Walmart - Inflation? or Deflation?

[charliebrown]

Re: Walmart - Inflation? or Deflation?

Will Walgreen's fill a niche? When we get to $5.00 a gallon gas, I'm going to think twice about driving the 8 miles one way to get to walmart. I'm either going to have to plan better, or find a closer store, for small sundries. If walgreens gets beaten down again I'm going to buy more as a high gas price play.

Yes walmart (big box) has killed main st. u.s.a, but at the same time I can not afford mom and pop pricing. Typically I see mark ups on stuff of 30% at Ace vs. Walmart or Home Depot. I'm willing to pay for convience and friendly service, but 30% seems a bit high. I don't know if its mom and pop is getting fat, or their profit margin is roughly the same as the cost structure of having a place down town, with small inventory leads to these high prices. Most stuff at ACE says made in china too, I've checked. If you're lucky enough to be shopping when the "old man" is around at ACE you can get some good advice, but
go in at the wrong time, and the ACE is packed with no nothing teens/twenties who don't know where anything is and
can't give any worthy advice, just like you find in a big box. I actually think Home Depot on average has better help than ACE.
Most of the guys walking around seem to be tradesman who can't find steady work.

I know ACE is not a perfect fit to walmart, but since I'm a guy and don't shop at clothing botiques or jewelry stores, there are no mom an pops left except for ACE. Seems like these businesses are the only lines that have survived the big box attack near
me.

[dbarberic]

Re: Walmart - Inflation? or Deflation?

My local WM went through a remodel about 3 months ago. The primary difference I noticed was the reduction of self space via much wider isles. I do not know much about the change in selection of processes foods, but I would say that I've seen an increase in selection of organic foods and products at my local WM. From the different WMs I've been to, I'd say that inventory is tweaked based on local demographics. WMs near higher income areas have more organics, higher priced electronics, and fresh fruits/veggies and are a much more plesant experience to shop at.

To call the remodel a Soviet USSR style grocery store, is a bit overblown. Afterall, in the USSR you only have one grocery store in town and you could only buy why they had on the shelf. You had no other options. If you don't like the selection at WM, head down the street to Whole Foods or Trader Joes.

[jiimbergin]

Re: Walmart - Inflation? or Deflation?

Isn't Walmart a reflection of globalization?

If you're going to enjoy the benefits of cheap labor and the products it provides, then you will have to compete with those workers in poorer countries who are willing to work for lower wages. In global marketplace, as things equalize between the richer and poorer countries, the richer countries will experience a reduction in standard of living. Walmart's business practices are a symptom of that effect.

I'm not claiming that there isn't some bad behavior, but when you talk about sweat shops in China, keep in mind that the peasants there are falling all over themselves to get to the cities to work in those sweat shops. To them, it's a better life. Aren't Walmart's crimes you refer to, "Union blocking, poor-wage paying, emergency-room (non-insured) filling lousy neighbour!" primarily due to the US having to accept a lower living standard in order to compete with the poorer nations' workers who are willing to work for less and under less desirable conditions?

The real problem with the world is that the Financial Elite sucks out an disproportionate amount of the world's wealth, lowering the People's standard of living everywhere. That's what needs to be fixed.

And, for those who criticize Walmart for displacing local small stores . . . done any internet shopping lately?

Yes, great comments!

[jiimbergin]

Re: Walmart - Inflation? or Deflation?

My family likes Walmart. We also like Target and Lowes. My favorite grocery store is ALDIs, which does not look anything like a big box store, but happens to be one of, it not, the largest grocery store in the world. It more than competes with Walmart.

[shiny!]

Re: Walmart - Inflation? or Deflation?

And, for those who criticize Walmart for displacing local small stores . . . done any internet shopping lately?

I not only shop online, I have an E-commerce store. It's a very small business, so small that I can't afford the overhead to rent a brick-and-mortar store or pay mall rents. The internet gives people all over the country access to my wares, as easily as for people in my home town. Most of the online shopping I do is from small businesses like myself. Even Amazon, for a fee, provides storefronts for small businesses, giving them a presence they might not be able to gain on their own. The internet is the new Main St.

[jiimbergin]

Re: Walmart - Inflation? or Deflation?

I not only shop online, I have an E-commerce store. It's a very small business, so small that I can't afford the overhead to rent a brick-and-mortar store or pay mall rents. The internet gives people all over the country access to my wares, as easily as for people in my home town. Most of the online shopping I do is from small businesses like myself. Even Amazon, for a fee, provides storefronts for small businesses, giving them a presence they might not be able to gain on their own. The internet is the new Main St.

We too shop on line a lot. The net has indeed become the new main street.

[c1ue]

Re: Walmart - Inflation? or Deflation?

To call the remodel a Soviet USSR style grocery store, is a bit overblown. Afterall, in the USSR you only have one grocery store in town and you could only buy why they had on the shelf. You had no other options. If you don't like the selection at WM, head down the street to Whole Foods or Trader Joes.

At the rate the smaller chains are disappearing, it is quite possible that only time separates the US from the situation above.

[jiimbergin]

Re: Walmart - Inflation? or Deflation?

At the rate the smaller chains are disappearing, it is quite possible that only time separates the US from the situation above.

In my small city of Hickory NC, we have the choice of Walmart, Food Lion, Lowes Foods,Aldi,Harris Teeter, Galaxy. I do not see any of these going out of business anytime soon. We have lost a couple chains, but that was because they were way over priced or cheap and dirty.

[Milton Kuo]

Re: Walmart - Inflation? or Deflation?

Marvelous -- I'm going to remember that one for the next time people are slamming Walmart.

It's one thing for Wal-Mart to put a mom-and-pop store out of business; it's another thing altogether when Wal-Mart puts tremendous pressure on manufacturers of products to move production to China, which puts the U.S.A. out of business. The Man Who Said No to Wal-Mart, is an article I read many years ago about Snapper's (a lawn mower company) experience with Wal-Mart.

While I buy a lot of goods on-line, I only buy quality goods unless there is no alternative. That means I buy stuff made in the U.S.A., Canada, Germany, Japan, etc. I make do with fewer goods than most people but my goods are among the best in quality and some last practically forever.

[raja]

Re: Walmart - Inflation? or Deflation?

It's one thing for Wal-Mart to put a mom-and-pop store out of business; it's another thing altogether when Wal-Mart puts tremendous pressure on manufacturers of products to move production to China, which puts the U.S.A. out of business.

While I buy a lot of goods on-line, I only buy quality goods unless there is no alternative. That means I buy stuff made in the U.S.A., Canada, Germany, Japan, etc. I make do with fewer goods than most people but my goods are among the best in quality and some last practically forever.

You expect Walmart to choose patriotism over capitalism? US consumers wouldn't stand for the higher prices

I shop all over the place . . . .

I recently bought an Italian meat band saw (for cutting up our sheep, goats, etc.) -- three times as expensive as the Chinese ones. Also, purchased a German grain mill for our daily bread, four times the cost of the cheap models, which are probably Chinese. And, an Italian garden tiller, German chainsaws, Korean 45 hp tractor.
When I buy something mechanically complex that I want to last, I usually go European (not so patriotic, eh?).

On the other hand, I just bought a cheap Chinese diesel generator, because I only need it for occasional use.

Things I buy from Walmart include engine oil, canned fish, various small hardware items, Q-tips, ammo, toilet paper, a trampoline for my daughter, rose bushes, some clothing items . . . and a million other little things. They all work just fine for their intended use.

[shiny!]

Regulations, not wages, causing manufacturing to go to China

I had a conversation today with someone involved with manufacturing and importing, who told me that the real expense of American manufacturing, the real reason why it's cheaper to make things in China, isn't the cost of American wages but the cost of American regulations.

A little American company, Fly Scooters, made the most amazing motorscooters. Unlike most cr*ppy Chinese scooters, Fly scooters were built in a Chinese factory with high quality parts and assembly. Unlike other quality scooters that are expensive, Fly scooters were affordable. The 150cc Fly "il Bello" (see picture) listed for $1,800, compared to approx. $4,500 for a Vespa or Honda.

ilbello150cc-2010.jpg

Sadly, Fly stopped making motorscooters a few months ago. They still sell parts and accessories but don't make new scooters anymore. Last month I managed to get a new il Bello marked down to $1,400 at a local dealer.

Today I had the opportunity to ask someone at Fly why they stopped making their scooters, and if they had plans to make them again in the future. According to this fellow, the high cost of government regulations and lack of investment interest were the reasons for going out of business. They had gone with a Chinese factory because China doesn't have the regulatory red tape that we do. Unfortunately, import regulations have now made it too difficult and expensive to import their products from China, so they have stopped making their wonderful scoots.

He said they would like to manufacture right here in the USA, but the cost of government regulations makes it impossible to build an affordable product. They even considered Mexico, but the Mexican factories were too unreliable.

We discussed Peak Cheap Oil, devaluation of the dollar, and the gas price shocks that we're in for over the next several years. I told him that IMO they have the right product at the right time, and if they can hold it together long enough they will find their scooters in great demand once people realize that high gas prices are here to stay.

We agreed that the silver lining of governments going broke is if they can't afford to enforce all the regulations, there might be a chance for manufacturing jobs to come back to this country, and for people to "live like Citizens again".

[thriftyandboringinohio]

Re: Regulations, not wages, causing manufacturing to go to China

...
He said they would like to manufacture right here in the USA, but the cost of government regulations makes it impossible to build an affordable product...
We agreed that the silver lining of governments going broke is if they can't afford to enforce all the regulations, there might be a chance for manufacturing jobs to come back to this country, and for people to "live like Citizens again...

I've worked most of my career in manufacturing in the US, and don't know exactly what you mean. In the chemical industry, we didn't just dump our waste into the nearest creek, but in central america or asia we could. We used guard rails and safety devices in the US, though in other places we could just hope the employees didn't have a momentary lapse of attention and kill themselves, and we could ignore exposure to toxic chemicals for workers; too bad for them long-term, but we could always hire more. They couldn't sue us so no need to bother.

Unless you are talking about going back to killing employees and neighbors for money, I don't understand what this blanket notion of regulation means, exactly.

There are several places with zero regulation, like Somalia, and they don't seem to have much industry. Germany is the number 2 exporter today.

No offense, but "...high cost of...regulations...and lack of investor interest..." sounds like an excuse from someone who just really isn't that good at running a manufacturing business and got beat fair and square in the market, despite having a good product.

[shiny!]

Re: Regulations, not wages, causing manufacturing to go to China

I've worked most of my career in manufacturing in the US, and don't know exactly what you mean. In the chemical industry, we didn't just dump our waste into the nearest creek, but in central america or asia we could. We used guard rails and safety devices in the US, though in other places we could just hope the employees didn't have a momentary lapse of attention and kill themselves, and we could ignore exposure to toxic chemicals for workers; too bad for them long-term, but we could always hire more. They couldn't sue us so no need to bother.

Unless you are talking about going back to killing employees and neighbors for money, I don't understand what this blanket notion of regulation means, exactly.

There are several places with zero regulation, like Somalia, and they don't seem to have much industry. Germany is the number 2 exporter today.

No offense, but "...high cost of...regulations...and lack of investor interest..." sounds like an excuse from someone who just really isn't that good at running a manufacturing business and got beat fair and square in the market, despite having a good product.

No offense taken at all. You might be right, but just because a business complains about expensive, burdensome regulations doesn't mean they don't value the health and welfare of their employees and the environment. I'll give you two examples of which I have first hand experience:

Ex. #1: Years ago my husband did machinery maintenance in a small factory in California. One day the OSHA inspector came in, and upon inspecting the workers' dressing room proclaimed that the factory was out of compliance because the lockers were not painted "OSHA blue". My husband took time off from working on the machinery in order to paint the lockers.

Two weeks later, the Fire inspector came in and said that the paint on the lockers was a fire hazard and had to come off, or they would be shut down. My husband took more time off from maintaining the machinery and stripped the paint off the lockers.

A week or two later the OSHA inspector came back and threatened to shut them down because they had failed to paint the lockers. Once again he ordered them to paint the lockers. My husband was fed up. He handed the Fire inspector's card to the OSHA guy, told him to work it out with the Fire inspector, and walked away.

*****

Ex. #2: A fellow we knew owned a very small specialty retail shop. He was the only employee. The man has a birth defect that left him with legs that are only a few inches long. He had a restroom in the back that was not open to the public, with a toilet that was very low to the ground. It worked well for his needs.

An inspector came into the shop and declared that his bathroom setup violated the Americans With Disabilities Act. He was ordered to install a high toilet with a handrail in order to make his bathroom wheelchair accessible. The toilet would also have to be moved further away from the wall which would have required the plumbing to be redone. This guy, all of maybe 3-feet tall, patiently explained that he was the only one who used the toilet and it worked for him, and that also and incidentally he was considered handicapped and thus deserved accomodations according the ADA.

The inspector Would. Not. Listen. Unless the man gutted his bathroom and made it wheelchair accessible, the inspector would shut down the business. The renovation would have cost him about $3,000 way back in the late 90's. He shut down his shop instead.

*****

Small businesses just cannot afford this kind of bureaucratic nonsense!

I can tell you that the day comes I have to start filling out 1099 forms for all my customers, I'll be closing my tiny business, too, 'cuz it's just not worth it.

There's a marvelous book about government regulations published some years ago called The Death of Common Sense. I highly recommend it:

http://www.amazon.com/Death-Common-S...4097114&sr=8-1

[lektrode]

Re: Regulations, not wages, causing manufacturing to go to China

No offense, but "...high cost of...regulations...and lack of investor interest..." sounds like an excuse from someone who just really isn't that good at running a manufacturing business and got beat fair and square in the market, despite having a good product.

i tend to agree on that, after working in various types of factories myself, would say that it's easy to blame regulations/unions etc, but well-managed businesses here in The US can compete globally in most any industry.. WHEN the exec's interests are aligned with a _longterm_ strategy, vs whats become all too commonplace these daze: pump up the quarterly numbers to pop the stock price, collect millions in bonuses/options, while gutting the assets that made the biz profitable in the first place - tween that and LBO pirates, using OPM and paying too much, then unable to cashflow their investment, gutting/selling/extracting the core profitability, forcing the help into pay/benefit cuts and to work like dogs to save their jobs and then declaring bankruptcy anyway - _after_ they've paid themselves millions - ala chainsaw al, of sunbeam a few years back.

in short, if businesses were run the way their founders intended them to be run, we would likely still be competitive in most industries - but when the 'new age' MBA whizkids are interested in only _their_ exit strategies, USA inc = doomed
and with the FIREmen calling the shots in Washington??? its going to happen a lot faster than most think.

why i keep repeating: TERM LIMITS FOR CONGRESS - NOW!!!!

[lektrode]

Re: Regulations, not wages, causing manufacturing to go to China

No offense taken at all. You might be right, but just because a business complains about expensive, burdensome regulations doesn't mean they don't value the health and welfare of their employees and the environment. I'll give you two examples of which I have first hand experience:

Ex. #1: Years ago my husband did machinery maintenance in a small factory in California.

that right there explains quite a lot, seeing as mfg'g is fleeing CA like a burning movie theater....
no offense.

I can tell you that the day comes I have to start filling out 1099 forms for all my customers, I'll be closing my tiny business, too, 'cuz it's just not worth it.

ditto!
who snuck that one in to the 'healthcare' bill, anyway?? they mustave been drunk.
(and why do i think it was one of the kalifornia delegation... no offense)

There's a marvelous book about government regulations published some years ago called The Death of Common Sense.

seems to me it started dying the moment the lawyers took over congress!

TERM LIMITS NOW
(esp for the kalifornia delegation... no offense ;)