Reflections on Wal-Mart..

Via Always Low Prices, the internet's premier Wal Mart Blog, two interesting article.

The first is this rather pointless article on Costco and Wal-Mart as a reflection on Bush and Kerry.. The point seems to be that the CEO of Costco is a Democrat, and Costco shoppers are Democrats, and Costco has been doing well lately, so Kerry will probably win. Or something.

The author makes the point that Costco stock has been doing well the last couple years against Walmart. Which is true, but Wal-Mart is still doing incredibly well. More importantly, CostCo has a market cap of $18 billion while Wal-Mart has a market cap of $274 billion.

It would also be interesting if the author compared Costco to other wharehouse clubs, such as Sam's club, which Wal-Mart owns. Is Costco's success a sign of the sucess of wharehouse clubs in general, or Costco in particular?

There are also other stats that make one wonder - for example, the author points to the low shrinkage rates at CostCo as proof of their superior management. I wonder if it could have anything to do with it being hard to shoplift from a store that you have to show ID to get into and that sells items by the case? It's hard to fit 4 pounds of croutons down your pants.

The other interesting article is on a stupid LA law that requires cost-benefit studies be done before large stores can be built. If you've ever taken economics, or even made a major purchase, you know that cost benefit analysis can be swung pretty much any way depending on what the bias of the person conducting it is. Most future costs and benefits are estimates, so any calculation is going to be off the mark.

That is the beauty of the free market - resources automatically go to their highest uses, to the ones where they serve the most benefit. Government requiring cost/benefit analysis to build a store is a step away from socialism - it's government deciding what should be done instead of allowing people to make their own decisions.

I wish the Govenator, who is quoted in the article saying that "In most cases in America, the communities welcome them because you have cheaper prices and you have great additional employment," he said. "But in some communities, there's the argument: 'I like my little store, where they hand-make the ice cream and you still go shopping the way you did in the old days.' ". Well, if they feel that way, then they shouldn't shop there, and if enough people feel that way the handmade ice cream stores will survive. But people shouldn't stand in the way of rational economic decisions by their fellow citizens because they like their ice cream handmade.