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Wal-Mart saves you $50/week?
Posted by: Scott McMahan | more..
Wal-Mart has had someone do a study that claims they save families about $50 per week, or about $2500 per year.

What they don't tell you is that Wal-Mart has done this largely at the expense of quality. They tell the suppliers who sell them the items you buy on the shelves that they will only pay $X for the item. The manufacturer has to find a way to make the item for $X, and that's usually done by cutting corners.

In the short run, you save money. In the long run, you buy the same products over and over again because they're inferior in quality to what they used to be. In the past decade, the items I've been buying just aren't as good as they once were. Brand names that once stood for quality are now just buying Made In China goods and slapping their logo on them, particularly consumer electronics and small appliances. Clothing has gotten remarkably low in quality recently.

Not only that, but other stores like K-Mart and (I guess) Target (although I don't go there) have to match the low prices. To compete with price, all the stores basically stock the same Made In China stuff with different labels on it.

Recently I needed a small drill, and looked at K-Mart's Craftsman drills, and they're Made In China now. Their Craftsman $70 5-amp drill was $30 at Lowes for a Black and Decker. Why pay a premium for Made In China?

What I really don't understand about K-Mart, and I guess this is true of Target, although I don't go to Target, is why K-Mart doesn't position themselves better. Why doesn't K-Mart position itself as the alternative to Wal-Mart? Why don't they play up their Craftsman tools that are made in the USA? Make that a reason to come to the store? Why don't they stock more Made In USA items? I think there are more Made In USA items in Wal-Mart than K-Mart. I know Back To School this year had K-Mart selling smelly, poorly printed notebooks Made In India while Wal-Mart had better notebooks Made In USA. The problem with K-Mart is they're trying to be an also-ran clone of Wal-Mart, but with less selection, empty shelves, and employees who don't want to be there. Why doesn't K-Mart make itself more distinctive as a clear alternative?

Even if K-Mart just matched Wal-Mart, people who don't like Wal-Mart would shop there. But they don't. The shelves are empty so often at K-Mart now that I have to go to Wal-Mart to get basic supplies from time to time. K-Mart managers must have to do that too, because they can't shop in their own stores for their supplies when the shelves are empty. (My K-Mart went about a month before getting in more liquid soap one time!) They ought to take notes about what Wal-Mart does right. I think Wal-Mart is winning on intangibles, too, not just price.

Category:  Boring Money Article

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