Wal-mart absorbs increased wages, no price increases

[BehindBlueI's]

Not to discredit the state of your wife's employment/diminished benefits, but this is the norm today. I work with a large number of defense contractors, most of which are fortune 500 company employees. All of them have seen reduction not only in benefits (PTO accumulation, health insurance, retirement contributions, etc) but also pay. I've known several that have had their hourly pay reduced by as much as $4.00/hour in the past few years. This is the key point I think many people overlook when addressing poverty, the separation between the rich/poor, the destruction of the middle class.

I see many people champion themselves as defenders of the free market and capitalism without opening their eyes to the fact the corporate world has hijacked our political system for their own personal gain. Everything that has stagnated wages for decades has been lobbied for by corporate America, and then pushed upon us by politicians as if being done for our own good. Free trade. Immigrate workers doing jobs American's won't do... (at the price they want to pay is the part they leave off), etc. All policy bad for the US worker advanced for good of corporate America.

You're quickly labeled "socialist" and told to just work harder when you point things like that out on INGO.

 

[BehindBlueI's]

So you raise the wage of your employees without adjusting other factors and end up closing stores under the guise that they weren't performing well. Again they say they will raise wages and not adjust other factors so who knows maybe this is their way of pushing people to their website while keeping those stores that sell sell sell open while closing ones that are mediocre.

List of the 154 U.S. stores Walmart is closing

. In the United States, 154 stores will be closed, including: 102 Walmart Express stores, 6 discount centers, 12 Supercenters, 23 Neighborhood Markets, 4 Sam's Clubs and 7 Amigo stores in Puerto Rico.

What guise?

 

[1775usmarine]

List of the 154 U.S. stores Walmart is closing



What guise?

Post 138

 

[BehindBlueI's]

Post 138

Not backed by the facts.

Wal-mart tried a pilot program of getting out of the big box store format. It failed. The majority of stores being closed are the "small format" stores.

As part of today’s action, the company will close 154 locations in the U.S., including the company’s 102 smallest format stores, Walmart Express, which had been in pilot since 2011. Walmart instead will focus on strengthening Supercenters, optimizing Neighborhood Markets, growing the e-commerce business and expanding Pickup services for customers.

Walmart Continues Sharpened Focus on Portfolio Management

Also closing 115 stores in Latin America. Did wages change there?

Domestically, Walmart intends to open 50 to 60 Supercenters and 85 to 95 Neighborhood Markets in Fiscal 2017, which begins Feb. 1. In the same period, Sam’s Club plans to open in seven to 10 new locations. Internationally, Walmart intends to open between 200 and 240 stores during the coming year.

So...wages were the issue but they are going to open new stores?

Summary: Wal-mart is closing non-performing stores and cancelling a test bed of small footprint stores that are outside of their core business model and did not do well. They are expanding their core business of large format stores and putting more emphasis on e-commerce. They are abandoning some emerging economy countries were they have not made successful inroads.

There is no "guise". This is business expansion as normal. Try something new. If it works, expand it. If it doesn't, kill it off.

 

[1775usmarine]

Not backed by the facts.

Wal-mart tried a pilot program of getting out of the big box store format. It failed. The majority of stores being closed are the "small format" stores.



Walmart Continues Sharpened Focus on Portfolio Management

Also closing 115 stores in Latin America. Did wages change there?



So...wages were the issue but they are going to open new stores?

Summary: Wal-mart is closing non-performing stores and cancelling a test bed of small footprint stores that are outside of their core business model and did not do well. They are expanding their core business of large format stores and putting more emphasis on e-commerce. They are abandoning some emerging economy countries were they have not made successful inroads.

There is no "guise". This is business expansion as normal. Try something new. If it works, expand it. If it doesn't, kill it off.

They are still closing stores to pay for the wage increase it doesn't matter if in Latin America are not as they are an international company. If thy don't raise prices they have to find some other way to negate the effect the free market will have on their profits, hence closing stores.

 

[BehindBlueI's]

They are still closing stores to pay for the wage increase it doesn't matter if in Latin America are not as they are an international company. If thy don't raise prices they have to find some other way to negate the effect the free market will have on their profits, hence closing stores.

Then how are they opening stores?

 

[Lil Bob]

Not to discredit the state of your wife's employment/diminished benefits, but this is the norm today. I work with a large number of defense contractors, most of which are fortune 500 company employees. All of them have seen reduction not only in benefits (PTO accumulation, health insurance, retirement contributions, etc) but also pay. I've known several that have had their hourly pay reduced by as much as $4.00/hour in the past few years. This is the key point I think many people overlook when addressing poverty, the separation between the rich/poor, the destruction of the middle class.

I see many people champion themselves as defenders of the free market and capitalism without opening their eyes to the fact the corporate world has hijacked our political system for their own personal gain. Everything that has stagnated wages for decades has been lobbied for by corporate America, and then pushed upon us by politicians as if being done for our own good. Free trade. Immigrate workers doing jobs American's won't do... (at the price they want to pay is the part they leave off), etc. All policy bad for the US worker advanced for good of corporate America.

I agree with what you are saying here. Since the 2007 financial crisis I have noticed that many people have taken pay cuts and the many of the available open jobs are low paying minimum wage. The richest 5% own 90-95$ of the wealth. This is the group that has made most of the money since then. Walmart is not the only company in cost cutting mode the last few years. Many companies have boosted profits by cutting costs not by growing their companies.

I like to use Walmart as examples because I know about them. Although, they are the big bully on the market, but that is what it may take to be successful.

 

[1775usmarine]

Then how are they opening stores?

Because they live in fantasy land and think the rules bend to them. Closing store only to open stores when they can't afford the wage increase.

 

[BehindBlueI's]

Because they live in fantasy land and think the rules bend to them. Closing store only to open stores when they can't afford the wage increase.

Heh, ok. So they realize they have to close stores because wages but are too stupid to realize they can't open new stores because wages?

If it's just a fantasy land and fueled by wages, why are they closing little stores almost exclusively and opening only big stores?

Do you think they would have kept unprofitable stores if wages hadn't increased. I mean, if that were true there wouldn't be closures in emerging markets 1-2 years prior to the wage hikes in the US would there? Or looking to close about 100 stores the year before the first round of wage hikes were announced due to losses and flat sales? Nah...that couldn't be, right? (Hint: look at Wal-mart in China 2012-2013 and check out the move to smaller format stores which was conceived on rising gas prices making it less economical for customers to drive so many smaller stores, while less efficient, would make up for it with a broader customer base but oil prices have dropped off and....well, you know, it's got to be the wages thing, though. Couldn't be a realigning of corporate policy based on predictions failing to come true in terms of gasoline costs, consumer preferences, etc. Nope, just the wage thing. Even when it was before the wage thing.

 

[1775usmarine]

Heh, ok. So they realize they have to close stores because wages but are too stupid to realize they can't open new stores because wages?

If it's just a fantasy land and fueled by wages, why are they closing little stores almost exclusively and opening only big stores?

Do you think they would have kept unprofitable stores if wages hadn't increased. I mean, if that were true there wouldn't be closures in emerging markets 1-2 years prior to the wage hikes in the US would there? Or looking to close about 100 stores the year before the first round of wage hikes were announced due to losses and flat sales? Nah...that couldn't be, right? (Hint: look at Wal-mart in China 2012-2013 and check out the move to smaller format stores which was conceived on rising gas prices making it less economical for customers to drive so many smaller stores, while less efficient, would make up for it with a broader customer base but oil prices have dropped off and....well, you know, it's got to be the wages thing, though. Couldn't be a realigning of corporate policy based on predictions failing to come true in terms of gasoline costs, consumer preferences, etc. Nope, just the wage thing. Even when it was before the wage thing.

You increase wages you have to make a change somewhere in your company for the added expense. Walmart did not do this as they thought they had more capital to hold on to allow more shoppers to make up the difference. Too bad free market said nope and they are closing stores. As explained several times now. Just because they are building stores doesn't mean they are right. They have to absorb the costs with new buildings and if they are not willing to increase prices elsewhere on the chain then they will be back where they are now. As I said earlier this could be a way for them to drive their shoppers to their online store while keeping on the most profitable stores open. Hence the pay increase as the convenience of shopping from home will appeal to many and they can absorb wage increases by boosting sales online.

 

[looney2ns]

So I hear that when a Meijer comes to town, they kick Wally Worlds butt?

 

[Hardscrable]

So I hear that when a Meijer comes to town, they kick Wally Worlds butt?

Dont know about that however...Meijer built a new store in my local area a couple years back. I have just started shopping there some in last few months. Somewhat different inventory offerings. Prices similar to maybe slightly higher on most common items. Big differences I notice are Meijer seems more customer friendly ( including friendly workers - for the most part anyway ), cleaner/brighter, wider isles, etc. Biggest difference is the customers.

 

[pudly]

^This. It is minimal cost upgrade with a noticeable quality upgrade, both in the store and the clientele. Definitely worth it to me.

 

[Crbn79]

Does everyone here realize Walmart sets it's own purchase prices from it's suppliers? IE Supplier 1 selling Doodaads @ $8.99, Walmart submits order for 10,000,000 Doodaads @ $2.99 each. Supplier either agrees to minimal profit per, sometimes as low as $0.10 each, or is removed from supplier list. Because $0.10 profit each turns into $1,000,000 profit @ 10,000,000 sold.

At the end of the day the Walmart can "maintain" prices simply by not adjusting on downward trends. Remember that 20 oz bag of Doritos you used to get? Sure, they are still 2/$5 but what's the weight of it now? 10 1/2 oz? A 24 oz bag is now the "Party size" for $4.29.

Big business is Big Business because they know how to make money. A $15/hr pay rate will undoubtedly cost the consumer more $ in the end, it's simple economics. Also, employers are going to demand more from that same worker. Those loafs you see walking around walmart in uniform talking on their phone instead of working, they will become "unemployable".