Quote:
Originally Posted by spence
I think it's a fair observation that the "big box" stores in general have had a tremendous impact on modeling consumer behavior.
This "modeling" has been going on in the U.S. for well over a century. Walmart is just another in the line of department store types in which the new model finds ways to sell at lower costs. Just about all the usual brand items have gone through this selling process--even automobiles with Henry Ford's assembly line manufacturing and the growth of dealerships. And this "modeling" is based on the age-old model of haggling where the consumer tries to buy at the cheapest price. Any type of intervention to "model" the consumer into buying at smaller, single owned outlets at a higher price will have to overcome the natural and reasonable desire to save money, and will have to be done by force against free market principle. Whenever this has been done, either by price fixing or by socialist governments, economic activity dwindles, and instead of job growth, unemployment and shrinking economy results.
They can both leverage their buying power as well as squeeze the manufacturer to reduce costs. While the consumer might see an increase in variety and cheaper prices, the flip side is lower quality products or people buying junk they really don't need...while still racking up a lot of debt.
-spence
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Reducing manufacturing costs should be the aim of competitive manufacturers. If lower quality results, then there will be a market for better quality producers. There are many niche products of all types that sell on the basis of quality at a higher price and they do well.
Have you been to a Walmart? Many, if not most, of the goods are brand items. It's not all junk. Most of it is not junk. And this is just a guess--I'd guess that most Walmart customers go there in order not to rack up a lot of debt, or to rack up less of it than they would if they had to pay higher prices.