Sunday, September 30, 2007

Wal-mart effect comes to Yelm?

QFC closes in Yelm:
Is this the first of other Yelm stalwart businesses that will close because the Wal-Mart Effect did them in?

Can Wal-Mart's employee wage scale and large use of part-timers replace these full time Yelm jobs at Kroger?
Here's an interesting related observation from a Lacey planning review board meeting when Wal-mart was being debated closer to my home:
Took unofficial poll. Majority of residents favor Wal-Mart. It would be of economic help to have Wal-Mart close. If QFC is having trouble, Wal-Mart will bring in more people to shop at other stores.


I’m for Wal-Mart. QFC doesn’t have business because their prices are too high. I like to economize. If you put in a big box store that has higher prices, it will not do business either.
Bill Virgin back in 2002 points out that this might be one battle in a long war between Kroger and their QFC brand and Wal-Mart:
The Kroger Co. has a problem. Sales growth has been sluggish at best, earnings have been weak, and the company faces tough long-term competition on prices from Wal-Mart.


Furthermore, QFC seems lost in the shuffle of a huge concern like Kroger. Just consider the number of store brands Kroger operates, aside from its namesake and those mentioned above. According to the Kroger Web site the company's brands also include King Soopers, City Market, Dillons, Fry's, Kessel, Baker's, Owen's, Cala Foods Bell Markets, Pay Less, Gerbes, Jay C and Hilander -- not to mention warehouse, convenience and warehouse store chains.
Virgin makes a lot of good points, the entire piece is worth the read. But, the essential point I got is that maybe if QFC had been smaller and leaner, not owned by another mega company like Kroger, the QFC in Yelm might have survived.

Criticism of Wal-Mart
The Wal-Mart Effect

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