Walmart closing hundreds of stores

[Elheru Aran]

Walmart does well in rural areas since quite often it's the only super-store in the area. There might be small neighborhood grocery stores (or not so small like Kroger) but there won't be another Walmart for miles around, and given the cut-rate prices on everything, they'll make good business there. It's no coincidence you often see a hardware store like Lowe's close to Walmart-- they know damn well they're actually offering something Walmart doesn't have and the proximity will allow them to share customers to some degree, as if someone's coming out from the boondocks to do their weekly groceries they can also buy any hardware or whatever that they need at the hardware store.

In more urban areas, there's far more competition for the same goods. And given that urban areas are only growing so far... it's no wonder Walmart is hurting there despite their efforts to diversify.

[Jub]

Aside from the fact that they're just doing it plain wrong. Costco's advantage isn't low prices. In fact in some cases they have higher prices. Their advantage is that they actually give a shit about the customers and the products they sell, so shoppers are kept satisfied both with the products and the service.

As I understand it Costco has such a limited selection because they're very picky about brands. They also have some of the best pay and benefits in the business, which makes for a unique shopping experience.

[Elheru Aran]

Aside from the fact that they're just doing it plain wrong. Costco's advantage isn't low prices. In fact in some cases they have higher prices. Their advantage is that they actually give a shit about the customers and the products they sell, so shoppers are kept satisfied both with the products and the service.

As I understand it Costco has such a limited selection because they're very picky about brands. They also have some of the best pay and benefits in the business, which makes for a unique shopping experience.

Aldi is in a similar situation as I understand. They run stores maybe a fifth or sixth the size of a typical Walmart, geared almost exclusively towards groceries with a rotating variety of other products, and have maybe... twenty workers MAX, about five or six to a shift. But their check-out times are extremely quick, the product is pretty reasonable as almost all of it is their store exclusive brand and so they save a lot of money by not selling brand-name goods, and really it's just a better atmosphere in general than Walmart's. Walmart tends to be very cold and antiseptic; it's like shopping at a hospital. Aldi uses more browns and tans throughout the whole store, so it comes off rather warmer.

EDIT: I should have said, with such a lower work force per store, I have to assume they're being paid better than the usual Walmart employee. I could be wrong, though, but when they had a recruiting drive at one store I did pick up one of their papers-- it said minimum starting wage was something like $9, which isn't bad. I mean, it's not awesome, but it's better than minimum wage.

[Jub]

Aldi is in a similar situation as I understand. They run stores maybe a fifth or sixth the size of a typical Walmart, geared almost exclusively towards groceries with a rotating variety of other products, and have maybe... twenty workers MAX, about five or six to a shift. But their check-out times are extremely quick, the product is pretty reasonable as almost all of it is their store exclusive brand and so they save a lot of money by not selling brand-name goods, and really it's just a better atmosphere in general than Walmart's. Walmart tends to be very cold and antiseptic; it's like shopping at a hospital. Aldi uses more browns and tans throughout the whole store, so it comes off rather warmer.

Store feel really can make all the difference. It's what Safeway and other smaller chains use to justify massive price hikes.

[Elheru Aran]

and really it's just a better atmosphere in general than Walmart's. Walmart tends to be very cold and antiseptic; it's like shopping at a hospital. Aldi uses more browns and tans throughout the whole store, so it comes off rather warmer.

Store feel really can make all the difference. It's what Safeway and other smaller chains use to justify massive price hikes.

I wouldn't know about that as I don't have any Safeways around here... but I will note something: Kroger in my area has been revamping their stores to resemble higher end grocery stores like Publix. I suspect it's for pretty much that reason. I don't think they're going to hike prices (much) because frankly if they went much higher they would lose business to Walmart and Aldi, but one thing Kroger does have in its favour is their fuel rewards card. That's not going to matter much now that prices are going down though.

[Broomstick]

Aside from the fact that they're just doing it plain wrong. Costco's advantage isn't low prices. In fact in some cases they have higher prices. Their advantage is that they actually give a shit about the customers and the products they sell, so shoppers are kept satisfied both with the products and the service.

As I understand it Costco has such a limited selection because they're very picky about brands. They also have some of the best pay and benefits in the business, which makes for a unique shopping experience.

Aldi is in a similar situation as I understand. They run stores maybe a fifth or sixth the size of a typical Walmart, geared almost exclusively towards groceries with a rotating variety of other products, and have maybe... twenty workers MAX, about five or six to a shift. But their check-out times are extremely quick, the product is pretty reasonable as almost all of it is their store exclusive brand and so they save a lot of money by not selling brand-name goods, and really it's just a better atmosphere in general than Walmart's. Walmart tends to be very cold and antiseptic; it's like shopping at a hospital. Aldi uses more browns and tans throughout the whole store, so it comes off rather warmer.

EDIT: I should have said, with such a lower work force per store, I have to assume they're being paid better than the usual Walmart employee. I could be wrong, though, but when they had a recruiting drive at one store I did pick up one of their papers-- it said minimum starting wage was something like $9, which isn't bad. I mean, it's not awesome, but it's better than minimum wage.

$9/hour is comparable with the starting wage at other stores in that price niche (like mine, even if we're more of a hypermarket rather than strictly grocery).

Aldi saves not only on limiting brands and selections, concentrating on basic items, but also on minimal store fixtures - they don't have fancy shelves or displays, basically, they bring out a pallet of product and people shop from that. Their heating and power costs are lower simply because they have a smaller footprint for the store, lower ceilings, and basically, much less to power and heat/cool. You bag your own groceries. It's very no-frills and they're up front about that - it doesn't appeal to everyone but that's OK, they have their target demographic and they aren't trying to pursue everyone. For awhile they had signs in their stores that said more or less "We know you shop other places - come to us to stock up on the basics" which pretty much sums up their North American operations. If you want something exotic they don't have it, but they do have the basics. I assume that also depends somewhat on local wants - some have a larger selection of, say, Mexican style peppers and other ingredients, others stock mangos (presumably due to local desires) and so forth. They make their money moving large volumes of low-cost items with no frills attached.

Because the stores are small it usually isn't that hard to find an employee when you need one. Said employee may be doing any number of jobs - they require their staff to be jack-of-all-trades within the store - but you can always find one. Also because they don't have a lot of staff you tend to get to know the ones at your store if you're a regular. That makes the service feel more personal. Aldi employees also seem to have a bit more independence than Wal-Mart employees, not requiring a supervisor for every little thing.

[Me2005]

...and really it's just a better atmosphere in general than Walmart's. Walmart tends to be very cold and antiseptic; it's like shopping at a hospital. Aldi uses more browns and tans throughout the whole store, so it comes off rather warmer.

This is a design trend of the times, and not of Walmart. In the 90's, people liked bright lights and white everything. Now, they like more subdued browns and beiges. All the Walmarts near me use the newer palate because they're newer stores and/or doing well enough they can afford to remodel. I know of a Kroger and Target that were still looking as you describe last I visited, but they're about 30 miles away.

All of the Kmarts I've ever been to look as you describe, however.

[Elheru Aran]

...and really it's just a better atmosphere in general than Walmart's. Walmart tends to be very cold and antiseptic; it's like shopping at a hospital. Aldi uses more browns and tans throughout the whole store, so it comes off rather warmer.

This is a design trend of the times, and not of Walmart. In the 90's, people liked bright lights and white everything. Now, they like more subdued browns and beiges. All the Walmarts near me use the newer palate because they're newer stores and/or doing well enough they can afford to remodel. I know of a Kroger and Target that were still looking as you describe last I visited, but they're about 30 miles away.

All of the Kmarts I've ever been to look as you describe, however.

Well, sure, yeah, it's also a separate trend from economics, it's obviously not a single factor that's affecting Walmart. I have noticed that Walmart has been revamping its style in the past, say 5 years or so. More carpeted areas, more colour. Newly built stores are shooting for a little less of the big-blue-box look. It makes sense; if you make it look a little less industrial, a little more welcoming, you're going to attract and/or keep more customers.

Overall though my impression has been that the model Walmart has been working under (thousands of highly similar super-stores offering the same products in a broadly similar layout) is simply losing steam in the current economic climate due to a broad variety of factors. It's going to work better in some areas than others, but in an urban area where people have more options, they are starting to move away from Walmart because they know they could do better. Aldi wouldn't be succeeding otherwise in areas where Walmart used to rule supreme, like down here in Georgia.

Of course part of that is probably because of social movement-- for example I've noticed a number of Aldi stores springing up in the suburban Atlanta area where I live, but I haven't been into the more urban areas of Atlanta enough to see what's going on in those areas. That suggests that perhaps the suburban population is doing better economically than the urban population and can absorb the impact of smaller stores versus the mega-mart. But I have neither the time nor inclination to study that in depth...

[His Divine Shadow]

You bag your own groceries. It's very no-frills and they're up front about that - it doesn't appeal to everyone but that's OK, they have their target demographic and they aren't trying to pursue everyone.

I have to say that having someone bag my groceries would feel very weird to me. I don't think it's a thing in europe, certainly not in Finland or the nordics.

[Elheru Aran]

You bag your own groceries. It's very no-frills and they're up front about that - it doesn't appeal to everyone but that's OK, they have their target demographic and they aren't trying to pursue everyone.

I have to say that having someone bag my groceries would feel very weird to me. I don't think it's a thing in europe, certainly not in Finland or the nordics.

It's different here. Bag-boys are definitely a thing in many stores, though generally they perform other tasks as well, of course. Walmart has the cashiers bag the purchase, but most other grocery stores will have at least a few bag-boys to help people with large purchases or older shoppers. So Aldi is somewhat of a new exception to the rule. Dropping a quarter deposit on the carts is new, too, and some people actually refuse to shop there because they don't want to do that!

[His Divine Shadow]

Yeah it sounds like they brought the whole european shopping experience right over. Never had a problem with giving a coin to the carts as I get it back, but it's been like that since the 90s basically everywhere. Still I think it's a bit funny how we aren't trusted with the carts in Finland but we pick and weigh our own produce on scales in the shops grocery sections. In Lidl stores they do it the german way and the teller weighs it.

[Me2005]

Overall though my impression has been that the model Walmart has been working under (thousands of highly similar super-stores offering the same products in a broadly similar layout) is simply losing steam in the current economic climate due to a broad variety of factors. It's going to work better in some areas than others, but in an urban area where people have more options, they are starting to move away from Walmart because they know they could do better. Aldi wouldn't be succeeding otherwise in areas where Walmart used to rule supreme, like down here in Georgia.

Of course part of that is probably because of social movement-- for example I've noticed a number of Aldi stores springing up in the suburban Atlanta area where I live, but I haven't been into the more urban areas of Atlanta enough to see what's going on in those areas. That suggests that perhaps the suburban population is doing better economically than the urban population and can absorb the impact of smaller stores versus the mega-mart. But I have neither the time nor inclination to study that in depth...

I think I've started to get a grasp on what Aldi is, and I think we have something similar here in the PNW. It's called Winco, and if the two are anything alike, Aldi is only encroaching on Walmart on the grocery department because they do groceries cheaper than Walmart does. All their savings vs. Walmart come about the way Boomstick describes:

Aldi saves not only on limiting brands and selections, concentrating on basic items, but also on minimal store fixtures - they don't have fancy shelves or displays, basically, they bring out a pallet of product and people shop from that. Their heating and power costs are lower simply because they have a smaller footprint for the store, lower ceilings, and basically, much less to power and heat/cool. You bag your own groceries.

Winco's around here don't even accept cards (or they didn't in the past, I haven't been in awhile). So from *just* a cost perspective, Aldi/Winco are beating Walmart at a game Walmart has never been great at, which is groceries (as my local variant Kroger grocery/superstore has always had prices competitive with Walmart for better stuff grocery wise). Winco beats my local store as well for groceries (and often for exactly the same groceries), but I don't shop there because it's farther away and enough more of a hassle (bagging my stuff, needing cash, not always carrying everything I need to buy) not to justify the savings.

I've never lived in an truely urban area, but I suspect that superstores don't do well in those markets because they can't offer their clientelle significant savings by going with higher bulk (shoppers won't carry 20-40# bags of whatever home), they require huge footprints in costly locations, and catering their stock to better fit the local area is more difficult for distribution and planning. I really don't think any of this has to do with moral questions, it's all about the cost of goods vs. apparent quality to the consumer.

[Broomstick]

Of course part of that is probably because of social movement-- for example I've noticed a number of Aldi stores springing up in the suburban Atlanta area where I live, but I haven't been into the more urban areas of Atlanta enough to see what's going on in those areas. That suggests that perhaps the suburban population is doing better economically than the urban population and can absorb the impact of smaller stores versus the mega-mart. But I have neither the time nor inclination to study that in depth...

Aldi seems to do well in urban areas, including impoverished urban areas and “food dessert” type areas, probably because of their low prices and lower cost footprint. I also have noticed that Aldi will pay for uniformed security guards in rougher neighborhoods.

You bag your own groceries. It's very no-frills and they're up front about that - it doesn't appeal to everyone but that's OK, they have their target demographic and they aren't trying to pursue everyone.

I have to say that having someone bag my groceries would feel very weird to me. I don't think it's a thing in europe, certainly not in Finland or the nordics.

It's different here. Bag-boys are definitely a thing in many stores, though generally they perform other tasks as well, of course. Walmart has the cashiers bag the purchase, but most other grocery stores will have at least a few bag-boys to help people with large purchases or older shoppers. So Aldi is somewhat of a new exception to the rule. Dropping a quarter deposit on the carts is new, too, and some people actually refuse to shop there because they don't want to do that!

I've always been slightly amazed at that – people refusing to shop there because of the bag-your-own rule or having to put a deposit on the carts. I could see some of the disabled having an issue with that, or the frail elderly, but young healthy people?

On the upside, you don't get too many spoiled, self-entitled jackasses in Aldi's, either.

Yeah it sounds like they brought the whole european shopping experience right over. Never had a problem with giving a coin to the carts as I get it back, but it's been like that since the 90s basically everywhere. Still I think it's a bit funny how we aren't trusted with the carts in Finland but we pick and weigh our own produce on scales in the shops grocery sections. In Lidl stores they do it the german way and the teller weighs it.

Aldi is, essentially, a German grocery store that set up shop in the US. There is a separation between European and North American Aldi, but yeah, they essentially imported the German store to the US way back in the 1970's. They've largely been in urban areas ever since. A lot of people “discovered” Aldi during the Great Recession, but I've been shopping at them since the mid-1980's.

Winco's around here don't even accept cards (or they didn't in the past, I haven't been in awhile).

Aldi's around here accepts cash, debit cards, and food stamps. That's it. No credit, no checks, no coupons.

[Simon_Jester]

Not taking credit cards may help them keep prices lower.

One of the greatest scams of the 20th century may have been the major credit card companies pressuring retail sellers to charge the same price for cash and credit transactions, given that the credit card merchants extract a fee from transactions that use credit. Thus, as a side effect, stores that take credit cards have to jack up prices on everything by a tiny fraction, just to compensate for the X% fee that goes to the credit card company from Y% of their total sales.

[Ralin]

I've always been slightly amazed at that – people refusing to shop there because of the bag-your-own rule or having to put a deposit on the carts. I could see some of the disabled having an issue with that, or the frail elderly, but young healthy people?

I remember year before last when I was in Germany and first saw the deposit for cart system I thought it made so much sense, but that it would never catch on in the US because no one wants to be the first chain to start making customers do it.

Plus smaller denominations of coins in common usage.

[Channel72]

Secondly and on a more cynical note, do you really think Target executives are just that much more scrupulous and moral than Walmart executives that they're willing to sit there and watch Walmart systematically beat them on prices by, oh, five percent across the board? If Walmart really started to get that much of a price advantage over them by pursuing some particular unscrupulous or antisocial tactic, you can bet Target would have every motivation to start emulating them.

I'm taking it as a given that Walmart prices actually are significantly cheaper - across the board - than competitors. Are you saying this is not true?

Add me to the "Walmart is not cheaper accross the board" camp.

All right... I'll take your word for it. I never actually go grocery shopping anyway - I basically just get everything delivered to me from Fresh Direct. Maybe that's why Walmart is failing in urban areas at least. I had just assumed that Walmart actually was pretty much cheaper than most of their competition - given all the controversy surrounding them.

[His Divine Shadow]

Not taking credit cards may help them keep prices lower.

One of the greatest scams of the 20th century may have been the major credit card companies pressuring retail sellers to charge the same price for cash and credit transactions, given that the credit card merchants extract a fee from transactions that use credit. Thus, as a side effect, stores that take credit cards have to jack up prices on everything by a tiny fraction, just to compensate for the X% fee that goes to the credit card company from Y% of their total sales.

Not taking cards here would probably drive you out of business in a day. Debit cards though rather than credit cards.

[Simon_Jester]

My understanding is that debit card providers typically charge smaller service fees.

[LaCroix]

Debit cards charge a 1% fee in Europe. Credit card companies 2-4%.

Thats why even many small businesses do debit card payment, while credit cards are occasionally rejected. Debit cards have become the premier payment method in Europe, before cash.

Cheque is almost unheard of, most people under 40 have never even seen one in their lifetime.

Also - the no coupon thing is also an European thing. We barely have those, ever. We only have items put on special sale.

[Raw Shark]

On the subject of bag boys: This was my first "real" job, for (I'm dating myself here, I know) US$4.25/hour, back when that was legal and considered ethical, and boy howdy, did I have other duties aside from bagging groceries. I loved and welcomed the times when the store was busy, so the 17-year-old douchebag who wore the name tag that said Manager on my shift, who was blatantly stealing from the store, didn't make bizarre shit up for me to do. If I wasn't high the whole time, I would've killed the prick.

Costco has better hiring standards than Walmart / Sam's Club, pays their people more, and treats them well, and it shows.

Kroger is in a blind fucking panic right now, locally, because of all the new competition. Different franchises are trying different emergency measures, ranging from brilliant (matching the prices on produce at Sprouts) to pants-on-head stupid (going from reliably 24/7 to closed from Midnight-5am, for which I will never shop at effected stores again), to incredibly dickish, such as the one closest to me kicking out parking lot tenants who it told would have their lease indefinitely so it could demolish their strip mall and build a drive-through pharmacy on practically zero notice, right after one of them spent $70,000 on renovations.

[Starglider]

One of the greatest scams of the 20th century may have been the major credit card companies pressuring retail sellers to charge the same price for cash and credit transactions, given that the credit card merchants extract a fee from transactions that use credit. Thus, as a side effect, stores that take credit cards have to jack up prices on everything by a tiny fraction, just to compensate for the X% fee that goes to the credit card company from Y% of their total sales.

Cash handling for medium to large businesses comes with a significant cost. Banks charge to count and deposit it and there are security issues as well. Roughly speaking, cash handling costs add an overhead of 2 to 3 percent depending on size of transactions etc (in the UK; may be more in countries with a higher crime rate). Cheque processing also has a significant cost particularly for lots of small transactions, largely due to the fact cheques are so vulnerable to fraud. As such card processing fees in the same range are not unreasonable, at least not when first introduced when the primary competition was cash and cheques.

[Broomstick]

Fees are why many business will accept MasterCard, Visa, and Discover but not American Express - the latter charges significantly more to the business using it. For places like hotels, where each transaction is large enough on average and they do massive amounts of such business it can be profitable, but not so much for smaller businesses and smaller transactions.

[Raw Shark]

Back when I turned 18 and didn't know shit about anything, I decided that I should have one credit card for emergencies, and that that card should be American Express. I made the second half of that decision because every other asshole in the business who showed up at my college cafeteria was giving away t-shirts with their logo on them, and Amex was giving away large Snickers bars. You ask 18-year-old, high-as-fuck (or probably even sober, really) me whether he wants to wear a corporate logo or eat a large Snickers bar and he will answer the same way every time, damn the consequences.

[Welf]

Cheque is almost unheard of, most people under 40 have never even seen one in their lifetime.

For American posters: this is not an exaggeration. I saw checks 3 times in my life. Once private, twice in my job. And I worked as accountant and accounting consultant for 4 years. Even professional accountants usually don't know how to handle payments with checks (fortunately google does).

Winco's around here don't even accept cards (or they didn't in the past, I haven't been in awhile). So from *just* a cost perspective, Aldi/Winco are beating Walmart at a game Walmart has never been great at, which is groceries (as my local variant Kroger grocery/superstore has always had prices competitive with Walmart for better stuff grocery wise). Winco beats my local store as well for groceries (and often for exactly the same groceries), but I don't shop there because it's farther away and enough more of a hassle (bagging my stuff, needing cash, not always carrying everything I need to buy) not to justify the savings.

I've never lived in an truely urban area, but I suspect that superstores don't do well in those markets because they can't offer their clientelle significant savings by going with higher bulk (shoppers won't carry 20-40# bags of whatever home), they require huge footprints in costly locations, and catering their stock to better fit the local area is more difficult for distribution and planning. I really don't think any of this has to do with moral questions, it's all about the cost of goods vs. apparent quality to the consumer.

I don't think Walmart actually offers savings, they just dump a lot of hidden costs on their customers while Aldi is transparent about price and benefits. Walmart offers very large packaging, which looks cheap on the unit price. But it means the customers has to spent time and money on transportation, has to keep storage space, and buy a large refrigerator and pay a higher electricity bill. And for this he gets a lower life quality, because he has to eat several days the same meals or throw away large parts.
Meanwhile I wonder if Walmart on purpose supports the image as brutal employer as marketing tool. From a number of posts it sounds people assume Walmart has to be cheaper because it abuses its employees. It's the perfect marketing spin; the mechanism how it should work is easy to understand (abusing employees means less costs), and the observable facts fit the story (they abuse employees), but the conslusion is only implied and not verified (company uses lower costs to lower prices). Throw in the difficulties to compare total costs (storage, transportation, choice) and you have an excellent way to increase real prices and make extra profit.

Back when I turned 18 and didn't know shit about anything, I decided that I should have one credit card for emergencies, and that that card should be American Express. I made the second half of that decision because every other asshole in the business who showed up at my college cafeteria was giving away t-shirts with their logo on them, and Amex was giving away large Snickers bars. You ask 18-year-old, high-as-fuck (or probably even sober, really) me whether he wants to wear a corporate logo or eat a large Snickers bar and he will answer the same way every time, damn the consequences.

And what were the consequences? I think I lack some frame of reference. I have a credit card, but didn't have negative experience so far. Although I read the horror stories about what happens in the US when you overdraft your card.

[Broomstick]

Another problem with this store closing is that in small, rural areas where Wal-Mart opened an "express" store, or is closing a full-size one, Wal-mart has typically already driven the competition out of business. This will leave some communities without a grocery store. In other words, it's creating food desserts.