Wally World since 2006! That was a they only had it there time!

Of course I do a lot of my purchases from the NEX-PX-BX & the DECA Commissary.

[DesertDiamond]

81. WalMart's karma bites it in the ass. I highly rec Winco if you have one in your area...

Their prices are low - I've read that they're always the low price leader in any market they're in - and...... employee owned!!!