Tag Archives: Walmart

Should new “Buy American” pushes be lauded if they occur because goods are now cheaper to make in the US?

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Walmart is purchasing and selling more goods made in America – primarily because making some things in America is now cheaper:

In many cases, Wal-Mart’s suppliers had already decided to produce in the United States, as rising wages in China and other emerging economies, along with increased labor productivity and flexibility back home, eroded the allure of offshore production.

Though wrapped in the stars and stripes, the world’s largest retailer’s push to bring jobs back to the United States also makes business sense both for suppliers and retailers.

Some manufacturers are finding they can profitably produce certain goods at home that they once made offshore. And retailers like Wal-Mart benefit from being able to buy those goods closer to distribution centers and stores with lower shipping costs, while gaining goodwill by selling more U.S.-made products.

“This is not a public relations effort. This is an economic, financial, mathematical-driven effort. The economics are substantially different than they were in the 80s and 90s,” Bill Simon, chief executive of the Walmart U.S. chain, told the Reuters Global Consumer and Retail Summit earlier this month.

To restate, this isn’t because of some commitment to the United States or patriotism or creating American jobs. This is because the goods can be made more cheaply in the US due low-wage workers in other countries now earning more and rising transportation costs. Thus, if items could once again be made and shipped more cheaply overseas, businesses would likely chase that again. Granted, profits of American companies might be good (shareholders, for example, might be happy) but is this the only way to assess manufacturing and sales decisions? Is selling products partly on the fact that they are made in America then somewhat deceptive?

When you build a Walmart in Chicago, you better make sure public transit goes there

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A new Walmart under construction on Chicago’s South Side has a problem: public transit doesn’t make it all the way to the store.

CTA bus routes No. 106 East 103rd and No. 111 111th/King Drive currently stop at Cottage Grove Avenue, which is several blocks from the store that is part of a $135 million development.

Beale said he is outraged and he threatened to convene public hearings on the CTA bus routes if the situation is not rectified by the time the Wal-Mart opens this week.

The alderman said the retail developer built the site to accommodate buses with a bus turnaround and nearby sidewalks for commuters. He said CTA officials told him it would cost $680,000 a year to extend the two bus routes to the Wal-Mart. But Beale said the costs would be offset by the additional riders making trips to the store.

CTA officials, acknowledging that they signed the 2011 contract Beale described, said late Monday afternoon that the transit agency is working with the developer and Beale and will implement service “as soon as possible.”

It sounds like the CTA is behind on this one. At the same time, this provides an interesting contrast to the typical suburban or exurban Walmart which relies on a large parking lot full of drivers. Big box stores are still relatively rare in denser big cities, even as companies like Walmart and Target (their first Manhattan location opened three years ago) are looking to expand. Thus far, the Walmarts in Chicago are more on the edges of the city, lending themselves to driving.

It would be interesting to hear how the companies themselves, local residents, and the city describe how the big box experience changes in an urban area. This would be ripe for participant observation as the store opens and both changes and is influenced by the surrounding urban neighborhood.

Painting the church of Walmart

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Lots of “normal” activities take place at Walmart so why not spiritual matters as well? Artist Brenden O’Connell has taken up the subject:

For the past decade, O’Connell has been snapping photographs inside dozens of Wal-Marts. The images have served as inspiration for an ongoing series of paintings of everyday life — much of which involves shopping, which O’Connell calls “that great contemporary pastime.”

“Wal-Mart was an obvious place” to look for inspiration, he tells The Salt. “It’s sort of the house that holds all American brands.”…

Wal-Mart stores, he notes, are “probably one of the most trafficked interior spaces in the world.” In the tall, open, cathedral-like ceilings of Wal-Mart’s big-box stores, he sees parallels to church interiors of old.

“There is something in us that aspires to some kind of transcendence,” he told me back in February. “And as we’ve culturally turned from religious things, we’ve turned our transcendence to acquisition and satisfying desires.”

In conversation, O’Connell comes across as thoughtful and urbane. He’s well aware that, as a company, Wal-Mart can be polarizing. But “regardless of your feelings about it,” he told me back then, “it just is. It’s like an irrevocable reality that’s part of our experience.”

On the occasions that we go to church and then Walmart afterward, I have joked that we are visiting America’s two kinds of churches. This may not be too far from reality considering the number of shoppers at Walmart, its yearly sales, and the power of its brand. But, it is really that surprising that a retail store could be the contemporary version of a spiritual space when our country is so devoted to consumption and shopping?

Walmart opens stores on college campuses

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Walmarts are everywhere in the United States – but only recently have they opened on college campuses.

In January 2011, Walmart opened its first location on a university campus at the University of Arkansas at Fayetteville, a half-hour drive from its corporate headquarters. Now, Walmart has announced that it will be opening a second campus location, at Arizona State University, with luck by May, according to Delia Garcia, a Walmart spokeswoman. A third location, at Georgia Tech, is slated to open at a to-be-determined time next year. “Walmart on campus is an opportunity to bring low prices to students, reach new customers and serve our on-campus customers in a convenient way,” Garcia said in an interview.

Garcia said that the products sold by the university stores would be “tailored to the on-campus customer, providing general merchandise, convenience items [and] pharmacy services,” as well as the store’s $4 generic prescription drug program. Garcia emphasized that the company was still “testing this format,” and as such there are no concrete plans beyond the Georgia Tech location. While the Arkansas location is 2,500 square feet, the Arizona location as planned will be 5,000 square feet. The ASU location will also offer financial and bill-paying services, and will employ 10 associates…

As has often been the case with Walmart, the expansion is not free of controversy. In an e-mailed statement, the labor group Making Change at Walmart criticized the company for paying what it says are insufficient wages, “while public institutions like ASU have faced painful budget cuts.”…

In addition, according to a spokeswoman for Making Change at Walmart, the University of Arkansas (via the university’s Applied Sustainability Center) and Arizona State (via the university’s Global Institute of Sustainability) are “the two universities Walmart picked to create its ‘Sustainability Index,’ which has been criticized for lacking meaningful standards and appears to have had little to no effect on suppliers’ product manufacturing processes.” Rob Walton, Walmart founder Sam Walton’s eldest son and current company chairman, is also co-chair of the Board of Directors for Sustainability at Arizona State.

So what is the deal behind the scenes between the colleges and Walmart? The colleges would want Walmart on campus because it can bring in money. Walmart wants to be close to a base of customers who want cheap goods.

How does this change life on campus? It could make it easier for students to remain on or around campus if they can buy things nearby. However, it could also change local town life.

Do the Walmarts have to follow the architectural rules or styles of the campuses to fit in? It would be kind of amusing to have a typical big box Walmart near traditional college buildings dignified in their brick and ivy.

Argument: if you want a Walmart, you have to accept the McMansions and other things that come with it

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Henry Briggs argues that the phenomena of Walmart is related to other phenomena like McMansions:

In any event, the idea of paying less and less and buying more and more is a real driver of our economy. As most economists will tell you: unless the US consumer is spending, the US economy tanks.

That is what’s behind the “You deserve it! ” lines in ads, why having a “McMansion” is part of the “American Dream,” and why the American Dream is no longer a dream: “It’s my right, by God!”

That’s why household debt shot up from $734 billion in 1974 to $13.6 trillion in 2009, from 45 percent of GDP in 1974 to 96 percent of GDP in 2009.

We complain about Walmart wrecking communities, even as we go there for the deals, and then we must go there for the deals because Walmart is all we can afford.

If you walk into a house built in the ’50s or ’60s, you’ll find smaller closets, smaller kitchens and smaller garages. This in a time when people were happier, the country was thriving, and the future glowed with promise.

You want things cheaper? There’s a price.

This is a familiar argument about McMansions: they are linked to larger patterns of consumption. But, if the economy really does depend on such spending, can’t buying McMansions, smartphones, and other items and shopping at Walmart be seen as helping American society? Of course, one can choose to buy “better” items than others – instead of a McMansion, perhaps a passive house or a tiny house. Instead of a regular car that contributes to sprawl, perhaps a membership to Zipcar. While some complain about particular kinds of houses, Briggs and others suggest that consumption comes in bundled packages. If this is the case, then McMansions are just the symptoms of a society that consumes and spends too much and likes sprawl.

 

Illustrating problems with big retail in Naperville: push for more landscaping but offer sales tax rebate

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The response from the city of Naperville to a proposal for a new Walmart in the suburb illustrates some of the issues communities face when approving big retail stores:

Councilman Grant Wehrli said he would like to see the store follow the lead of nearby Costco and Whole Foods by going “above and beyond” the city’s landscaping requirements.

“I would love to have Walmart come in, but I’m concerned about the landscaping. What I would like to see done there is for Walmart to follow the lead of the other two developments, literally across the two streets, and go above and beyond with the landscaping. It’s relatively inexpensive and the benefit to society is massive,” Wehrli said. “If we go to the higher standard of landscaping, we’re not just going to be like the Walmart in Buffalo Grove. It’s going to take that intersection to a higher level.”…

Wal-Mart representative Aaron Matson called the timing of the request “eleventh-hour,” but said they were doing the best they can to address the concerns…

“If we’re not careful with what we’re asking for, they may decide to say, ‘Hey, let’s move right across the street (to Aurora),” Krause said…

Wal-Mart officials still hope to break ground this year on the store that has also been awarded a $1.75 rebate in sales tax revenues over 10 years.

Here is how I interpret this:

1. The community is concerned with how Walmart looks and how it fits in with the nearby Springbrook Forest Preserve. Naperville has its share of ugly retail stretches, notably Ogden Avenue east of Washington Street and Route 59 south of the Burlington Northern tracks. In order to present a nicer image befitting of a wealthier suburb, Walmart needs to add some landscaping and go beyond typical requirements. I am amused by the comparison to Buffalo Grove. According to the Walmart Store Locator, there is no Walmart in Buffalo Grove though there is one very close by in Wheeling. Regardless, Naperville doesn’t want to have any run of the mill Walmart; they want one that reflects Naperville and helps distinguish it on the higher end from other suburbs.

2. Yet, the city may not be able to push the landscaping requests too far because Walmart could still locate their new store in nearby Aurora. In other words, the city has to offer a sales tax rebate because it cannot pass up this revenue source. Naperville officials may be particularly attuned to this because Naperville has lost retail business to Aurora before. In one notable case, the developer for the Fox Valley Mall played Naperville and Aurora against each other in the early 1970s, Naperville was less willing to budge, and the mall was built just across Route 59 in Aurora.

Overall, the community needs the tax money Walmart generates but they also want the store to be presentable. Such are the tensions today regarding big box stores.

Mapping Walmart’s rise

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I’ve seen this before but it is still a cool set of maps: watch Walmart expand across the United States.

Several things I like about this:

1. The flowing data is a nice touch as you can see changes over time. Maps can sometimes appear to be static but merging them into a time-series presentation makes it more dynamic.

2. This is a reminder that Walmart began as a Southern regional retailer who then expanded greatly. Though it is hard to remember a time when Walmarts were not located pretty much everywhere, its rise was not inevitable and it was relatively recent.

3. I remember the first Walmart that opened in our area in the Chicago suburbs. It did seem like an oddity as it had such a range of products and low prices. For example, I bought many of my first CDs there as it was significantly cheaper than the local music stores like Tower Records or Sam Goody. Of course, that initial store looks paltry compared to the more recent editions that feature even more products including a full grocery section.

4. I wonder if this couldn’t be enhanced with some other layers of data. Perhaps color shadings for each state that would show Walmart’s share of the retail market. Or the sales figures for each state. Or the number of Walmart employees per state. For critics, perhaps the number of local businesses that were forced out of business by Walmart (though this would probably be difficult to quantify).

Targeting suburban “Wal-Mart moms” in 2012 elections

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Similar to the 2010 elections and echoing an analysis from November 2011, a commentator suggests the 2012 elections could be decided by suburban “Wal-Mart moms”:

Those voters most likely to remain undecided about their presidential preference are taking on a distinct profile, according to pollsters on both sides of the aisle: They’re suburban white women, between the ages of 35 and 55, who probably haven’t attained a college degree and who have kids under the age of 18. They very likely voted Democratic in 2008, then turned around and voted Republican two years later — if they voted at all. And polling and consumer research shows their focus is on their own household rather than national events…

Bratty and Margie Omero, a Democratic pollster, have extensively surveyed a group they call “Wal-Mart moms,” part of a clever campaign by the retail giant to associate itself with this year’s ultimate swing voter, similar to the oft-cited NASCAR dads of 2004, the soccer moms of 1996 or the hockey moms of 2008. The retailer has avoided getting too specific in terms of race, educational attainment, or geographic area — it defines the women as mothers who are registered to vote, have at least one child under 18 at home, and have shopped at Wal-Mart in the last month — but the group tracks closely with suburban, noncollege whites…

Consumer data backs up that sentiment. Wal-Mart moms are three times more likely than the average American to be interested in family or animated movies, dogs, and products like ketchup, frozen vegetables, and air fresheners, according to data collected by the consumer research firm Lotame. That indicates the women are the ones shopping for their families and are interested in saving pennies wherever they can. They are more interested in information on cruises, too, suggesting they’re eager to get away when their economic situation improves…

With such weighty economic situations on swing mothers’ minds, both pollsters say neither Obama’s nor Romney’s campaign has truly reached these voters yet. And both candidates face challenges in relating: Obama contends with a sense of disappointment that his first term hasn’t sped the economic recovery as much as they expected or that the recovery is leaving them behind. Romney contends with a growing sense that his business experience demonstrates he would favor the wealthy over the middle class.

For all of the talk about big money in elections, the American voter tends to be suburban and working/middle-class people looking for deals at places like Walmart.

One issue I have with analyses like these: they rarely give us the numbers to truly know the size of this group (how many Walmart moms are there really, particularly compared to other cleverly named demographic groups). Additionally, is this group distributed in such a way to really swing an election (in other words, are they located in sizable numbers in the swing states that matter)?

Might Target want to get in on this and start discussing “Target moms”? I assume these might be more educated, slightly more wealthy shoppers…

Study: home values increase several percent very near a Walmart

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A new study suggests that the value of a home increases a few percent if it is located within a half-mile of a Walmart:

It turns out, according to their recently published research, that values increase an average of 2 to 3 percent for homes within half a mile of a Wal-Mart store and 1 to 2 percent when the home is a half mile to 1 mile from a store…

The duo studied more than 1 million home sales between January 1998 and January 2008 near 159 Wal-Marts that were built between July 2000 and January 2006. They compared the prices of homes within four miles of a store that sold up to 21/2 years before an opening or 21/2 years afterward. The long time frame was picked on purpose, after the researchers discovered that the median number of days between when Wal-Mart announced a new store and when it opened was 516 days.

The study also noted that Wal-Mart’s entry into a market often acts as a beacon, generating other economic development nearby…

“On average, the benefits to quick and easy access to the lower retail prices offered by Wal-Mart and shopping at these other stores appear to matter more to households than any increase in crime, traffic and congestion, noise and light pollution or other negative externalities that would be capitalized into housing prices,” the professors wrote.

One interpretation of these findings: people are willing to pay a little more to be located near some commercial development. They may not want to live right next to it evidenced by the fact that most municipalities have some strong guidelines about how commercial areas to demarcate the space between development and residential areas, often with some combination of a berm, a fence, and trees/bushes. But, being a few moments away from a place where you can quickly buy groceries (and Walmart is the country’s biggest grocery store) and other goods is a plus.

One thing that is likely ironic about this data is that while homes close to the Walmart are a little higher, it is unlikely that residents walk to Walmart even though they could. You could interpret this data as evidence people want to live closer to some denser commercial development but having a Walmart nearby is probably not about walkability.

I wonder if these researchers could also tell how much development Walmarts tend to attract. Do they tend to act as anchors for one corner of a busy intersection? Is it enough for development on multiple corners? How many square feet of retail space, on average, can be successfully operated once a Walmart moves in?

I’m now going to look for real estate ads that mention the proximity of a Walmart…I’m not holding my breath.

Walmart increases nearby home values

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The Atlantic reports on a University of Chicago working paper (subscription req.) that having a Walmart nearby noticeably affects housing prices:

Home values within a half mile of a new store got a 2 and 3 percent boost. Within a mile, the store pushed up values 1 to 2 percent. That translated to a $7,000 average bump for nearby homes and $4,000 for houses a little further away.

Unfortunately, I don’t have a subscription and thus cannot look at the paper directly, but I have a few questions:

1.  Do other big-box retailers (e.g., Target) similarly boost nearby housing prices?
1a.  Is Walmart’s boost larger?

2.  Is there a corresponding drop in housing prices if/when a particular Walmart closes (often only to reopen at a new location a few miles away)?
2a.  If yes, is the drop greater than the boost?