14 July 2008

WalMart - Of The Morons, By The Morons, For The Morons

I was looking over a few forums the other day when people were talking about how terrible Wal-Mart was. Personally I hadn't shopped there in a while because since Sam Walton died, I've felt that the employees there simply don't care any more so I stopped shopping there. I figured I'd stop by a local 'supercenter' and check out what all the Hubbub was about.
What a mess! I went to a Super Center near me and food in the Grocery section just looked, unappetizing, a lot of the surrounding areas were very dirty. I thought to myself, "No... definitely wouldn't buy any food from this place". So I looked around in Electronics, and saw entire bins of old crappy movies for $5.00, movies that I've long since either rented and thought, OK that was a waste of 2 hours, or simply thought to myself, "I'm not going to waste 2 hours on that". What I found astonishing is that most of the employees that I ran into, didn't speak English (or just barely - or maybe they were just pretending?), and seemed very annoyed with me for even bothering to ask them questions.

I thought OK, they must be selling things here that people
actually want for decent prices, but everything that I saw was either the same price, or maybe 1 or 2% lower than where I normally buy these things. Places that usually keep their stores clean, well stocked and filled with employees that are only too happy to help you. Like Whole Foods, Publix, Ace Hardware, Target, Game Stop and Brandsmart.

So I started thinking, OK, I can see the Morons who work here, people who mostly are unemployable in every other sector of the economy, maybe that's why Wal-Mart's cases of theft have gone up so dramatically.

What about those who shop here? What kind of Moron puts himself through the harrowing experience of shopping at Wal-Mart, then waiting in line for a half hour, just to save a few pennies? So let's say you save 5%. The average shopper spends $50.00, is the $2.50 worth your dignity, and the dignity of those that Wal-mart employs?

I used to work at Home Depot when Home Depot actually cared about their employees. There were no caps on Overtime, there were no caps on Salaries, and we would get a raise every 6 months (at least those of us who deserved a raise for hard work). After about 8 years, the company decided to invest a half billion dollars in the Olympics, and take it out of the employees hides. First to go was the overtime, then the raises were cut back to every year, then they put caps on Salaries. Keep in mind that up until they instituted these changes, the company had double digit increases in sales and more importantly profitability the entire time that I worked there. When the changes started coming through, I was in management, so I wasn't as affected by the changes, but all my best people were leaving. After 2 years of these shenanigans, I cashed in my chips and left. I didn't feel that I could be part of a company that no longer believed their employees were their greatest asset. My wife couldn't believe that I sold my stock in the company after I had seen the incredible rises in value over the previous 10 years. I told her, if the company continues to treat employees this way, short term, they may see a rise in profits, but eventually the company will fall. That was back in January of 1999, and while the stock did continue to go up by about 20% over the next year, by January of 2000, Home Depot Started a decline that led to the stock falling to less than half what I had sold it for. Home Depot has now announced that they will be closing stores. Big difference from the days me and my crew were the "Big Dogs" over there. Sure some of it has to do with the housing crisis, by their decline started, well before the housing slump hit.

I see the same things going on with Wal-Mart. It is a company perpetually in decline since the death of Sam Walton. Their stock peaked in January of 2000, eight years after Sam Walton died and over 8 years ago
and has been in decline since. How many stores have they opened in the past 8 years? Yet, their market share has fallen considerably in the Retail Sector. Wal-Mart is a company running on borrowed time and running on the Ghost of Sam Walton. Sam actually cared about his employees, he didn't have salary caps, he gave them health benefits, he made them feel like they were part of the team, the current management just sees them as just another cost to be controlled, tells them to get Government assistance for Health Care and limits growth in employee earnings with Salary Caps along with a Zero overtime policy.

I find it amusing though, all these websites out there that pushing:

  • We need to regulate Wal-Mart.
  • Chicago won't let them build, because they want Wal-Mart to pay a higher Minimum wage than every other business.
  • People want Wal-Mart to stop using cheap Chinese Labor.
  • People say Wal-Mart destroys their Towns (As if small towns haven't been disappearing for decades)
I'm not for any sort of regulation of Wal-Mart or any government intervention what so ever. All I'm saying is we should do like we did with Sears when they cut out all the full time employees and replaced them with kids that didn't care. Stop going there. that's what drove them into Bankruptcy. Sure at Sears it was easy, because they had high prices, and we figured Wal Mart had better prices AND better service. Well they don't have the better services anymore, but there are plenty of other choices out there that do. Sure you might pay a buck or two more, but isn't that worth the headache of dealing with Wal-Mart's shoddy enterprise? Maybe it's just me, but I've been to at least 5 Wal-Marts around Delray Beach, Florida and found every single one of them to be dirty, unwelcoming, filled with people who don't speak English, and filled with people who don't want to help you. So why go there?

Overall, I feel that Wal-Mart has been good for the economy in that it has greatly helped to keep prices low, but Wal-Mart sacrificed customer service to continue to lower prices, while trying to increase profitably. This one catastrophic decision, has left Wal-Mart losing market share, the only reason their sales are up, is because they continue to open new stores, but their percentage of the overall pie in Retail is slipping. A few more years of this will not be sustainable for them and they'll end up going the way of Sears, until a new contender rises up to over power them with the right combination of Better service and decent prices. There's a reason why Wal-Mart is the only company on Fortunes list of the 20 most profitable companies that doesn't offer all it's employees great pay and benefits. It's because it's a model that is unsustainable. Sure, just like Home Depot, you can have short term gains, but they all eventually come back to haunt you. What's ashame is that Sam Walton left David Glass a perfectly decent company that everyone from Wall Street to Main Street loved, and today it's a company that neither feels very comfortable with.

The greatest thing about Capitalism is that we have choices, and we can choose not to patronize businesses who we don't feel are good for the community, so here's one for all you Wal-Mart Morons out there. Just Say No!

Sources for this story:
Wal-Mart Tries Again to Salvage it's Declining Public Image.
Wal-Mart Chart
Wal-Mart Declining Morals
Wal-Mart Movie


  1. Ever been to a Wal-Mart shareholder's meeting? If you had, you'd understand just what happened to the company.

    Wal-Mart has become a freakish, secular religion to the shareholders. They just have "faith" that things will always be great, primarily because a lot of them started investing years ago, watched their shares split a few times and are convinced that the store will be profitable forever.

    They're in for a rude awakening. That company has gone straight to hell since Walton died.

  2. Well the stocks' been declining for the past 8 years, so you'd think they would have revolted by now.

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