Wednesday, February 17, 2010

In Praise Of Wal-Mart

Full Disclosure:  I work for a Wal-Mart supplier.  (We also supply Albertson's, Kroger, Winn-Dixie, Publix, HEB, Central Market, Brookshire's, Brookshire Brothers, and anyone else who wants to keep their groceries off the ground.  We've been keeping food off the floor since nineteen eighty-four, and we're better at it than anybody.  That's just how it is.)

I'm fascinated by Wal-Mart.  Because they bring good products to the masses at a low price, and because Wal-Mart plays a major role in keeping inflation down, and because Sam Walton probably deserved a Nobel prize, and because most low income families wouldn't swap their Wal-Mart for every social worker who has ever lived, and because of their anti-union stance, and because Wal-Mart accomplishes all this down-home Bentonville, Arkansas, goodness with no government aid, well, the lamestream media is required to portray Wal-Mart as downright satanic.   

We now have a few more goodies to add to that pile.  It's about the Wal-Mart produce selection.  Here's Reason magazine's Katherine Mangu-Ward:

(Author Corby) Kummer buys two batches of nearly identical groceries at Wal-Mart and Whole Foods. He has them prepared in a restaurant kitchen and invites taste testers to make a blind side-by-side comparison. The Whole Food grocery set cost $50 more, $20 of which is spent on top of the line chicken breasts (Wal-Mart didn't really offer equivalently high-end meat.)

The taste testers preferred the Wal-Mart veggies overwhelmingly, with complaints about the meat and dairy. "The tasters were surprised," he writes, "when the results were unblinded at the end of the meal and they learned that in a number of instances they had adamantly preferred Walmart produce. And they weren’t entirely happy."
Here's something else from Corby Kummer's original article about the taste test experiment, which is in the March 2010 Atlantic Monthly online edition:
Michelle Harvey, who is in charge of working with Walmart on agriculture programs at the local Environmental Defense Fund office, summarized a long conversation with me on the sustainability efforts she thinks the company is serious about: “It’s getting harder and harder to hate Walmart.”
Of course, it's getting harder and harder to hate Wal-Mart.  But what if hating Wal-Mart is one of the planks in your political party's platform?  I'm sure you'll find a way to continue that policy.
Some cynics think that Wal-Mart's sustainability efforts are nothing but window dressing.  Trust me.  I know differently.  They want everyone up and down their supply chain to operate in a sustainable manner.  Trust me.  I know.  They're for real on this.  I know.  Trust me. 
A few other things about the Atlantic Monthly Online's tour of Wal-Mart's produce offerings....Here's the picture they posted at the top of the article:

Are those not the best looking produce displays you've ever seen?  (Except, of course, for the others we have designed and manufactured for other grocery chains, which look just as good, but in a different sort of way?)  WE'VE MADE IT INTO THE ATLANTIC MONTHLY ! ! ! ! ! ! ! !   Mark Twain published in The Atlantic !  So did Hemingway !  And the THE ATLANTIC FREAKIN' MONTHLY is running photos of our fruitstands ! ! ! ! ! 

And if that's not enough, the Atlantic Monthly even made a video.  Corby Kummer has good things to say about the quality of Wal-Mart's vegetables, but that's not the best part.....  Those are our shelves inside the wall refrigeration units !  Those are our new-era Produce Tables at the :40 mark, built by Ray The Wood God and Super Igor The Wonder Serb !  I think that's some of our plastic at the 2:00 mark, built by Danny Ray and company.  Those are our bakery displays over the narrator's left shoulder at the end of the video.

Hit the second button from the right if you want to view it in full screen mode. 

But enough about us. You see, after all those exclamation points that I wasted in the previous paragraph, it might not even be our equipment in the video. WM has at least two suppliers for everything in their stores. (See the link above about how WM keeps inflation down.  Unlike the post office, the Department Of Motor Vehicles, or any other monopoly, we have competitors.  Therefore, we're obligated to build good products for a low price.  Let this be a lesson for anyone wanting a government monopoly in healthcare.)

One last thing....another one of my heroes, Radley Balko, wrote this post called "Does Wal-Mart make you skinny?" for The Daily Beast yesterday.  (It's been a good couple of days online for Wal-Mart.)
.....Economists Art Carden of Rhodes College and Charles Courtemanche of the University of North Carolina at Greensboro....conducted a study to find out (whether Wal-Mart had a positive impact on community health and overall economy.)   Carden and Courtemanche have done a number of studies on Wal-Mart. Carden insists they get no funding from the company, directly or indirectly. Rather, he says, the two free-market economists have been intrigued by the Wal-Mart debate and wanted to test some of the more common criticisms of the store. Generally, they’ve found that the worst fears about Wal-Mart are unfounded, and that the stores have a mostly positive impact on their communities.
But they thought this one might be different. “We expected the study to show an increase in obesity in communities with a Wal-Mart,” Carden says. “We know that Wal-Mart lowers the cost of food, but we figured it’s not always the best food for you.”
To their surprise, they found the opposite—there was a small but statistically significant reduction in obesity rates in communities with a Wal-Mart, perhaps because the store also sells fresh produce of good quality at a good price.....

In a widely cited 2005 paper for the National Bureau of Economic Research, economists Jerry Hausman and Ephraim Leibtag found that Wal-Mart significantly lowers prices in the communities where it sets up shop, even for people who never shop at the store. On food alone, Hausman and Leibtag found that Wal-Mart delivers a 25 percent benefit to consumers, which has a disproportionately positive effect on the poor because they spend a larger percentage of their income on food.

The mere presence of a Wal-Mart in a community results in the equivalent of a 6.5 percent increase in annual income, which, as The Washington Post’s Sebastian Mallaby has pointed out, makes the store a bigger boon to the poor than the federal government’s food-stamps program. And Carden and Courtemanche began their study before Wal-Mart began its $4 prescription drug program, which also delivers a big potential health benefit both to Wal-Mart customers and other consumers in the area, because many competing stores were moved to implement similar programs.
And here's the typical Radley Balko kicker at the end:

Every time Wal-Mart tries to open a store in a big city like Chicago, Los Angeles, or New York, it encounters a storm of protest from politicians, labor unions and activist groups who claim to speak for the poor and low-wage workers. Los Angeles City Councilwoman Jan Perry, who proposed the one-year moratorium on new fast-food restaurants on L.A.’s south side to combat childhood obesity, also in 2004, backed a bill to keep Wal-Mart out of that same community.

In Chicago in 2006, a proposed Wal-Mart store met with fierce opposition from groups critical of its labor practices—a position just reiterated by Mayor Richard Daley. So instead, Wal-Mart opened in Evergreen Park, one block outside the Chicago city limits. The store received 24,500 job applications for just 325 positions, and now generates more than $1 million per year in taxes for the small town while boosting revenue for local businesses.

Had Chicago’s politicians not been so obstinate, that economic windfall could have been enjoyed by the city’s low-income, mostly minority Chatham neighborhood—whose residents might have dropped some pounds as well.
The pictures of the GREAT looking produce displays in this post came from The Atlantic Monthly.  Thanks to Instapundit, as usual, for many of the original links.


Sarah Tutt said...

While there are many things about WalMart that aggravate me, I continue to shop there because of convenience and price. I also know that they are among the companies who facilitate employment for people with various disabilities.

Anonymous said...

I beg to differ on the point of Wal-Mart getting no government aid.

They DO get government aid. They've gotten abatements from sales/VAT taxes, they've gotten government-funded road/intersection rebuilds and traffic signals, they've gotten taxpayer-funded water and sewer lines laid to their buildings, including the cost of laying them across Wal-Mart owned properties like their parking lots.

Wal-Mart gets plenty of help from governments. They get tax breaks that aren't given to other businesses, the get construction projects paid for that other businesses have had to pay for themselves.

Wal-Mart is not the only one. The whole Kelo thing in New London CT was around a company that wanted the land those families were living on ... and the only reason that company wanted that land was because the city government was giving them a tax break to come there. (I think it was Pfizer, but I could be wrong.)

Wal-Mart is complicit in eliciting and receiving favors from governments that are not made available to other, smaller, local businesses.

I would have a great deal more respect for Wal-Mart if they would turn down those government-issued perks, in favor of competing in the local markets where their stores are, solely on their company's own merits.

TarrantLibertyGuy said...

And don't be Dissin' my boy John Mackey's store!

The Whited Sepulchre said...

Good to hear from you. Hope you're doing well.

You make some excellent points. The lights/streets/sewer connections are more or less standard. I was not aware of any sales/VAT issues, though. This is one of my pet gripes, and will read up on it.
Kelo vs. New London was a Pfizer boondoggle, and that land is still vacant, BTW. A great book on the subject is "Little Pink House". Will be posting on it soon, if you're interested.

Your man Mackey doesn't buy his display equipment from the correct company. I DID participate in the "Buycott" after his excellent editorial about the healthcare farce. First time ever, though. When it comes to keeping groceries off the ground, I'm a purist.

Fester said...

I operate on the principle that every store has its place so I buy some goods at wal-mart, but I get other stuff elsewhere. For instance I like the pizza dough from whole foods better. There are some things I only buy at wal-mart like grits because they are half the price.