On any given week, an estimated 100 million people shop at Walmart, or about a third of the American population. That number is set to tick upward with the advent of Franklin's Walmart Super Center. Like children waiting for Christmas morning, the anticipation continues to rise. For others, the outlook is more of a Walmart Scrooge, with a bah humbug point of view. For some, Walmart is too big/successful to patronize - the evil empire of retail. With annual gross revenue over $400 billion which exceeds many nations GDP, it's understandable why Walmart is despised by some as the Goliath among the David-sized competitors.
There has never been a time when it's been easy for the smalltime operator. The failure rate for new small businesses has always been high, even before Walmart arrived on the scene. The last century saw the emergence of the supermarket and the shopping mall as well as the critics who opposed their existence. These entities created a paradigm shift in the market place. The entrepreneurs who succeeded were those who could adapt to the changing times by carving out their niche. The latest change is the dominance of online shopping where a mega store is only a few keyboard strokes away. Ironically, the once seemingly invincible shopping mall and big box store are now feeling the heat they used to deliver.
A basic anti-Walmart argument is that it squeezes out or stifles competition because of its size, especially in smaller communities. The logic is that if a business gets a bigger slice of the pie, the other pieces shrink. However, despite the half-baked economic ideas of some of our politicians, new pies are always going into the oven, albeit fewer in recent years.
One of the factors that keep those pies baking is expendable income by consumers. Income is described as both nominal and real. Nominal is the actual dollar figure while real income is a person's buying power. A $50,000 annual salary in Macon County wouldn't go very far in Manhattan where the average purchase price of an apartment is $1.5 mil. One could sleep in their car, but a parking space would still cost a couple of hundred thousand to buy.
Walmart's low prices have gone a long way in improving buying power, especially for the infamous 47 percent of the population. The “Walmart Mom” has replaced last election's “Soccer Mom” as the key demographic group to court. Walmart Moms may not be into economic theory, but they understand the importance of stretching a buck. For those that are employed by Walmart, they know that “underpaid,” beats the alternative of being unemployed.
Another flawed market place premise is that rock bottom prices trump everything else. While price is a vital component, so is selection, service, quality and convenience. One such example of a new Franklin business that provides those things is the Palmer Street Amish Market. They are not a “super center” but they run a super operation. There were no special governmental incentives for them to open, only a special ability to anticipate and provide what customers want. Walmart is in my shopping portfolio along with many other options. What they do, they do very well. In the coming week or so, I won't be one of the 100 million patrons. It's not an aversion to Walmart, but to crowds. No bah humbug - more of a ho-hum outlook.