Punchinello’s Chronicles

November 13, 2009

What’s Good for China is Good for Walmart

Filed under: Butterfly Wings — Punchinello @ 4:53 pm
Tags: , , , ,

How many of us are watching the connection between Walmart’s various financial events and those of China? Following a retail conference the other day, the large corporate Big Box chains indicated that consumers (you and me) aren’t spending a whole lot of money. We seem to be shopping, in that we enter a store and walk around, but we’re not plunking down the cash. Even so, Walmart announced today that they’d be open 24/7 and will NOT be beat on prices!

The other major retailers complained that if Walmart will do whatever it takes to produce a lower price, then how will they compete? Oddly enough, when China keeps its money (the yuan) low, other nations complain that they can’t compete.

Walmart seems to be the go-to place for economists and financial whiz-bangs in terms of telling us how things are looking for the economy. China seems to be the go-to place for those same economists telling us that the “recession” (aka Great Depression II) is over, slowing, getting better, pick-your-own-phrase. China, we’re told, is the engine of the new world economy. Walmart, it seems, is the engine of the American economy.

Even luxury items coming from places like Norstrom’s are being affected. We’re told that all of America is shopping downward, trading quality merchandise that actually lasts until you get it home, for cheap crap at seemingly low prices. At least the commercials tell us they’re low prices.

Oddly enough, President Obama is telling us that the world can’t rely on consumers anymore. Hmm….then what exactly are we supposed to rely on? Big Banks? Too-Big-To-Fail international corporate conglomerates?

Have you noticed that Walmart seems to have less and less on the shelves? Have you noticed that instead of it being hard to walk between displays of clothing, there’s now a lot more aisle space? If you took a ceiling-camera view of Walmart a year ago and today, would you be able to count how many display racks have disappeared?

What about the actual shelves themselves? Have you noticed that there seem to be more empty spaces? And if you’ve shopped there in the past, have you noticed that the previous “brands” have changed repeatedly? They’re getting cheaper and cheaper and cheaper. Envelopes, for example, don’t actually stick together when you try to seal them. Or, they come apart at the seams when you try putting something into the “new and improved” cheap-ass envelopes.

We can look at the daily or monthly changes taking place in Walmart and see what’s actually happening in China. We also can examine the REALITY of what’s happening in Walmart and contrast it with the reported gobblety-gook coming out of economic news about China.

The bottom line is that China may still be the best-looking economy in the world, if you believe the financial reporting, but it’s not doing very well. Just so; if we’re going to say that Walmart is the representative lifestyle of America today, then it looks like we’re all going to be in big trouble very soon.

We used to shop at Walmart. They did indeed have the lowest prices. Last year. But then we found we couldn’t depend on the store to have what we wanted. Every time we shopped there, something else had vanished. The variety was getting smaller, and at first, we assumed it was because the manufacturing companies had discontinued the things we wanted.

Then we found Woodman’s, a much smaller, employee-owned store out of Wisconsin. There aren’t a lot of them (yet), and they’re mostly around a small area. But the stores are as large as Walmart and their prices all are lower than Walmart’s prices. They have all the varieties that Walmart used to have.

So what’s it going to be? Walmart’s prices now have become mainstream. There are very few deals there, anymore, with about 90% of what we see on the shelves priced higher or the same as Woodman’s. We see fewer and fewer people shopping at Walmart, and more and more people at Woodman’s. Will that be the problem for China?

If the Chines yuan starts going up, how long will it be before the world stops shopping at China, Inc.? Prices are certainly going up at Walmart, and fewer people are shopping there in our area. That’s because we HAVE an alternative! We also have Aldi, another locally based company. They don’t always have the same merchandise because they buy on “opportunity.” When they see a good deal, they grab it, then offer it in the stores.

Walmart still is somewhat convenient. It’s still open around the clock, and it still has a few items cheaper than other stores. But if you don’t buy what you need for winter in the middle of summer, then by winter-time it’s entirely out of stock, replaced by next summer’s bargains. I wonder when we’ll see a “Temporarily Closed” sign on China?

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2 Comments »

  1. I aggree that Walmart doesn’t seem to have the same quality it had when father Walton was running the show, but the folks must still be buying, because his four sons and daughters are still individually ranked in the top 20 of world billionaires. And Theo and Karl Albrecht of Aldi’s (and Trader Joe’s)fame are up at the top too, but hail from Germany, not the USA where we’re definately into abundance and food.
    Speaking of abundance, China did add two young billionaires to the Forbes list this year.
    p.s. The Woodmans in my area has an unbeatable produce section.

    Comment by unavocce — November 17, 2009 @ 5:38 pm | Reply

  2. I think there’s no doubt Walmart will continue on into the future, being the largest retailer in the world. But like the “too big to fail” banks, I think Walmart is skewing the entire retail industry, here in America. It doesn’t matter that the owners are mega-billionaires, since most of their money likely now comes from investment proceeds.

    Catherine Austin Fitts speaks about what she calls a sustainable economy. It basically pulls money away from central banks, Wall Street, and these global conglomerates, returning the money to the local community. I think what we’re going to see is a major fragmentation soon, with these kinds of localized economies taking a higher priority. Given the choice, I’d rather support Woodman’s, based out of Wisconsin and local to Illinois. What with Walmart’s prices going up, there’s no gain anymore to shop there, unless there isn’t any big retail shop in a particular area of the country.

    Comment by Punchinello — November 18, 2009 @ 1:59 am | Reply


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