The Wal-Mart You Don't Know

[MindPilot]

This is an article from 2003, but it bears repeating since most people don't really seem to grasp--especially since Wal-Mart is currently pretending to be all about consumer choice now that it is trying to push deeper into the blue ocean of the urban marketplace--the level damage that Wal-Mart has done to the business world, the US job market, and the American manufacturing base.

The giant retailer's low prices often come with a high cost. Wal-Mart's relentless pressure can crush the companies it does business with and force them to send jobs overseas. Are we shopping our way straight to the unemployment line?

A gallon-sized jar of whole pickles is something to behold. The jar is the size of a small aquarium. The fat green pickles, floating in swampy juice, look reptilian, their shapes exaggerated by the glass. It weighs 12 pounds, too big to carry with one hand. The gallon jar of pickles is a display of abundance and excess; it is entrancing, and also vaguely unsettling. This is the product that Wal-Mart fell in love with: Vlasic's gallon jar of pickles.

Wal-Mart priced it at $2.97--a year's supply of pickles for less than $3! "They were using it as a 'statement' item," says Pat Hunn, who calls himself the "mad scientist" of Vlasic's gallon jar. "Wal-Mart was putting it before consumers, saying, This represents what Wal-Mart's about. You can buy a stinkin' gallon of pickles for $2.97. And it's the nation's number-one brand."

Therein lies the basic conundrum of doing business with the world's largest retailer. By selling a gallon of kosher dills for less than most grocers sell a quart, Wal-Mart may have provided a ser-vice for its customers. But what did it do for Vlasic? The pickle maker had spent decades convincing customers that they should pay a premium for its brand. Now Wal-Mart was practically giving them away. And the fevered buying spree that resulted distorted every aspect of Vlasic's operations, from farm field to factory to financial statement.

http://www.fastcompany.com/magazine/77/walmart.html

[Gato Moteado]

1. i'm assuming the pickle jar was a "loss leader"......

.....someone should come up with a website listing all of walmart's loss leader sales and urge consumers to go to walmart and only buy products where walmart is losing money or breaking even.

[snagglepuss]

3. Exactly. nt

[MindPilot]

4. It's more than that though.

I saw it in real time when I worked for an electronics manufacturer. You simply can't be a major name and not be on the shelves at Wal-Mart, but Wal-Mart's pricing demands are such that you have sell to them for lower margins. Of course when you do that, the other retailers came at you with their lawyers wanting to know why you sell a product to them for one price and to us for a higher price.

So a manufacturer ends up creating Wal-Mart specific models which can hit the lower price points Wal-Mart demands. Doesn't take an MBA to see where that is going to drive up your production and distribution costs.

[katnapped]

6. And even worse

You now have "Walmart-quality" merchandise (electronics, appliances) everywhere, and little choice even if you want to spend for better.

[Sherman A1]

19. You can be a major name and not be on Wal Mart's shelves

You simply have to decide upon your business model and what you are trying to do. Snapper Lawnmower did that and told Wal Mart, they were not interested in selling through their stores.

[progressoid]

34. Seems to me Rubbermaid did that also.

[melm00se]

25. needs to?

i already do that.

i buy loss leaders when i need them and love it when they have nice long shelf lives or can be frozen then i really stock up.

i have so much stuff stocked up, my new neighbor asked if i was expecting the apocalypse any time soon

[lame54]

2. the same with Levi's - no longer an American tradition

[formercia]

13. Wrangler jeans at Wally World are not the same as what you get

from wrangler. I bought wrangler jeans from both at the same time. The ones I got from Wrangler are in excellent condition, while the Wranglers I bought from Wally World are almost worn out.

The fabric and construction are different. Sure, they're more expensive direct, but they will look good a hell of a lot longer.

The Wally world house brand jeans are total crap.

[hunter]

14. Wal Mart's "brand" name socks are like that too.

Same brand, look almost identical, but don't last as long.

[progressoid]

35. No shit.

Was out of town last week and I had to buy some emergency socks. Wallmart was the only option. Got a hole in one of them on the FIRST day!

[Lugnut]

15. Most of their stuff is crap.

On one of the rare occasions that I was in the local Walmart I looked at a rack of pajamas. They wanted $17 for pjs and the fabric was like cheese cloth. I have scrub rags that are more substatial than those pjs were. What a ripoff!

[Name removed]

28. Deleted message

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

[jmowreader]

16. But sometimes total crap jeans are perfectly fine

When I was still printing vehicle wraps, we had to lay the vinyl on the floor to dry for a day then crawl on the floor dusting it off and rolling it up before we could laminate it. A pair of jeans lasted about two weeks before the floor wore holes through both knees. So...I went to Walmart to buy the crap jeans they sold. If they're gonna last two weeks, why not?

[Horse with no Name]

46. If you have a Tractor Supply store nearby

You can get a pretty decent "generic" jean that will last a lot longer for about $10.

[Hannah Bell]

18. i looked at jeans the other day at a couple of stores. i usually buy them second hand but my

favorite store went out of business and i didn't want to drive to the next town, so i went to penny's & macys.

i was surprised at how thin the fabric was on all the levis & lees they had.

my memory of buying those jeans new is from the 70s & they were heavy-duty.

[formercia]

27. Go to the manufacturer's website and buy them direct

Not to push any particular product. I don't know about Levis but Wrangler is no hassle if you need to return them and they have odd sizes you seldom find in a store. Mine are now just broken-in well, after a year and a half. I will never go back. It's worth every penny. Mine have a heavy-duty herringbone pattern fabric which is totally different from the ones at Wally World.

[Hannah Bell]

44. thanks for the info.

[Horse with no Name]

47. When we have the need to buy new jeans these days

Department stores and Walmart are not options.
For cheap jeans, we go to Tractor Supply. You can get a rugged pair of heavy jeans for about $10.
For nicer jeans we go to western stores. They are a little more expensive, but will at least last instead of falling apart after being washed a few times.

[XanaDUer]

5. Damn, though; I love those pickles!

nt.

[prairierose]

7. One of the things that people do not understand about the way...

the evil Walmart does business is that most of the good prices in the store are usually the loss leaders. The majority of products are the same price as other stores in the area or they are higher. In my area, when walmart opened their grocery area, bananas went up 20 cents/lb. So every other grocery store in the area went up to their price. Groceries went up and have stayed up. Now that prices are going up every where, they are going up again. I would not buy much there because I do not trust all of the food products from China that I saw there.

We have lost 2 different grocery stores. One was a local company; the other was a national chain that pulled out of the area. I am not sure about other small local businesses that we have lost to the evil walmart. I do know that the city and county have spent millions rebuilding the infrastructure in the area to deal with the traffic.

I know this isn't exactly about how walmart has a detrimental effect on the businesses with which they do business but it all part of the bigger picture. However, I have known for years about what they do to the businesses with which they do business and that is yet another reason that I will not do business with them.

[Gato Moteado]

8. i buy all my food from local producers and markets and farmer's markets....

...we have a big chain here called hipermas and it's owned by walmart. they price their produce to try to compete with the farmer's markets and the prices definitely are cheaper on a lot of items but the quality and freshness of the food from the farmer's markets far exceeds that of the hipermas, so most people still go to the markets. for convenience, however, plenty of people shop at hipermas. regarding the pricing on electronic, appliances, clothes, etc, the hipermas doesn't seem to beat the shops in downtown san jose or the other clothes and appliance stores on most items. i think most of the shoppers have an illusion of savings when they go there, but the convenience of having everything in one place is probably what draws them in.

so far, though, i don't think hipermas has been able to destroy the local markets and stores, and hopefully it will stay that way.

[SmileyRose]

38. Yeah well, good luck with that in about a year

Some walmart big shot was on Colbert last week bragging about how their stores are going to start a "buy local" style. Meaning they'll sign local growers to advance contracts before the little mom and pops get in on it.

[Gato Moteado]

9. by the way....i still think it's a good idea to build a website that lists all of walmart's...

...loss leaders each week and have people rush to the walmarts on the first day of the new sales and buy only the loss leaders and nothing else.

[Ghost in the Machine]

22. Wouldn't that be considered a form of economic terrorism?

Not that walmart doesn't engage in it themselves, suggesting companies move production overseas and stuff, but still, wouldn't it be a form of economic terrorism?

[Gato Moteado]

45. to encourage people to take advantage of the best deals?

sounds like the free market to me.

[blondeatlast]

36. WM plays dirty, why not consumers? One could buy that stuff and donate at least

some to charity--for instance the jar of pickles.

[demigoddess]

10. we had a relative who bought all those big jars of stuff at walmart

and he kept having to throw out the remains because they never ate it up. They would go bad or outdated long before they finished it. A lot of waste. Also a lot of things that had to be replaced because they did not last.

[Zax2me]

11. If Vlasic isn't happy with the pricing don't sell to Wal-Mart.

In any case, I don't think American consumers are going to gobble up gallon jars of pickles to heave into refridgerators and bankrupt Vlasic.

[jmowreader]

17. This is a very old article...BUT...

The gallon jars of pickles DID bankrupt Vlasic, believe it or not.

[Horse with no Name]

12. How Snapper’s CEO said ‘No’to Wal-Mart

http://www.businessmanagementdaily.com/articles/12975/1/How-Snappers-CEO-said-Noto-Wal-Mart/Page1.html#
and the reason MORE need to do the same.
>>>snip
“As I look at the three years Snapper has been with you, every year, the price has come down. Every year, the has gone up. We’re at a position where, first, it’s still priced where it doesn’t meet the needs of your clientele. For Wall-Mart, it’s still too high-priced. I think you’d agree with that.

“Now, at the price I’m selling to you today, I’m not making any money on it. And if we do what you want next year, I’ll lose money. I could do that and not go out of business. But we have this independent-dealer channel. And 80 percent of our business is over here with them. And I can’t put them at a competitive disadvantage. If I do that, I lose everything. So this just isn’t a compatible fit.”

The VP tossed out options. Wier could create a lower-quality line using the Snapper name. Or he could move the manufacturing offshore.

Wier didn’t bite. He lost almost 20 percent of his business, but his dealers picked up much of the slack.

[Prometheus Bound]

20. I think that was a pretty easy decision.

Risking 80% of his business with loyal dealers that provide service to get an additional 20% with Wal-Mart wouldn't make sense to me.

[Manifestor_of_Light]

21. They've destroyed the economy in rural areas.

They destroyed the economy here in East Texas in the 90s.

There are no grocery stores in my town of 1400 people. There is a Dollar General where you can buy some grocery items. I have to drive twenty miles to buy groceries and it's either Wallyworld or a small Kroger. Or an H.E.B.

[cali]

23. They sure are.

thankfully, there's no Walmart near me. We have two local small supermarkets and a country store with a full line of groceries and lots of local products as well as the coop. I know that these local businesses wouldn't survive a Walmart.

[BeFree]

24. hmmmm

Think... if there ever is a near total collapse, it will not be small local grocers who keep the third-world supply chain open, it will be walmart. Could walmart save some people who might otherwise go without?

[cali]

31. if there is ever a near total collapse

Walmart will be among the first to collapse.

[BeFree]

33. well

The American employees, at least, have shown that together they can supply Americans needs faster and cheaper than any company ever. Of course, if that large group of people can't keep it together and continue to carry out their tasks, then we will know total collapse is near.

When I see walmart employee, I do not see an evil person, I see someone much like me just trying to earn a buck. Maybe that's just me?

[Thrustin]

40. Wal-Mart has created ghost towns out of small town downtowns all over the country

That's a lot of "town" usage in that post.

[Horse with no Name]

42. Our town too (Also in East Texas)

They built a small Walmart here--even built a new one, but not a Super Walmart, then built Super Walmarts 30-40 miles in each direction. They undercut all the local business, ran them all out of business and then shut their doors. After all, people could still choose to drive 30 miles in any direction and shop with Walmart--there wasn't anywhere else here left to shop.
They said they didn't make money--but tax receipts and full parking lots said otherwise. They just KNEW folks would drive to another Walmart--because they rinse, lather, repeat their abhorrent business practices in every town they infest.

[xchrom]

26. 'cheap' is killing the country. nt

[begin_within]

29. Same jar at Costco, $3.99

so I don't think Vlasic is really hurting as much as they want us to think they are.

[Hugabear]

30. Walmart is just plain fucking evil

They've driven countless small businesses around the country into the ground

They've become one of the sole employers in many areas, you either accept their minimum wage or nothing at all

They're one of the primary reasons why it's so hard to find anything "made in the USA" anymore

They're staunchly anti-union

Plenty of other reasons I could list, but it would take too long to go through them all.

Unless I don't have any other options available, I simply do not shop there.

[Octafish]

32. How Wal-Mart got that way.

The late Jackson Stephens of BCCI fame helped bankroll the Wal-Mart empire. Interesting fellah, Mr. Stephens.

BTW: When Sam Walton needed to add a woman to his board, he went to the then-First Lady of Arkansas.

EXCERPT...

Fellow board members and company executives, who have not spoken publicly about her role at Wal-Mart, say Mrs. Clinton used her position to champion personal causes, like the need for more women in management and a comprehensive environmental program, despite being Wal-Mart’s only female director, the youngest and arguably the least experienced in business. On other topics, like Wal-Mart’s vehement anti-unionism, for example, she was largely silent, they said.

[Earth_First]

37. +1

Does NAFTA ring a bell, anyone?

[formercia]

39. The Family

The Invisible Empire.

[lonestarnot]

41. Too late to recommend.

[InvisibleTouch]

43. Bah. I will be making my own pickles this year.

I grew so many cucumbers last year that I didn't know what to do with them all.

[Shagbark Hickory]

48. Vlasic doesn't have to sell tp walmart. Plenty of brands dont (snapper lawnmowers for example)

Instead I'd be willing to bet vlasic sticks a few less pickles in the jars that go to walmart thereby making them actually more expensive than a slightly less evil grocer.