Hey Wal-Mart, who's kidding who here?
Filed under: Budgets, Shopping
Wal-Mart has been running television advertisements lately trumpeting the assertion that they save the average American family something like $2,200 per year. At first I just let the promotion blow right over my head but on a recent trip to our closest Wal-Mart (about 40 miles away) I took a few moments to think about their promotion because my wife and I found ourselves saying "we can get that cheaper at home." First off, those Wal-Mart dudes have a lot of gall assuming that they know exactly what price every other retailer on the planet is charging for the same items they have stocked in their Wal-Mart stores. Secondly, it's more than a bit arrogant for Wal-Mart to assume that every item purchased in their stores is a must have item which a person will immediately find another retail source for if Wal-Mart doesn't sell it to them. That would be the only way they could have a valid claim about how much money their pricing saves for anyone.
I live in a region with a population small enough that once Wal-Mart stores become entrenched in an area, their level of retail competition drops to nearly zero and in light of that I have noticed a particularly interesting dynamic. It seems that where Wal-Mart has a captive audience such as is the case here in the northern most regions of Wisconsin, once the competition dies out, Wal-Mart's prices become conspicuously similar to or even higher than the prices of the retailers they drove under. I don't care what anybody says: that's a mode of operation similar to the way Al Capone and his boys did business in Chicago.
The deal goes like this: You come in low priced, undercut the competition until they starve out and then set your price points wherever you'd like to because you've become the only game in town.
Sam Walton must be rolling in his grave.
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Reader Comments (Page 1 of 1)
12-17-2007 @ 11:42AM
Tracy Coenen said...
Gary - Like it or not, Wal-Mart is the reason that prices at other stores are as low as they are. Wal-Mart has successfully caused prices to stay low on a wide scale. I don't personally shop at Wal-Mart, but they are (at least in part) responsible for the prices I get at other stores.
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12-17-2007 @ 12:48PM
jrk said...
Tracey..I'm pretty sure that if you don't shop at Wal-Mart then you shouldn't make comments to others who do. This is classic economics/business school learning. OF COURSE Wal-Mart drives out the competion and then moves up their prices. That is why so many small towns are against a Wal-Mart moving in. I have had several friends who worked for Wal-Mart and every one of them quit because they felt Wal-Mart had seedy business practices. I hope Sam Walton is rolling in his graves and his family should be ashamed of themseleves!
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12-18-2007 @ 5:03PM
gt2378b said...
I don't fight in Iraq; can I have an opinion about it?
12-17-2007 @ 12:55PM
Tracy Coenen said...
Could you cite an example of a store in which prices were raised following a "driving out" of competition?
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12-17-2007 @ 4:27PM
Aspen said...
I shop a a number of Wal-mart stores and the prices are the same. Your theory about driving the competition away and then jacking up the prices must be supported with concrete evidence before I will believe it.
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12-20-2007 @ 11:11AM
KB said...
I think Wal-Mart is right. They probably do save peole that much money. My local wal-mart goes to another chain grocery store and buys items. THen they buy the same items in the wal-mart. THey post the recpts side by side and the one from Wal-Mart is always cheaper. The groceries there are ALWAYS cheaper. Also, an item my daughter wanted for Christmas was $22 at Target and $18 at Wal-Mart. Things are almost always cheaper there. However, the items I will not buy from them are meats, produce and clothes.
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12-20-2007 @ 12:17PM
sarah said...
I hate walmart but I shop there because their prices are cheaper on a lot of things. But I live within 5 miles of three different walmarts and the prices are different at each walmart. Like frozen pizza or milk or even bacon. But there are somethings like gatorade that I can get at target (which is only 2 mins away from my house) for 1.67 not on sale and on sale 1.55 at walmart regular price is 1.92. I think that walmarts need to be a lot cleaner than they are. I dont think that they clean nearly as much as publix or target does.
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12-23-2007 @ 2:14PM
Sherri said...
The only thing that is american at walmart is the Christmas trees. The poor mom and pop stores out of business because we the american poeple want to save a buck. What is going to happen to our kids everyone in the family is going to be working in slave warehouses. Buy american and support your ancestors
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12-25-2007 @ 1:04AM
Kelly said...
I think that Walmart certainly has the lower prices on most items. If I were to shop at Publix grocery store (which I do) for most of my items, I would come out spending a heck of a lot more than shopping at Walmart. I do not agree with all of Walmarts standards but when it comes to saving money for my family, I will shop at Walmart. The meat has been a lot better, still like to shop where I can ask the butcher for a certain peice but really they are cheaper. You may spend a little more on an item at Walmart as they do not really have such good sales as other stores but all in all you come out saving a lot more money.
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