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Bubba

Sep 14, 2004, 12:40 PM

Post #1 of 42 (3158 views)

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WalMart, SchmalMart

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The WalMart phenomenon in Mexico strikes me as topical. Posts regarding this trend did not seem offensive to Bubba. Legitimate issues were raised and still up in the air. Does the locking of this thread meet criteria for banishment or was the moderator on duty simply bored by the subject? Is moderator boredom a sufficient reason for precluding further discourse?

jennifer rose

Sep 14, 2004, 1:37 PM

Post #2 of 42 (3115 views)

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Re: [Bubba] WalMart, SchmalMart

After a thread reaches 20 or so posts, it's best to lock it so that it doesn't become prolix and occlude other threads. Feel free to reinitiate the discussion here.

Jerry@Ajijic

Sep 14, 2004, 6:46 PM

Post #3 of 42 (3062 views)

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Re: [Bubba] WalMart, SchmalMart

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Bubba, to me the WalMart locations are not as important as their greater and greater control (due to volume) of many things. In some respects it looks a little like Standard Oil, AT&T, U.S. Steel, and other monopolies. WalMart does not control things through patents but their volume makes it very difficult if not impossible to compete with them. The other sode of this is they do have great selections and prices.

alex .

Sep 15, 2004, 7:20 AM

Post #4 of 42 (3023 views)

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Re: [jennifer rose] pyramide del sol y la luna

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I thought it was pretty cool to sit on top of la pyramide del sol and imagine what "Mexico City" was like 3000 years ago. Looking down one can make out ancient streets (at least the one that goes to La Luna) and visulize what it may have been like. Why not put the Walmart in Texcoco, or does it already have one?
Alex

gbatrucks

Sep 15, 2004, 12:15 PM

Post #5 of 42 (2983 views)

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Re: [Jerry@Ajijic] WalMart, SchmalMart

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“Bubba, to me the WalMart locations are not as important as their greater and greater control (due to volume) of many things…WalMart does not control things through patents but their volume makes it very difficult if not impossible to compete with them.”

And your point is..??? Geez- All this “Evil Walmart/Sam’s Club” bashing is wearing me out! Maybe I’m closer to the situation than most as I’ve been involved with transportation and supply-line logistics most of my life, but as consumers we are all better off for it. What makes Walmart so great is their distribution system which is second to none world wide (if you think we are having trouble adapting to Walmart, you should see how they are upsetting the applecart in Germany!) My earlier posts referred to the crappy selection, quality, and pricing of “Ed’s Family Market” & “Friendly Bob’s Furniture” stores back in the ‘50’s/60’s BK (Before K-Mart). I remember as a teenager how upset my dad was when the first K-Mart came to Spokane, WA. He was a wholesalers rep for GE, Westinghouse, Amana, etc. and I clearly remember his rant that the pricing to K-Mart was less than his lowest cost basis that he then had to mark up to sell to “Friendly Bob.” I didn’t understand it at the time, but now it’s obvious….K-Mart had a big warehouse in back of the store, and was located on a rail-road spur. They were buying whole CARLOADS of appliances at a time direct from the factory. Is there any doubt why there cost was lower?

Now distribution has evolved to JIT (just in time) delivery. Product is delivered just in time to put on the shelves and sell to the consumer. This minimizes warehouse space
and minimizes handling and re-distribution costs, which frees up capitol & LOWERS COSTS. It also means the time between production & sale is less which means the product is FRESH. Satellite tracking of trucks, computer tracking of rail road cars, this means items can be re-routed instantly to adjust for changing demands, so items are more readily AVAILABLE.

Enough of Logistics 101. Just look at the big picture. The milk man doesn’t deliver, Fuller Brush and Watkins don’t knock on your door any more, and the independent corner grocery is gone NoB. Embrace progress. We are better off for it, and we are not going to stop it.
"The trouble with life is there's no background music."

(This post was edited by gbatrucks on Sep 15, 2004, 12:20 PM)

sandykayak

Sep 15, 2004, 3:25 PM

Post #6 of 42 (2947 views)

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Re: [gbatrucks] WalMart, SchmalMart

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I was waiting for someone else to post this - if they did, I missed it.

I read in an article in The Miami Herald (in Miami) that Wal-Mart is the largest employer in Mexico.

Surely that is something with long-term benefits to the country?
Sandy Kramer
Miami, Fla & El Parque

Bubba

Sep 15, 2004, 6:36 PM

Post #7 of 42 (2910 views)

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Re: [gbatrucks] WalMart, SchmalMart

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Trucks:

Did you see my response to your post? I really was not paying attention but I think some moderator may have deleted that post which was, to say the least, innocuous. If this post also disappears, I'll e-mail you privately. A moderator also deleted a recent post I made to Satman and Satman was as puzzled as was I as to the motivation behind that uncalled for act. It may be time for small-minded moderators to explain publically the reasons for their arbitrary activities.

I came back to this board at management's invitation. Let's let the discourse here seek its lowest common denominator. Perhaps a discussion of lirio would be appropriate. Lirio can't talk back.

(This post was edited by Bubba on Sep 15, 2004, 6:43 PM)

Jerry@Ajijic

Sep 15, 2004, 7:36 PM

Post #8 of 42 (2894 views)

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You could be right but events in the past have seemed to indicate that monopolies or control of any industry is sometimes good for the consumer but as the control gets tighter then the controlling company can and quite often charge what they want to and pay what they want to both to employees and to suppliers. The last I heard WalMart had 5 different pricing levels. When they go in they price at their lowest as they eliminate competition they move up to the next pricing level. Of course Pemex or Telmex might also both be very good for the consumer.

Cynthia7

Sep 15, 2004, 8:59 PM

Post #9 of 42 (2878 views)

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Re: [Jerry@Ajijic] WalMart, SchmalMart

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That has not been my experience with going in with lower prices and then they raising them. I find them very consistent. Yes, they have specials and sale items but I find Superama prices to be the same as Bodega prices. Superama has things Walmart or Bodega may not have but most things are very equal. I think they have jerked a knot in many countries way of doing business. The Germans had never been given plastic bags. They had to bring their own bags and if they bought more than their bags held they had to buy a bag. Walmart had to cut back on thanking them for shopping at Walmart-they were suspicious of folk that spoke to them.. Walmart takes things back.. Did you ever try to return something to a Mexican chain store before WAlmart? They are making a big impact. You have a choice now. Isn't that nice.

Jerry@Ajijic

Sep 15, 2004, 9:16 PM

Post #10 of 42 (2874 views)

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Re: [Cynthia7] WalMart, SchmalMart

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Cynthia you could be right but I think they do go to a higher price schedule. Remember Sam Walton's original ideas were; eliminate the large support staff that most chains had and go into rural markets which were usually underserved. Once he had established a store in a rural area (which must at one time have a shopping population of not less than 15,000) he would eliminate many of the small shoe,camera,clothing, appliance, etc stores. They could not compete with the prices he offered. Then he could go to the next price range. This is not to say he was evil or anything like that. Just a sharp hard nosed business man. He also had a good sense of humor like when he danced on Wall Street in kilts.

Texwheel

Sep 15, 2004, 9:40 PM

Post #11 of 42 (2868 views)

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Re: [Bubba] WalMart, SchmalMart

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Bubba,

As you know, I don't comment very much on MexConnect, because most of the point (not always, but theoretically, of these posts relates to Mexico and I don't live there yet, so what do I have to contribute?). Some others don't follow this rule and some of them look like idiots most of the time...mostly the world savers.

But I can tell you (Bubba) and moderators and other posters this: If YOU(Bubba) are not posting it is a much more boring and less fun and exciting source of discourse than otherwise. As I told you once before, if you are ever feeling unwell for any length of time, I hope you train a replacement!!

Now I pay my bucks and I expect to read what is posted on this web site. So, moderator, what the heck am I missing?
Tom Williams
Georgetown, Texas
Texwheel@aol.com

gbatrucks

Sep 16, 2004, 3:18 PM

Post #12 of 42 (2750 views)

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Re: [Jerry@Ajijic] WalMart, SchmalMart

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In the mid 70’s I bailed from the aerospace industry in LA a moved to the resort town of Ruidoso, New Mexico. When it was announced that Walmart was coming to town, you would have thought a nuke had gone off. Oh the Doom & Gloom…Life will never be the same! They were right. It got BETTER! BW (Before Walmart) Ruidoso was served by little hick-town franchises like Yellow Front, Ben Franklin, & Gibson’s...Dingy little places with dusty old stock, and an attitude of buy it or drive to El Paso or Albuquerque. A couple of them were smart enough to close up before the Walmart opened... Some hung in and got creamed. It wasn’t that they were “eliminated”, they just didn’t have the market efficiencies to compete. As long as one does not sell below there costs, they are doing nothing illegal. Government can not tell you how large your profit must be.

Walmart is not a monopoly (witness Costco). Nor does it “control” the sector. They earned the right to be king of the hill by re-writing the textbooks and taking commerce to the next higher level. In time someone else will invent a better mouse trap. In fact it is already here and evolving. It’s called on-line shopping. NetFlix is killing Blockbuster. The truck industry is already developing the vehicles for a boom in the home delivery business. The end of brick & mortar stores is definitely coming at least in first world economies.

As to market dominance, Teddy Roosevelt did a good job ending real abuse by rouge business with his trust-busting. The Federal Trade Commission and Public Utility Commissions do a pretty good job of controlling monopolies and the Security and Exchange Commissions does its best to keep corporations on the up & up unless they get steamrolled by congress as happened with Enron.

Why didn't the SEC protect us against the Enron debacle? Arthur Levitt, then-SEC chairman wanted to split up the accounting firm's ability to do the CPA work & the financial advising. He wanted to crack down on stock option abuse. When he started making noise, the corporations bought off (read “campaign contributions”) Lieberman, Dodd & Tauzin and got it blocked. Not long after, Enron came crashing down, 13 congressional committees were formed to get to the bottom of it (read create a smoke screen & cover their collective asses). We got perp-walks. We got the Pres standing in front of that garish backdrop with "Corporate Responsibility" written all over it. Arthur Anderson was made the scape goat (Hey, better them than an elected official, for Gawd's sake). And just like Richard Geer playing the puppet-master in "Chicago", the average Luddite voter bought into it & never figured out that it was Congress who set us up...just like they did during the S&L crash in the '80's. By the way this isn't just the rant of some angry old man (not that I'm not,) It comes from the PBS Frontline report Bigger than Enron. Read all about it at the following web site. If you haven’t the time to plow thru the whole report, be sure to read "Congress & The Accounting Wars."
http://www.pbs.org/...ne/shows/regulation/

Oh I do go on, don’t I.

"The trouble with life is there's no background music."

Bubba

Sep 16, 2004, 6:10 PM

Post #13 of 42 (2719 views)

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Re: [gbatrucks] WalMart, SchmalMart

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Trucks:

Thanks for a well articulated piece on retailing and trends therein. If memory serves me, Sears was the first major retailer to come up with ideas Sam Walton later emulated. Sears is now a shadow of its former self. Remember when Kresge started KMart and that chain's initial enormous success? Now it's in the doldrums. And, what's the name of that major national retailer that failed in the 60s that has become the subject of MBA theses? The only thing that saved Ford Motor Company during the past years was its excellent liquidity and, as for today's excellent liquidity, an ex-bank client of mine once said ruefully to me in the 1970s in the Napa Valley, "I had so much money (from the sale of a very successful business he had started from scratch), who could have thought that an investment in a winery and vineyards could have eaten it all up in just a few years and I would,once again, be a pauper?"

WalMart will prevail until they fail just as is the fate of us all.

I remember LimeCola and RC and a Moon Pie and Western Union and the AT&T monopoly and American Express Travelers' Cheques (with the pretentious spelling) with their concept of "float" that nobody else understood and charging you a fee, for God's sake , for allowing them to use your money for free and God, how much they must have rejoiced in the old days when an airliner went down with all those traveler's cheques aboard. Now they have this, new obscenely expensive debit card (excuse me, prepaid travel cash card) to replace their travelers' cheque scheme and Bubba predicts there will be an audience for this ripoff as well.

As P.T. Barnum is reputed to have said, "Come in and see the ingress for free, if you wish to see the egress, that's a nickel."

By the way, Texwheel, thanks for your kind words but I am no longer on my highhorse. The ride was getting too bumpy and my ten gallon hat was causing me to lose my equilibrium.

(This post was edited by Bubba on Sep 16, 2004, 6:22 PM)

Jerry@Ajijic

Sep 16, 2004, 7:04 PM

Post #14 of 42 (2704 views)

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Trucks, Wal-Mart does not (unless it is a loss leader) sell below it's purchase price. It is just that with their purchasing power they can buy cheaper than anutone else, sell cheaper and still make a profit. As for The Federal Trade Commission and Public Utility Commissions The Security and Exchange Commissions are they still in business?. I thought the Sherman Anti Trust Act must have been repealed.

jennifer rose

Sep 16, 2004, 7:11 PM

Post #15 of 42 (2707 views)

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Get Back on Topic

And make your post relevant to Mexico. Or else I'll have to lock the thread again.

Jerry@Ajijic

Sep 17, 2004, 7:45 AM

Post #16 of 42 (2660 views)

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Re: [jennifer rose] Get Back on Topic

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Jennifer you can do whatever you way to. We were talking about is WalMart or is it not good for MEXICO as well as other places but if you can not understand that then by all means lock this thread.

Carron

Sep 17, 2004, 9:15 AM

Post #17 of 42 (2631 views)

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Re: [jennifer rose] WalMart, SchmalMart

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As a teacher of college English, I love the way you use the words "prolix" and "occlude". Only wish my students did.

As a long-time resident of Mexico who sometimes crosses the border into Texas to handle personal business, I can agree with other posters who say W Mart's business strategy is to come into town, drive out the small competition with amazingly low prices, then re-set prices at a higher level.

This happens both in the US and in Mexico. I prefer to support smaller businesses on both sides of the border whenever I can.

gbatrucks

Sep 17, 2004, 9:39 AM

Post #18 of 42 (2627 views)

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Re: [Jerry@Ajijic] WalMart, SchmalMart

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Jerry..
"It is just that with their purchasing power they can buy cheaper than anutone else, sell cheaper and still make a profit." And thats exactly my point. It does not a monoply make. As to the FTC & SEC, might want to check with Martha Stewart & Microsoft who both got slapped around by the Feds. Martha's heading for Club Fed, & while they couldn't split up Gates & Co, they did get some changes made. TO TIE THIS IN WITH MEXICO, this whole subject started when some feared that Walmart would ruin the local MEXICAN economy (not to mention the quaint charm they had all moved here to enjoy). Bubba, myself & others think it may help many MEXICAN citizens lift themselves out of subsistence living. The dirty little secret is that MEXICO has 10 or 12 billionaires that control a large majority of the nation's economy outright creating an unequall wealth distribution situation surpassed by very few developing nations on earth. As I may be bordering on political-speak, google "MEXICO wealth distribution" and form your own opinion.

Living in MEXICO or overseas anywhere has been vastly improved by progress. Imagin banking from MEXICO without the marvels of Microsoft and the internet...what would communications to NoB be like if AT&T hadn't been deregualted by the Feds years ago? Remember back when the airlines were regulated, "The Seven Sisters" flew all the routes, destinations were limited and only the wealthy could afford to fly? Progress is inevitable and serves us well if it is PROPERLY REGULATED TO SERVE OUR NEEDS. That was my reason for taking off on the Enron situation. Yes Jennifer, it was not relavant to the Walmart topic, but to all of you living in MEXICO, feeling secure that your NoB government has your best interests at heart and will protect your portfolios from unethical actors like "Enron", I still recommend the website.
"The trouble with life is there's no background music."

(This post was edited by gbatrucks on Sep 17, 2004, 9:42 AM)

esperanza

Sep 17, 2004, 10:09 AM

Post #19 of 42 (2612 views)

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From the following source: http://www.thornburginvestments.com/...r_int_value_comm.asp:

Wal-Mart de Mexico, S.A. de C.V. (WALMEXV MM)

Wal-Mart de Mexico (Wal-Mex) is a leading retailer in Mexico, with presence in 60 cities nationwide. The company has identified a total of 140 cities where they believe a presence is justified. Wal-Mex operates nearly 650 commercial units, including self-service stores (SAM'S Club, Wal-Mart Supercenter, Superama, Bodega), and restaurants (Vips, El Porton, Ragazzi). Wal-Mex was formed in 1991 via a joint venture between Wal-Mart Stores, Inc. and Cifra S.A., one of the largest Mexican operators of retail stores. Wal-Mart changed the Cifra name to Wal-Mart de Mexico S.A. in 2000. Wal-Mart Stores, Inc. currently owns 62% of Wal-Mex, which shares its systems, including inventory management and purchasing, with access to Wal-Mart’s purchases globally. However, 90% of Wal-Mex’s sales are sourced locally in Mexico. Wal-Mart also approves new location and format decisions, but otherwise the companies operate independently.
Wal-Mex controls more than 18% of the Mexican food retail market, with a growing share. Food sales generate almost 70% of Wal-Mex’s sales. On the contrary, Wal-Mart Stores, Inc. generates less than 30% of its U.S. sales from food items. Wal-Mex’s management expects a higher sales contribution from general merchandise and electronics in the future, as the Mexican consumer exhibits stronger demand for higher-margin, non-food goods. The company is also making efforts to expand the quality of its offerings in the food sector through a cold chain distribution center, set to open 2H 2004, which should enhance margins and provide fresher more varied produce, meat and fish.
Wal-Mex boasts good financial health. It continues to increase square footage through an ambitious new store plan, improve same store sales, and experience double-digit earnings growth. The company is debt-free and generates steady free cash flow. WalMex has around $500 million in cash, which it expects to use for further share buybacks and expansions.

According to the Wal-Mart de México website, they are now operating 657 stores in 65 cities and continue to grow. To me, the most interesting sentence in the above clip is "The company is debt-free and generates steady free cash flow."

The owner of Wal-Mex (Wal-Mart de México) is Jerónimo Arango, who is considered to be the 8th richest man in Mexico.

http://www.mexicocooks.typepad.com

gbatrucks

Sep 17, 2004, 10:27 AM

Post #20 of 42 (2609 views)

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Re: [Carron] WalMart, SchmalMart

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Carron,

This subject of Walmart price raising has been raised often (with no evidence) but I think it is urban legend. Why would Walmart need to do that? Their efficiencies allow them to be below the competition's price from the get-go. My experience is that the competition folds their tent before Walmart even shows up! I don't recall seeing a new Walmart having a big Bells & Whistles grand opening, word of mouth usually leads to a packed house from day one.
"The trouble with life is there's no background music."

gbatrucks

Sep 17, 2004, 10:50 AM

Post #21 of 42 (2600 views)

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Re: [esperanza] WalMart, SchmalMart

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Esperanza,
Great article. To me the most interesting sentence was Food sales generate almost 70% of Wal-Mex’s sales. On the contrary, Wal-Mart Stores, Inc. generates less than 30% of its U.S. sales from food items.

Now there is no doubt that consumers NoB have more discretionary income to make non-food purchases. Also there is more super-market competition to WalMart NoB. But I think we can draw this conclusion: Given a choice, the Mexican consumer will opt for the fresher, more varied, better priced product then that available from the local Mom & Pop store.
I rest my case
"The trouble with life is there's no background music."

Carron

Sep 18, 2004, 5:23 PM

Post #22 of 42 (2493 views)

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I base my agreement on personal experience. Big WalMart came to the small city of Del Rio, Texas--just across the border from where we live in Coahuila--about a year ago. I confess that we shop there from time to time. For the first few months the prices on almost everything were much lower than its largest local competitor, HEB. We buy certain items there that we cannot buy elsewhere and are familiar with the usual pricing. Within the past several months we have noticed that the prices on items we buy regularly are noticeably more expensive than they were when the store opened.

Esteban

Sep 19, 2004, 7:33 AM

Post #23 of 42 (2444 views)

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Re: [Carron] WalMart, SchmalMart

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You might also consider inflation. Everyone says there is no inflation but it's VERY HARD TO BELIEVE! I see prices going up on everything.

Marlene

Sep 19, 2004, 7:54 AM

Post #24 of 42 (2441 views)

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That's an understatement. I haven't noticed any particular price savings shopping at Walmart over Soriana. From day one, we haven't found Walmart in Mazatlán to be a bargain hunters paradise like up north, but it certainly doesn't lack shoppers. Sure they each have their loss leaders (more so Soriana) and some different stock but nothing stands out as a big savings. The furniture items are junky and overpriced in my opinion.

Bubba

Sep 19, 2004, 10:47 AM

Post #25 of 42 (2408 views)

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Re: [Marlene] WalMart, SchmalMart

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When Soriana opens its new superstore in Chapala in December and assuming it is as competitive as I expect, trips to WalMart in Guadalajara are a thing of the past. Soriana will revolutionize retailing in the relatively small but also relatively affluent community on Lake Chapala's north shore which includes not only locals and expats but middle and upper middle class Guadalajarans with weekend homes. I also think they plan to employ around 200 people. People in this community have been subject to price gouging by high-end retailers in the past. I don't see how the community can lose.

By the way, Soriana has represented to the local press that it will cater to the needs of the substantial expat and Tapatio markets around here with specialty food items including high quality and exotic food items imported from the U.S. and Europe. I have been in a number of WalMart stores in Guadalajara and their only interest appears to be turnover so you don't normally see this stuff. Let's hope Soriana lives up to its billing.

Jennifer is right that the frozen lamb racks at Costco are excellent wherever Costco is located in Mexico. Sometimes they do stock out temporarily. In this part of Jalisco, good lamb in all cuts is also available any time at the specialty butcher in Guadalajara's abastos and often in shops in Chapala and seasonally in Jocotepec. In the Jalisco mountains around Tapalpa, lamb is a local specialty and the pine forests around Tapalpa are filled with campestre style BBQ joints serving lamb family style.

(This post was edited by Bubba on Sep 19, 2004, 10:58 AM)

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