Wednesday, December 18, 2013

Walmart's Troubles

Walmart USA is not having a good year. In a move to cut costs last year they reduced their workforce quite sharply with the result that there were too few staff in many stores to keep the shelves stocked. The goods were often in the store, just not on the shelf. And as they say, you can't sell from an empty shelf.

This year their same-store sales are down by over 1%, a major change for a company for whom growth in sales was normal and expected.

The noted social critc and commentator JH Kunstler says this about Walmart and similar stores (in a very important book The Long Emergency, Grove Press, 2005):

Corporations such as Walmart and its imitators used their wealth and muscle to set up "superstores" on the cheap land frontier outside small towns and put every other retail merchant out of business, often destroying most of the town's middle class. They also, incidentally, destroyed the local capacity to produce goods. [...]
The local merchants who were put out of business had been the caretakers of the town. They often owned at least two buildings in town - their homes and the buildings in which they did business - and they generally took good care of them. The physical decrepitude that is now the most visible characteristic of American towns is the direct result of extirpating that class of local people. These individuals also generally were the caretakers of the town's institutions. They sat on the library boards, the school and hospital boards, the planning board. They ran the local charities. They were invested in the history of a place. [...] Every virtue that grew out of these local relations of person and place was traduced by the big-box national retail corporations, and the American public were absolutely complicit in the hosing that it got.

Anyone familiar with downtown Dartmouth will recognise this pattern: the vibrant downtown slowly gutted as first the Kmart mall and then the MicMac mall were built, and finally Dartmouth Crossing is hurting the other malls. Fisher's Stationery on Portland Street is closing this month, leaving just Nieforth's Furnishings as the last of the locally owned and operated stores.

The very formula that made Walmart a success is now contributing to its undoing. They set their stores amid acres of parking on the outskirts of town and the absolute premise was that every customer will drive to the store. Now that so many Americans are in financial distress many of them can no longer afford to drive to a Walmart and so have to shop at smaller Dollar stores that are closer to residential areas. The ultimate irony.

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