Sunday, November 28, 2010

Wal-Mart is good for the Black Community

Everyone likes to pick on a winner, but when you add it up, Wal-Mart is good for the Black Community. Not great, but pretty good. Wal-Mart is a plus for the economic health of the Black Community because of it's low prices and job creation.

Disclaimer: I do shop at Wal-Mart for commodities like detergent, meat, and basic clothing.

1) The lower prices on basic goods really do help consumers. Wal-Mart prices really are about 20-33% cheap on the same item at a local suburban supermarket and up to 50%-75% cheaper than supermarkets in low-income areas.

2) The quality is also better. Wal-Mart requires maximum dating, rotates stock and does not sell expired product. Products are delivered frequently since they do not want to keep inventory.

3) The selection is better. Wal-Mart typically offers two brand names and one store brand for all major product categories. Many competitor carry one national brand and one store brand.

4) Wal-Mart employs large numbers of low-income people and minorities who could not find employment elsewhere. Wal-Mart gives jobs to many people that could not work else where due to geography, discrimination and skill issues. Wal-Mart offers a chance to get on the first rung of the employment ladder. Many Mom-and-Pop business in poor neighborhoods would never hire the people that work in Wal-Mart. Now they can work where they shop.

5) Destination Economics. A Wal-Mart has a significant leakage effect. Wal-Mart always brings in a string of related businesses that capitalize on the traffic. Fast-food places, banks, cleaners, and gas-stations. Usually other big box retailers like Lowes, Home Depot, Staples, 99 cents store and Pet store join the neighborhood.

6) Finally, there are also subtle ways in which Wal Mart is good. As a large public, corporation Wal-Mart worries about it's public image. Wal-Mart can be pressured. When the news media has found Wal-Mart misdeeds, Wal-Mart has corrected them.

Wal-Mart also has some negative attributes / strikes against it.

1) Low wages. Walmart typically pays the minimum legally required where it operates. It gives employees few or minimum holidays. It also forces employees to work maximum part-time hours to keep benefits down. Wal-Mart also offers low-quality benefit plans.

2) Hard work. Wal-Mart has many incentives (both postive and negative) to keep employees working hard. Cashiers are measured on scans per hour, stock clerks on stock levels, receiving clearks on accuracy and put-aways. All the store data are instantly available to the store manager and their management team as well as regional and division managers.

3) Leading the outsourcing of manufacturing from the US. Wal-Mart is a leader in non-US manufacturing of clothes, toys, sports equipment, jewelry and fashions. Just about anything with a significant amount of labor has been "sourced" by Wal-Mart from China.

4) Drive local businesses out of business. Yes, Wal-Mart does drive local shopkeepers out of business. Retailers who are in the same business and cannot offer anything better (faster service, unique items, cheaper products) usually are put our of business by Wal-Mart. However some businesses survive.

5) Wal-Mart contributes to a unhealthy life style of shopping as an activity, over spending and over consumption. Wal-Mart encourages over consummerism and impluse buying. Wal-Mart stores are destinations for a "full-day" of activity: Shopping. Cheaper items lead to buying more products that contribute to poor health and an sedentary lifestyle. Do we really need a five pound bag of chips ?? or two pounds of cookies ??

When you weigh up the pluses and minusus of Wal-Mart, the low-prices and jobs tip the balance in favor of Wal-Mart being a postive economic influence on the Black Community.

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