Wal-Mart Raising Prices (Now that they've killed off the competition)

[L.A. BRONCOS FAN]

Wal-Mart Quietly Raises Prices

By JONATHAN BERR Posted 11:30 AM 08/10/10



Wal-Mart Stores (WMT), which for years has touted its prowess at lowering prices, has been doing the opposite as it tries to bolster its bottom line amid stagnating sales.

A JPMorgan Chase (JPM) study of a Walmart Supercenter in Virginia found that the world's largest retailer has raised prices by nearly 6% on average over the past six weeks, according to the New York Post. Reuters says it was the biggest sequential increase since JPMorgan started the study in January 2009.

Some Prices Hiked Over 60%

Some of the price hikes were considerably larger. For instance, the price of a 32-ounce bottle of Windex household cleaner jumped 50%, a 12-ounce box of Quaker Oats instant grits climbed 65% and a 50-ounce container of Tide detergent rose by more than 50%. A spokesperson for the Bentonville, Ark., company could not immediately be reached for comment.

The results of the price-hike study aren't entirely surprising. Shares of Wal-Mart, which rose at the height of the recent recession, are down more than 2% this year amid lackluster performance at its U.S. stores, where same-store sales fell 1.1% during the 13 weeks ended April 30. When Wal-Mart announced a revamping of the management team overseeing these stores, including the departures of CEO and President of Wal-Mart U.S. Eduardo Castro-Wright and Chief Merchandising Officer John Fleming, current Wal-Mart U.S. CEO Bill Simon bluntly said, "our mandate is clear: increase customer traffic, make sure our products are relevant to our customer and never give an inch on price leadership."

Unfortunately for Wal-Mart, keeping prices low is tough with less store traffic. To make matters worse, rivals appear to be doing better. Target (TGT) reported a 2% gain in July same-store sales, which are a key metric for retail investors. Kohl's (KSS) reported a 4.1% gain. Wal-Mart stopped releasing monthly same-store sales figures for its units last year, so making an apples-to-apples comparison is difficult.

Narrowing Its Lead in the Low-Price Wars


Wal-Mart is also under assault in the grocery aisle -- one of the areas it has aggressively expanded over the last few years. As the Post notes, "Although Walmart still has lower prices on key groceries and staples compared to mainstream supermarkets, its lead is narrowing -- to 10.4% last month from 16% in June." The grocery business is noted for its low margins and fierce competition. Even niche players like Whole Foods Market (WFMI) cut prices by 0.7% in July, the paper says.

Theoretically, this should be Wal-Mart's moment to shine. U.S. consumer confidence in July was at its lowest point since February. People still want low prices. Unfortunately for Wal-Mart, they just would rather shop at other stores.

[L.A. BRONCOS FAN]

"My friend grew up in a small town that had a thriving downtown area back in the '60s and '70s -- butcher, baker (no candlestick maker), supermarket, hardware store, appliance store, florist shop, etc., -- all profitable businesses owned by people who lived in the town and hired local people at reasonable wages.

Then Walmart moved in about 15 years ago -- well, they actually built about a mile outside of town to avoid paying local taxes. It was uncanny -- every week in the local paper if the hardware store had a sale on, say, Stanley tools, or the supermarket put grapes on sale, Walmart would have a big ad with the same items on sale for much less, as in 50 or 60 percent less.

Eventually, unable to compete, all of the local stores went out of business and the downtown area is now a deserted ghost town except for a coffee shop that's still open. So now, everyone in the area is forced to shop at Walmart whether they like it or not, or drive 35 miles to shop at another big box store.

Any surprise that there are no more 50 and 60 percent off sales, they pay the help barely-get-by minimum wage, or that prices for everything at the Walmart have been gradually rising since they killed off the competition?"

- Rick

BTW, the local weekly paper closed its doors, too -- apparently ad revenue from Walmart
wasn't enough to keep it in business.

Just another dismal tale from the front lines of our Republican 'free market' economy.

[That One Guy]

So, band together and stop shopping there.

I have a slightly different little story though.

In my mom and dad's hometown, there used to be this awesome little cafe that did all you can eat fried fish on Thursdays. It was great food and you could get something like a bowl of fried mushrooms for a buck or two. Every Thursday, it was lunch. Then the cafe had to shut down because of Wal-Mart.

No, Wal-Mart didn't compete with them - the owner who ran the place needed to go work at Wal-Mart so she could get cheap health insurance as she or her husband (don't remember which exactly) came down with some health issues.

Not saying I love Wal-Mart but there will always be a double edged sword here. Why can't these small towns come together and avoid Wal-Mart though if that's what you want? Why do people spend so much time talking about how terrible they are yet it's their first stop when they need something?

[Mr.Meanie]

Then don't shop there. Pretty simple...

[Garcia Bronco]

I shop there once a year on average and buy like one thing. Two years ago it was a 5 gallon water jug for camping and last year a cooler for camping....oh and a tarp.

[Rohirrim]

Everbody is raising prices: Insurance, banks, stores, cable, telecoms, etc. In fact is was reported that the big six health insurers are raising their prices by an average of 39% and spreading out 200 billion in raises among their executives. Times are good. Time to sheer the sheep. Fortunately, we have been able to get rid of all those tiresome government regulations over the last thirty years and give the free market a chance to work. Don't worry. Everything will find its own value, and its own level, just as the free market decides. It will be great.

One thing I've learned about the crazy apes; They don't scream until it's their tit in the vise.

[That One Guy]

Originally Posted by Rohirrim

Everbody is raising prices: Insurance, banks, stores, cable, telecoms, etc. In fact is was reported that the big six health insurers are raising their prices by an average of 39% and spreading out 200 billion in raises among their executives. Times are good. Time to sheer the sheep. Fortunately, we have been able to get rid of all those tiresome government regulations over the last thirty years and give the free market a chance to work. Don't worry. Everything will find its own value, and its own level, just as the free market decides. It will be great.

One thing I've learned about the crazy apes; They don't scream until it's their tit in the vise.

I really have to ask who you're attempting to insult and... generally.. what you're even rambling about.

I think you're crying about Bush policies again but... he's not the president so I don't know what he can do about anything.

Completely lost, I think this might've just been a ramble post.

[cutthemdown]

Really? Target IMO competes with them on a ton of prices.

[cutthemdown]

What stores did walmart put out of biz? Fedmart, Gemco and all those stores were put out by target and some others in the late 80's right? There is nothing wrong with Walmart. If something there too expensive buy it somewhere else.

[cutthemdown]

Originally Posted by Garcia Bronco

I shop there once a year on average and buy like one thing. Two years ago it was a 5 gallon water jug for camping and last year a cooler for camping....oh and a tarp.

I wander in a buy things there a few times a yr. Household cleaners, paper towels etc etc. But most of the time I just shop at Costco. Really those places probably put out other businesses as well.

[That One Guy]

Also, anyone that argues for Free Trade and against Wal-Mart is ignorant.

Free trade means anything is fair game and whoever produces the best product for the lowest price wins. Everyone isn't held to a single set of rules and can generally use any advantage they can gain over the opponent.

Wal-Mart is hated because they generally have the best products at the lowest prices and will use just about any legal means to gain an advantage over their opposition.

What's the big difference?

[Garcia Bronco]

Originally Posted by cutthemdown

I wander in a buy things there a few times a yr. Household cleaners, paper towels etc etc. But most of the time I just shop at Costco. Really those places probably put out other businesses as well.

It's a tough world no matter what you do and really it's good to have sharp elbows whether you are WalMart or a snow cone salesmen

[Doggcow]

Capitalism is horrible.

[Rohirrim]

Putting aside the morality of forcing people to work in slave-like conditions, the so-called free market does not exist in China when it comes to wages. China artificially suppresses wages by anywhere from 47 to 85 percent below what they should be,according to the AFL-CIO's complaint about China's labor policies filed with the United States Trade Representative last year. With Wal-Mart as its willing customer, an authoritarian regime ruthlessly warps the market for wages by enforcing a system that controls where people can work and imprisons and tortures people who attempt to organize real unions or strike. Maybe the rock-bottom labor costs are really behind Wal-Mart’s slogan “always low prices,” but the company is certainly not an example of how to win in a free market economy.

It’s easy to see why Wal-Mart and its conservative defenders discard ideology: money. By ignoring free market principles, the left-wing Harvard Business School estimates that Wal-Mart reduces its procurement costs by 10-20 percent, primarily by taking advantage of the artificially suppressed labor market in China. One can’t help note the delicious irony that Wal-Mart’s “free market” leadership is powered by an authoritarian regime that still refers to itself as communist.

Back at home, Wal-Mart’s free market mantra stops at the water’s edge of the public till. By one estimate, Wal-Mart has pulled in $1.5 billion dollars in taxpayer funded subsidies (see www.walmartwatch.com) . And that's at the low end, because subsidies are sometimes hard to track based on the lack of public reporting requirements. Wal-Mart is happy to cash in on government largess like property tax abatements, infrastructure support, free land and just straight-out cold cash—all of which are the antithesis of “free market” ideology.
http://www.tompaine.com/articles/wal...et_fallacy.php

[That One Guy]

Originally Posted by Rohirrim

Putting aside the morality of forcing people to work in slave-like conditions, the so-called free market does not exist in China when it comes to wages. China artificially suppresses wages by anywhere from 47 to 85 percent below what they should be,according to the AFL-CIO's complaint about China's labor policies filed with the United States Trade Representative last year. With Wal-Mart as its willing customer, an authoritarian regime ruthlessly warps the market for wages by enforcing a system that controls where people can work and imprisons and tortures people who attempt to organize real unions or strike. Maybe the rock-bottom labor costs are really behind Wal-Mart’s slogan “always low prices,” but the company is certainly not an example of how to win in a free market economy.

It’s easy to see why Wal-Mart and its conservative defenders discard ideology: money. By ignoring free market principles, the left-wing Harvard Business School estimates that Wal-Mart reduces its procurement costs by 10-20 percent, primarily by taking advantage of the artificially suppressed labor market in China. One can’t help note the delicious irony that Wal-Mart’s “free market” leadership is powered by an authoritarian regime that still refers to itself as communist.

Back at home, Wal-Mart’s free market mantra stops at the water’s edge of the public till. By one estimate, Wal-Mart has pulled in $1.5 billion dollars in taxpayer funded subsidies (see www.walmartwatch.com) . And that's at the low end, because subsidies are sometimes hard to track based on the lack of public reporting requirements. Wal-Mart is happy to cash in on government largess like property tax abatements, infrastructure support, free land and just straight-out cold cash—all of which are the antithesis of “free market” ideology.
http://www.tompaine.com/articles/wal...et_fallacy.php

As long as those are the world conditions, Wal-Mart isn't doing anything unethical or illegal. What would you really expect Wal-Mart to do, avoid employing in those areas on moral grounds?

Wal-Mart is as free market as every other good we import from China. As long as we're importing Chinese made crap, why can't the Waltons be on the receiving end of the profits? Better than a Chinese company getting them.

[Pony Boy]

But Hillary Clinton loves Wal-Mart and you liberal loons love Hillary

[Rohirrim]

Originally Posted by That One Guy

As long as those are the world conditions, Wal-Mart isn't doing anything unethical or illegal. What would you really expect Wal-Mart to do, avoid employing in those areas on moral grounds?

Wal-Mart is as free market as every other good we import from China. As long as we're importing Chinese made crap, why can't the Waltons be on the receiving end of the profits? Better than a Chinese company getting them.

I'm not saying Walmart can't rationalize this. I'm not saying the right wing ideologues can't rationalize this right into the realm of their free market fantasy. Hell, if there is one thing us humans are the masters at, it's rationalizing our ethics. Sure, Walmart is making profit off of slave labor. But if Walmart wasn't doing it, somebody else would. It's all good.

And if such policies move American jobs to China, hey, that's just free market principles working on a global scale and we benefit by having cheaper products to buy. They better be cheap, because pretty soon, we'll all be out of work.

[spdirty]

I love it when new Wal Marts pop up. Just got a 30K check for putting the signs up at the Wal Mart on 128th and Quebec. Only thing I have against em is they use that stupid cheap ass U-Channel **** for their sign posts. Looks like crap and they're a pain in the ass to install.

[L.A. BRONCOS FAN]

Originally Posted by Mr.Meanie

Then don't shop there. Pretty simple...

That's all well and good for those of us who live in larger cities, but what about those people who live in smaller communities where Wal-Mart has put all the local competition out of business?

[L.A. BRONCOS FAN]

Originally Posted by Pony Boy

But Hillary Clinton loves Wal-Mart and you liberal loons love Hillary

Hillary Clinton isn't a liberal - more like center-right republican light.

Bill Clinton, FWIW, worked hard to encourage Wal-Mart to buy American - and he was successful in large part. Then, when Bush came along, all of our manufacturing ended up going to China and elsewhere, and the rest is shameful history...

[DenverBrit]

I've never stepped inside a Wal-Mart.

The 'People-of-Wal-Mart' scare me.

http://www.peopleofwalmart.com/?page_id=9804

[spdirty]

Originally Posted by L.A. BRONCOS FAN

That's all well and good for those of us who live in larger cities, but what about those people who live in smaller communities where Wal-Mart has put all the local competition out of business?

If the local competition is put out of business by Wal Mart, they can go work at Wal Mart.

When the "local competition" contracts my company to install their signs, and not just piddly ass 1-2K jobs, but 30-40K jobs I might start giving a ****. Oh. And when the local competition pays their contractors as well and fast as Wal Mart. Unlike the crooks who own Southglenn who still owe their prime 3.5 mil.

Wal Mart right now is our saving grace. When every other contractor is slow as hell at paying, Wal Mart and their prime contractor came through. When everyone else takes at least 90 days after invoice to pay their contractors and subs, Wal Mart paid us in 35.

When most other companies are sitting on their money, Wal Mart is out building new Wal Marts everywhere they can, shelling out a ton of money to struggling builders, pavers, and helping construction companies keep their people employed, while helping the economy by actually CREATING more and more jobs everywhere they go.

And as long as Target is still out there, Wal Mart and their prices will remain reasonable. Jump your prices up too much people will go somewhere else.

[broncocalijohn]

Originally Posted by L.A. BRONCOS FAN

That's all well and good for those of us who live in larger cities, but what about those people who live in smaller communities where Wal-Mart has put all the local competition out of business?

Kinda like those supermarkets back in the day, huh? I guess as long as it is union jobs knocking out the Mom and Pop shops, then it is ok.

[Spider]

Originally Posted by spdirty

If the local competition is put out of business by Wal Mart, they can go work at Wal Mart.

When the "local competition" contracts my company to install their signs, and not just piddly ass 1-2K jobs, but 30-40K jobs I might start giving a ****. Oh. And when the local competition pays their contractors as well and fast as Wal Mart. Unlike the crooks who own Southglenn who still owe their prime 3.5 mil.

Wal Mart right now is our saving grace. When every other contractor is slow as hell at paying, Wal Mart and their prime contractor came through. When everyone else takes at least 90 days after invoice to pay their contractors and subs, Wal Mart paid us in 35.

When most other companies are sitting on their money, Wal Mart is out building new Wal Marts everywhere they can, shelling out a ton of money to struggling builders, pavers, and helping construction companies keep their people employed, while helping the economy by actually CREATING more and more jobs everywhere they go.

And as long as Target is still out there, Wal Mart and their prices will remain reasonable. Jump your prices up too much people will go somewhere else.

if it was only that easy ........ in the bigger picture is transportation , bout the only way to keep up is to have their own trucking fleet . example King Soopers / Kroger / City Market , Safe way , Albertsons ...Target has its own trucks , but no where near the size of Wal Marts ........... I could sell out and go to work drivin a wal mart truck right now ........ **** that , just turned down a job haulin Oroweat bread to Omaha , then to Alamosa ...... I can find something better

[Spider]

Originally Posted by broncocalijohn

Kinda like those supermarkets back in the day, huh? I guess as long as it is union jobs knocking out the Mom and Pop shops, then it is ok.

it wasnt that way ........used to have aot of A.G. stores ............wasnt prices t was transportation that did em in