WALMART: The HIGH Cost Of low Prices

bobman1235

brettw22 wrote:

Sadly, there's nothing ha ha funny about fanatics.

Sure there is. They're self-parodies that end up just showing the absurdity of fanatacism.

unc2701

bobman1235 wrote:

Sure there is. They're self-parodies that end up just showing the absurdity of fanatacism.

Until they start making you wear pieces of flair.

Drumingman

I did not buy any Christmas Gifts at Wal Mart last year because they banned Merry Christmas through their actions, even though they sold "holiday gifts.
I bought ALL my Christmas stuff at Sears where they could say Christmas without fear of reprimand by the management. Wal Mart does have it's place and I do shop there. It's great on the weekends when you go there and see the cast of Deliverence shopping for stuff and the Banjo starts playing in your head.

aaharvel

I went into Kmart today with my friend who wanted to go for something in the Pharmacy.

I immediately came home and took a shower.

danger boy

aaharvel wrote:

I went into Kmart today with my friend who wanted to go for something in the Pharmacy.

I immediately came home and took a shower.

yeah, but that was K-Mart.. not Wal Mart.. so two different stores.

shack

Drumingman wrote:

I did not buy any Christmas Gifts at Wal Mart last year because they banned Merry Christmas through their actions, even though they sold "holiday gifts.

Target kicked out the Salvation Army bell ringers.

reeltrouble1

shack wrote:

Target kicked out the Salvation Army bell ringers.

And the Devil grinned.

RT1

PhantomOG

It is possible to beat Wal-Mart

Wal-Mart gives up in Germany

:cool:

aaharvel

Weg, Deutschland zu gehen!

MacLeod

Karma baby!!!

Still, I would hazzard a guess that it was Germany's confiscatory tax rates that hurt Walmart the most. Its hard to sell dirt cheap with a 80% tax rate that Im sure their domestic stores wouldnt have to pay.

shack

Wal Mart got out of Germany because they were being undersold. Germans are real CHEAP! They were making money, just not as much as they could elsewhere, so they decided to concentrate assets on China and South America. It's no more than a pimple on their ****. Irritating but insignificant.

F1nut

They left China too.

hexon

Our walmart was recently remodeled. They "convieniantly" placed the food storage and food items on the other side of the store as the food. I find it really annoying that they are trying to get people to walk by and see things they like on the way to buy plastic forks for their food. A guy that works there said they remodel every 6 years so that people will buy more things, since they have to look around for what they need because it is no longer where it used to be.

shack

F1nut wrote:

They left China too.

Nope! China is a very big growth market for them.

http://www.wal-martchina.com/english/walmart/index.htm

They moved out of South Korea.

F1nut

Could have sworn it was China.

jojo5639

WalMart gave up Germany because of the socialistic labor laws, that ought to tell you something, the company I work for wouldn't dare hire people in Europe because you can't fire them without paying them a fortune, and the social taxes are up to 80% of wages, that's why unemployment is so high in Germany, over 10%, that's why all those kids rioted in France, cause not enough companies are willing to put up with it. If we want to mandate "living wages" here or lavish benefit plans, a lot of us would find ourselves out on are butts. Capitalism is the only way to go, companies need to be able to make a profit to support themselves and their owners. If companies were in business solely to support employees and provide cheap goods and services to the masses, you have communism, sort of a dying fad. BTW, WalMart takes about $0.06 of profit for every $1.00 their customers give them, Target $0.08, Starbucks, $0.12, Exxon $0.20, and drum roll please....Microsoft, $0.40, so who's really **** you? WalMart really is in business to offer the lowest prices, in general, across the board. Their lean business model, modest corporate dalliances (includes being frugal on the donations, too) and highly effcient business processes allow them to do that. And they need a hell of a lot of volume at 6% profit to make money for their shareholders. They could make just as much money on half the volume if they marked things up like Starbucks, but then they wouldn't be able to pass those savings on to you and me.

bobman1235

Hell of a first post, jojo.

mrbigbluelight

I wouldn't mind if Walmart increased their profit margin to $0.08 for every dollar they took in, than put that extra $0.02 into employee health care.

aaharvel

Jo-Jo how can 6% even be conceivable when Walmart posted a 9.4% increase in profit from the fiscal year before?

FORTUNE 500 snapshot:
http://money.cnn.com/magazines/fortune/fortune500/snapshots/1551.html

Given the numbers based on the above Fortune 500 end of fiscal year snapshot table and Walmart's in-store numbers of that same year (288 billion in-store sales/ 10.3 billion earnings), then that proves beyond any reasonable doubt that the 6% profit claim is absolutely disingenious at best. Walmart's in-store sales are just a small piece of their "little" profit pie and this proves it. For Mr. Bottom-line 6% to be mathmatically feasible, Walmart would have to have posted in the red (approx. -3.4%) the fiscal year before. They didn't.

Next year, Walmart's opening 365 new stores. 365. In a capitialistic market, if you're having to keep your head above water with a mere 6% year-end profit as you claim Walmart does, you don't build 365 new stores. You find ways to cost-cut what you already have in order to appease Wallstreet and your own investors expectations for the upcoming fiscal year.

I'm fully aware of the 6% profit based on in-store earnings b/c they're all over the pro-Walmart blogs and anyone who actually has a vested stake in the company is quick to point that out to me. So from that standpoint you are right. But from the actual Fortune 500 fiscal year earnings statistics, you are also wrong.

Welcome to Club Polk.

brettw22

hexon wrote:

Our walmart was recently remodeled. They "convieniantly" placed the food storage and food items on the other side of the store as the food. I find it really annoying that they are trying to get people to walk by and see things they like on the way to buy plastic forks for their food. A guy that works there said they remodel every 6 years so that people will buy more things, since they have to look around for what they need because it is no longer where it used to be.

This isn't uncommon in a retail environment and is done by most if not all stores. Retailers typically try to keep their stores fresh, and layouts are always changing/product is always moving. Consumers will spend more money in a store that has a current look than in one which is run ragged.

shack

aaharvel wrote:

Jo-Jo how can 6% even be conceivable when Walmart posted a 9.4% increase in profit from the fiscal year before?

Apples and oranges. They could have a 1% rate of return and still have y-t-y 9.4% increase in poffits. How? Increase sales volume by 9.4%. Open 9.4% more stores. Have stores that were losing money make money this year. Etc... Direct corelation of the % rate of return with % rate of growth is possible only if volume remains constant.

shack

In a capitialistic market, if you're having to keep your head above water with a mere 6% year-end profit as you claim Walmart does, you don't build 365 new stores. You find ways to cost-cut what you already have in order to appease Wallstreet and your own investors expectations for the upcoming fiscal year.

In case you missed it:

Profits as a percentage of revenues = 3.6%


The retail gorcery chains would kill to have this high of a profit margin:

Kroger = 1.58%
Ingles = 1.56%
Safeway = 2.63%

jojo5639

I was quoting operating margin of 6%, but AAHarvel hopefully gets the point, my original numbers stand. I am an accountant and can read a financial statement. And btw, a lot is being made of Exxon as well. I can safely say that their operating margins have barely budged (20%) since oil moved from $35 to $75/barrel. All we hear is about record $10B in profits, but I am know telling you what don't hear. If something costs you $0.40 and you sell it for $0.50, you make $0.10, or 20%. If something costs you $40B and you sell it for $50B, you make a world-record $10B, or 20%. If their margins had improved, I would say they are gouging, but they are entitled to their cut. Corporations are not charities, they are in business to make money. These companies are not monopolies, no one is forced to patronize them, the market drives their pricing and tactics. Our market-driven, capitalistic economy is the model of the world for three generations now, let's not tinker with it.

EricBurg

The only real problem that I have is with big oil companies making such a huge profit. This is a commodity that has no competition, because they fix their prices and is a resource that we all must consume in some manner, just to live. It effects all other prices and has one of the biggest impacts on the nations economy. Now, if true competition existed among big oil, then I would say the ones that provied the best prices and products would deserve what they made.

Wal-mart does not monopolize the retail industry, they simply provide goods and services at a competitive price that people are able/willing to pay. With that said...I won't shop at wall mart in my area, because they are dirty and crowded. I don't mind paying a few cents more per item to just stay away.

Eric

jojo5639

eric,

you are implying that there is collusion here, there is not...there is not even much wiggle room for competition, because you've rightly branded oil a commodity, just like gold...beef...orange juice, etc. Prices for commodities are a perfect example how the free market adheres to the laws of supply and demand. Neither Exxon nor any other oil company is involved in the pricing of oil, it is simply a raw material they must have to produce their end products, gasoline being just one. Demand has exploded, yet refining capacity has yet to expand for various socio-political reasons and traders recognize this as a imbalance that continues to drive the price higher. We simply are consuming oil by products faster than we can produce them. Once again, if we tinker with this market, we will face disastrous consequences...the last time we did... if your license plate ended in a odd number, you could buy gas on Monday...Even numbers were Tuesday and so on and so on. I would rather pay $5.00 for a gallon, than to have none to buy at $2.00. At $5.00/gallon an entrepreneurial spirit in this country will rightly develop and commercialize one or more alternate sources of fuel that will solve this, just like in the face of rising wagon wheel costs, Henry Ford developed and commercialized the automobile...JK

F1nut

you are implying that there is collusion here, there is not...

If you believe that, then you sir, are delusional.

EricBurg

While they are not involved directly in the pricing of the barrel of oil, they are responsible for the record high prices that we pay at the pump. Are you telling me that the refining process and overhead of all the oil companies equal the exact amount? So, while exxon sells fuel for $2.89, why can't shell sell it for $2.75? And how much profit is too much? 10 billion dollars?

I would love the idea that alternative fuels would suddenly appear from this, but at this time, I have no "alternative". I am forced to pay whatever the going rate is for gas. I just don't understand how there can be many different refining companies and somehow they all sell gas for the exact same amount to the 1/10th of a penny. When I go look at sony tv's, they cost a certain amount to build, but when I go to 5 different stores, I can walk away with 5 different prices to chose from.

I understand the arguement you make, but I'm just not buying into it 100%.

Eric