Wal-Mart has a problem: they’ve saved so much money on labor costs that their shelves are going bare.
Margaret Hancock has long considered the local Wal-Mart Stores Inc. (WMT) superstore her one- stop shopping destination. No longer.
During recent visits, the retired accountant from Newark, Delaware, says she failed to find more than a dozen basic items, including certain types of face cream, cold medicine, bandages, mouthwash, hangers, lamps and fabrics.
The cosmetics section “looked like someone raided it,” said Hancock, 63.
The difference between Wal-Mart and its competition is that Wal-Mart optimizes their operation for one goal, having the lowest price on their products. Their competition, like Target, is not such a one-note song. For example, I knew a guy who worked at Target corporate, and he said that their customer surveys told them that shoppers like a clean store, so Target’s cleaning budget was quite a bit higher than Wal-Mart’s.
The reason that suburban middle class types generally shop at Target isn’t their politics or their ethics–it’s that spending an hour shopping in Wal-Mart is just plain unpleasant. The place is dirty, and the shelves are a mess. Better to pay a couple cents more for your laundry soap than to feel like you’ve just visited a third world country. The logical end to the Wal-Mart experiment in lowest-cost retailing is probably some kid being attacked by rats in the toy aisle because someone in corporate decided that extermination was an unnecessary expense.