- Multinationals -

It's possible to coexist with Wal-Mart and other discount retailers

Posted by: Hugh Morris ( Howard Stern Society, USA ) on November 25, 1998 at 12:41:33:

In Reply to: Soul Sucking WalMart posted by Scott A on November 22, 1998 at 12:26:20:

: Lori got the deal half right, I believe -- YES, Walmart does move into a town, decimate the small business of said town, leaving those consumers with a soul little choice where to spend their dollars.

The arrival of Wal-Mart doesn't have to spell gloom and doom. In my town, Kmart arrived at the edge of town nearly 30 years ago. They were mostly filling a void left when other mass-marketers, Sears and J. C. Penney, folded their tents and abandoned this town, along with other towns of its size. Wal-Mart is about 40 minutes or one hour away, depending on which direction you drive. More on the plight of this town later. Although an independant retailer will never be able to compete with the prices offered by Wal-Mart and other mass retailers, I believe that Wal-Mart can be defeated on at least two counts...

1) Service. I can tell you about an uncle of mine who owned a guns-and-ammounition shop in Texas. Wal-Mart arrived in town in 1983, and my uncle faced a dilemma: how to compete. It couldn't be on price; the cheapest hunting rifle my uncle stocked could be purchased at Wal-Mart at an even lower price than my uncle's supplier was charging him. The solution seems rather simple: Stop stocking that cheap rifle; you'll never turn a profit on it. He only stocked high-end merchandise, so the price differential between him and Wal-Mart would be small. Next, he expanded some of his services. Most people would agree that the service at Wal-Mart sucks. Indeed, the 24-hour Wal-Mart near here, built five years ago, often resembles the football stadium after being trashed by drunken football fans. My uncle employed a small, but highly knowledgable sales staff, so one could talk to someone who knows about rifles, rather than some apatheitc teenager earning minumum wage for twenty-eight hours a week. He offered a lucrative cleaning and repair service, which wasn't availible at Wal-Mart. Wal-Mart just sells its rifles; the rest is on you. Some of my uncle's clients purchased their rifles at Wal-Mart. Lastly, my uncle had some space on his store's land, so he added a firing range; something you'd never see at Wal-Mart. The firing range was even more profitable than actually selling the rifles. So, my uncle's store became even more profitable after the arrival of Wal-Mart. He even used the service angle in his advertising; something like, "Tried to buy a rifle at Wal-Mart? Didn't like the experience? Come to..."

2) Convenience. Why do you think so-called "convenience stores" turn a profit by mostly selling cigarettes and overpriced merchandice, which could easily be purchased more cheaply at a nearby grocery store? Convenience, which is partly related to location, is what people seem willing to pay for. The other part of convenience is people don't feel like waiting in the long lines at the grocery store. Even Kmart, largely built during the 1960's and 1970's, is often located near places people live, since real estate near urban areas was relatively cheap then. However, for many Americans, a trip to Wal-Mart is an all-day affair. Part of the way Wal-Mart can afford their low prices is that the stores are built near the distribution centers, thus saving on shipping costs. Therefore, you probably have to drive an hour from your home to the middle of Cowshit County to get to Wal-Mart. Particularly on the weekends, you would then have to put up with huge crowds of people walking around an enormous, cavernous store, and stand in a maddeningly slow checkout line when leaving. This is acceptable when buying large quantities of dry goods that are non-perishable and can be easily stored, which is how I shop at Wal-Mart (infrequently), but would be entirely too much trouble for a few, quick purchases. Those are made locally.

Unlike some towns, the arrival of mass-retail stores did not decimate the downtown retail area. It's been a mixed bag, to say the least. Once, it was possible to never leave town for anything you could possibly need. Now, there is no place in town one could buy a bicycle, a pair of men's dress shoes, a ladies' handbag, or a compact disc (other than the "clean" versions sold at Kmart). However, most everything one would buy, from food to lumber to appliances, can be purchased from small retailers, either here or in other towns within a five-mile radius. About half of the 100-year-old storefronts locally house antique stores (mostly antique furniture). It sounds dull, but this business must be highly lucrative, otherwise they could not all possibly exist in the same town. Indeed, they draw a fair amount of tourist traffic from the nearest large city, which is about an hour away. As a result, the old buildings are well maintained after the century's passing. This, and the political and economic reasons this town was built in the first place, have that section of town placed on the National Register of Historic Places. Thus, nothing can be torn down to make way for a Wal-Mart.

There are nasty rumors that an old (1950's) shopping center, located about ten miles away, is due to be razed and replaced with a Wal-Mart. I hope this doesn't happen, but I don't think anything will be lost if it does.

That's Wal-Mart's "Tough Love" Campaign,

Hugh Morris

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