Friday, May 21, 2010

Everyday Low Prices Could Get Even Lower

May 21 (Bloomberg) -- "Wal-Mart Stores Inc., the world’s largest retailer, is seeking to take over U.S. transportation services from suppliers in an effort to reduce the cost of hauling goods.  The company is contacting all manufacturers that provide products to its more than 4,000 U.S. stores and Sam’s Club membership warehouse clubs, said Kelly Abney, Wal-Mart’s vice president of corporate transportation in charge of the project. The goal is to take over deliveries in instances where Wal-Mart can do the same job for less and use those savings to reduce prices in stores, he said.

“It has allowed our suppliers to focus on what they do best, manufacturing products for us,” Abney said in a telephone interview yesterday from Bentonville, Arkansas, where Wal-Mart is based. “With lower costs usually comes increased sales.”

Under the program, Wal-Mart is increasing the use of contractors, as well as its own private fleet of trucks, to pick up products directly from manufacturers and transport the goods to its distribution centers and stores. The retailer currently moves most goods only from its distribution centers to stores. The plan allows Wal-Mart’s fleet of 6,500 trucks and 55,000 trailers to carry more per truck and improve on-time delivery rates, said Leon Nicholas, a director at consulting firm Kantar Retail. Wal-Mart would also have more sway in negotiating fuel prices."

MP: Another example of why Wal-Mart is the world's leading retailer and how its relentless pursuit of supply chain efficiencies and other cost-cutting measures allows Wal-Mart to keep lowering prices to consumers, and in the process make millions of Americans better off.  In Wal-Mart's world, the consumers reign as the kings and queens, and there's probably no better example of consumer sovereignty than Wal-Mart.

Thanks to Norman Berger for the Wal-Mart link.

24 Comments:

At 5/21/2010 2:00 PM, Anonymous Gene said...

I wonder how long it will be before the union(s) that represent the truckers who currently deliver those goods will respond with the "Walmart is a destroyer of jobs in the name of profits" mantra...Just askin'...

 
At 5/21/2010 2:24 PM, Blogger sethstorm said...

I'd have to call BS on that Consumer sovereignty. In a high enough volume, they will buy anything if it's the only thing they can afford, even junk.

This sounds more like a labor relations measure than a cost-saving one.

With lower costs comes increased junk and more thugs.

 
At 5/21/2010 2:51 PM, Anonymous Dave Hayes said...

Every time I walk into Wal Mart, I genuflect and thank God I'm an American (at least inside myself I do).

I don't get the comment about junk. Most of what I buy there is a brand name product. As I type, I am wearing a Casio brand watch, Jockey boxers, and Hanes socks. I buy $12 jeans and laugh all the way to the bank.

As for the off brand things, I am constantly surprised by how good the stuff is. I pay 68 cents for a two liter bottle of Sams Club soda and like it better than Coke.

Of course, it's diet caffeine free so I gave up on taste a long time ago. But then the best soda I have tasted was Japanese Coke which has actual cane sugar in it. But then we have Coke with HF corn syrup because of US sugar quotas.

 
At 5/21/2010 4:22 PM, Blogger sethstorm said...


I don't get the comment about junk.

To meet their exacting standards about cost, everything else goes out the window.

Something sold somewhere else has corners cut around it to sell it at Wal-Mart. The only thing that's left in the brand name is the brand name - if they're lucky enough to survive.

You might get cheap stuff with more nonworking features. That said, you get what you pay for - cheap stuff that breaks too easily or performs worse than the original product.

 
At 5/21/2010 4:25 PM, Blogger sethstorm said...


Of course, it's diet caffeine free so I gave up on taste a long time ago. But then the best soda I have tasted was Japanese Coke which has actual cane sugar in it. But then we have Coke with HF corn syrup because of US sugar quotas.

That's not so much Wal-Mart as much as it is sugar being used in other countries.

 
At 5/21/2010 6:57 PM, Blogger Ron H. said...

>"I don't get the comment about junk. Most of what I buy there is a brand name product. As I type, I am wearing a Casio brand watch, Jockey boxers, and Hanes socks. I buy $12 jeans and laugh all the way to the bank."

Dave, sethstorm has a serious attitude about anything not manufactured in the US. He considers everything else 3rd world junk made by slave laborers whose only incentive is to make the shoddiest goods they possibly can.

He believes American consumers are somehow forced to buy this awful trash, although the exact forcing mechanism isn't ever explained

 
At 5/21/2010 7:13 PM, Blogger Ron H. said...

Seth, surely you understand that while most of the world enjoys cane sugar, which is dirt cheap, sugar quotas and tariffs in the US makes it too expensive for most uses. That's why beverage manufacturers in the US use high fructose corn syrup instead of real sugar.

 
At 5/21/2010 8:10 PM, Anonymous Anonymous said...

16 Items They Only Sell At Chinese Walmarts

 
At 5/21/2010 8:16 PM, Anonymous Party Platteform said...

"
take over deliveries in instances where Wal-Mart can do the same job for less
"

Next will be to by-pass UPS when delivering downstream to consumer. Furniture stores do this already. Why not Wally World?

 
At 5/21/2010 8:48 PM, Blogger juandos said...

Per his usual whining style sethstorm blathers on about Walmart without bit of credible substance behind his whines...

Is this another one of your short term memory loss episodes sethstorm?

"That's not so much Wal-Mart as much as it is sugar being used in other countries"...

Professor Mark has posted on sugar more than once and Ron H. tries to remind you also...

Get a grip sethstorm...

 
At 5/21/2010 9:36 PM, Blogger Ron H. said...

"You might get cheap stuff with more nonworking features."

I'm trying to imagine what nonworking features those Jockey boxers could have. No elastic at the waist? No leg openings, maybe? Or those Hanes socks: Are the toes not closed?

 
At 5/21/2010 10:11 PM, Anonymous Lyle said...

RE Party Platfom. Wal-Mart has already done this with their direct to store program. See their web site, basically they ship the goods to the nearest Wal-Mart and let you go there to pick it up for free. It takes 7 to 10 days since they have to put the goods into their pipeline, (it sounds like it is done on a space available basis on their trucks). They send an email when the goods arrive. So you can get it fast for a charge or more slowly for free.

 
At 5/22/2010 12:30 AM, Anonymous grant said...

It's good to see Walmart with stores in china doing a good job helping to start to balance trade with the US.

 
At 5/22/2010 12:33 AM, Blogger sethstorm said...


I'm trying to imagine what nonworking features those Jockey boxers could have. No elastic at the waist? No leg openings, maybe? Or those Hanes socks: Are the toes not closed?

More like those things rip open sooner and with less effort.

 
At 5/22/2010 3:41 AM, Blogger Ron H. said...

>"It's good to see Walmart with stores in china doing a good job helping to start to balance trade with the US."

Grant, how does that help? Are they selling US made goods? None of those 16 items in the pictures were produced in the US.

 
At 5/22/2010 8:53 AM, Blogger juandos said...

"Grant, how does that help? Are they selling US made goods?"...

Question here Ron H, doesn't some of that money generated at the China Walmarts come back to the US?

Granted it isn't much but...

Yet another BS filled comment by the sethstorm: "More like those things rip open sooner and with less effort"...

Why is it BS you may wonder...

Well I've been using same said products as David Hayes has listed and not a one of them is any shabbier than at some time in the past...

Mechanical looms are mechanical looms and that's what socks, boxers, and jeans are made on...

 
At 5/22/2010 11:03 AM, Anonymous Capitalist Lion Tamer said...

There is a downside to using lowest-bid independent contractors: reliability.

When I was a manager at a Sam's Club in Lincoln, NE back in 2005, they were using independent contractors to pick up and deliver shipments of paper goods (mainly paper towels and napkins).

These products would frequently run out before replenishment would arrive. And when it did, it was usually done after normal receiving hours which was way less than convenient.

Cheap or not, it's pretty hard to sell your product when it's still sitting miles away.

Other than that, more power to them. I shop Wal-Mart pretty much exclusively. (I also am not their employee any more, just in case anyone feels I'm just bleeding company blue.)

 
At 5/22/2010 11:33 AM, Anonymous grant said...

Ron H:

When Waimart repatriates profits from China back to America.

 
At 5/22/2010 11:37 AM, Anonymous grant said...

Capitalist Lion Tamer:
Maybe Penalty Clauses in their employment contracts.

 
At 5/22/2010 1:40 PM, Blogger Ron H. said...

juandos, grant, You guys are right, there is a trickle of profits returning to US stockholders, but I guess I would stop short of calling it --"a good job helping to start to balance trade with the US."

Walmart in China is likely a good deal for Chinese consumers, just as it is for US consumers.

I can't wait for my local store to start offering crocodiles.

 
At 5/22/2010 2:26 PM, Blogger Ron H. said...

>"Mechanical looms are mechanical looms and that's what socks, boxers, and jeans are made on..."

Yes, but in third world countries these looms are intentionally maladjusted by the slave laborers to create an inferior product. :-)

 
At 5/22/2010 6:06 PM, Blogger sethstorm said...


Yes, but in third world countries these looms are intentionally maladjusted by the slave laborers to create an inferior product.

Not so much purpose as it is them running everything on the property into the ground. It doesn't matter whether it is people, machines, buildings, countryside, and/or local governments that get worn out(and break) faster. Maintenance to them is too expensive.

 
At 5/22/2010 8:12 PM, Blogger Ron H. said...

>"Maintenance to them is too expensive."

Not working at all is cheaper than maintenance?

 
At 5/23/2010 2:18 AM, Blogger sethstorm said...


Not working at all is cheaper than maintenance?

Short of being pushed to do it, replacement is usually cheaper. Whether it's people, localities or equipment.

 

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