Letter: Walmart: How cheap is cheap?


By Staff Reports

Wicked Local Watertown • May 19, 2012

You have likely heard many arguments against a Wal-Mart moving into Watertown – its effect on traffic, crime, property values and the flavor of our neighborhoods. And perhaps you’ve read about how Wal-Mart won’t really net Watertown much revenue – far less than originally imagined – and may even cost us money in the long run by boarding up local businesses and making our town less inviting for new investors and homeowners.

But the one counterargument that pops up again and again is the idea that families and low-income seniors and, well, all of us, will save lots and lots of cash by shopping at Wal-Mart. If we can drive or walk or take a bus to an all-under-one-roof store that undercuts the competition, we win…right?

Well, a few of us decided to find out.

We visited Wal-Mart in Framingham, MA and Salem, NH, and our local Target, BJs, Trader Joe’s and Stop & Shop stores to compare prices on everyday staples. Armed with a uniform list of items such as white bread, spaghetti, toilet paper and bananas, we jotted down the prices that a shopper would have paid (regular or sale price) on the day of each store visit. Our results may surprise you. For some items, Wal-Mart did have the lowest price, but often by only a few cents. But for many other items, Wal-Mart lost out to the competition – such as with ground beef (you would save 29¢ per pound at Trader Joe’s and a whopping $1.09 per pound at BJs), onions (save 29¢ per pound at Trader Joe’s), laundry detergent (better price at BJs and Stop & Shop), paper towels (choose BJs, Stop & Shop or Target), eggs (shop Target), instant oatmeal packets (think BJs or Stop & Shop). All in all, we were underwhelmed by Wal-Mart’s claim of lower prices. And it’s no wonder. Recent national business trend-watch websites such as CNN’s Money report Target beating out Wal-Mart for lower overall prices!

Comparing Wal-Mart’s price policies to other stores’ gave us a similar feeling. Both Wal-Mart and Target promise to match competitor’s advertised prices and honor manufacturer’s coupons, but only Target offers a 5% discount for using its credit card.

We also dug around for information on the quality of Wal-Mart’s merchandise, its customer service and how it affects costs in its local community. In recent Consumer Reports grocery and big-chain product surveys (published March and April 2012), “Shoppers who frequented Wal-Mart…were most likely to be miffed about the lack of open checkouts, out-of-stock regular items, indifferent employees, spotty pricing, and confusing store layout.” In these surveys, Wal-Mart ranked at the very bottom of big box grocery stores in our area for customer service, and Wal-Mart was the only chain to earn below average scores for the quality of its men’s, women’s, and children’s clothing. A study published in Social Science Quarterly (2006) showed that communities with a Wal-Mart store end up with more poverty and a greater use of food stamps than those without it. Another recent study published in the Journal of Urban Economics (2011) concluded that a Wal-Mart in town makes residents fatter. And recent exposes such as the new book, The American Way of Eating: Undercover at Wal-Mart, Applebee’s, Farm fields and the Dinner Table by Tracie McMillan (Scribner, 2012) describe Wal-Mart’s policies of “crisping” – continuing to sell produce after removing rotten parts.


Doing this kind of research is always tricky because prices change daily and assumptions must be made (such as that the prices at a Watertown Wal-Mart will be similar to those at the Wal-Marts we visited). Undoubtedly area stores will respond to the arrival of a Wal-Mart by price matching to retain their customers, but this exercise taught us some valuable lessons:

– Wal-Mart is cheap, but it is by far not a guaranteed low-price leader. Target often beats Wal-Mart, and we’ve already got a super-sized Target to call our own. By taking advantage of Target’s credit card discount, BJs bulk pricing, Trader Joe’s all-around great prices or sales at our local grocery stores, we can be pretty sure to snag the best prices on almost everything we need.

– Wal-Mart is cheap – as in cheaply made goods and poor service. The cost of buying poor quality items is incalculable. But spending a bit more for something that will last feels like a good financial decision.

– Wal-Mart feeds us poorly. When it comes to produce, Wal-Mart ‘s offerings are typically low-end, and may be likely to rot sooner than truly fresh produce from Russo’s or our Armenian markets, a farmer’s market or our local grocery stores.

– Wal-Mart is alluring. Cheap stuff also leads to impulse purchases (“It’s only $12.97, how can I pass it up?”), making it harder for even the most financially saintly of us to avoid the temptation to stray from our intended shopping list. This would likely eat up the few pennies we could save, making any per-product savings disappear.

– Wal-Mart costs us more than what is on the receipt. These costs come from poor health care benefits provided to Wal-Mart’s own workers; in 2009, Wal-Mart employees used $8.8 million in publically subsidized health care in Massachusetts alone.

If your personal reason for wishing Wal-Mart would move into Watertown is that you’ll save money, we urge you to re-do this math with the true costs – to yourself, your family and our community.

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