Tuesday, August 17, 2004

Wal-mart the great Satan

The title says it all from an article that tacitus cited.
Wal-Mart = Bush. Costco = Kerry. Costco's Winning.

At first I was totally convinced and I decided that I was voting for Kerry, then I slept on it. When I woke up I was less convinced, and had many questions.

Things I noticed the author does a great job of citing his sources, which I really respect that.

Here is the killer line.

Consumers vote by shopping. And so far this year, they're voting more for Costco than Wal-Mart, yet another illustration of the Two Americas shopping theme. Costco's customers plainly have cash to spend. For the four weeks ended Aug. 1, Costco's same-store U.S. sales rose 9 percent; in the 48 weeks ended Aug. 1, they were up an impressive 10 percent. At Wal-Mart, the registers haven't been ringing quite so loudly. In its most recent four-week sales period, same-store sales rose a meager 2.4 percent. For August, Wal-Mart sees same-store growth of between 2 percent to 4 percent—about the same growth rate as the economy, if not slower.

first, I would like to point out an apparent disconnect in the writers argument. The write points out that the average income of the Costco shopper is around 93,000 dollars a year, which supports the writer's "Two Americas shopping theme", then through out the entire article the writer is extolling costco's labor polices and pay polices which are very leftist in nature. Typically, the left tries to paint republicans as rich fat cats, who are evil. The writer does not attempt to look at the wages differences in light of regional cost of living differences.

Secondly, Costco is doing very well by these numbers, but I wonder how target, family dollar, and dollar general are doing. As far as price range is concerned, walmart is about in the middle of those stores.

Family Dollar stock prices (dropping).
Dollar General stock prices (dropping).
Wal-Mart stock prices (dropping).
Walgreen stock prices (rising).
Target stock prices (took a big jump earlier in the year and has remained level).
Costco stock prices (took a big jump in the past few months and has remained level).

I am sure their is a story here, but I don't know if that story is the same one as I am being told.

thirdly, they are comparing a store where you have to buy a member ship to, against a store that you can just walk into. A friend pointed out to me that I would be more fair to compare Costco and just Sams, not Costco against walmart.

also, Walmart is beginning to address some of it's underlying theft and reputation problems.


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