Comments on: Wal-Mart does not save families $3,100 a year A slice of lime in the soda Sun, 26 Oct 2014 19:05:02 +0000 hourly 1 By: Eugene Thu, 12 Nov 2009 09:29:55 +0000 A better question is, what’s the impact of Walmart on incomes? I would not be least surprised to find out that Walmart’s existence had an effect of a 3.6% cumulative decline in CPI that was evenly matched by a 3.6% cumulative decline in household incomes, every dollar “saved” by a shopper is a dollar not earned by a retailer or a producer. Walmart depressed prices, but it also squeezed out mom-and-pop stores and American manufacturers.

By: Dan K Thu, 12 Nov 2009 06:50:14 +0000 I agree with everyone’s comments here about the limitations of the study and the frank absurdity of using $86K as a base for Walmart applicable family purchases.

That said, Felix’s corrections still propagate incorrect math. For someone who’s complained about innumerate journalists, that’s somewhat egregious.

If you think the conclusions or methodology are wrong, and don’t pass a gut check, say that. Don’t post comments confusing an annual savings rate with the change in an annual savings rate.

By: rjs Wed, 11 Nov 2009 23:12:13 +0000 i agree, there is no one i know who spends half of 86,000 per year on food & walmart carried consumer goods

By: Steve Wed, 11 Nov 2009 18:21:34 +0000 There are a lot of problems with the study.

First, when comparing identical products, there is evidence that Wal-Mart prices may not always be the lowest, particularly for electronics goods — see 11/10/american-consumer-institute-releas es-study-finding-no-difference-in-consum er-electronics-prices-between-wal-mart-a nd-best-buy-study-calls-for-wal-mart-to- improve-on-shelf-labeling-to-ensure-shop pers/. Deutsche Bank and others have shown similar results. So, attributing all of the retail industry’s savings to Wal-Mart is certainly wrong.

When comparing products that are not identical in terms of quality, buying cheap goods does not mean lower prices. The Consumer Price Index (CPI) compares like items over time. So, if one retailer offers and sells a lot of low quality products, the price of the good (and the CPI index) does not have change. The Bureau of Labor Statistics, which measures the CPI, is responsible for considering this quality adjustment.

Also, comparing a cumulative savings (reported in the study) with annual family income is misleading — the reported 1985 savings is being counted 24 times, the 1986 figure 23 times and so on.

In addition, since the retail industry’s economic output consists mostly of intermediate sales, the use of total factor productivity to determine savings should be based “value-added” basis, not final sales.

Finally, translating productivity change into pure price reductions is also improper, since there are other factors to consider, such as the sector’s price recovery and its profits. (There has been no cumulative shareholder value?) There are other problems too, such as issues involving present discount value adjustments, but I will stop there.

Steve Pociask
American Consumer Institute

By: Tiny Tim Wed, 11 Nov 2009 12:54:27 +0000 Dan K is right – the previous year’s savings don’t go away.
This is poor blogging.

The question is: what would the average family pay this year with WMT and without WMT? The delta is $3,100 according to the research – THAT is the definition of the saving.
Sure if you set the clock back to today and look forward one year it is $129 but the following year it would be $129+$129…

However, to suggest the average family spend $86k is a fact that can be readily checked, and of course turns out to be totally bogus.
Gross up that spend with say 30% tax takes it to $123k.
Two wage earners per family, means c.$60k each. If only. Average wage is closer to $30k.

By: Jim Abeel Wed, 11 Nov 2009 12:27:28 +0000 It is impossible to save money if you spend it no matter how much discount you are getting. My New England grandfather made this clear to me when I asked him for a dime when I was 5 years old. He looked down at me from a 6 foot plus height asking me, “What did you do with the one I gave you last year.”

By: Black Friday Ads 2009 Wed, 11 Nov 2009 10:19:35 +0000 It’s hard to believe that Black Friday is just around the corner. The time has come by so quickly. We are less than a month away and shopping is already on the minds of many of us. Major retailers like Best Buy, Walmart, Kmart, Target, Amazon, Ace, Apple, JC Penney’s and more will be having their sales and you don’t want to miss out on what they can offer.

By: Andrew Wed, 11 Nov 2009 01:47:43 +0000 $86K per year is an extraordinary amount – I’d be surprised if after taxes, housing, transport and other non WalMart goods the amount is as high as $20K (given the median income of $50K posted above, which sounds about right).

There’s also the question of the impact of WalMart on wages and benefits. Can’t see making the case that that’s been positive. Race to the bottom, etc.

By: Katie Tue, 10 Nov 2009 20:16:03 +0000 Would it be fair to say that Walmart has contributed to exported jobs as well? They used to boast “Made in the U.S.A” and now everything you see is made in China.
Walmart= Made in China
Made in China= Exported Jobs
Exported Jobs= Unemployment
Unemployment= Less spending
Less spending= No money circulating
No money circulating= Shrinking Economy

Walmart needs to re-evalulate their strategy. I wish there was better competition. If there was a store that sold Items that were “made in the u.s.a. I would pay that little extra. That would mean there were jobs, families eating and paying bills, and money staying here.

By: So lazy Felix... Tue, 10 Nov 2009 19:39:46 +0000 I first saw this post before the updates and was astonished at how lazy Salmon was in not bothering to research Walmart’s very active ad campaign touting its $3,100 savings claim (I know the wine-swilling Bobo probably rarely goes near a TV to see what “Real America” is being subjected to on a daily business).

This blogging business is obviously all about quick quips and the process thankfully allows for updates like Salmon eventually posted, but my goodness. Do some real work first.