In the past week, I’ve had the opportunity, nay, the pleasure to spend time at some of our Nation’s finest big-box retailers and warehouse stores out here in northern New Jersey. I did so not in the name of channel checks or due diligence, but to actually, ya’ know, buy stuff, specifically large quantities of meat, lawn & garden supplies, and bbq accessories. What follows are some observations, in no real order particularly, of my experiences. Please excuse my rambling, possibly incoherent prose.
My family and I generally believe in supporting local businesses when we can, so long as we’re not paying substantially more and/or being inconvenienced in so doing. It’s unfortunate, but in some of my experiences true that local businesses, even relatively sizeable ones, just can’t come anywhere close to competing with the national chains on price, to say nothing of selection. Yesterday, my brother & and I went to a not-insubstantial local-ish lawn & garden store to get some grass seed, wood chips (to use in the smoker), and other summer/bbq paraphernalia like tiki torches and such. We found pretty much everything we were looking for, but the prices seemed high, so we only bought some hickory chips there, and moved on to Walmart and Home Depot.
At Walmart – bear with me a minute here while I hold down my breakfast – we found everything we needed and then some, accompanied, as usual, by some of the sorriest excuses for humanity this side of the Mason Dixon. I don’t know what it is about Walmart that suggests to shoppers “hey, don’t waste your time getting all gussied’ up to come out in public, just come in whatever you want!” Was it not our mission to get in and out with what we’d came for ASAP, I would have snapped some pictures of these sorry (liberated?) souls, alas, maybe next time.
At Walmart, we found a surprisingly large lawn & garden section, including a grill selection rivaling that at Home Depot and Lowe’s. I was previously unaware Walmart dabbled in pavers and masonry block, but apparently, they do. When people say that you can literally get anything at Walmart, I’m usually quick to dismiss them for two reasons. 1: Many are the carcasses of retailers past who aspired towards this goal, and 2: its just not possible, in my head, to carry such a wide variety of items and manage inventory (turns, mix, etc); seldom, in any endeavor, does trying to be all things to all people work out at all, let alone well. After walking the aisles, though, I am convinced Walmart has, for now, accomplished what I previously thought impossible.
I should note that I am not unfamiliar with Walmart, having studied the company in some depth in school, a school near what I’m told is the highest-revenue-generating store in the country (have never confirmed this, though). I don’t think I really appreciated Walmart though until the past few years when stores started popping up in middle-to-upper-middle class suburbia, already the stomping ground of more specialized big-box retailers like Best Buy, Home Depot, Bed Bath & Beyond, warehouse stores like BJ’s, Costco, Sams Club, and “general” big boxes like Target (pronounced “Tar-get” not “Tar-jay”) and Kohls.
I never imagined Walmart would succeed in such places, or that fairly affluent people would abandon their pride and shop alongside their slightly less polished brethren from the other side of the tracks (er, highway), all in an attempt to save a few bucks here or there. Yet Walmart, due to nothing short of brilliant logistics (and chutzpa, Arkansas chutzpa), seems to have been able to accomplish what I previously thought impossible. Almost everything and anything you could conceivably need to buy (short of boats, cars, and high-luxury/fashion items), you can buy at Walmart, for cheaper than almost anywhere else.
The grass seed we were looking for yesterday was ~$25 at the fairly large local lawn & garden store; it was about 20% cheaper at Walmart. We bought tiki torches for $2.50 each (whether they’ll even last through the whole summer is besides the point for that price). We’re going back this week to get blocks with which to make a fire-pit for $xx.xx! I haven’t done an exhaustive comparison, but that is freaking cheap, the kind of cheap where you buy it just because even if you never get around to doing what you set out to do, you only spent $50, less than you’d spend on a dinner date at freaking Olive Garden! (trying keeping the suburb theme going here)
Fast forward a few hours and we found ourselves at BJ’s, shopping for some serious foods. I can’t remember the last time I was out in the burbs that I went to a traditional grocery store for anything but one or two (or a handful, tops) items; its cheaper (per unit, seldom total) to go to Costco or BJ’s, especially as the latter has significantly expanded its grocery section over the past few years. Apparently I’m not alone in this, seeing as the line at the deli counter is routinely over 20 minutes, a phenomenon I’ve yet to see at ANY grocery store anywhere, at any time of day. When I shopped at Jubilee Market in Manhattan’s Financial District, Monday nights were an absolute zoo, with hundreds upon hundreds of yuppies (myself included) flocking to load up for the week, but even then, I never witnessed a longer line for the deli counter than at BJ’s, weekend or weekday. I don’t think it’s BJ’s deli prices are any cheaper than the grocery stores (especially if you use coupons at them), and the quality/selection seems to be essentially the same. Apparently people like buying their non-durable goods not only in bulk, but at the same time. Whod’a thunk it!?
From a business model perspective, I think warehouse stores are brilliant; they lure people in with (not always) lower per-unit prices, but often, in my experience, succeed in getting them to spend far more than they intended in total. This is no different than how Grocers (or really any retailer) operate(s), but the scale and scope is. You may go to a grocery store with a list and end up at the check-out counter with a box of Entenmann’s donuts (~$4) and carton of Haagen-Dazs ice cream (~$7) you didn’t plan on buying. At BJ’s/ Costco/Sam’s Club though, you walk in with a list only to find yourself at the check-out counter with a 16-pack of Gillette Fusion Proglide razor blades (~$55!!!!), a new grill ($125), Panera Bread pre-made soup 4-pack (~$14), etc, etc, and next thing you know, your trip to get groceries for the next week or two has turned into a two-hour ordeal and a $500 bill!
This past week I’ve been thinking alot about what companies are most leveraged to good summer weather, considering how terrible it’s been so far (and really for the past 7+ months, far cloudier/rainier in the NYC area than normal). The crowds (lines, etc) were much shorter this week than I expected, and I was out & about during prime Saturday shopping hours. If the same is true elsewhere in the area, or the country, then retailers and the producers of many goods are going to feel some serious pain when they release q3 results.
The last observation I’d like to discuss is the obesity of people at stores like BJ’s and Walmart. For every “normal” sized person there seems to be two fat ones, and at least one morbidly obese person. I don’t think this is as easily explained as some might expect, that skinny/in-shape people don’t buy in bulk, while the thicker among us do. First, that ignores the chicken or the egg aspect of obesity, and second, I think the primary motivation behind warehouse/discount stores is saving money, not getting more stuff. In the ‘burbs, I don’t think there is the kind of correlation between incomes and obesity there is in more urban areas, especially not to the degree that would explain why a disturbingly high % of the people in the check-out line at BJ’s is thicker than I whenever I’m there (for comparison’s sake, I wear a 42-44″ jacket and 32-33″ waist, so I’m not exactly skinny).
Again, apologies for the rambling. Hope you’ve enjoyed my thoughts.