Articles
The Walmart Effect
by Cheryl Baumgartner Medical Billing/Coding/InsuranceWal-Mart effect n. The economic effects attributable to the Wal-Mart retail chain, including local effects such as forcing smaller competitors out of business and driving down wages, and broader effects such as helping to keep inflation low and productivity high. Also: WalMart effect.
I was reading the news yesterday and came upon another example of the Walmart effect. We have been seeing the results of Walmart's expansive growth for decades. Walmart moves into a town then one day you notice that all of the mom and pop stores are going out of business. They cannot compete with the lower prices of Walmart and are forced to close their doors.
It's funny how people saw this happening and just made comments in passing. It didn't really unsettle anyone. Who cares, it's just old man Jones little general store down the street that had been in business since the old timers went there to enjoy a malt after school. The problem is there are literally hundreds of Mr Jones all over the country who are either retired or in the ultimate show of humiliation, handing out carts and saying "Welcome to Walmart"
Well the Beast that is Walmart has an appetitie that cannot be satisfied. However we are not talking about little mom and pop shops anymore. It's the electronic store chains that are now falling victim. Circuit City is facing a buy out by Blockbuster (Investors are not taking a number and getting in line), REX will be closing half of their stores, even Best Buy is looking at downsizing and layoff's because of Walmart's Black Friday tactic of offering LCD and flat screen TV's under $1000.
Now it's nice to know you can get a Flat screen TV so cheap and other things so cheap too but think about the effects. When we had Mr and Mrs Jones entering the workforce looking for jobs the economy was able to absorb the hit. Now we are looking at literally hundreds of workers entering the workforce many of them will end up at Walmart. Employees of Walmart who are working in the stores are not even making a living wage in many cases so we the taxpayers get to subsidize them through government programs.
Most of us are already feeling the bite of higher gas prices. I'm not talking about at the pump either, but in the higher cost of all consumable products. The prices are rising because somewhere in the trip from production to consumption you have truckers. Truckers who are spending well over $1000 a month just in fuel. Those fuel costs are factored into what you pay for products. So the economy is taking not only the hit from higher gas prices but also the hit from unemployment.
Unemployment caused by the import of cheap Chinese (sweatshop)goods, the closing down or outsourcing of jobs and the death of many viable small businesses as a direct effect of Walmart.
Considering Sam Walton's insistence on buying and selling American (Remember Walmart's store brand was American Fare), I'd like to have a seance and channel his spirit to ask him what he thinks about his Frankenstein Monster now.
Sponsor Ads
About Cheryl Baumgartner 
Medical Billing/Coding/Insurance
1,142 connections, 69 recommendations, 4,101 honor points.Joined APSense since, May 18th, 2007, From San Antonio, TX, United States.
Created on Dec 31st 1969 18:00. Viewed 0 times.
Comments
|
Jeff Greene
 Online Marketing Specialist/ConsultantThey are going into the business of Health Care, too Cheryl... You already know how I feel about this kind of thing from your comment on my Bonfire Burning Stick Post: http://www.apsense.com/subject/27159.html I was being a bit sarcastic then, but these days I am very concerned about this type thing-- Competition is the Lifeblood of Industry and Innovation Walmart's "Conquer by Bullying and Beatdowns" is precisely the type of thing that will lead to Mono- Opticalism (My Word), in which a society's progress is determined by the single vision of a Cyclops, which is a perfect description of what Walmart has become... I'll bet they are sizing up the Pre-Paid- Legal Industry, as well as some others that we might not be aware of... Jun 3rd 2008 11:28 |
|
Arthur Webster
 Just plain honestyThe Wal-Mart effect. Sounds like a science fiction movie title, doesn't it? There are three prices we pay for corporate greed and public indolence:- 1 - less choice in where to buy what 2 - less choice in where what we buy comes from 3 - no choice at all as far as after sales service goes - there isn't any. These three prices are the price we pay for our own stupid short sightedness and greed. They say you never miss something until you no longer have it, you no longer have it because you no longer care for it and you no longer care for it because (ironically) it is too easily replaced. Look at it this way. When horse drawn carriages were the normal mode of transport, manure was so easy to obtain that it was taken for granted. Now you have to look hard to find somewhere that will sell it to you if you live in a town. I used to own what you call a Mom and Pop store. It was a meeting place for the community. It was somewhere to get out of the rain. It was somewhere some people actually spent money. The day I closed it down a lady came to the store and said "Are you closing? What will we do now?" My answer was simple, "I've never seen you in my shop before so I suppose you will continue as you always did and do your shopping 20 miles away in Barnstaple." Jun 3rd 2008 11:49 |
|
Cheryl Baumgartner
Medical Billing/Coding/InsuranceLot's of people like Walmart. So what? It's not about whether you like Walmart, it's about the detrimental effect Walmart has had on our economy. Competition is dead. American manufacting is dead. Competitive pricing is dead. One of those nasty little Walmart tricks is to drive it's competition out of business by undercutting prices and then raising their own prices. So Walmart's little self contained world is thriving. Since they aren't paying outside truckers who are passing the cost onto the consumers and Walmart truckers don't pay for their gas, why is it that a gallon of milk is the same in Walmart's healthy little world as it is out here in the real world? That is exactly why Walmart is busy putting everyone out of business, Because no one wants to look beyond the immediate gratification to the long term effects. Decades ago the big chain stores not only thought Walmart was great, they followed the same business model and got rid of the mom and pop shops. Now those same chains are crying the blues since Walmart turned on them. And whether you want to see it or not they have already turned on the consumer by eliminating jobs both in the retail sector and the manufacturing sector. But people just refuse to see it, they would rather stay comfortably blind to the fault of the great retail god. I've seen religious fanatics less blind than many Walmart shoppers. Jun 3rd 2008 12:14 |
|
|
Jeff Greene
Online Marketing Specialist/ConsultantThe sight of once-proud small town business owners now wearing Walmart uniforms is jarring and sad... Jun 3rd 2008 12:15 |
|
|
Cheryl Baumgartner
Medical Billing/Coding/InsuranceHonestly Walmart couldn't care less for their employees, or anyone else. All they care about is the almighty dollar and how many of them they can collect. If this was a caring company they would not have attempted to take money from a disabled employee http://www.apsense.com/subject/27674.html It took a court battle and massive publicity to check their greed. Jun 3rd 2008 12:29 |
|
|
Jeff Greene
Online Marketing Specialist/ConsultantI well remember that article, Cheryl... Great Job! :) Jun 3rd 2008 12:42 |
|
|
Arthur Webster
Just plain honestyit's about the detrimental effect Walmart has had on our economy Really? I don't think so. Wal-Mart have created a business model that works. Businesses are not obliged to take into consideration any detrimental effects their activities might have on the local community (indeed, manufacturers in America have to do no more than pay lip service to polution control). Local communities have cut their own throats by accepting and adopting a centralised shopping locale rather than a diverse and localised one. Shopping Malls all around the world are destroying local businesses as they attract an innordinate amount of traffic to their one-stop-shop, formulaic presentation. In some countries the out-of-town shopping centres (Malls) have killed the town centres leaving only banks and charity shops in residence. With any luck, the current high price of petrol will see a slow down in the numbers of people prepared to drive to an out-of-town mall. With any luck, they might still find a local shop open. With any luck the whole sorry scenario could be reversed. You can't blame Wal-Mart nor any other business that finds itself in a monopoly situation for charging what the locals will pay, that is what ALL businesses do - but why do the town planners let the situation (which is predictable after many years of experience) develop in the first place? Because the likes of Wal-Mart make so much money, they can buy the destruction of any shopping area they want to take over. They do it all the time. Never, ever expect a social conscience from a business - that is the height of extreme folly. Jun 4th 2008 01:43 |
|
|
Cheryl Baumgartner
Medical Billing/Coding/InsuranceArthur I beg to differ with you on this one. If it was just a case of making things convenient I wouldn't argue with you but Walmart ruthlessly set out to destroy all competition. Even knowing what would happen with the plasma TV promotion back in November they did it because they want to be the leader in the electronics industry like they want to be in everything else. In this case leader does not mean lead the way but be the only game in town. This was not a monopoly that occurred from circumstance but a planned out campaign. And when you are living on a salary that does not even begin to keep up with the rate of inflation, Walmart's business model was the perfect thing to introduce to families who are barely squeaking by as is and they knew it. Thank goodness in San Antonio they have some competition from our HEB grocery stores who are using their own tactics against them by creating HEB Plus stores. The only thing that HEB has not put in these stores is clothing and furniture. And HEB is so deeply rooted in the SA community Wally World doesn't stand a chance. A local business providing jobs to local residents, that's a rarity and they provide decent pay, decent benefits and still provide competitive prices to local shoppers. Walmart is 5 miles away from me there are 3 HEB's within 3 miles including an HEB plus. I'm not sure what the concentration statistics are but I'm willing to bet that there's no more than 2 miles between HEB's as a matter of fact I have to pass three HEB's just to get to Walmart. Jun 4th 2008 10:01 |
|
Karl Rose
 Well you make a good point Cheryl, about something I missed the other day. If Walmart is going to be the ONLY gmae in town, what happened to the MONOPOLY laws? aRE THE LOCAL OFFICIALS GETTING bribed OR WHAT?? Pac-Bell tried to be the ONLY phone company in Calif some years ago but was slapped with HEAVY fines by BOTH the state gov't as nte FEDS. A T & T suffered the SAME fate trying to be the ONLY US phone carrier and they ARE STILL paying for that mistake. It seems like the 'watchdog' was tossed a piece of beef(wal-mart brand no less) while wal-mart slowly becomes the ONLY supermarket in the country. With their 'supercenters' they are blowing out TARGET(whic I realy LIKE too) but can only find stuff from them online. Wal-mart is suceeding in shutting down some TARGET stores as well. NOW THAT bothers me. Jun 4th 2008 12:29 |
|
|
Arthur Webster
Just plain honestyWalmart ruthlessly set out to destroy all competition But isn't that exactly what I said - but in a more roundabout way? Every business, in every sector, everywhere in the world attempts to create a monopoly for itself. No business, in any sector, anywhere in the world has a social conscience. (Even those that try to grow by claiming that they do!) Jun 4th 2008 12:29 |
|
|
Cheryl Baumgartner
Medical Billing/Coding/InsuranceKarl the problem with Walmart is the ruthless underhanded tactics they are using. They are using the common consumer such as you and I to further their plans. It's hard to say it's a monopoly when the game has been played on all hole cards. There's really nothing a watchdog group can point to, Walmart just "Gave the consumers what they wanted". The consumers wanted it because it's much cheaper and cost effective to go to one store for all of your shopping than to go to two or three. And yes they offer low prices but those low prices are created by cheap labor (Note outsourced as opposed to American made) and then even in the US by cheap labor by giving a low pay package and crappy benefits. This is the kind of job that students filled before now this is what many Americans have to live on. And even though their exec are rolling in the dough, Walmart's policy of "reimbursement" through legally seizing third party settlements to employees who are disabled brings them even more money. Walmart was born of a great idea by Sam Walton. Provide quality goods from American manufacturers to the American public at a reasonable price. On the day he died, his ideas and integrity died with him. Look at the Walmart victims so far, K-mart, Circuit City, Zayre's, Woolco etc. It's not just the mom and pops anymore it's now the competition(Larger corporations). The American public allowed themselves to be used and duped, but in their defense when inflation is rising at double digits and you are getting a 5% cost of living wage, eventually you have to save your pennies however you can, that was the whole scheme in a nutshell. Jun 4th 2008 13:39 |
|
|
Karl Rose
I sold insurance in L.A. calif for some time. ALL sorts of insurance. The agency broker is a GREEDY RUTHLESS SOB and we worked 56 hours/work MANDATORY as independent contractors. I took home some NICE paychecks BUT I STOLE accounts from other brokers and CHANGED our clients auto insurance policies ALL to HIGHRISK(even though thy had spotless driving records). This made my stats look good and I was eventually made office manager. I also padded my own pockets by 'cooking the books' via stealing the NEW accts from the other agents. I had FULL control of what was submitted to the BOSS. I eventually quit the day before the agency was raided by the feds and everyone was arrested. I was tipped off by a cient and good friend who had phoned me at home and advised me to quit. I left L.A with the D.A. and many others after my butt. I tracked down that person(agency owner thru an internet search and found he relocated in calif and is doing business as usual in another city. I was working on commissions only so Ihad to do WHATEVER means possible to earn an income. I DID NOT CARE HOW I got it. And to this VERY DAY I have NO REMORSE about what I did. It was a matter of survival. Jun 5th 2008 13:35 |
|
|
Jeff Greene
Online Marketing Specialist/ConsultantThey are going to attack the Internet bu offering FREE CLASSIFIED ADS Online! http://articles.moneycentral.msn.com/Investing/CompanyAction.aspx Jun 6th 2008 02:40 |
|
Jenny Stewart
BRAVO Cheryl, It is too late too comment today - but will be back tomorrow. What a great article. dont people realise what is happening? Have we really been so dumbed down? Jun 12th 2008 18:11 |
|
Jean DAndrea
RetiredThe Walmart Effect is going to happen all over the world - it's the nature of the beast. Once the competition is driven to closing, then the prices will go up, as they'll be the only game in town! We do have some control over monopolies here in Australia, but how effective it is, we've yet to find out......... Jun 12th 2008 18:25 |
|
|
Arthur Webster
Just plain honestyKarl the problem with Walmart is the ruthless underhanded tactics they are using. Now, that reminds me of something.... I have the answer on the tip of my ton..... Oh, Yes! Of course! Internet Marketing Gurus! Don't forget, Cheryl, we may not like it but "ruthless nearly" always wins. When coupled with "underhand", it ALWAYS wins. NO BUSINESS HAS A SOCIAL CONSCIENCE. Why is that so difficult to understand? Jun 13th 2008 04:18 |
|
|
Cheryl Baumgartner
Medical Billing/Coding/InsuranceA better question would be, why are we so complacent as to allow a business to get away with it? Jenny actually stated the answer we are dumbed down. Walmart's tactics have been evident for years so why do we go along with it. In the long run it is not just other businesses that lose but the consumer. Walmart could not succeed without our help. And when we have helped them get rid of all competition, they turn around and gouge us by way of saying thanks by raising their prices. Before K-mart actually began closing doors WalMart insured they had lower prices. Once K-mart was gone, Walmart's prices not only reached the level of the K-mart price but were higher. It the old bait and switch tactic squared. Jun 13th 2008 08:12 |
|
|
Jeff Greene
Online Marketing Specialist/ConsultantWith all their bucks and bullying, I'm not a bit suprised that they are aiming at the Internet advertising industry, and the are just getting warmed up, people! Jun 13th 2008 08:23 |
|
|
Karl Rose
Hi Old Coot, yes you ARE 100% CORRECT. ruthless=winner and I can see the similiarties btween walmart and the so-called 'internet guru's'. Hey Cheryl I hav a ray of hope for you. here is a local supermarket here and they are NOT caving in' to walmart's tactics. They are called Martin's and are NOT a big chain either. last week, my wife did some comparison shopping and WALLA! 90% of the items at Martin's was either the same price or even a little LOWER than walmart. SADLY there are still some things we will be buying from walmart BUT NOT AS MUCH ANYMORE. We will now be buying about 90% from Martin's(which is closer to home) and about 19% from walmart. The other items at Martins are so exceedingly high that it is worth the extra drive to walmart for the lower price. I just thought you'd like to know ther ARE some stores that REFUSE to 'give in' Karl Jun 13th 2008 14:00 |
I LIKE WALMART! Ans SO WHAT about those employees, if they do NOT like working for wal-mart then go GET ANOTHER JOB!!!! ANOTHER THING, walmart has it's OWN set of truckers THEIR truckers DO NOT PAY ONE RED CENT out of THEIR pockets for gas. Wal-Mart PAYS fr THEIR gas. So the wal-mart truckers have it pretty good in my opinion>
Jun 3rd 2008 11:20