Sunday, October 17, 2010

Cheap: The High Cost of Discount Culture by Ellen Ruppel Shell

Big Box Stores - Walmart, Trader Joes, and saving money


Shell devotes a chapter to the destruction of mom-and-pop stores by big box stores such as Walmart. Small stores go out of business because they cannot compete with Walmart's low prices. The big-box store provides less customer service because it dehumanizes its employees.


Up until about a year ago, I would agree with Shell's assessment of Walmart. However, in the past two years, Walmart is selling locally produced food (grown within the state) in its store. While some people might quibble that within a state is not local, it is still more local than Mexico, Holland, or Canada, and it does boost the economy of the state. It also may provide a higher quality product at a lower price.

http://www.nytimes.com/2010/10/15/business/15walmart.html?ref=dining


In addition, while I do not shop at Walmart (I've never been in one) I do know people who are regular Walmart customers. Last night, as I was buying cat litter in my local supermarket, a man checking out bird seed told me that he normally buys a month's worth of pet food at Walmart and only comes into the supermarket if he runs out of food before the next shopping day. We discussed a local pet food warehouse where I shop for cat food, and he told me that the Walmart prices are still lower. He estimated that he saved $500/year at Walmart - a significant savings. We both agreed that the supermarket was twice as expensive as the other stores and that it was taking unfair advantage of the many people in the neighborhood who own pets and did not have cars or time to take the highly unreliable bus to the petfood warehouse.

On one hand, I agree that big box stores can be soulless. On the other hand, $500 saved could make a difference between getting veterinarian care for a pet or waiting out a potentially fatal pet illness. The same issue can apply to people who buy their medicine from Walmart- they may want to buy at a small store but they may need the savings they get from using Walmart. It is easy to advocate using more expensive local alternatives if you have a good income.

The same issues can be applied to Trade Joes. There have been recent protests outside of NYC Trader Joes because of the ethics of their produce suppliers (suppliers who also supply the NYC area supermarkets). Once again, the issue (at least here in Queens) is whether to buy pricey goods at local supermarkets who are using the same suppliers but have a lower media profile, buy cheaper items at Trader Joes, or resign yourself to a lengthy trip via subway to a farmers market to buy a week's worth of produce. Is it wrong to look for the cheaper alternative when there is no real viable ethical alternative?

In addition, it looks as though supplying health care for employees under the new health care plan may make it even harder for mom-and-pop store to stay in business. Big box stores will have an easier time although their profits may drop. With this health care bill, consumers may have little say in the survival of small stores in their community.





3 comments:

Anonymous said...

I think you are only thinking of the upfront costs. One must also think of the tax breaks Walmart gets that small mom and pop stores do not. Probably, mom and pop pay proportionally more local taxes than Walmart. Also, one must consider the hidden infrastructure costs the city must pay for when huge box stores move in. Box stores bring in huge amounts of traffic, and who do you think pays for the new traffic lights, new road construction, additionally traffic enforcement, etc? We do. You may save $500 less on pet supplies, but union people have been thrown out of real jobs as Walmart looks to overseas manufacturers. (Remember that scandal a few years ago as Walmart was caught encouraging its employees to apply for social services to make up for their low salaries.) So, people in decent jobs are now on unemployment and other social services. Are you really saving $500 a year? Or has it just moved from one area--pet supplies--to another--less social services, higher public transportation costs, higher medical costs, etc.? I have learned to look at the hidden costs of everything.

Oscar W. said...

It's hard to argue against saving money these days, but I agree with Anonymous that we have to look at all of the effects of transitioning from small stores to box stores. It isn't as much of a factor with buying from Walmart, but the loss of expertise from proprietors of, say, small hardware stores might be significant. Home Depot and Lowes highlight the knowledge of their staff, but is it as great as that of the stores that are being replaced?

Tracey said...

I buy ninety-nine percent of my personal hardware needs as well as supplies for my branch from my local hardware store. It's a third-generation store and they also have a resident locksmith. They store has very prompt, courteous customer service and the employees are very knowledgable. The few times that I have used my local Home Depot have been negative experiences. I have to say tht I am willing to pay a bit more for the service at my hardware store.