A new piece from BusinessWeek showcases Wal-Mart's (NYSE: WMT) victory over nearly all of its competitors in the TV pricing war. Wal-Mart's decision to offer a 42-inch flat panel television for the unheard-of price of $988 wreaked havoc for stores like Circuit City, Tweeter, Best Buy, and Rex Stores.
This is a great example of why all the negative press that Wal-Mart receives probably won't effect it nearly as much as its critics would like. People might complain about the company's employment practices, complain when a local mom and pop goes under, or subscribe to anti-Wal Mart newsletters. But who is going to pay $500 more for a television as a matter of principle? For all the criticism of Wal-Mart's customer service, it isn't bad enough to go next door to pay more.
The triumph of Wal-Mart is the triumph of price. Given a choice between quality and service and price, most people will choose price on items like televisions. However, I think Wal-Mart will encounter greater resistance in its foray into areas like organic foods. That demographic is likely to be less easily swayed by the promise of a better deal.
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Reader Comments (Page 1 of 1)
4-24-2007 @ 7:08AM
Kathleen said...
Hello!
Just wanted to let you know that my family misses the Kashi cookie product .. Wal*mart use to carry it in the cookie isle.. $2.00 a box.. Lets bring them back..
Next item.. waxed paper sandwich bags.. like the ones they use to have in the old days.. Plastic, isn't always so nice.. contamination..
Thanks, Kathleen
4-24-2007 @ 7:08AM
Mark said...
I am most thankful Walmart is in my community. I live in a sparsely populated area and the merchants are horrible. No selection, poor customer service, and an attitude of "Love it or leave it." If it was not for Walmart I would no be able to purchase anything I need. I think Walmart is great.
4-24-2007 @ 7:09AM
Chicky said...
As far as I'm concerned, in their effort to squash competitors, Wal-Mart will be the losers in the end. Their anti-worker stance, as well as the common knowledge that merchandise is "subsidized" by the taxpayer through repeated labor law violations, will continue to tell the story.
I can't wait until they finally go under. If customers want welfare, they should have to qualify for it. Wal-Mart's welfare to the customer has got to end.
4-24-2007 @ 7:08AM
Jerry said...
Walmart may have great prices, but they serve poor service to the employees, I need not wonder how pleased Sam Walton would be to see what his company has become. Ohh, and don't think you are not paying for it in the long run. state healthcare,daycare,and the loss of mom and pop stores. sorry, I don't shop Walmart anymore. i'll spend the extra dollar and sleep at night.
4-24-2007 @ 7:09AM
john said...
Walmart saves the average family in America something like $1,500.00 a year. They help make it possible for low income families to lift themselves out of poverty, giving them lower prices instead of a welfare check! How much does that save the government Jerry? When Walmart enters an urban area, their prices are on average 5% lower than their competition, and when they enter a rural area they are 8% lower.
Would those low paid Walmart employees be better off if they had no job at all? Let's not pretend that if Walmart didn't exist at all that all of these people would be employed by someone else. The economy is larger because Walmart exists, and there are more jobs in aggregate, because Walmart has expanded our economy.
Thank God for Walmart!
4-24-2007 @ 7:08AM
cliff said...
unfortunately many people do not realize that it has been shown that after 5 years of entering a specific area for every 2 jobs walmart "creates" there is also a loss of 1 job.
many folks also compare walmart branded items with competators national branded items. In areas with Target stores over 50,000 items in the Target stores are within 1 to 2% of walmart's prices.
also many items are going down in price as technology improves. consider that only a few years ago digital cameras were in upwards of $500 while today you can get a decent one for less than $200
4-24-2007 @ 8:50AM
Floyd said...
I used to build the new Wal-Mart SuperCenters, I have seen how they treat their contractors and treat their people on these new stores. Wal-Mart does'nt care who they hurt or who they ruin, just as long as they get their store built. I do'nt build these stores any more, much less shop in them.
4-24-2007 @ 8:50AM
Sue said...
The people of the United States have a right to choose where they want to buy anything. We can approve or disapprove at any given point. Wal-Mart has hurt many business while trying to produce a center for the people while trying be ahead of everyone else. All other businesses have the same option. I love to shop Wal-Mart for some things and go elsewhere for others because I have that right. I do not like waiting in long lines at any store. Customer services is lacking in most department stores because businesses have a problem with turnover. I do think Wal-Mart needs to bring up their pay scale and offer better benefits, but I feel same way about other businesses. There again, you can make your own decision where you work and where you shop. We need to be more concerned about the fuel prices and address that. That is reeking havac to our entire economy across the board. Everything you purchase is going up largely because of fuel prices. Most everything we purchase is delivered by truck at $3 plus dollars a gallon. Even those items that go by rail still have a truck deliver to the rail and picks up and delivers from the rail. Thank about this. I have said for years if all trucking companies shut down for three
days we would get these prices under control and the stores would not have product on the shelves. The government would have to intervene and get the prices back down. Oh yes, they can do it. They would have no choice. Right now, they are making so much off the war and the fuel they are NOT going to address it. We are not screaming loud enough to make it happen. We just stay silent and they like that.
4-24-2007 @ 11:57AM
Stephen said...
>>7. Sue,
Personally I think gas prices should increase. I think a national average of $8-$10/gallon is about right. Oil should not be what we are concerned about. Higher fuel taxes could pay for needed road repairs and more importantly research into alternative fuels. Maybe if/when the prices reach $8/gallon people will think a little more about what kind of vehicle they drive. We don't need more SUV's on the road.
Personally I don't shop at Wal-mart, I really haven't for about 5 years now. I've worked in a small retail business that has to actually take a profit on products they sell to stay afloat. Wal-mart sells such volumes that they can take only cents profit and still do well. They also bully their supliers to give them lower wholesale prices (by saying we'll buy them at X.xx/case or we won't sell your product). Personally I would love to see some of these big companies stand up to wal-mart and say no. In my opinion this would hurt wal-mart.
Wal-mart has created a lot of jobs, but don't you think its also destroyed just as many? Think about all the small business' that had to shut their doors because everybody prefered the cheaper product. How about the factory/industrial employees that are out of work because wal-mart can get the product cheaper in china or taiwan.
My last point, hopefully, is who do you think owns wal-mart? I know its a Publicly traded company, but who do you think owns the majority of the company? A few rich Chinese business owners who can now use wal-mart as a sorce to sell their cheaply made product in the united states. So in my opinion wal-mart does very little to help the economy of the United States, it does more to help the enconomy of Asian countries.
And to the author of the article, I would gladly pay twice as much to buy something from a specialty shop as opposed to buying it at wal-mart.
4-24-2007 @ 5:09PM
Mike said...
So Stephen, where would you recommend the people shop who can not afford to pay more simply to make a point?
Wal-Mart is not a social program.
4-25-2007 @ 10:14AM
Stephen said...
If they can't afford to buy a 50" tv for a few bucks more at an electronics store do they really need to buy a tv? Yes, Wal-mart does have the cheapest prices and one major area I would condiser being important is groceries, I admit it. At the same time though, people could go to their local grocery store and make up some of the difference in gas money to get to the wal-mart.
The entire world is going towards large retail chains that are all expanding their products. Personally I don't like department stores in general. You always seem to "get what you pay for" in department stores. Typically if a product is cheaper somewhere else, there is a reason for it. If its not an identical product then the life of the product suffers, etc. Using tvs as an example, you are getting the same exact product no matter where you buy it. But do you think wal-mart cares if their employee's can help customers decide? No. People in their electronics department aren't there because they know alot about tv's, etc. They're there so people can't steal stuff from that area.
I recently bought a tv from best buy, after doing research I went to go purchase one, I spent 2 hours talking to a guy in the tv department about tv's. I had the model picked out and he spent the time to talk to me about all the different tv's. They don't get commision at best buy, I have friends that work there. Best buy takes the time to train their employee's so they can answer questions about products. Wal-mart doesn't. Do you think that costs Best Buy money?
Would you like to buy a car or a house from wal-mart?
4-26-2007 @ 4:41PM
Joe said...
As a consumer, I am pleased to have Wal-Mart in my community and other growing communities when visiting and traveling. Before in the dinasour days, moms and pops stores use to rob us of simple things when in demand, finally, there's competition..... THANK YOU WAL-MART!
4-27-2007 @ 3:50PM
GUY said...
imagine a world in which you can only shop at wal-mart..that is the master plan. eliminate competetion and set the retail price as high as possible. guy
4-27-2007 @ 7:09PM
wall fart said...
Probably responsible for a lot of drug problems in those rural areas too(ie meth,prescription drugs)Human Nature feeding on human nature?Does WalMart equal TrailerPark?
4-27-2007 @ 9:57PM
wall fart said...
I repeat does walmart=trailerpark?apparantly so!
4-27-2007 @ 9:57PM
wall fart said...
#5 dont fool yourself, competition is good for business and consumers.
4-28-2007 @ 11:19AM
Texmac said...
" Look folks wal-mart has been good for America,"PERIOD" The mob control unions are pissed that they have failed to take control of the labor in wal-marts stores, Old Sam Walton was a good man, All the bitching a moaning should take a hike off the first clif you find,
4-29-2007 @ 10:55PM
Bradley Byrd said...
I can't understand why people are working at Wall Mart if they don't want to. We have plenty of work that needs to be done in and on the farms in our country.So why all the complaining. If you really don't like Wal Mart then, Why are you doing it ? If you don't like shoping there then don't do it. No one is making you do anything you don't really want to do. I don't care who is making it or where it is made , If I don't want it, Then I don't buy it, And the same goes for any one. I guess the brunt of it is everyone has the right to bitch if they want to. So go ahead and make a ass of your self , Because that's all you are really doing, But every one needs something to do. So go ahead and do what ever you are going to do. It takes all kinds to make the world go around.
5-10-2007 @ 12:03PM
Chuck McChuckerson said...
Wow, I'm very impressed by the testimonials written above by Walmart's PR corps, very compelling.
Walmart is killing America, period. They've forced many businesses that manufacture products to send their production overseas to China, where most the profits go as well. Which is GREAT for one country... China, not the US. China is now solvent beyond belief and the US is buried in debt that the average American turns their blind eye to. Walmart kills downtowns of small town America, circumvents environmental laws to build their toxic stores on top of environmentally protected land and/or will do whateve it takes to put a store in an area. It treats itself like a town hall... but one where you go to shop, to spend money, money on junk, garbage built in China, more junk that you'll never need, peddled on the poor and uneducated consumers in middle America.
They're blight and stain and proof greed, corruption, and screwing the common man in the US be that through their large lobby or brilliant PR is the new American way. The rich will get richer and the poor, who are Walmarts biggest sucke... er, I mean, customer... will get poorer. China, meanwhile, when they take us over, will get the last laugh, and the average dumb American won't ever connect the dots.
5-10-2007 @ 6:21PM
Caroll Holmstrom said...
The comment by the Tex needs to have a response. If it weren’t for Unions the working class wouldn't be able to afford TV's as they brought health care and retirement benefits to the working class. With the demise of the Unions brought on by outright lies by the Republicans so goes you retirement benefits and company sponsored health care. The irony is we end up paying for the health care for the companies like Wall Mart when they don't supply it for the employees. Then the Righteous Right fight to keep illegal immigrants in this country allowing the Wall Marts of the country to keep getting labor for sub standard wages. If we could get to the point were everyone had a good job available companies like Wall Mart would have to raise there benefits’. Until then they and other companies will shaft the worker as much as possible and use reasons like low prices as justification while making their founders family 5 of the richest 10 people in America.