Originally Posted by
Six_Shooter
Competition is good, undercutting is not. It's impossible for an independent retailer to be competitive with big box stores, when the bog box stores sell the same product to the consumer for less than the independent can purchase that same item for. Don't fooled for an instant that Walmart and most big box stores are "playing fairly" or are providing "healthy competition".
Walmart doesn't go to a manufacturer and ask "How much will this item cost us?"
They go to that manufacturer and say "This is how much we will buy this item for and no more." They usually also add: "We want exclusive distribution rights on this too."
For items they are not granted exclusivity on, they will sometimes get their own model numbers, but sell the same product as independents who pay more. This practice has been going on for years with the Car Audio industry. Pioneer Electronics is a co-hort to this. They will provide an "exclusive model" to a big box store, that has all the same features as the ones the independents get, but for less money and usually one digit difference in the model number.
I agree that employment is good, but don't kid yourself. One Walmart employs less people than if there were independent shops selling all the same product, even if it was only one store selling each of the different departments. They do this by having as few staff on hand as possible.
It's a downward spiral. A big box retailer moves in, closes down most of the independents, though a few usually survive, thanks to people who refuse to shop at Walmart, killing a bunch of jobs, driving up unemployment, without even attempting to reduce the unemployment stats. So now there is less money in that community to spend, so more people need to buy things cheap, where to get them cheap? Walmart, the same place that caused them to lose their job in the first place. So now the poor get poorer and Walmart feeds on this to keep the economy down.
What needs to happen is that bog box stores need to do business the same way the independents do, buying at the same rate, selling at the same rate, or close to, and then you'll see how real competition works.