Thursday, December 27, 2007

"IT'S AMAZING WHAT WAL-MART DOES TO A TOWN."

Two items caught me in today's Bulletin. (I'm not sure this blog could exist without the Bulletin blogfodder.)

The first, of course, was that Erickson's Thriftway is closing after half a century.

Probably a good time to mention....and oh, by the way.... the mass market is winning, has won, is a giant anaconda squeezing the life out small town business.

But wait, you might say, aren't you an example of a survivor?

I direct you to the first five words in the title of my blog. Go on, read them...

The second thing that caught my attention was the two women buying 800.00 worth of clothing at the Old Mill. (Banana Republic). This is above my daily sales average, folks. We are small potatoes. We are a mouse skittering between the cracks, hoping the snake will go after the rabbit, instead.

What I find amusing is that Walmart spends most of the article about Erickson's denying they have anything to do with it.

Yeah, and Blockbuster had nothing to do with almost all the indy video stores disappearing.

Yeah, and Barnes and Noble had nothing to do with 3 out of 4 existing indy bookstores closing.

Yeah, and Best Buy had nothing to do with Boomtown closing.

This is where the mass market defenders jump up and say, yeah, but what about the internet, what about Netflix, what about downlowding, what about Amazon? Major factors, I don't deny. But without the Mass Market, they still would have had a chance.

My wife and I skipped Christmas this year, for the first time. We make these kinds of vows every year, but then I catch her buying something anyway and I go out and get something and she goes out and gets something.

We got a single, not overly expensive item for each of our family members here in town. That was it.

I, personally, just don't need anything, and if I need anything, I'll go buy it.

Anyway, back to Ericksons.

There is a kind of feeling floating around that those of us who are anti-Walmart, anti-big-corporate store come to town and crush the competition, have a do-gooder political agenda that defies the facts.

I submit to you that it is the opposite. The Walmart defenders are denying the facts. The facts are, mega-stores crush the competition.

There are hard-working locals losing their jobs, why do you deny it? Sure Walmart may have created 30 jobs to take the place of the 30 lost jobs at Ericksons. But the money at the top is going to Arkansas, folks. And the two owners of the Gibbs Bakery are also self-employed. So the grandfather and grandmother Gibbs lose their bakery -- so what, I can get my cottage cheese .50 cheaper at Walmart?

Almost everyone's doing it. No, has done it. Because I really believe the battle is over, it's just mopping up operations.

Like I said, Walmart spends almost the entire article denying it is their fault, but I'll let the people at Erickson's have the last word:

Manager Adam White...."saw the writing on the wall when the 217,896 square-foot Wal-Mart Supercenter opened Sept. 19 and his sales started to slip.

"It's taken enough that we're not going broke,but we're not making any money," White said. (Italics, mine.) "It's amazing what Walmart does to a town."

20 comments:

BilboBend said...

"It's amazing what a Walmart does to a Town"

*

First of all just wait for our Super-Walmart up by Mt. Borgman aka LesSchwab CamPussy.

Today, just go to Walmart South, don't even go in the inside, just walk the parking lot. A few days ago, for only the second time this year I went there. I had three mothers holding kids BEGGING for gas money to LA-PINES, I saw fights. Later, I saw online news that there had been a riot in the Walmart parking lot. I had least 1/2 dozen aggressive panhandlers follow me around, the silly thing is they were dressed better than me!

So yes, Walmart is the 'mirror of a town', I was there once past spring looking for a toilet bowl cleaner, and some electronic shit with a friend the other day. Note we ended up going to Costo ( he has a membership ), the Walmart stuff might have been 'cheap' but was all dated, and re-furbed. The costco stuff tended to be agressively priced, but was state of the art.

Regarding these people who BUY food at Walmart & Costco, yes the costco lines were 1/2 a block long, yet more than 1/2 the people had two items or less in the cart. I know people that go to the new Redmond Super-Walmart twice a day!!

I myself shop at Newport for stuff I intend to eat, and Ray's for stuff that I use to wipe my ass. I hate safeway, because I don't belong to NO fucking club. I can walk to Newport or Rays, and WALMART/COSTCO are made for people who watch TV all day long and spend the rest of their live in their fucking car.

Want to see the FUTURE of Bend today, want to see what ALL of Bend will look like FALL of next year?? Then go to WALMART today ( south-bend ), and spend a few hours walking around the parking-lot.

BilboBend said...

Duncan,

Eventually it all has to implode ( walmart, costco, ... ) big box is all 'holding company' Buffett speculation, Walmart is one of the Best plays in the generation. Eventually it will implode.

Eventually they'll mainstream their product stock.

All WALMART shit comes from China, which eventually is going to poison a few million.

Newport does fine, "know your customer", offer quality. Hell you still can't get REAL Italian Cheese or Meats in Bend, even Newport is fake USA product. Note the real thing. Bend talks a lot about being Aspen, but we're a long way away from having real Tuscan food available. Who in the FUCK really shops at Walmart or Costco?? Looking at the faces ( lard arses ) , and the cars ( cali plated SUV's ), ... I would say the same people who make cali cali.

The come up TO BEND, and demand the big box stores, the couple I mentioned above that go to WALMART twice a day just moved here from Cali.

Something will give, some day "Wall Street", aka US pension funds will PULL-THE-PLUG on Walmart, and the stock will implode, and thus the stores will implode. They JUST sell crap, economy comes and goes, when money again becomes 'dear' people will want quality.

Regarding the Thriftway in Redmond, note they probably killed a few small biz'es years ago themselves. Anyone could if they cared do the Newport thing in Redmond.

A last comment, and you'll love this I know dozens of couples that live at Walmart, and believe it or not what they do is BUY shit on special and then put it on EBAY. These are the folks that cause riots, they go there severals times a day, and BUY what ever they can, then RUSH home and put it all on EBAY. Its now called a family business. I think this is what keeps Walmart and UPS alive, and NOTE both of these stocks are over-priced and about to go down the tubes.

All these Internet-Stores selling junk to people to avoid 'tax' (VAT) whether in Canada, US, or EU, ... too many people doing the same thing. I just thought I would share some insight, so you really knew what this shit was all about.

I highly suggest that you visit WALMART/COSTCO once awhile to make sure your store doesn't carry similar product, because eventually ALL this HOME-INVENTORY'd SHIT is going to end up at the DUMP.

One of my favorite quotes on Business is from Elvis Presley during the peak of his career, on why he wiggled his ass, he said "These days to make money you got to be different".

Vanilla Manilla, is going to be very passe' very soon,

Duncan McGeary said...

"I highly suggest you visit WALMART/COSTGO once in a while...."

I almost don't have to. My customers let me know, they can "get it cheaper". Hear that three or four times, and I start backing off.

I sold alot of Settlers of Catan this Christmas. Time to really stock up?

No. Barnes and Noble tip toed into Euro games this year. First swallow of spring, you know.

I'll carry the game, but not go crazy.

Duncan McGeary said...

Not only did B & Noble have the game, but they were selling it for essentially my cost, and they had a bonus that I couldn't get.

Exclusives are impossible to compete with, you know?

Next year, B & N could easily stack a table 6 ft high with games, and know they can return what doesn't sell, and so on.

BilboBend said...

B & N could easily stack a table 6 ft high with games

*

Well you have survived 25 years, eventually this false-front 'stock-market' loss corporations will implode, they always do.

Since DOT-COM everyone has been losing money to buy market share.

If the "Newport Market" guy can do "know your customer" plus quality, then so can you.

Eventually when Walmart is the last man standing, you'll be the competition. I just would make sure that you stay in niches so small they don't bother.

SCH said...

Dunc, The Redmond Erickson's was just waiting for something to knock it over for years -- the only question being, would it be Wal Mart or something else.

This is, I believe, the only grocery in Central Oregon without conveyor belts at the checkout, and as such, hardly anyone ever bought more than a few things at a time. It's a small store, but not a specialty store (like Newport).

It's as though you stocked nothing but chess sets and Donald Duck comics and wondered why you couldn't compete.

phatmogera said...

First time i read your blog, and it's really cool. It's not just WalMart, it's the customers that love it, too. WalMart used to be a good company that sold 70% USA made goods. As soon as Sam Walton was in the ground, they started getting everything from China, and since then, you can see the China factor seep into almost every industry.

Keep it up.

Duncan McGeary said...

I agree that they were probably already weakened, Scott, though 50 years of business is pretty hard to dismiss.

Still, Walmart has that effect. It can be the tipping point.

Duncan McGeary said...

Walmart was presented a devil's choice; make a connection to China or stop growing so dramatically.

They chose the China route.

RDC said...

Actually they did not choose the Chinese route any more then did most manufacturers. Take a good look at how many of major manufacturers have more than 50% of their manufacturing capacity in China or other south eastern Asian countries.

The reality is that manufacturing locations shifted. Based upon their business model which is basically low cost, they really did not have much choice. To do anything else would have required a change in their business model.

The level of the change in manufacturing locations becomes very clear if you have seen the CNBC special on Warren Buffet televised recently, During that special they had a discussion with the president of one of BRK's original companies, a furniture store. He mentioned that he was surprised on how fast manufacturing shifted to China. He also indicated that prices to the consumer dropped substantially and that there were not any remaining US sources for the volume and quality needed.

You can go back for 100 years and with every change in business mod you have people talking about the evils of the change. Independent gas stations killed by chains. Small groceries and butcher shops killed by supermarkets. Carriage makers killed by automobiles, etc.

Change in business happens get used to it. Business is a mutant or die area. The fastest example of evolution in action.

As far as money leaving an area, since most of these companies are public one can argue that you see more distribution of money in the form of stock appreciation to shareholders, then in privately held companies where the owners accumate the profits and may not necessarily spend more locally. Actually if they are making a lot the extra money might be going into investments of public companies held else where.

Duncan McGeary said...

From what I've read and seen, Walmart blazed the trail to China, and the others followed.

I'm not sure dividends to stockholders is something I can relate to much. I guess, without evidence, I don't believe it replaces local revenue. I've seen some real eye-opening percentages about how much local stores spend locally, vs. the mass market.

I understand change, believe me. Marvel is talking about putting their comics online, which would probably spell the end of the comic shop as we know it.

But I'm not waiting around for it to happen. I had success with European boardgames this Christmas, and it looks like designer vinyl (cool toys created by artists) might finally be taking off in Bend.

But I don't necessarily feel all change is good or bad. Much of what I've seen was change to be sure -- but not beneficial to anyone. I think the sport card market made horrible choices, Marvel had made horrible choices, and it's almost always in overreaching, for going beyond the
'base' of support that brought them to the mass market.

When the mass market falls through, theres no base to go back to.

Bigger and more interconnected isn't always better.

I wonder if you got a bunch of toy or book or record people in a room together, they wouldn't mostly regret alot of their choices. And I suspect that there could've been an alternative besides appealing the the lowest common denominators.

(Oh, oh. I've revealed myself to be an elitist.)

I have only been in Walmart once, and I've never been in Target. I won't spend money there.

But, as I constantly say, I'm under no illusion the battle can still won.

It's already over.

Said with sorrow, not anger.

Lyle said...

Funny side story, Duncan. An older couple came in the other day and were quite demanding of the waitress, wanting extra this and extra that. They wanted more salsa for their meal so I told the waitress to make sure that she charged for it especially since they were so demanding.

I bussed the table next to theirs and listened to them after the waitress delivered their check. They were grumbling over having to pay for the salsa. "I could buy twice that much salsa at Walmart for that price.", she grumbled. "Next time, I am going to bring my own salsa and keep it in my purse."

RDC said...

I have spent some time in a certain building in Bentonville, AR (the one where Walmart does there purchasing).

Keep in mind Walmart is not a manufacturer. They are a retailing with a track record of squeezing every cent of cost out that they can. As other companies started to copy some of the methods that Walmart developed, such as very rapid inventory turns and very efficient distribution, Walmart continued to pressure manufacturers to reduce price, the way manufacturers responded was to shift to China. Now keep in mind the segment that led the way in China was clothing. Walmart actually lagged other companies in getting clothing these. If you check back a few years ago, around the time that Sam Walton died, there was a lot of speculation that Walmarts growth phase was coming to an end because other retailers had copied their methods and in some cases were getting ahead of Walmart in reducing costs because they were already shiftng their sources, at a time when Walmart was not.

Duncan McGeary said...

The everyone's doing it defense?

But, yeah, I suppose they didn't want to end up like K-mart.

Still, I've more than once taken the high road when I knew it would cost me money. Admittedly, I'm a small store with small consequences.

By the way, every time I've done the 'right' thing instead of the easily profitable thing, it has turned out in the end to be the thing that kept me going when the others dropped out. Partly because I suppose I was still satisfied with my job, and partly because the 'wrong' thing eventually became obvious to everyone.

Does anyone have any examples of a socially responsible company who hasn't bought through China?

Costgo?

Perhaps Walmart could have lead to way to being a extremely large but not overwhelming retail presence, with moderate but not overwhelming profits?

But then, their stockholders would replace them.

We're really fucked, you know?

Duncan McGeary said...

Interesting that Walmart is still a hot button issue around here.

I'm sure that when all the dust settles over on Cooley, that Walmart will be ensconsed. Interesting that both Juniper Ridge and Walmart both are held up by the same traffic block.

So, that's going to happen.

RDC said...

Except Walmart is a public company. That means that they have a fudiciary responsibility to their shareholders to generate a return on their investment, which means increasing profits. Sames as any other public for profit company.

phatmogera said...

You brought up a good point that still needs expounded upon: Walmart and all the box stores (and too a lesser extent your mom and pops) pressure the manufacturers and distributers on price, because Joe Customer is pressuring us. The manufacturers and distributers end up trying to increase their profit margin somehow, and that led to the wide acceptance of the chinese import by the majors. Now those of us in the trenches as an independent retailer have choices to make. Keep our strengths (better selection and service, local ownership) and deal with our weakness (price and distribution), or bow to the pressures the big boxes have created.

Duncan McGeary said...

Like I said, I think we're fucked, in more ways than one.

Duncan McGeary said...

phatmogera,

Or not go head to head with the mass market, but look to go around, under or over, or find unexplored product, or stuff that used to be hot and still has a bit of buzz but which has been dropped, or stuff that will soon be hot but the mass market hasn't found, or.....

Makes our job much much harder.

I've always said, a 'niche' product is just a product that makes so little profit for the effort that the mass market isn't interested.

They leave that to us.

Duncan McGeary said...

By the way, I stopped fighting on a price basis.

I charge full retail. Period. That designer toy over there had limited production and was painted by the artist himself.

Sure, Barnes and Noble probably has NO COUNTRY FOR OLD MEN at 20% off, but you have the book in your hand and gas is 3.00 a gallon, and minimum wage is 8.00, and why don't you just get it.

Take it or leave it. A certain percentage will leave, so you find out which people don't leave and keep adjusting your store for them.

But look at all my 'cool' stuff......! But look at the variety......! Look at the convenience.....!

I don't think you can win over the hardcore Walmart shopper no matter WHAT you do.