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#169581 - 11/17/04 10:06 AM Ah Ha! Did you catch Frontline last night?
MALIBU Offline
If your PBS station didn't pick up the Frontline story on Wal-Mart you should call or email them right now and ask them to get it.

GO TO http://www.pbs.org/wgbh/pages/frontline/shows/walmart/
TO CHECK THIS OUT. All the interviews are on this site.

Here are some tid bits:

This, from a former Wal-Mart manager: Jon Lehman worked for Wal-Mart for 17 years, managing six stores in four different states before he left the company in 2001.

"So you go to Wal-Mart, and you're looking for a lawn mower, and to your delight, you walk in, and you see this $99 lawn mower. You may not want a cheap, basic lawn mower, but you see that price point on an end cap or a big display stack base, and you say, "Wow, what a great price." And it draws you in. It lures you into the department, and you form the perception immediately that "Hey, Wal-Mart's got the lowest prices in town. Look at this item right here. How could they sell it for $99?" ...

But as you walk into the department and look for that $269 power-drive lawn mower that you really are after, they're not losing money on that item. And it may not be the lowest price in town. Wal-Mart used to advertise "Always the low price." They don't do that anymore.

Because? (interviewer)

They got in trouble. Some of the other competitors sued them, tried to go after them and say, "You can't say 'Always the low price,' because you're not always the low price." They did a study -- a very critical study, very thorough study -- and found that Wal-Mart was not always the low price. And Target and Kmart got a little miffed, and some other competitors that [said], "How can Wal-Mart advertise this and it's not true?"

(Interviewer) So what you're saying is Wal-Mart, when it says, "Always low prices," it's not always the lowest price on every lawn mower or every microwave oven or every vacuum cleaner or every TV set.

Absolutely not."


(Walmart Manager) "But it's my understanding, through listening to buyers from [Wal-Mart's headquarters in] Bentonville, [Ark.] that buy the merchandise -- for example, electronics buyers -- they visit these factories; they visit the manufacturers. They want to look in their books; they want to look at the cost of manufacturing, the cost of packaging, the cost of shipping, the cost of production. All of those things are factored in, and Wal-Mart wants to see all that. ...

Well, take a case like Rubbermaid. There was a very, very well-known American company. They're making all kinds of products, office products, in-and-out trays and garbage cans and all kinds of things in plastics and so forth. And they got into quite a confrontation [with Wal-Mart]. Who's in charge at that point? Was Rubbermaid selling stuff to Wal-Mart, or was Wal-Mart dictating terms of what it wants to buy? ...

... Wal-Mart puts the pressure on these manufacturers to: "Come in here and sell me the same merchandise you sold me last year, but sell it at a reduced cost. And we know you can sell it to us at a reduced cost, because we've been to your factory. We've seen your books. We've seen your cost of product, cost of shipping," so on and so forth, "your wage cost." They look at all that, and they call it "partnership."

Rubbermaid had a situation they got into with the cost of resin to produce their product. Rubbermaid tried to communicate that there was a price increase in the cost of raw materials that it took to make these totes and storage containers that they sold at Wal-Mart.

And the buyers at Wal-Mart -- my understanding is that the buyer said: "No way. You're not going to raise your cost. If you can't sell it to us for the same price or less than you did last year, we'll find somebody else. We'll go to another company." And that's what Wal-Mart tried to do, and it really hurt Rubbermaid.

The communication is one way: It's our way or the highway. You do it our way, or you hit the highway. We'll find somebody else.
Why can't a Procter & Gamble or a Rubbermaid or a Huffy Bicycle or almost anybody, why can't they just say, "Look, we're not going to do it at this price"? This is Rubbermaid, after all. At the time, they were the most admired company in America. Why can't they just say: "I'm sorry. We're not doing it that way"? What gives Wal-Mart the ability to, as you put it, dictate the terms?

... Well, what's happening across America is Wal-Mart is eliminating competition. ... Wal-Mart is extremely fine-tuned on their ... pricing policies. ...

What do you mean... ?

... As a store manager, I'll give you an example. Memorial Day, I'd go out to the local competition and look at the price of, say, for example, ketchup, mustard, relish, mayonnaise. And if my competitor lowballed me on a price, if they undercut me on, say, Heinz ketchup, then what I would do is I'd come back and say, "OK, you're going to play with me on Heinz ketchup?" The company's policy that I followed was that "OK, I'll take it, and I'll match the price." OK? I'll match the price.

Then I would go back and check it the next day or the following day at the same competitor. And if they'd lowered their price again, then I'd come back, and I would lower my price 5 percent under their price, plus I'd hit five more items in that category. So I would not only take the ketchup; I'd take mayonnaise, mustard, relish, whatever was there, five other items in that same category, as if to say: "Don't mess with me. I'll come after you."

But isn't that good for the consumer? Isn't that exactly what Wal-Mart says it's doing? Isn't that American competition in the free market?

Well, it depends on what you describe as good. Good for the consumer? Maybe in the short run, but in the long run, no.

Why not?

Well, because for Wal-Mart to be able to do that, if they're selling merchandise at these ridiculously low prices ... then there's a cost to that. And the cost in America is the low-paid American domestic workers that Wal-Mart has. They pay their people a poverty-level wage.

And also, by doing this ... they're really hurting the competition. Competition is supposed to be good for you, like you said. Competition is supposed to be good for consumers. But what ends up happening, I think, is if you don't have a level playing field ... then you eliminate competition. ...


GO TO http://www.pbs.org/wgbh/pages/frontline/shows/walmart/
TO CHECK THIS OUT. All the interviews are on this site.


#169582 - 11/17/04 11:05 AM Re: Ah Ha! Did you catch Frontline last night?
CrackerLarry Offline
The Shrade knife company just went out of business after 103 years of knifemaking. Walmart was their main distributor for the last several years. Wonder if it is for related reasons?

Did you also hear that Sears and Kmart are merging? 11 billion $ deal.

#169583 - 11/17/04 11:19 AM Re: Ah Ha! Did you catch Frontline last night?
MALIBU Offline
cl, I was floored about the 'China Syndrome', as I am now calling it. Did you go to the link and read about this stuff? I knew tidbits of this, and frankly still only know just a little more tidbits about all this. I am fuming and I don't know what to do about it. What can we do? When Wal-Mart sides against America, the American people/workers, what exactly is one to do? How can we fix this?

law cuchi what do you think on all this.......

#169584 - 11/17/04 11:53 AM Re: Ah Ha! Did you catch Frontline last night?
Denny Shane Offline
Well, the way to get the attention of a company is to hit them where it hurts... the pocketbook. Unfortunately many Americans moan and groan about Walmart putting people just like Shrade Knife out of business... but these same Americans actually shop at Walmart.

When I first heard about Kmart and Sears, I honestly thought Sears was buying Kmart... little did I realize that bankrupt Kmart was BUYING Sears... eek

#169585 - 11/17/04 11:58 AM Re: Ah Ha! Did you catch Frontline last night?
SP Daily Offline
Sears was strangling its suppliers over 50 years ago, back when the US was still a free market economy. How times (and attitudes) have changed!

#169586 - 11/17/04 12:00 PM Re: Ah Ha! Did you catch Frontline last night?
ChrisW Offline
The traditional solution is to get rid of free trade (IE the opposite direction the US has been heading in). Remember Ross Perot and "that giant sucking sound" of jobs being lost overseas.

Free trade means that all workers around the globe will eventually earn approximately equal wages. IE your average factory worker in the US will earn the same as one in Mexico or one in China. This happens in a herky jerky fashion as employers seek out the lowest priced labor around the world and countries with high unemployment eventually respond by cutting wages (typically via inflation) to attract jobs.

Obviously, for some countries this will mean a rise in the standard of living and for others it will mean a decrease in the standard of living. Guess which side of the fence the US is sitting on?

Note: this use to be a problem just for blue collar workers, but now with advances in global communication systems. It is also taking a bite out of white collar workers as well...

Meanwhile enjoy your cheap imports while you still have a job to pay for them or find yourself a job that can't be easily exported... frown

In my opinion, the problem is not that Wal-Mart is squeezing its suppliers. This is generally healthy...low prices for consumers and efficient suppliers. If one goes out of business, it is replaced by a more efficient one. The problem is that the most efficient suppliers are currently overseas.

#169587 - 11/17/04 12:06 PM Re: Ah Ha! Did you catch Frontline last night?
MALIBU Offline
The ONLY job I can immediately think of that cannot be exported is a hairdresser.

I would think my job, mortgage banking, is OK however I am afraid it isn't. With the internet and people getting home loans on it now, I don't see why the Chinese can't take my job.

Where did I put that number to the local beauty collage...... eek

#169588 - 11/17/04 12:20 PM Re: Ah Ha! Did you catch Frontline last night?
Sir Isaac Newton Offline
What can we do? When Wal-Mart sides against America, the American people/workers, what exactly is one to do? How can we fix this?
In four years, vote for the Democrats.

Check out my site: www.ambergriscayerealestate.net

#169589 - 11/17/04 12:22 PM Re: Ah Ha! Did you catch Frontline last night?
Malibu, Here's what I think:
I think that what I think is not very important - at least on this topic in this forum. What I think about walmart is very little likely to change what anyone else thinks about walmart and vise versa. I also think that in general arguments with people I don't know and who don't know me on topics that require a fair amount of insight and thoughtful evaluation are pretty much a waste of everyone's time. I also think when I get to Texas for the big Partee, I am going to win most, if not all, of the best prizes.

#169590 - 11/17/04 12:24 PM Re: Ah Ha! Did you catch Frontline last night?
dogmatic prevaricator Offline
casino positions and prositution would probably be keepers
If you must choose between two evils, pick the one you've never tried before.

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