Saturday, January 07, 2006

OK by us

A nonscientific sampling of Laurel residents appears to be OK with having Wal-Mart come to town.

Meanwhile, Evelyn Pyburn blames federal regulations for the success of big box stores.

I'm always reluctant to mention this, for fear some federal bureaucrat will come along and point out all the paperwork I haven't been doing, but my own eight years running a business hasn't proved terribly burdensome in terms of paperwork. No doubt it's worse for some businesses.

But I always wonder if the burden of regulation isn't a bit exaggerated, especially for tiny businesses that are exempt from some of the more burdensome requirements.

23 comments:

D. Ricardo said...

Economic “theorists” like Evelyn Pyburn are the main reason why nobody wants to do business in Montana. Obviously, if the Big Sky Business Journal has been publishing upside-down economics continuously since 1982, it must have a fairly solid readership, which means Montana has a lot of nincompoops, or at least Eastern Montana does.

Anonymous said...

more pyburn pablum...

Anonymous said...

spoken like a life long employees

Eric Coobs said...

WALMART would empty out the main street in Laurel in a year.

If anybody doubts me, take a drive through the midwest where they landed a WALMART store in a small town.

I've got the video, 'WALMART the high cost of low prices' and if anybody wants to borrow it just let me know.

Of course, it really didn't change the way we shop, because my wife refuses to pay Albertsons almost $4.00 for a box of cereal that WALMART sells for $2.50.

Anonymous said...

the people in Laurel will get what they desreve. Look at Herbsfest...

D. Ricardo said...

“[M]y wife refuses to pay Albertsons almost $4.00 for a box of cereal that WALMART sells for $2.50.” --Eric Coobs

Your wife is a lot smarter than you, Eric. While she’s out there voting with her dollars, you’re wasting your time watching “Wal-Mart, the High Cost of Low Prices” (and probably “Super-Size Me!” and “Fahrenheit 911,” too).

D. Ricardo said...

“[When Wal-Mart comes to town] the people in Laurel will get what they deserve.” --Anon.

Yes, on average, each Laurel family will save about $2600 per year by shopping at the new Wal-Mart.

David said...

D. Ricardo, Do you have a source for that $2,600 a year figure? I'd like to look at that.

Anonymous said...

D. Ricardo, or Don, as it were, mistakes Eric Coobs for a fan of Michael Moore! Oh, the irony!

5 said...

Man, I figured Coobs to be a poster boy for sprawlmart...
Its true, as a truck driver, I watched three towns dry up along 287 in N/w Texas. Every trip through, another locked up store front after sprawlmart opened nearby.

D. Ricardo said...

David:
My $2600 figure PER YEAR was wrong. The report I was trying to remember (see below) had given an estimated CUMULATIVE savings over several years of $2329. Other studies indicate “the typical family saves by shopping at Wal-Mart nearly $800 per year on groceries alone." (New York Times, cited below.)

My own experience has been to realize a savings of around $1200-$1500 PER YEAR by shopping at Wal-Mart Super Centers, as compared to shopping locally. That would include food and just about all other household purchases except gasoline.

+++

"Previous studies have shown that Wal-Mart has contributed to lower
consumer prices.* Global Insight conducted a statistical analysis that supports these findings. We found that the expansion of Wal-Mart over the 1985-2004 period can be associated with a cumulative decline of 9.1% in food-at-home prices, a 4.2% decline in commodities (goods)prices, and a 3.1% decline in overall consumer prices as measured by the Consumer Price Index - All Items, which includes both goods and services. These estimates are in line with other researchers' estimates of Wal-Mart's price effects. This impact amounts to consumer savings of $263 billion by 2004, which is the equivalent of $895 per person or $2,329 per household. These results are based on empirically derived estimates from the CPI as it is measured by the Bureau of Labor Statistics and do not include any additional cost savings that might come from capturing the effects of measurement bias in the CPI itself."

Source:
"The Economic Impact of Wal-Mart"
Business Planning Solutions
Global Insight Advisory Services Division
November 2, 2005
_______________________
* Refers to earlier UBS Warburg study.


See also:
"Progressive Wal-Mart. Really."
By Sebastian Mallaby
Washington Post
November 28, 2005

And:
"The Good Goliath"
By John Tierney
New York Times
November 29, 2005

Anonymous said...

Walmart's parking lot intimidates me. I generally do not shop there and when I do it is either very early in the morning or very late at night. Their fruits and veggies do seem to be the freshest in town though (besides Costco and I only hit that place once every couple of months). I don't mind paying a bit more not to have to deal with the crowds, provided it is good quality. I like the Laurel IGA and I hope this doesn't hurt them too bad.

Loxjet said...

Ricardo, your points would fall on more receptive ears if were weren't such a d**k to other contibutors here. Just an FYI.

PS: If there's a blog contributor more blindly devoted to the GOP than Eric Coobs, I've yet to read him. Maybe you ought to save your nasty put-downs for those who disagree with you.

Anonymous said...

I would think that most of the people in Laurel who are inclined to shop Walmart are already shopping Walmart in Billings. If the local stores are offering good service (and that is the key) I doubt they will be hurt very much. bonnie

Eric Coobs said...

Maybe other companies should figure out how to lower their cost of doing business, like WALMART has.

Then they could be competitive.

I doubt a big chain like ALBERTSONS really pays that much more for product than WALMART.

D. Ricardo said...

Loxjet -- You don't know what "nasty" is.

Eric Coobs -- Although Albertons is one of the largest grocery chains in America and likely could be a lot more price competitive, they cannot come close to matching the advanced supply chain management that Wal-Mart has developed. That is the key to Wal-Mart’s success.

Pete Hansen said...

When the Heights Wal Mart opened, I discovered that the Smith's market had and coninued to charge $2.25 more for the same orange juice carried by Wal Mart. Only one example of the difference in prices and what we'd been charged or maybe, overcharged for many years by Smith's and the Heights Albertson's certainly, to the delight of their "Bean Counters." Ok. I've said it before and repeat myself here. For everybody who are Wal Mart bashers. Let's all get a ballbat and stand ouside our Wal Marts and smack those people coming out with baskets of stuff they just bought there. After all, the customers are the ones to blame for Wal Mart's success. I might mention that before we start, that you can buy the ball bats at Wal Mart for $5.00 less than at Big Bear or Sheels!

David said...

D. Ricardo,
Thanks for the sources. I haven't had time to examine them in detail, but it's worth pointing out one detail of the Global Insight study: The 3.1 percent decline in consumer prices is offset in part by a 2.2 decline in wages. So people earning Wal-Mart style wages come out ahead only if they are able to get Wal-Mart style prices.

I'm skeptical of all these figures, in part because this stuff is just so hard to measure. But I'm more interested in one thing that hasn't shown up yet in this discussion: Wal-Mart has 30 or so lawsuits pending charging that it cheats people out of overtime -- forcing people to work off the clock and in some cases altering time cards.

As I have noted elsewhere, the concept that people deserve to be paid for their work is so basic that it's right in the Bible. What are the ethical implications of trying to save money by doing business with a company that achieves low prices in part by cheating its workers? The Bible would seem to argue that Wal-Mart managers who cheat workers will go to Hell, but will shoppers have to go with them?

D. Ricardo said...

David-- You are getting a little too philosophical for me, or maybe a little too theological. Nevertheless, your hypothetical questions are interesting.

1. “Wal-Mart has 30 or so lawsuits pending charging that it cheats people out of overtime -- forcing people to work off the clock and in some cases altering time cards.”

I have not been following this story as closely as I should, but as I recall, the dispute first erupted in California, where that state has some peculiar labor laws about lunch breaks. Straining my memory, I believe the state law required any employee to be paid for one extra hour of work if the employee worked so many hours (four?) and did not receive a lunch break. I think the original complaint concerned employees who were working the nightshift stocking shelves. As for the other suits, I have no idea what they are about.

I will also add that Wal-Mart has around 5000 lawsuits against it at any one time, according to a documentary film aired by the History Channel some years ago. I would bet many of the suits are frivolous, merely another symptom of the legal lottery system so many people are playing these days. But that is a subject for another thread.

Whatever the merits of the suits against Wal-Mart, all labor laws (and health and safety laws) must be enforced.


2. “What are the ethical implications of trying to save money by doing business with a company that achieves low prices in part by cheating its workers? The Bible would seem to argue that Wal-Mart managers who cheat workers will go to Hell, but will shoppers have to go with them?”

Ethical implications are different from legal ramifications. If a company is doing something illegal, the law will deal with it. Any other behavior may or may not be unethical, depending on one’s ethos.

Start another thread if you want to discuss “social justice,” “socially responsible investing,” or the economic theories of St. Thomas Aquinas.

Mark T said...

David - in addition to your comment about the regulatory burden being a little overstated, I might also add that most government employees I have known work hard and take alot of unfair criticism.

Anonymous said...

Good News -- Albertsons is working some kind of deal with Krispy Kreme Doughnuts. If you don’t have a Krispy Kreme store in your town, but you have one in your state, Albertsons will stock its own store with Krispy Kreme doughnuts. This is true. It’s happening in Albertsons stores all over Montana. The doughnuts are apparently coming from Billings and are delivered fresh each morning.

The only thing Wal-Mart can do is follow suit or put a whole Krispy Kreme mini-store inside their Super Centers, similar to the mini-McDonalds they have in some Super Centers. Maybe the Wal-Mart mini-McDonalds can sell the Wal-Mart mini-Krispy Kreme doughnuts, too!

And then there’s those mini-Starbucks inside the B. Dalton bookstores. They could use some doughnuts also!

Isn’t American capitalism great?

Rocky Smith said...

Walmart will kill many Laurel businesses. That means real jobs by your neighbors going bye-bye. First they choked the crap out of Kmart and other variety retailers; then they went big into the grocery business. Kiss a few grocery stores and the attatched jobs goodbye. Tidyman's was having a meeting with employees this morning. No doubt, more lost jobs. Now they want to go into banking. Do any of you work at a bank? Who's next after that?
Maybe you can get a job with Walmart being the overnight cleanup guy. Walmart used to use illegal aliens to do this job. They'd lock them in the store overnight! Pray there isn't a fire!
I wouldn't shop there if they were giving stuff away for free.

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