Wal Mart - just as bad as big oil
Posted by: McQ
As most know, Wal-Mart is the company the left loves to hate.
But consider who Wal-Mart really serves. It serves Americans who have to make every penny count and then some. It helps families who may be living on the edge to at least stay on the edge instead of falling off.
So I have to wonder what a Barack Obama or Hillary Clinton would have to say about Wal-Mart's present attempt to keep its grocery prices low by using its purchasing power to lean on its suppliers to absorb some of the cost increases they've undergone due to fuel, commodity and other price increases?
Because of its size it has been able to do some innovative things which, you'd think, the left would find to be wonderful. For instance:
Shrink the goods. Ever wonder why that cereal box is only two-thirds full? Foodmakers love big boxes because they serve as billboards on store shelves. Wal-Mart has been working to change that by promising suppliers that their shelf space won't shrink even if their boxes do. As a result, some of its vendors have reengineered their packaging. General Mills' (GIS, Fortune 500) Hamburger Helper is now made with denser pasta shapes, allowing the same amount of food to fit into a 20% smaller box at the same price. The change has saved 890,000 pounds of paper fiber and eliminated 500 trucks from the road, giving General Mills a cushion to absorb some of the rising costs.
Almost a million pounds of packaging saved. The 500 trucks necessary to haul that packaging eliminated. Fuel saved, pollution avoided - what's not to love?
Cut out the middleman. Wal-Mart typically buys its brand-name coffee from a supplier, which buys from a cooperative of growers, which works with a roaster - which means "there are a whole bunch of people muddled in the middle," says Wal-Mart spokeswoman Tara Raddohl. In April the chain began buying directly from a cooperative of Brazilian coffee farmers for its Sam's Choice brand, cutting three or four steps out of the supply chain.
And all of that in the middle does what? Add cost. Eliminate the costs in the middle and pass on the savings to the consumer. Sounds like another thing over which the left should swoon (well, unless, of course, those folks in the middle are union members, and then its back to Wal Mart being the great Satan).
Go locovore. Wal-Mart has been going green, but not entirely for the reasons you might think. By sourcing more produce locally - it now sells Wisconsin-grown yellow corn in 56 stores in or near Wisconsin - it is able to cut shipping costs. "We are looking at how to reduce the number of miles our suppliers' trucks travel," says Kohn. Marc Turner, whose Bushwick Potato Co. supplies Wal-Mart stores in the Northeast, says the cost of shipping one truck of spuds from his farm in Maine to local Wal-Mart stores costs less than $1,000, compared with several thousand dollars for a big rig from Idaho. Last year his shipments to Wal-Mart grew 13%.
Wow. By from local growers, save on shipping, pass the savings on to your customers. Seems to me that's just what the doctor ordered.
As the article points out, while the small suppliers are feeling some pain from the Wal Mart "pushback", imagine the pain for the poorer consumer having trouble paying $3.80 a gallon for milk if Wal Mart wasn't pushing back.
This is great, isn't it? A seller trying to do what it can to keep its prices low?
Oh, wait. Their profits increased by what amount?
During the first quarter, which ended April 30, Wal-Mart's profit increased 6.9 percent, to $3.02 billion, or 76 cents a share.
6.9%?
Forget everything I said. I'm sure the Democrats will be intoducing legislation soon to tax their windfall profits or put them before the "Reasonable Profits Board".
6.9%
Shameful.
