Welcome To Wal-Mart

Back in 1976, on one of our family vacations to visit relatives in Oklahoma, I was introduced to Wal-Mart. We crossed the state line of Oklahoma into Arkansas where my cousins were ecstatic about this store that carried everything. The store was located in Siloam Springs, Arkansas which is within spitting distance of Wal-Mart’s world head quarters. At the time I was not overly impressed with the store. I asked why they didn’t shop at K-Mart. Coming from Ohio, that was the big discount chain at the time.

Fast forward 30 years and you have little old Wal-Mart as the big dog on the block. They have taken out the US competition and now offer low prices on just about everything you would want to buy. They have managed to avoid any relationship with unions, keep prices low, and grow their business. It is simple. Get the things that people want to buy to the shelves where people want to buy it, when they are there to shop. Also, do it at a price they are willing to pay. It’s simple in theory but not always easy to implement. Note the number of retailers that have either gone belly up or tired to; Montgomery Wards and K-Mart among the big names.

Wal-Mart has kept prices low by going where the bargains are and demanding that their target prices are met. They have squeezed their suppliers to make them leaner and continued to wring cost out of the supply chain. When domestic costs do not meet the needs of their customers, they go overseas. This has brought the spotlight on Wal-Mart as a corporation. They are buying from China and other low cost producers to allow Americans to buy at the best price. This makes sense to me but for some reason bothers other Americans. Some US citizens prefer to pay higher prices or at least they seem to enjoy that privilege. Wal-Mart has managed to keep the rest of the retail business honest by keeping prices low. The casualties of this war have been the small “ma and pa” shops that cannot buy enough to get the big cost breaks. I feel bad for the family business that struggled and gave up. But this happens every day. Look at car manufacturers 100 years ago. There were many small businesses out there making automobiles. Some did it well and succeeded and some went by the way side. It is called competition. I guess that is what people are afraid of. They cannot stand to lose so they strike out at the obvious target, those who are successful and try to bring them down. Whether it is unions, environmental groups, or small businesses, they are all looking for a scapegoat for their lack of success. It goes back to a definition I am sure to have used before; “If you always do, what you’ve always done, then you’ll always get, what you always got.” That is not a recipe for success.

Icool

Cobb