Very good argument, WhaleShark. Well thought out and very fair. The only line item I would nitpick at is "moving into a small town and monopolizing the local retail economy."
First, this is called competition. I'm a big proponent of free trade and open markets. Windows received similar criticism and legal prosecution for monopolizing the OS trade in the 90s, but Mac could have fought back by making its systems cost less and negotiating more licensing opportunities. They didn't. Windows ended up dominating the industry and being labeled "evil," all while making home computing ass-cheap and software compatibility prevalent. WalMart has done the same thing, making goods ass-cheap while traditional retailers couldn't, and making goods available in mass quantities.
Second, it is by no means easy for a big box retailer such as WalMart to move into small-town America. In fact, it's damned near impossible to build it in a town where it's unwanted. Here I am going to bore you to death. But read on. I hope the non-politically involved forum-goers will get some insight into what really happens when something like WM wants to move into town.
I'll bet you know about municipal zoning, but others might not. In municipal corporations (villages, towns, cities, hamlets, townships, etc.), the property therein is divided into zones. Some are designated for residential use and corresponding density (in Ohio it is R-1, R-2, and R-3 where R-3 allows the most homes per acre to be constructed and occupied). Some are designated for industrial (I-1, I-2, and I-3). Some are designated for commercial (C-1, C-2, and C-3). Some is designated farmland and wetland and preserve land, etc. Officials, not developers, get to choose where and how large and what restrictions are placed on each zone.
When a corporation like WalMart wants to build (and here I will use a simple statutory example), they must first find a piece of land on which to build. If a city wants to protect its existing retail, it is unlikely they have designated huge, open C-2 and C-3 areas where WM would be at home. If they have, then there are few speed bumps, and WM goes ahead and opens a store.
But if they are protectionist, and they always ALWAYS are, cities will have very small commercial zones. This allows them to screen big companies that want to move in. To get a big enough piece on which to build, WM must first approach a zoning commission with a rezoning request. Then they must approach a planning commission to get preliminary approval for the site plan. Both of those bodies make a recommendation to a building and lands committee, which considers the development proposal and either kills it or forwards it to a city council.
Upon receipt, a city council orders a public hearing, where no vote is made but information is presented and resident concerns are aired. Following that, usually 30 days later, council is given a rough draft of the rezoning proposal. It typically goes through three readings, spaced at least 14 days apart before becoming eligible for formal adoption. At any point along the trip, it can be tabled, killed, nullified, or shuffled back to committee. And that's just for a typical, medium-sized, statutory city! Bigger ones have even more hoops, more committees, more subcommittees, more zoning regulations, and more building codes to cut through!
I'm not trying to be dull. I'm trying to point out that it is near impossible for a retailer like WM to just build and camp out in order to drain a town of its "vibrancy." Officials have the chance every step of the way to turn it down on zoning and site plan grounds for the entirety of what is typically a three-to-four-month (or much longer) process.
And at any time along the way, the public is free to circulate petitions and place a zoning issue on a referendum ballot. That's been done twice here where I live, and both times a WM was defeated.
You think zoning protectionism is bad if you don't let Wal-Mart in? You haven't seen anything yet. In a town near my parents house Walgreens wants to put a pharmacy on a plot where an out of business grocery store currently exists. The owner of the property is more than happy to take rent from Walgreens. The town is still trying to stop it. That's crazy protectionism.
Jason: While I too am generally a fan of the free market, Wal-Mart is in a bit of a unique position, due mostly to their status as the world's largest retailer. The reason Wal-Mart has such cheap goods, other than using factory seconds and having other low-quality/low-cost products, is that many suppliers specifically cut deals for Wal-Mart that they will not cut to other retailers because Wal-Mart guarantees them a large amount of repeat business. Essentially, Wal-Mart is ahead in a game of increasing returns; the bigger they get, the better able they are to manage their resources and to use them effectively. They have a lead that no other retailer can actually close, and it will only ever increase, until they hit a point of actually being a retail monopoly.
I'm all about free-market competition; indeed, the very idea has led to some great technological advancements. However, in Wal-Mart's case, it's very nearly impossible for almost any retailer of any size to actually compete. Coupled with Wal-Mart's jump start is their cutthroat business tactic; while it may be difficult for Wal-Mart to enter a small town that doesn't want them there, it does happen, quite often actually, and Wal-Mart very specifically targets these towns. Most small towns have smaller businesses that simply cannot afford to compete with Wal-Mart, and to top it off, Wal-Mart will also aggressively undercut the prices of local retailers to a point with which they cannot compete. Since the cost of goods to Wal-Mart is almost always lower than for other retailers, they literally cannot compete and remain profitable, and so are eventually forced to fold. It's happened repeatedly in smaller towns across America, which is why you see such a furious fight in current small towns to keep Wal-Mart out.
Now, I'm not saying that aggressive business tactics are necessarily a bad thing. In a highly competitve marketplace, you need to do things like that in order to get ahead. However, once you're on top, and you're staying on top, keeping up those practices is tantamount to bullying, and in the business world, will eventually result in a monopoly, the very antithesis of the free market. There is a point in a David vs. Goliath style match at which David simply cannot win because Goliath is too damn big, and that is quite often the case with Wal-Mart.
Yeah, to add to what WhaleShark says. Let's say you have a fight between David and Goliath. Everyone agrees that Goliath isn't cheating, and is playing completely according to the rules. Nobody is saying that Goliath doesn't have a right to exist or that he's somehow evil. That doesn't mean we're going to root for Goliath or give him any support.
There is a point in a David vs. Goliath style match at which David simply cannot win because Goliath is too damn big, and that is quite often the case with Wal-Mart.
Isn't the whole point that David won? Maybe not the best analogy. ~_^
Perhaps it is because I'm a business major and I'm more tolerant of business practices that others find "evil", but I think the lawnmower salesperson is an idiot. Did he not do any research into Walmart and their target consumers? If it is too expensive of course Walmart isn't going to sell it. Flip it and try to imagine Neiman Marcus selling $20 tennis shoes or Walmart selling $80 designer t-shirts.. it makes no sense. Please do research and avoid wasting people's time..
There is a point in a David vs. Goliath style match at which David simply cannot win because Goliath is too damn big, and that is quite often the case with Wal-Mart.
Isn't the whole point that David won? Maybe not the best analogy. ~_^
Yes, David did win, and the whole point of that story is to show people that it is possible for the little guy to beat the big guy, for someone in a desperate situation to overcome what seems to be an insurmountable challenge.
What I'm saying, by refercing that parable, is that it has a limit. There is simply a certain point at which a fight of "big guy vs. little guy" will always favor the big guy no matter how hard the little guy tries. It would be nice to say that anyone can overcome any hardship/adversity/what have you, but it's simply not reality. It's far better to recognize when a situation is hopeless and attempt to either circumvent the problem or try a different route of attack.
They have a lead that no other retailer can actually close, and it will only ever increase, until they hit a point of actually being a retail monopoly.
This was the same exact fear voiced against Kmart. It didn't hold up. Admittedly, Kmart didn't reach a size or power anywhere near WalMart's.
But there IS competition that is not only surviving, but thriving wildly against WalMart. Many of you have stated that WM doesn't produce the highest quality goods, only the cheapest and most affordable. That's where other retailers are picking up the pieces: Target, Costco, Best Buy, etc. Here is an interesting fiscal comparison of how well some are doing.
And then there are the WM competitors who provide better or unique services: Amazon kicks WM's ass all over the place with online ordering. World Market openly admits that its goods were all made overseas by poor people, and charges a premium for upscale products. Apple is providing music in a much more advanced and easy-to-use way than old CDs. Netflicks et al are quickly proving that their business model can crush traditional video sales. Dillard's and Macy's will always prey on people who want to pay the most to get the best, and they'll provide the best customer service for it. Lowe's and Home Depot have completely locked WM out of the hardware business -- not by whining about WM's unfair advantage, but by providing a huge selection, offering installation at under-contractor prices, and marketing to do-it-yourselfers.
Here is a great article I used as background research a few weeks back when fact-checking a local feature my paper ran. It suggests that because of how economies constantly evolve, even WM isn't immune to shifting market structures. It can't just build its power base and sit on it. If consumers demand something different or better, even WM has to change its strategy. It's not about becoming the biggest and strongest; it's about becoming lithe and flexible.
Uber-critics of WM (and I'm not saying you, WhaleShark, it's the just the logical progression of the argument) always paint this weird vision of a future where we all wear gray jumpsuits issued by our local WM, which has become the only retailer and has branched out to control all aspects of government as well. The see a retail-city-state. But it's just silly. As long as people want something, there will always be someone who can come up with a newer, better idea to provide it than the establishment.
In the next town over from me, New Milford CT, a company bought a big piece of land that was zoned for industrial use. Abutting this property is a section zoned residential that was once zoned industrial.
This residential area was developed about 4 years ago and is full of one acre McMansions.
The company that owns the industrial land adjacent to it wants to either:
a) build and industrial park b) rezone commercial and put in a small mall
The land owners in the residential area are fighting tooth and nail to stop ANYTHING from being built on the adjacent property. They do not want it developed as commercial because of different NIMBY fears AND they do not want it to become an industrial area either!
This confuses me because it is up to YOU, when you buy property, to look at adjacent lots and their zoning.
I think these folks see this adjacent property as something that will decrease their property value when developed and it will destroy the several acres of forest that have grown up on this industrial property that was never developed.
Unless your property abuts a state forest you should not expect that land to stay forest forever.
I live in a very rural area. Two towns in this area were eyed by Wal-Mart. One was my town, and the other was a town 16 miles away. My town had strong opposition, so Wal-Mart went into the town 16 miles down the road. The town that Wal-Mart went into was never quite as economically successful as the town I live in.
A few years later... my town is entirely stagnant while the other town is booming. Our downtown is dead - the other downtown is full of life. (And no, Wal-Mart is not downtown.)
Here is the reality... the local small department store is as realistic as a buggy whip factory. That's life. You can either accept this or fight it. My town fought it, and look where it got us. We have stores closing left and right. Not a single store has closed in the other town. Why? Because they really weren't competing with Wal-Mart. They are stores like nice clothing stores, bookstores, jewelry stores, etc. Heck, even the hardware store is still doing well.
On any given Saturday the town where Walmart is located is full of cars. Many people drive up to an hour just to go shopping there. Those cars used to come to my town.
Walmart is here. Whether or not they are bad is really rather irrelevant. Plenty of people are going to shop there, even if you choose not to. Fighting this reality is like trying to push a cement wall with your bare hands.
I'm about 50 minutes due east of Stowe. Skiing this year has been terrible, although that changed about a week or so ago. We have a decent size ski area near us (2011 vertical feet) that's one of the few hidden gems left. It isn't that busy because no matter where you come from (NY, Boston, Montreal) there are places that are much closer.
I'm a moderate... so it could be worse. But man... this is certainly one heck of a liberal state! Fortunately, I live on the border of Vermont and New Hampshire. If things get too bad, I can hop in the car and breath in the conservative air there.
I've been to Burke Mountain. I grew up in Malone, NY, about 10 minutes from Mt. Titus. With an annual snowfall of about 220 inches, it was usually good skiing. Right now, though, I could ski in my backyard. I just finished shoveling my long-ass driveway and unearthing my cars; it took five hour-long forays to get it finished. My shoulders hurt so much I can barely type.
I've been to Burke Mountain. I grew up in Malone, NY, about 10 minutes from Mt. Titus. With an annual snowfall of about 220 inches, it was usually good skiing. Right now, though, I could ski in my backyard. I just finished shoveling my long-ass driveway and unearthing my cars; it took five hour-long forays to get it finished. My shoulders hurt so much I can barely type.
Christ, Malone? That's really upstate, practically Canada. I grew up in Crown Point, just a bit south of Port Henry.
Yeah, Albany got rocked pretty hard. Roughly 2 feet in a couple of days; I haven't seen a snowfall like this since my childhood back up north.
Yep, Malone, where our two seasons are winter and the Fourth of July. Every year it snows on Halloween and Mother's Day. Malone-ites all hold Canadian citizenship by default and locals are 1/4 Native American and 2/3 polar bear. Our official city flag is an albino penguin on a field of snow. Even our pets wear snow shoes. We laugh in the face of blizzards, but are scared and confused when a strange liquid falls from the sky. At night, we have to circle the wagons to protect against wolves and wampas.
Yep, Malone, where our two seasons are winter and the Fourth of July. Every year it snows on Halloween and Mother's Day. Malone-ites all hold Canadian citizenship by default and locals are 1/4 Native American and 2/3 polar bear. Our official city flag is an albino penguin on a field of snow. Even our pets wear snow shoes. We laugh in the face of blizzards, but are scared and confused when a strange liquid falls from the sky. At night, we have to circle the wagons to protect against wolves and wampas.
Perhaps you should consider investing in a Tauntaun.
I once spent a night nestled in the intestines of a tauntaun. It was only the sharp eyes of John Ratzenberger that saved me from freezing to death. He was all like "open the shield doors!" and the mayor of Malone let me back in.
Wait... are you saying it's evil that Wal-Mart paid $470,000 for a part-time employee's health costs, or are you saying it's evil that she didn't read her contract before signing it?
Wait... are you saying it's evil that Wal-Mart paid $470,000 for a part-time employee's health costs, or are you saying it's evil that she didn't read her contract before signing it?
Yeah, I'm with you Jason. I'm no Wal-Mart fan, but my opinion on this story completely flipped once I read beyond the PR spin headlines.
Also, if you want to point fingers about who is evil, the woman won $1 million and was left with $417,000. HER LAWYERS took $583,000. The lawyers are the ones who victimized this woman most.
[A]re you saying it's evil that she didn't read her contract before signing it?
This libertarian freedom of contract thing can bite you when you least expect it. Before you knee-jerk a "Why, I always read contract before I enter into it. Haaarumph.", can you truthfully say that you read every line of every contract you sign and that you are aware of all the legal ramifications of those contracts?
Her lawyers probably didn't take the whole $583,000. A large portion of that was most likely costs that went to court, depositions, experts. and so forth. Those costs would have been forwarded by the evil lawyers. She wouldn't have had any recovery at all without them.
[A]re you saying it's evil that she didn't read her contract before signing it?
This libertarian freedom of contract thing can bite you when you least expect it. Before you knee-jerk a "Why, of course, I always read contract before I enter into them", can youtruthfullysay that you read every line of every contract you sign and that you are aware of all the legal ramifications of those contracts?
Her lawyers didn't take $583,000. A large portion of that was costs that went to court, depositions, experts. and so forth.
Even if she didn't read the contract, I can still blame the lawyers. If the lawyer's she hired to file suit were really looking out for the woman's best interest, they would have realized that winning the suit meant that Wal-Mart would try to take the other money back. Obviously they overlooked this. Either they didn't care about actually doing what was best for the woman, or they were shitty lawyers and didn't realize.
Well, when and if I go to WalMart, it's usually to buy food, candy, deodorant, or other toiletries. Almost everything else they sell is crap priced (electronics section) or crap quality (clothes).
Comments
First, this is called competition. I'm a big proponent of free trade and open markets. Windows received similar criticism and legal prosecution for monopolizing the OS trade in the 90s, but Mac could have fought back by making its systems cost less and negotiating more licensing opportunities. They didn't. Windows ended up dominating the industry and being labeled "evil," all while making home computing ass-cheap and software compatibility prevalent. WalMart has done the same thing, making goods ass-cheap while traditional retailers couldn't, and making goods available in mass quantities.
Second, it is by no means easy for a big box retailer such as WalMart to move into small-town America. In fact, it's damned near impossible to build it in a town where it's unwanted. Here I am going to bore you to death. But read on. I hope the non-politically involved forum-goers will get some insight into what really happens when something like WM wants to move into town.
I'll bet you know about municipal zoning, but others might not. In municipal corporations (villages, towns, cities, hamlets, townships, etc.), the property therein is divided into zones. Some are designated for residential use and corresponding density (in Ohio it is R-1, R-2, and R-3 where R-3 allows the most homes per acre to be constructed and occupied). Some are designated for industrial (I-1, I-2, and I-3). Some are designated for commercial (C-1, C-2, and C-3). Some is designated farmland and wetland and preserve land, etc. Officials, not developers, get to choose where and how large and what restrictions are placed on each zone.
When a corporation like WalMart wants to build (and here I will use a simple statutory example), they must first find a piece of land on which to build. If a city wants to protect its existing retail, it is unlikely they have designated huge, open C-2 and C-3 areas where WM would be at home. If they have, then there are few speed bumps, and WM goes ahead and opens a store.
But if they are protectionist, and they always ALWAYS are, cities will have very small commercial zones. This allows them to screen big companies that want to move in. To get a big enough piece on which to build, WM must first approach a zoning commission with a rezoning request. Then they must approach a planning commission to get preliminary approval for the site plan. Both of those bodies make a recommendation to a building and lands committee, which considers the development proposal and either kills it or forwards it to a city council.
Upon receipt, a city council orders a public hearing, where no vote is made but information is presented and resident concerns are aired. Following that, usually 30 days later, council is given a rough draft of the rezoning proposal. It typically goes through three readings, spaced at least 14 days apart before becoming eligible for formal adoption. At any point along the trip, it can be tabled, killed, nullified, or shuffled back to committee. And that's just for a typical, medium-sized, statutory city! Bigger ones have even more hoops, more committees, more subcommittees, more zoning regulations, and more building codes to cut through!
I'm not trying to be dull. I'm trying to point out that it is near impossible for a retailer like WM to just build and camp out in order to drain a town of its "vibrancy." Officials have the chance every step of the way to turn it down on zoning and site plan grounds for the entirety of what is typically a three-to-four-month (or much longer) process.
And at any time along the way, the public is free to circulate petitions and place a zoning issue on a referendum ballot. That's been done twice here where I live, and both times a WM was defeated.
I'm all about free-market competition; indeed, the very idea has led to some great technological advancements. However, in Wal-Mart's case, it's very nearly impossible for almost any retailer of any size to actually compete. Coupled with Wal-Mart's jump start is their cutthroat business tactic; while it may be difficult for Wal-Mart to enter a small town that doesn't want them there, it does happen, quite often actually, and Wal-Mart very specifically targets these towns. Most small towns have smaller businesses that simply cannot afford to compete with Wal-Mart, and to top it off, Wal-Mart will also aggressively undercut the prices of local retailers to a point with which they cannot compete. Since the cost of goods to Wal-Mart is almost always lower than for other retailers, they literally cannot compete and remain profitable, and so are eventually forced to fold. It's happened repeatedly in smaller towns across America, which is why you see such a furious fight in current small towns to keep Wal-Mart out.
Now, I'm not saying that aggressive business tactics are necessarily a bad thing. In a highly competitve marketplace, you need to do things like that in order to get ahead. However, once you're on top, and you're staying on top, keeping up those practices is tantamount to bullying, and in the business world, will eventually result in a monopoly, the very antithesis of the free market. There is a point in a David vs. Goliath style match at which David simply cannot win because Goliath is too damn big, and that is quite often the case with Wal-Mart.
What I'm saying, by refercing that parable, is that it has a limit. There is simply a certain point at which a fight of "big guy vs. little guy" will always favor the big guy no matter how hard the little guy tries. It would be nice to say that anyone can overcome any hardship/adversity/what have you, but it's simply not reality. It's far better to recognize when a situation is hopeless and attempt to either circumvent the problem or try a different route of attack.
But there IS competition that is not only surviving, but thriving wildly against WalMart. Many of you have stated that WM doesn't produce the highest quality goods, only the cheapest and most affordable. That's where other retailers are picking up the pieces: Target, Costco, Best Buy, etc. Here is an interesting fiscal comparison of how well some are doing.
And then there are the WM competitors who provide better or unique services: Amazon kicks WM's ass all over the place with online ordering. World Market openly admits that its goods were all made overseas by poor people, and charges a premium for upscale products. Apple is providing music in a much more advanced and easy-to-use way than old CDs. Netflicks et al are quickly proving that their business model can crush traditional video sales. Dillard's and Macy's will always prey on people who want to pay the most to get the best, and they'll provide the best customer service for it. Lowe's and Home Depot have completely locked WM out of the hardware business -- not by whining about WM's unfair advantage, but by providing a huge selection, offering installation at under-contractor prices, and marketing to do-it-yourselfers.
Here is a great article I used as background research a few weeks back when fact-checking a local feature my paper ran. It suggests that because of how economies constantly evolve, even WM isn't immune to shifting market structures. It can't just build its power base and sit on it. If consumers demand something different or better, even WM has to change its strategy. It's not about becoming the biggest and strongest; it's about becoming lithe and flexible.
Uber-critics of WM (and I'm not saying you, WhaleShark, it's the just the logical progression of the argument) always paint this weird vision of a future where we all wear gray jumpsuits issued by our local WM, which has become the only retailer and has branched out to control all aspects of government as well. The see a retail-city-state. But it's just silly. As long as people want something, there will always be someone who can come up with a newer, better idea to provide it than the establishment.
In the next town over from me, New Milford CT, a company bought a big piece of land that was zoned for industrial use. Abutting this property is a section zoned residential that was once zoned industrial.
This residential area was developed about 4 years ago and is full of one acre McMansions.
The company that owns the industrial land adjacent to it wants to either:
a) build and industrial park
b) rezone commercial and put in a small mall
The land owners in the residential area are fighting tooth and nail to stop ANYTHING from being built on the adjacent property. They do not want it developed as commercial because of different NIMBY fears AND they do not want it to become an industrial area either!
This confuses me because it is up to YOU, when you buy property, to look at adjacent lots and their zoning.
I think these folks see this adjacent property as something that will decrease their property value when developed and it will destroy the several acres of forest that have grown up on this industrial property that was never developed.
Unless your property abuts a state forest you should not expect that land to stay forest forever.
A few years later... my town is entirely stagnant while the other town is booming. Our downtown is dead - the other downtown is full of life. (And no, Wal-Mart is not downtown.)
Here is the reality... the local small department store is as realistic as a buggy whip factory. That's life. You can either accept this or fight it. My town fought it, and look where it got us. We have stores closing left and right. Not a single store has closed in the other town. Why? Because they really weren't competing with Wal-Mart. They are stores like nice clothing stores, bookstores, jewelry stores, etc. Heck, even the hardware store is still doing well.
On any given Saturday the town where Walmart is located is full of cars. Many people drive up to an hour just to go shopping there. Those cars used to come to my town.
Walmart is here. Whether or not they are bad is really rather irrelevant. Plenty of people are going to shop there, even if you choose not to. Fighting this reality is like trying to push a cement wall with your bare hands.
So, how far are you from Stowe? Good skiing there this year?
I'm a moderate... so it could be worse. But man... this is certainly one heck of a liberal state! Fortunately, I live on the border of Vermont and New Hampshire. If things get too bad, I can hop in the car and breath in the conservative air there.
Here's the latest snowfall forecast:
I'm firmly in the 16-26 inch zone.
Here's the view from the local ski area:
This storm is living up to the hype. We've gotten over a foot, with plenty of storm left. The blizzard warning doesn't expire for 13 hours.
I feel like I'm back home in Michigan.
Yeah, Albany got rocked pretty hard. Roughly 2 feet in a couple of days; I haven't seen a snowfall like this since my childhood back up north.
Her lawyers probably didn't take the whole $583,000. A large portion of that was most likely costs that went to court, depositions, experts. and so forth. Those costs would have been forwarded by the evil lawyers. She wouldn't have had any recovery at all without them.