"We kept Wal-Mart out of our town!"

Page 8 of 12  


Wrong. They pay a LOT in taxes.

Wrong.
The contemporary Supercenter dedicates about 1/3 of the store to its grocery operation. Pre-packaged, consumable food is not subject to SALES tax in many areas but virtually everything else is. Given they are not a not-for-profit entity, they pay taxes on their profit. They pay property tax.
--
:)
JR

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Jim Redelfs wrote:

Not in my state. When they want to build a store we obtain the site and prepare it for them for free (corporate welfare by transferring wealth from taxpayers) including the infrastructure such non-trivial costs as utilities, highway interchanges etc and give them a nine year tax exemption. They *explicitly* do not pay property taxes and they pay a very reduced corporate franchise tax or whatever that tax is called to the state. When the nine years is about to run out they move across the street to restart the nine year clock. The third local walmart is about to move across the street as I write this.
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And of course building highways, running sewers, etc is not a function of government in your area? Also, nobody ever builds anything near a WalMart to use the infrastructure so it is only built for Walmart and nobody else benefits and n0 other buildings are built so no other tax money comes in. Cities and towns loss leader as much as any retailer.
and give them a nine year tax

Sounds like more of a problem with the local tax authority. WM is pretty much required by its fudiciary responsibility to try and get the most out anyone they are negotiating with.
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Kurt Ullman wrote:

Absolutely. But the government didn't pay for my lot and let me use it for free or install my driveway or extend the mains just for me and install the sewer lateral or water lines into the house.
Also, nobody ever builds anything

Not in my area. So far the original Walmarts and the new sites we prepared for or are preparing for them are occupied only by them. The highway interchange, traffic signals etc are solely for their use. And even if they were shared by others why would the taxpayers need to pay for it? Let a developer buy and prepare the property and lease it to their commercial customers or as in the case of some organizations that have multiple properties have their property management division acquire and prepare the site for their use.
Cities and towns loss leader as much as any

The program is run by the state and the locals have little to say. Sure, everyone should negotiate for the best deal and then there is greed. I don't see any particular other reason why Walmart needs to be a welfare queen.
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Which, of course they are also not doing solely for WalMart. Every WM I have seen is surrounded by other buildings, many coming to the area specifically for the traffic WM generates. I would find it hard to beleive that the city buys the lots, too.

Well then your area is the only one in the known galaxy where that has occurred. Heck the WMs LIKE to have other places around because it also tends to drive even more traffic to them. Also, are they really the only ones that the infrastructure goes to? The roads just stop and there is absolutely nobody between where the roads and sewers stopped before and where they go now? Nothing further on? Again, outside normal.
The

That is a good question, but I doubt it is a WM only question. Manufacturers, wharehouses, other big boxes, heck even banks get the same economic development incentives in our area and I would bet yours, too.

Which of course boils down the entire discussion, to WM offends you so you don't think they should get what many others of similar size get.
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Kurt Ullman wrote:

They don't, it is a state program where the state acquires the property and then Walmart gets to use it for cheap.

I live in a mountainous area. All of the primo spaces in the valley plain areas are occupied. So if you need to accommodate a super wally and have it anywhere near the population you need to do some heavy duty blasting and prep work to create a terraced space. I know exactly what you are describing but that doesn't work here because of topography. The closest will be when we move local Walmart #3 across the street. There is already a complex that was build by a private developer (its a novel idea). From the plans I saw at my friend's office the new Wally site we are building will almost touch the existing complex.

No, not really. If we run utility lines to a terraced space on a mountain who else can use them? And in this area the prospective user pays for utility extensions. My brother had to pay $6,000 to have a natural gas line extended 150' down the public borough road so he could get service. My buddy built a garage for equipment for his business and it cost him over $100,000 for relatively minor extensions. But we pay for Walmarts expenses.

I know Target for example didn't. I know Lowes didn't. I know a regional market who built two large stores here didn't. Walmart without a doubt is the welfare queen.

As I said lots of other outfits don't get welfare. Can you give me a good reason why Walmart should be on welfare?
Before you answer consider this. I know a guy and his son because they belong to the same shooting club I do. And an old friend happens to work for them as a property manager.
Years ago the guy opened a food market and then grew the business all on his own. Now he owns 3 large modern complexes (with a 4th in planning) anchored by a large food store, the plazas include gas stations, large hardware/garden stores, mini-marts and around 15 spaces for the typical bank, laundry & medical offices. The guy is tough, no-nonsense, wealthy, not a supporter of Hussein Obama and doesn't spout "God bless America, I am sure God would want me to do whatever it takes to make money etc) but he is an adamant believer in not being greedy so unlike Walmart he pays his help well and also provides real benefits and his business isn't on welfare.
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And this is only for the Dreaded WalMart? This isn't a program available to others who qualify under whatever the criteria are? Solely and utterly a plan at the beck and call from the Boys from Arkansas. The WalMart Act? Or is it just the use by WM that offends you?

Sounds like a problem with the government instead of WM. Vote 'em out.

If qualifies under the state law, why shouldn't they?

Cool. Does HE have any problems with WalMart getting this largesse?
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Kurt Ullman wrote:

Any company that is on welfare offends me. Walmart just happens to be (at least in my state) the #1 welfare queen.

Would you proudly announce to your friends that you were on welfare or would it feel better to say that you pay your own way?

The guy reminds me of the first job I had with real authority. The guy I worked for was a self made man who became very wealthy in an honest fashion. He had a very simple saying concerning dealing with others. It was "the other guy has to eat too..". Meaning get value and a fair deal but don't cross the line and stand on someone's head just because you are in a superior position. Simply put he wasn't greedy.
I can't say what he thinks about Walmart being a welfare queen because I have not heard his opinion. However he is very vocal about the low wages they pay and how they muscle their suppliers way past a fair deal.
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wrote Re Re: "We kept Wal-Mart out of our town!":

In regards to WM muscling their suppliers way past a fair deal, this is a must-see for anyone wanting to be a WM supplier
http://www.netflix.com/Movie/Wal-Mart_The_High_Cost_of_Low_Price/70040809?trkid "2336&lnkctr=srchrd-sr&strkid96743468_0_0
After viewing this expose, I decided I would rather go out of business than be a WM supplier.
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Hmmmmmm. bet they don't sell that movie at walmart.......
s

http://www.netflix.com/Movie/Wal-Mart_The_High_Cost_of_Low_Price/70040809?trkid "2336&lnkctr=srchrd-sr&strkid96743468_0_0
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http://www.netflix.com/Movie/Wal-Mart_The_High_Cost_of_Low_Price/70040809?trkid "2336&lnkctr=srchrd-sr&strkid96743468_0_0
You're more likely to go out of business by becoming a WM supplier.
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wrote Re Re: "We kept Wal-Mart out of our town!":

That is the exact inference I got from watching that expose.
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It is amazing how many people still think they can lose money on every one, yet make it back up in volume (g).
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wrote:

I didn't see the link to the expos, was it about Vlasic Pickles? IIRC, becoming a WM supplier nearly put them out of business.
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Why don't you just go out of business anyway? If you can't make business choices that involve selling something for less than it costs you to make it, you don't sound like business material to me. Unless, of course, you get government contracts.
Steve
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h wrote:

I can relate an example of this. The particular company is now gone and folks I know have moved on so I don't think it will cause grief for anyone. The company whose branding includes the words "57 varieties" owned a pet food division. They definitely ran it above board and in a reputable fashion. They had an sophisticated onsite lab for inspection of materials and animals on site in their quality lab for testing purposes. There was no union but folks who worked there got decent pay and benefits. Everything I know was from responsible people and because of providing certain services. This isn't Bob the forklift guy overhearing someone and creating a rumor.
They started selling to Walmart and eventually they became their biggest customer. For the folks without business experience who will now say "but they didn't have to to sell to Wally" just read on.
They went through the various steps of minimizing packaging and improving efficiency. Walmart placed huge orders and things were good. They installed additional process equipment and expanded the building and things were good. Then each time Walmart placed an order they would demand a lower price even though costs of operation had risen. So they needed to figure out how to meet the pricing demands. If you are reputable and have a moral compass there is only so much you can do.
Along the way someone at Walmart got the idea that people wouldn't notice if packaging changed from 6 up to 4 up (that refers to the common packaging where they bind 6 cans with a plastic ring) so they could sell 4 cans of "happy cat" for the price of 6 cans of "happy cat". The company spent a large amount of money putting a line in to do 4 up packaging but it didn't work out at retail so they had to absorb all of the costs of that failed idea.
Meanwhile each time Walmart placed an order it would go like "1 million cans of happy cat, last time $0.12/can, this time $0.11/can.
They had already cheapened up their process as much as they could and the only options left were to cut even more corners, pay Walmart wages to their employees etc so they simply decided to close the division and sell it off. Net result was lots of good jobs lost and a reputable company with losses.
But there is always someone without a moral compass just like Walmart who will step in. So another outfit whose name I can't remember picked up the slack. According to my friends they were a perfect match and would do whatever was necessary.
Then some might remember the fairly recent melamine flavored pet food incident. According to my friends the reason it happened was that the company without a moral compass was shopping around for the cheapest stuff they could find and got a good deal on the contaminated supplies. The "57 varieties" place would have caught contaminated supplies because their lab tested all materials and the final result was fed to their lab animals.
And for those who would suggest "no one has to sell to Walmart" just consider the chronology. The deal starts off good, the supplier makes enough margin to stay in business and keeps expanding. Once Walmart becomes their major or sole customer they then demand unreasonably cheap prices. If you have a large investment in a facility you can't afford to loose major volume because you loose your economy of scale so your only choice is to do whatever is necessary which includes cheapening the product, paying Walmart wages, closing the plant and going offshore depending on what is being manufactured etc.
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wrote Re Re: "We kept Wal-Mart out of our town!":

Good post George. The whole degrading process you described is sadly illustrated by the documentary in the NetFlix link above. In that documentary a small mom/pop company makes a massive effort to lower their costs to become a WM supplier. They went so far as to mortgage their home to raise the funds necessary to increase their production facility to meet WM's requirements. They are eventually successful and at the end of the documentary they are very happy and pleased to be a new WM supplier although at a very low (but high volume) profit margin.
I was left wondering:
What happens when WM starts putting the screws to them to lower prices?
What happens when they can't lower prices anymore and make a profit?
What happens to their moorage then?
How will they compete against slave labor in China?
It's true that the consumer benefits from the low prices ... in the short term. The documentary title is "The High Cost of Low Price". How appropriate that title is.
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\\

But this is hardly new behavior on the part of WM. Again, they got blinded by the original numbers. Also nothin' new from a corp. standpoint. Sears did basically the same thing to my Dad in the 70s. Got him to build nice new plant and then not only took the contract away, gave it to a subsidiary, but (according to the completely adjudicated suit) infringed his patents. He went bankrupt soon after the loss of the contract, but got a lot of money back on the infringement.
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George wrote:

Good story, but I sense a flaw. How is it in Walmart's best interests to drive it's suppliers out of business?
Walmart DOES send its own experts to its suppliers to show these suppliers how they can streamline, optimize, and improve their production, back office techniques, shipping schedules, etc. Techniques that have worked at thousands of other suppliers.
Some companies, however, may think they know more than Walmart or ignore the advice.
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Read this http://www.fastcompany.com/magazine/77/walmart.html
But I like this story better. http://www.fastcompany.com/magazine/102/open_snapper.html
Reminds me of our company. We told our largest customer we don't want to sell to them any more. Our competitor was happy to get the business. One year later, they filed for bankruptcy, we went on to more profits.
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