On Mon, 05 Aug 2013 20:45:58 -0700, Patrick Elliott wrote:

> No, they won't. Those corporations didn't just edge out small businesses
> by selling non-local goods. Most local businesses, with the exception of
> food providers, or other "immediate sale" types, ordered parts, or
> goods,
> had them shipped to them, in smaller, more expensive, volumes, or
> special ordered them, and then you waited. The big corporations could do
> "volume"
> purchases, hire their own, lower paid shippers, then undercut the prices
> of the local sellers, even selling the **exact identical items**.

I spent about a decade working in the food & drug industry as an IT 
professional, and towards the end of the time, when my "Fortune 50" 
company was acquired by another Fortune 50 company, we had to take a 
course on "retail business basics".

In that course, one of the things we talked about was the death of the 
"mom & pop" style grocery store.  Companies like ours were responsible 
for those smaller local shops going away for precisely the reasons you 
state, Patrick:  Volume purchases, the ability to sell some items at a 
loss (which is actually a sound strategy, because you lay the store out 
so you have more impulse purchases and drive the average sale up).

But here was the interesting thing (and part of the reason that the 
combined larger company itself became an acquisition target - that and 
incompetent senior management, IMHO):  Walmart was (and is) doing the 
exact same thing to stores that focused on just food & drug.  Walmart 
leverages the welfare system in (IMHO) an unconscionable way to drive 
prices even lower than what food & drug retailers (who deal with unions 
in most states) can afford.  A not insignificant number of Walmart part 
time employees have to supplement their income with food stamps or other 
forms of welfare because they don't make a living wage (the ironic 
statement that "Walmart employees can't even afford to shop at Walmart" 
is sadly true in a lot of cases).

So now the food & drug giants like Safeway, Albertson's, Supervalu, and 
so on are faced with being on the receiving end of what they did to the 
mom & pop grocery stores.  To say they're not liking it is an 
understatement.

Jim

Post a reply to this message