Monday, May 24, 2004

Shang-a-lang, feel the sturm und drang in the air

So if I'm understanding the National Trust for Historic Preservation's spokesman correctly, Wal-Mart should, instead of constructing new facilities for their stores, take over older abandoned buildings. Let's spin a story, shall we? The granddaddy of the discount store chain is, of course, F.W. Woolworth's Five & Dime. Frank Woolworth built a wildly successful retail empire because of efficiency and volume - finding new ways to shorten supply chains, and deliver quality goods to retail outlets quickly and cheaply. These efficiencies made his chain more profitable than its 'Mom & Pop' competitors. Sound familiar? Sam Walton took the exact same approach sixty years later, on a much larger scale, and it's similarly been paying off, at least for the time being. Woolworth's, like Wal-Mart, engaged in international expansion, opening locations in Canada, Britain, South Africa, Germany and even Cuba. The stores are still apparently there in Havana, run-down and filthy, as could be expected when operated by a property-expropriating socialist hellhole of a state - yet they survive, undead and unloved, after the parent corporation shut down American operations under the Woolworth's name in 1997. One spinoff of the original stores was the brand extension Woolco, intended as a competitor to Wal-Mart and the other discount chain challengers of the 60s and 70s. Woolco survived until 1994 in Canada - when they were bought out by Wal-Mart. Thus, the first Wal-Mart stores in Canada were established in former Woolco outlets, typically in dense and somewhat run-down suburban malls. These were cheaply built and badly aging facilities; the worst I can think of is the Lincoln Fields location, in the west end of Ottawa. It continues to operate as a Wal-Mart, and is perhaps the grubbiest, most badly designed and unpleasant example of the chain I've ever seen. A few years later, Wal-Mart started construction on their own buildings, at the edges of suburban expansion; these were a sharp contrast, being more or less bright, clean and inviting. I worked at the Kanata location for a few years in high school, and found it copacetic enough, if understandably awful in the manner of all dead-end retail jobs. We called Lincoln Fields "Shawshank." Even the company saw it as just that bad - more shoplifters, maintenance issues, and inventory movement problems than any other location, and mostly due to the inherent flaws of the old Woolco building. As a lowly drone, I of course was not privy to any detailed sales information regarding Lincoln Fields, but word on the grapevine suggested that it would not surprise me to find out it was less profitable than other locations in the region. (I don't remember it myself, but another former Wal-Martian insists that we were in fact told by management at one point that Lincoln Fields was the least profitable location in the country.) That is what's wrong with Mr. Moe's ("You wanna stop callin' me 'Mr. Moe?'") creative solution. Using already-existing buildings causes problems for a company with extensive experience in planning for traffic, inventory control, and population growth, problems that cut into the profit margin - and so force raising prices. Not that most opponents of Wal-Mart care about that, mind you, but it's necessary to understand why the company much prefers to build their own stores: It's cheaper in the long run. If it's cheaper in the long run, it'll serve the customers better. If it serves the customers faster, better and more cheaply, it's good for the economy - end of story.

2 Comments:

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