Wal-Mart Price War Continues. Thanks Again Capitalism

From The Wall Street Journal:

Wal-Mart Stores Inc. opened a new front in its price war against other retailers by temporarily slashing prices on 50 popular videogames in a bid to steal market share.

The discount chain’s videogame price cuts are some of the most aggressive the videogame industry has seen and may have an impact on competitors like Best Buy Co., Toys “R” Us Inc. and GameStop Corp.

Its good to be a consumer.

Wal-Mart Vs. Amazon: The Capitalist Fueled Price War Continues

Slate reports:

With retails sales expected to drop again this year, Wal-Mart is fighting for sales with Amazon, “a relative schooner to Wal-Mart’s ocean liner.” Even though Wal-Mart’s annual sales are more than 20 times that of Amazon’s—the retail giant made $405 billion last year, while Amazon made about $20 billion—Wal-Mart is concerned about the growing popularity of e-commerce, which is cutting into its market. “This fight, then, is all about the future,” the New York Times says. As retail sales have gone down, e-commerce sales have gone up, and Amazon enjoyed a 24 percent sales spike last quarter. Even though Amazon has been doing well for years, major retailers are now responding. According to the Times, the fight began last month over media pricing, with Wal-Mart dropping prices on popular novels and video games in order to compete with Amazon. Bizarrely, Wal-Mart has been framed as the underdog in the fight. When asked about the price sniping, one retail executive referred to it a “part of a greater strategic plan,” adding, “they are just not going to cede their business to Amazon.”

So who will win this war? Whether its Wal-Mart or Amazon, I am not certain. But either way, the consumer will enjoy the falling prices. Thanks again Capitalism.

The Wal-Mart Effect

Foriegn Policy reports:

Wal-Mart’s debut in a country is a bellwether for future growth. Indeed, Wal-Mart has started operations in 15 countries since 1991, and 13 of them have had boom economies, with an average of 4.4 percent annual growth since Wal-Mart arrived. Over the last five years, the economies of Wal-Mart countries outside the United States have grown 40 percent faster than the world average. So what’s going on?

Does the ability to buy giant bags of Froot Loops at cut-rate prices inspire economic growth? More likely, Wal-Mart is simply a smart, cautious investor. “Wal-Mart chooses to go places with a sizable middle class,” says Nelson Lichtenstein, a historian who just published a book on Wal-Mart’s rise. And Wal-Mart’s attention to middle-class growth could pay off for the company in the future.

HT: Carpe Diem

Wal-Mart Takes on Amazon in Price War Protected by Capitalism

Competition, protected by Capitalism, helps the consumers. Below is a case in point from The Wall Street Journal:

Wal-Mart Stores Inc. launched a brash price war against Amazon.com Inc. on Thursday, saying it would sell 10 hotly anticipated new books for just $10 apiece through its online site, Walmart.com.

That was just the beginning.

Hours later, Amazon matched the $10 price, squaring off in a battle for low-price and e-commerce leadership heading into the crucial holiday shopping season. Wal-Mart soon fired back with a promise to drop its prices to $9 by Friday morning — and made good on that vow by early evening Thursday.

Undercover at Wal-Mart

Charles Platt of the New York Post writes:

Some people, usually community activists, loath Wal-Mart. Others, like the family of four struggling to make ends meet, are in love with the chain. I, meanwhile, am in awe of it.

With more than 7,000 facilities worldwide, coordinating more than 2 million employees in its fanatical mission to maintain an inventory from more than 60,000 American suppliers, it has become a system containing more components than the Space Shuttle – yet it runs as reliably as a Timex watch.

Sheltered by rabble rousers who forced Wal-Mart’s CEO to admit it “wasn’t worth the effort” to try to open in Queens or anywhere else in the city, New Yorkers may not fully realize the unique, irreplaceable status of the World’s Largest Retailer in rural and suburban America. Merchandise from Wal-Mart has become as ubiquitous as the water supply. Yet still the company is rebuked and reviled by anyone claiming a social conscience, and is lambasted by legislators as if its bad behavior places it somewhere between investment bankers and the Taliban.

Considering this is a company that is helping families ride out the economic downturn, which is providing jobs and stimulus while Congress bickers, which had sales growth of 2% this last quarter while other companies struggled, you have to wonder why. At least, I wondered why. And in that spirit of curiosity, I applied for an entry-level position at my local Wal-Mart.

Click here to read what he found.

Power to the People? Not In Chicago

Chicago Tribune:

Wal-Mart’s plans to build a second store in Chicago remain bottled up in the Chicago City Council. The store that Wal-Mart would like to build on the South Side at 83rd Street and Stewart Avenue, is going nowhere because the aldermen live in fear of organized labor and organized labor despises Wal-Mart.

We know organized labor wants to keep Wal-Mart from expanding in Chicago. But what do the aldermen’s constituents want? The answer is clear: They want the opportunity to work or shop at Wal-Mart. A new Tribune/WGN poll found that 68% of city residents would like to see a new Wal-Mart store in Chicago, and 72% say Wal-Mart would be good for the community. The support is even higher with African-Americans, who stand to gain the most economic benefit from the proposed South Side store. The poll found 72% of African-Americans want Wal-Mart in the city and 81% say it would be good for the community.

The Tribune poll, conducted in late August, mirrors polls taken this summer for Wal-Mart and for the Chicagoland Chamber of Commerce that showed strong public support for the retailer. But the aldermen aren’t listening to their constituents. The unions provide money and troops at election time. Apparently the aldermen have decided that keeping the labor bosses happy is more critical than following the wishes of their citizens.

Two hundred construction jobs — union jobs, by the way — and up to 500 retail jobs. But City Council leaders won’t even allow a vote on an ordinance that would clear the way for Wal-Mart to build and open on the South Side. They’re in step with the union bosses, but they’re out of step with the people.

HT: Carpe Diem

The Expansion of Wal-Mart

Wal-Mart is the world’s largest employer

With 2.1 million employees, Wal-Mart employs more people than any other private or public entity.

Seems to me a clear cut example of an evil corporation. If only they were taxed more they would hire less people and everyone would be better off. Right?

Thomas Sowell: Hollywood Economics

Thomas Sowell writes,

It is not really news that Hollywood is still producing anti-business movies, but there is a certain irony in it nevertheless.

Although these movies tap a certain envy and resentment of corporate wealth, that large corporate wealth comes from far more modest individual amounts of money from about half the population of the United States, which owns stocks and bonds — either directly or because money paid into pension funds or other financial intermediaries are used to buy stocks and bonds.

The irony is that the average Hollywood star who is making anti-business movies is far wealthier than the average owners of those businesses, who are half the population of the country.

The Los Angeles Times refers to documentary “films” that are “critical of corporate power.” But just what does this vague word “power” mean when it comes to businesses?

Click here to continue reading.

Wal-Mart outpays target

Wal-Mart out pays Target for cashiers, retail cashiers, sales associates and retail sales associates positions.