Kakar wrote:
I don't know, I've thought there's been considerable backlash at Walmart in recent years. Despite that the plain truth is that lower to lower middle class folks are more concerned with the convenience that Walmart provides along with the low prices than business ethics. And that's probably the majority of their business. Poor folks may grumble a bit about things, but ultimately they'll still shop there. Particularly in rural areas where the majority of local businesses were driven out when Walmart moved in, so they have little choice left.
Also, lots of businesses are using inventory management techniques to drive down their operating costs and increase their performance numbers. Amazon did it, so did Dell when it started their JIT (just in time) model. Many more companies, particularly big ones that can muscle around their suppliers due to their large business, are using their clout to demand that suppliers keep the product on their shelves till it's needed thereby reducing inventory.
It's a technique that works, despite the fact it's still just a shell game and creative accounting for the shareholders (at least in my view, an economist might disagree).
The problem is the lower class will always go where things are cheapest, if the convenience is about the same. Why go to Walmart for a nifty digital camera, if I can just order it for 25% cheaper from Amazon on my phone, and if I really want get it next dayed for the same price as Walmart. Department stores will always have a place for basic necessities but Walmarts low prices are getting beat by online big time.
In store you get someone that doesnt know the product, or has general knowledge, on online usually there is 100s of reviews from people that are novices-experts. Also sites like Amazon arent forcing companies to always sell at that price, they negotiate and say hey give us X amount at this price and we will sell them in a sale, we will take this much and you can keep this much.
Walmart seemed to say we want your product at X price, so we can sell it at X price giving us a profit. If you don't agree well we just wont have your product in our stores. The Vlasic pickles story shows that, suddenly their more premiere pickles were undercut by their cheap ones. It looks good in the short term but you kill yourself in the long term.
I'm a lower class myself never having made more then 20k in a year, I rarely buy stuff at Walmart just because I know I can find it cheaper at other places, and usually has a better quality (I almost never buy food at Walmart).
Overall Walmart created the cheap consumer, but other companies improved upon it, those with tighter budgets are only 'deal' shopping and I rarely see good deals at Walmart, because local grocers can beat them out with weekly deals and specialize in only food, and have stuff like double coupon days.
i.e. My local grocer has a flyer every week with 5-8 pages of all the different foods on discount. Walmarts weekly flyer is 80% other departments, 20% food. Walmart has the always low price on 24 packs of soda for 7.50, while the local store is 8.49 but they they constantly have deals where you can get a 24 pack for 6.99 or 5.99, and the weeks where that deal isnt around, usually 12 packs are on some sort of sale 5/$10(rare) 4/$12. While Walmart ALMOST never has deals like that. In the end Walmart can't keep up, because even on the weeks where there isnt a discount on soda, the grocer will have a sale on something else, and the 50cent to a dollar I would have saved at Walmart wouldn't be enough to cover my cost of driving across town/time wasted.
Because local and smaller stores can say to companies, hey were going to have a big sale this week on your produce, so we want a big amount for just this weeks, what kind of bulk deal will you give us. While Walmart says we want to sell your produce at this much cheaper then other places and we always want this price, so give it to us @ this price.
Edit: My excuse is writing is my worst subject.
Seriously I need to hire an editor 1/10th of a penny for every mistake found. payable only in Rupies after being converted from pesos Edited, Feb 28th 2013 9:11pm by BeanX