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WalMart Suppliers Brace For The Coming Storm: "Now We Know Why They Have Been Pushing So Hard"
When Wal-Mart moved to hike wages for its lowest paid employees earlier this year, we were quick to note that the fallout would end up rippling through the supply chain. Here’s what we said in April:
The irony is that while WMT (or MCD or GAP or Target) boosts the living standards of its employees by the smallest of fractions, it cripples the cost and wage structure of the entire ecosystem of vendors that feed into it, and what takes place is a veritable avalanche effect where a few cent increase for the lowest paid megacorp employees results in a tidal wave of layoffs for said megacorp's vendors.
Subsequently, the retailer embarked on a series of efforts to extract every last penny of savings from suppliers including i) an effort to compel vendors to forgo marketing expenditures, ii) adding storage fees and manipulating payment schedules, and iii) demanding that suppliers pass along any savings from China’s yuan devaluation.
As we’ve been at pains to explain, this was absolutely inevitable.
When “everyday low prices” is the corporate religion, you can’t pass along rising labor costs to consumers. Add it the fact that WalMart’s customers largely belong to the same tax bracket as the company’s meagerly compensated hourly employees and raising prices simply is not an option.
That means either suppliers suffer, hours are cut, people get laid off, or all of the above.
At Wal-Mart, it’s been all of the above, as workers at some stores report reductions in hours and the Bentonville office looks to cut hundreds of management level positions.
Meanwhile, some of the retailer’s higher paid workers have become disgruntled at the company’s failure to preserve the wage hierarchy (i.e. when you summarily hike wages for one group of employees and not others, you have distorted the pay ladder).
Now, after last week’s dramatic guidance cut and subsequent stock price plunge, suppliers are bracing for the worst. Here’s Reuters:
Suppliers of everything from groceries to sports equipment are already being squeezed for price cuts and cost sharing by Wal-Mart Stores. Now they are bracing for the pressure to ratchet up even more after a shock earnings warning from the retailer last week.
The discount store behemoth has always had a reputation for demanding lower prices from vendors but Reuters has learned from interviews with suppliers and consultants, as well as reviewing some contracts, that even by its standards Wal-Mart has been turning up the heat on them this year.
"The ground is shaking here," said Cameron Smith, head of Cameron Smith & Associates, a major recruiting firm for suppliers located close to Wal-Mart's headquarters in Bentonville, Arkansas. "Suppliers are going to have to help Wal-Mart get back on track."
For the vendors, dealing with Wal-Mart has always been tough because of its size – despite recent troubles it still generates more than $340 billion of annual sales in the U.S. That accounts for more than 10 percent of the American retail market, excluding auto and restaurant sales, and the company increasingly sells a lot overseas too. To risk having brands kicked off Wal-Mart’s shelves because of a dispute over pricing can badly hurt a supplier.
On Wednesday, Wal-Mart stunned Wall Street by forecasting that its earnings would decline by as much as 12 percent in its next fiscal year to January 2017 as it struggles to offset rising costs from increases in the wages of its hourly-paid staff, improvements in its stores, and investments to grow online sales. This at a time when it faces relentless price competition from Amazon.com Inc dollar stores and regional supermarket chains. Keeping the prices it pays suppliers as low as it can is essential if it is to start to claw back some of this cost hit to its margins.
Speaking of Amazon, recall the following which we posted in the aftermath of the guidance cut:
Back to Reuters:
The squeeze on suppliers was clear to those selling to Wal-Mart’s Sam’s Club warehouse clubs around April this year. Sam’s Club’s buyers summoned major vendors to meetings and told them a "cost gap analysis" showed they should be delivering at a lower price, and demanded millions of dollars in discounts on future purchases, according to emails reviewed by Reuters and interviews with suppliers and consultants involved in the talks.
Unlike in prior talks, which featured give and take, vendors were told they could not ask questions at the meetings, with queries to be handled later via email, according to suppliers and consultants involved in or briefed on the meetings.
Yes, no questions allowed, and as we've pointed out before, WalMart can sadly get away with this type of approach to dealing with vendors because after all, if you're a supplier, you're not going to cut your nose off to spite your face by rebelling against your largest revenue stream. Or, as Leon Nicholas, a senior vice president at Kantar Retail, which advises Wal-Mart suppliers put it last month, "you can push and push, but at the end of the day you know where the power lies."
And after last week's carnage, the supply chain is finally beginning to understand why WalMart has become even stingier than normal.
Wednesday's announcement sent ripples through the supplier community in the Bentonville area, where more than 1,000 have offices to stay close to Wal-Mart.
"Now we know why they have been pushing so hard," said an executive at a major consumer goods supplier to both Walmart and Sam's Club, adding that his team was shocked by the projected decline in profits. "Maybe they were banking on more suppliers rolling over on the terms."
Wal-Mart's success in boosting profits could hinge in large part on the willingness of suppliers to sign on to its new terms and agree to its price demands. Despite signs of resistance, one consumer goods supplier reckons most will eventually give in to Wal-Mart’s market power, though not without a fight.
He pushed back after the retailer asked him for new terms that cut 2 percent off his annual sales. They settled on 1 percent, but he fears further demands down the road.
“I just worry that this is a slippery slope of them going in this direction," he said.
A slippery slope indeed, much like the slippery downward slope the company's earnings seem to be on, and between the above mentioned pressure from online retailers and fierce competition from no frills dollar stores, one is left to wonder if perhaps WalMart's move to hike wages may have set the legendary discounter on a path to becoming the next K-Mart.
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"...and what takes place is a veritable avalanche effect where a few cent increase for the lowest paid megacorp employees results in a tidal wave of layoffs for said megacorp's vendors."
Are you still sticking with this preposterous thesis??? I'm supposed to believe that Wal-Mart's business model is so shaky, so lean, so teetering on the edge, that kicking a few more cents to the groundlings will kill it??? Of the universe of things that Wal-Mart does wrong, arrogance and parsimony in dealing with suppliers, arrongance and parsimony in dealing with employees, targeting the most brain-dead zombies for hiring, consistently selling inferior and ugly merchandise, having ugly, dirty, messy stores, shelves full of damaged goods, driving down expenses uber alles, etc. etc. etc., you want to tell me that a pay raise is the worst??? Of the universe of problems afflicting the economy, you expect me to believe that a pay raise for the worst paid employees in the US economy is hurting Wal-Mart the most???
The truth is that there is still plenty of profit in Wal-Mart's business model to keep all the Walton heirs comfortably in the billionaire bracket. There is still plenty enough profit to keep vendors from walking away. Until those things change, your thesis will be horse manure.
You libertarians better do some serious thinking about all your "free-market" rhetoric. If you can't make an economy work without slave-labor, you're going to be mystified by the ascendancy of guys like Bernie Sanders (he's a socialist, OMG!!!), and YOU'RE GOING TO LOSE THIS HISTORIC ARGUMENT!!!
I agree soewahat with your argument Dr S but you're 15 years too late to be worrying about libertarians or socialists whatever. Walmart is on the decline because its main customers don't have any money because jobs are disappearing really fucking fast. Libertarians will let the unemployed and old people starve and Democrats will try to save everybody. Which approach is correct I don't know.
"Libertarians will let the unemployed and old people starve and Democrats will try to save everybody."
You are speaking only in the context of a federal government taking by force someone's personal property and giving it to someone else (with a nice commission to those who are running the scam). Were there no bloated corporatocratric bureaucracy of a pig-fuck going on in washington there would be more resources for everyone and a welfare state wouldn't appear to be necessary. Get rid of the systems that take away from people by force and you'll have a more functional society.
Neuronius, you're 30 years too late with that argument. If the Vatican and Islam and Washington had embraced mandatory birth control then maybe but we're way beyond that shit now. Long term unemployed in the US constitutes the 13th biggest nation in the world. There isn't any policy decision or ideology can fix that.
damn, z-z-zing!
What argument?
That you and I and everyone else know how to spend our money better than a government bureaucrat in some far-off ivory tower?
That's what I am saying.
If that's not what you're talking about then you're not really addressing my comment.
Don't get me wrong, I'm not disputing the accuracy or sentiment of your comment, just the timing. 30 or 40 years ago if the government had made some tough but necesary decisions then we wouldn't be in this situation, I'm of the opinion that no matter what your ideology there are no good answers as to how to solve the current issues the world is facing. How would anyone for instance address the current refugee crisis in europe? It's a monster clusterfuck. But not really any different from what is happening in the US. We're in reaction territory.
I don't disagree with anything in your comment, whatsoever.
I believe we need to change the conversation and deal only with root causes; foundational issues, like honest money. Once you fix this then I think most of the other problems will disappear pretty fast.
A society based upon thievery produces thieves, and will never be based upon the Rule of Law. Been that way for 102 years.
How would anyone for instance address the current refugee crisis in Europe?
By not causing the crisis in the first place. The Syrian people were going along minding their own business, when they were suddenly buttfracked by the U.S. (through its proxy ISIS army) because Assad aligned with Russia on an energy pipeline. Similar circumstances for all the other ME “crisis”. As for your semi veiled forced population control policy, I can only ask: are you serious? So...what? The U.S. should have gone China's route of 1 child per family policy. Perhaps forced abortions. Maybe Soylent Green is the final answer.
The only thing that is wrong with most of the western world is that we have become a bunch of self-absorbed, narcissistic, lazy voyeurs, more interested in Kim Kardashian's butt than we are in working and creating quality products. In our never ending quest to acquire more, consume more, but forever demanding cheaper and cheaper prices (forget quality, we'll just buy a new one on credit when it breaks), we have created the Walmart, JP Morgan, APPLE, MS monster companies of the world, that control our lives in ways that would make George Orwell blush.
Libertarians are by several multiples the most charitable people on earth. We just don't think it should be done at the point of a gov't gun.
"Democrats will try to save everybody". Democrats are by far the least charitable people. Compassion isn't person A giving person C, person B's money; that's theft.
I was born into poverty and now have significant wealth. I work 80 hours a week running 4 businesses. I have given away a larger percentage of my wealth than anyone I personally know. Supporting a particular gov't policy has nothing to do with being charitable or compassionate.
2012 numbers, WalMart made $19b in profit and it's employees received $40b in welfare. WalMart has nothing to do with the "free market". Their model is based on the tax payer subsidizing their labor. If WalMart went non-profit and gave all profit to employees they still couldn't pull their employees out of poverty.
In the free market you need a business model that doesn't rely on gov't policies. WalMart is the opposite of the free market
Got a link? Quick google says they receive more like $6B in welfare, which is still a lot, but much different from $40B.
And you think the numbers are any different for WalMart than they are for any other retailler? Fast Food Chain? ANY entry level/minnimum wage employer?
So why the hate for WalMart? I tell you what would happen - without those WalMart jobs the cost to the government purse would be a whole lot higher.
40 years of decreasing disposable income, wage slavery, food bank assistance for WalMart employees, decreasing full time employment, increasing part time employment. In brief, what we have here is a failure to communicate
I N E Q U A L I T Y via C O R P O R A T I S M.
It works the other way too - what if several major brands said "we temporarily are not selling to Wal-Mart?"
Walmart's problem is simple...They have catered to the EBT, Welfare recipient "low end" clientele while running off middle class people like myself who choose not to be around the same "low end" clientele for obvious reasons........Walmart sold its soul for The Federal Govt. handout society and the PC crowd...and now they have to fall on their "EBT" sword.....
Just how do they "cater" to "those" people that is different from any other major retailer?
I'm a 1% er - proud of it - I've worked hard my whole damned life. Normally I wouldn't say that because it's irrelevant but I say it now to create a frame of reference. I don't understand many of these comments. When I am in the US I still primarily shop at WalMart. I've never had a bad experience there. Where I grew up (SE US- Gulf Coast) and my parents and family still live the stores are neat, clean and well stocked. When I was younger and still lived in the US I travelled a lot. I can't ever remember being disappointed by what I found in a Wal-Mart anywhere in the US.
Maybe I am missing something - but from my experience there is not much difference between Target, Wal-Mart ect...
Anyway - a bit of a ramble but I just don't get all the WalMart hate. It does exactly what it says on the tin...
Bo
Probably weren't around to see the destruction of small towns by Walmart. The true legacy is all the family merchants destroyed by their voracious appetite to take over entire downtowns in small cities
There are downtowns in small towns? You mean the stop light?
If Walmart hadn't mythologically put these supposed family merchants out of business, Amazon would have 20 years (or 10 years) later. And here's the bitch for Wally, he undercut other retailers only to be undercut by someone with yet an even lower cost structure. And the consumer had to suffer that 25 years or so through lower priced junk.
Same story for literally 125 years in retail. The supposed "family merchant has been put out of business" bullshit is as old as the traveling salesman. The Music Man is based off this idiotic song and dance.
Wait until the TPP kicks in! The problem is WM sells cheap Chinese junk because we don't make anything in America anymore! We don't make anything anymore because of piss poor trade deals! Let's face facts. China doesn't allow us to sell jack shit there! So it's time to smack large tarrifs on all Chinese goods! Then American Goods will become competitive again and more businesses will open in America manufacturing things HERE for a change! Yes things woill cost more but they will last longer and we will be able to pay people real, livable wages! Don't blame the Wal-Mart. Blame the government that allows them to do what they do.
Nope. That goes against the goal to fuck #Murica into a third world shithole or socialist dystopia like the rest.
They need us on par with the rest of the toilet bowls.
We don't make anything anymore
We still make pretty good guns. Gun sales are booming (pardon the pun) and no sign of abating any time soon.
Like hell we don't make anything anymore in the USA! There are a bunch of bootleg taco stands in my city everywhere you go. Who says America isn't exceptional?!?
Our small goods cannot become competitive--Just about anything in Walmart can be bought over the internet (from an Asian source) and sent to a customer here in the USA cheaper than you or I can mail a small package across town. Check out the "E Packet" which our government created to create jobs in Asia AND WE FREAKING PAY FOR IT. Newsflash Washington--you dont need to worry anymore about China dumping Treasuries--they are doing it and the FED is successful at hiding it. So please, before just one more first class rate increase in pushed on us--do away with subsidized shipping for China and Hong Kong !!
Edit
I logged in just to say I hate Walmart. I hate the attitude of every employee that works there also,( like I owe it to them that I shop there) I hope they choke on there 9 $ an hour.
So let me get this straight "Walmart returned $7.2 billion to shareholders through dividends and share repurchases. Walmart ranked first on the 2014 Fortune 500 list of the world's largest companies by revenue," but if it boosts the living standards of its employees by the smallest of fractions, it cripples the cost and wage structure of the entire ecosystem...WOW
Per Fortune magazine
Many critics argue that because Wal-Mart made $17 billion in profits last year, it can afford to pay more and even has an obligation to do so. That’s silly, too. Public companies have to make enough money to satisfy shareholders, or else their stocks tank and executives end up getting canned...The majority stock holder of Walmart is the Walton family
Chronic over-supply is today’s problem leading to deflation.
We have armies of advertising and marketing people trying to get consumers to buy products that they neither wanted nor needed in the first place.
Modern scarcity is the scarcity of consumers for all the stuff that is produced.
We need more consumers, or more affluent consumers, for all the stuff that is produced already, we don’t need businessmen producing more stuff that no one wanted or needed in the first place.
Debt was a stop gap solution to insufficient consumption and demand as it allowed consumers to purchase more stuff.
But the consumer has now maxed out on debt and weighed down with the repayments on that debt.
There is already an acknowledgement that lack of demand is the problem with ever rising minimum wages, but it doesn’t go far enough.
Helicopter money is the only solution, in this world of chronic over-supply.
Yet it hasn't increased happiness either despite us buying a lot more and the average sq ft that the average American increasing 2.5x since the 60s.
We have championed the idea of everyone being individuals, competing against each other for more stuff.
Probably why no one is very happy.
Actually we have been told its our patriotic duty to buy more stuff.
In other words....
CONSUME PLEBE.
Wal-Mart is only crying so much because most of their overseas efforts have failed or have serious setbacks. They are still heavily dependent upon the US market for their sales and with the exception of grocery sales (having the same disastrous effects on the US agricultural system as they did on US manufacturing over the past 30 years) their sales metrics suck.
I despise Wal-Mart more than any single company in the U.S. but especially since they essentially have had a policy for a long-time to push off employee costs on to the public roles in a huge way along with taking in a huge amount of U.S. spending programs (mainly food stamps).
Do you have a 401K which contains mutual funds that own Wal-Mart shares??
Go to the local stadium and give the gains to a homeless guy sucking empty beer bottles.
LOL
Supply shocks due to currency, trade, and real wars are coming. The demand for USD, and thus it's bying power, is about to start going down as the world begins to decouple from the US banking system. Consumer demand for all but essentials is collapsing as Americans cease to have jobs or a real economy. Farmers markets however are on the rise, as is 3D printing. Amazon is directly linking suppliers and buyers.
In short, the trends are all against Walmart. Thanks to it's size and massive logistical supply chain, Walmart is more, not less, succeptable to these changes. Forget remaining the apex retail outlet, Walmart will have to struggle to just exist.
Every day brings more good news for the common man. If only more people could see the fearmongering for what it is.
The reality is Wally world has a long LONG history of running suppliers out of business any way they can. Order million one year, none the next then buy in bankruptcy.,then rip the guts out and have it manufactured in China for nothing. They get what they deserve to say the least, and that goes for the suppliers who used them as a cash cow. The whole fucking thing needs to collapse, it is the very definition of crony capitalism. Suppliers you got your asses into this crack, Good fucking luck..
Like Vlasic Pickle
walmart borrows $20bil for stock buybacks and cant handle $1.5 bil in new wage costs....seems to me the execs could take a 90% wage cut and solve a lot of problems...
E-Stores will put WallStores out of business.
The future is a society with no walls.
Just a web-page and a warehouse full of robots buzzing around packaging things/sorting shelves.
How can Walmart compete?
Simple
Close half the chains, convert/sell the realestate, use the capital to convert remaining chains into warehouses full of robots, improve its online shop.
The reason walmart is on its last legs is the same reason Radioshack self-destructed, not keeping up with the times....
If walmart simply eliminates half its employees, goes full retard online shop..... or some kind of hybrid shop where you go to a terminal pick what items you want swipe your card and a robot goes off and grabs the items off shelves for you boxes them up and brings them to your car, they stand to survive.
But walmart has never really been a high-tech company, logistics isn't their primary strong attribute, exploitation was.
Walmarts success was driven through artificial means (exploits) it cheated with the help of govt.
Most of Walmarts income probably comes from govt checks given to welfare queens who shop at walmart.... why do you think walmarts are all built in shit areas?? in the middle of nowhere where the only people that live there are able to afford things because of govt assistance??? walmart exploited the situation to make money and its no longer working because they money they are making isnt enough to keep their workforce alive with recent cost of living increases.
If the future is a society with no walls, then who will buy half their real estate with a gigantic big box retail space on it and a huge parking lot? The next sucker who hasn't realized the future is nigh?
Not trying to be a dick. But this is it. Walmart is what Walmart is: big box retail.
I could be totally wrong, but I am hazarding a thought. I was shocked to the core by the Walmart announcement of a wage hike. This made no sense in light of Walmart's entire history. It just didn't pass the smell test, if you get what I mean.
So the wage hike goes through. Then after an appropriate short time, all hell breaks loose in the Walmart financials. They suddenly are in deep trouble in their retail space. Hmmm, I thinks, was the wage hike made in full knowledge that a coming crash of Walmarts finances would have to go public? It is just too convenient to have this handy excuse all lined up. "We were doing good, until we let public pressure force us to raise wages for workers who have no justification for such high wages". "We comply with social pressure, and LOOK, now the whole profit system is in trouble"
Well, there may be no connection at all. There may be no way Walmart would provide themselves with this all too perfect example to throw in people's faces of what higher wages does. In any case, it sure makes Walmart look good. They told us higher wages would sink the ship, and now it has. How terribly convenient to be able to say "I told you so", "This shows wages must always race to teh bottom, or capitalism doesn't work". "Profits and pay outs are never too high, wages are never too low" This is the neo-liberal model.
"If I could make one more comment to really piss you guys off... I someone who likes to buy the best of things. I'm not rich, but I do like quality, and I'm old enough to remember that the clothes sold in KMart were a higher quality than what you get today at Macy's."
Old saying and it's a truism.
I am too poor to buy inexpensive things.
If people would DO WITHOUT until they can buy the best built quality items, they are are richer in the process.
The article does not even pass a cursory smell test. The conclusion that its writer makes that Walmart's financial woes are all because they raised the minimum wage for its employees is nothing but neo-liberal disinformation. Neither Radio-Shack, Sears, JC Penny, K-mart and McDonald's raised their minimum wage employees' wages, yet they are all suffer bigger financial troubles than WalMart.
where is dutch boy? zh is boring without dutch boy
more anti labor bullshit. my grandfather used to say(he was japanese), "take care of the poor. they will make you rich." in the usa the attitude of business is, "fuck the poor. it is their fault." that is ultimately a bankrupt philosophy.
Henry Ford realized that if he gave his workers decent wages-they would be more likely to buy his cars
Walmart doesn't sell cars and they're even less skilled.
i wonder if walmart quants ran an algo to determine how much of the pay raise will be spent in walmart. conceivably, with the local velocity and multiplier walmart may actually gain more revenue than they pay in wages. now that is an analysis i would be interested in. this article is bullshit.
Ironic
https://www.youtube.com/watch?v=Wnec6SmjHP0&list=RDT-WYxwg94L4&index=13
stock hits 43 I will be happy, until then I wont the rest is bs, we got alot of ways to go to get there captain kirk! Wake up futures red..
Then there is the position of the Progressives – or maybe profits / stockholders backfill the hole. The article also fails to mention the part about Progressives funding a “Living Wage” Movement. That road show has been traveling across across America for at least 10 years. Not to mention the phreaking elephant in room – the overwhelming odds are that persons close to the policy makers carried the water on this thing to what were assumedly stable industry partners in stable industry sectors in the vain effort to generate systemic inflation. It didn’t go swimmingly. Sadly Americans need to be spoonfed, but the REAL STORY here is Progressives’ have a mindset that leads to inefficient markets. The situation that we are in is due to DECADES of inefficient markets thanks to the policy makers who are in turn heavily influenced by USCongressofWall Street. Americans need to be taught the value of being stewards of efficient markets, as they lead to less influence by the Gov / lower tax burden / more freedom.
What is the big deal here? Walmarts is in trouble, may go bankrupt. So?
In my lifetime, I have seen WT Grants, Zayre, Woolworth, Montgomery Wards, KB Toys, Circuit City, Best Buy, Radio Shack, Expo, and many more go bust.
Walmarts goes bankrupt, others will fill the niche. Adapt or die. No one "owes" Walmart.
Walmart, the largest retailer in the USA is going down while Goodwill Thrift Stores and the 99 cent stores are thriving. Oh, the irony of it all!
For a couple of years now I've been posting about the "bottom-up depression" that's slowly destroying America's economy and now the "Retailer to the Bottom" and the "Restaurateur to the Bottom" are both in serious trouble.
I'm probably going to annoy the other commenters here by saying that neither Walmart or McDonalds are being run by officers who believe their corporations will thrive if a growing, world-wide depression is afoot.
As they make the retail sales, both Walmart and McDonalds are more aware of the necessary and competitive price points of the items they sell and therefore they are obliged to get their suppliers to agree to 'fair' costs for both them and their suppliers.
The suppliers will scream, but in this war against An Economic Depression some companies are just foot soldiers, while others are generals.
It goes without saying that the Administration in Washington and the Fed are camp followers and jesters, whose only goals are getting laid and undermining the tactics of the general staff.
Doesn't make sense to have monetary policy TRYING to create inflation and then people wondering why we are getting wage inflation!
This is exactly what they ordered?
Inflation just hurts rich people. Poor people don't give a fuck because our wage goes up and price of a gallon of gasoline goes down.
Fuck Walmart.
Speaking of K-Mart, aren't there some bankers and other associated ne'er-do-wells that need to have some "blue light specials" visit them, if you get my drift? :)
whats the difference? either raise their wages or have them get EBT--YOU pay for it in the end.
They will still get EBT,, the Negros don't want to work. If you take the $15/hr wage and subtract the EBT equivalent, its only a few dollars an hour more (if that,, and I'm not even figuring in the income tax part). Negro will not work for just a few dollars and hour when he can stay at home and drink his fawty, do drugs, get out of bed when he wants and make about the same $$$.
A good question is why did Wal-Mart flourish so long if its treatment of vendors was so draconian? Hmmm.... I wonder if there is an agency of legalized force that often legislates rules that favor some groups over others or some businesses over others..... hmmmm. If such a thing existed, it might have done something or several somethings in this case to skew the market in favor of wal-mart and allow it to persist in activities that would typically have been rapidly damaging to its business..... States and local governments didn't give tax breaks to wal-mart to come into their cities and towns did they? State and local governments didn't fanagle really peachy land deals for wal-mart did they? State and federal governments don't legislate start up rules and investment rules that make it much harder for new companies to gain funding and start up and compete, do they? State and federal governments don't legislate tax codes that are much more onerous for new, smaller businesses do they? (You can go on and on. Our law makers are criminals or confused false philanthropists. There is plenty of private injustice that should be more than enough to keep the government busy. But, oh no! They've just got to go and create their own by perverting the law.)
Short term very bad for the Economy
Long term the best thing for US economy is for Walmart to Fold.
I'm waiting for some crazy bastards to start making fake (or real) bombs and leaving them in stores. Start with bomb threats and work their way up to leaving them, I bet Walmart business would tumble like a crack whore getting bitch slapped.
The scary part of that scenario would be the fatty scooters running three wide down the snack aisle to get to the nearest exits . . .
The clientele is enough to deter most people from going there.
Smaller retailers and suppliers should form a union with one goal in common to destroy Walmart, putting and end to this collection of corporate assholes. When that mission is met do the same the assholes at the US Chamber of Commerce.
Thought another way, Wal-Mart is a consumer union guaranteeing the lowest price.
You can tip anyone in the store at any time. If you ‘feel’ bad for the Keebler Elves, mail them a tip directly…. A few pizzas or dozens of donuts would be a surprise.
Awe the poor suppliers. Where do we send the check?
If Wal-Mart can squeeze a nickel out of them for us, great. That means they’ve been over charging all along.
If wages go up then rent goes up. This is good for the owners of property.
They can try to spread out the pain but deflation is coming our way.
The Dems had been banking on inflation rearing it's nasty head to deflate the value of the debt. When it didn't, they've tried to force it from the bottom. They hoped that a massive rise in the minimum wage would ripple through all other wage tiers and cause more money to chase after the same amount of goods.
Wal-Mart's success in boosting profits could hinge in large part on the willingness of suppliers to sign on to its new terms and agree to its price demands. Despite signs of resistance, one consumer goods supplier reckons most will eventually give in to Wal-Mart’s market power, though not without a fight. "
People have breaking points. When the work and risk needed to service Wal-Mart accounts becomes a pain without profit to match they will bail out. Its not if but when. Win-lose relationships are unsustainable.