Unfair and Unbalanced Comparisons

The NY Post, continuing with its Walmart advocacy campaign-unfair and unbalanced-has a price comparison story in today's paper that contrasts Big Wally's grocery prices with those of a local Key Food store: "The Post compared prices at the Walmart in North Bergen, NJ, which has a full grocery department, with those at a Key Food supermarket in Forest Hills, Queens -- and it was no contest. The same items -- dairy goods, coffee, soda, snacks, veggies and household cleaners -- were dramatically cheaper at Walmart."

This calls to mind an apocryphal story we once heard-it goes like this: Two Germans were walking past the Jewish ghetto during the Nazi regime and one of the men commented: "Boy, those Jews sure stink." His companion replied, "That's not the Jews you are smelling, it's Nazism."

Which brings us back to the Post's one sided expose-and you'll notice that the paper didn't compare local food prices with union staffed chains in New Jersey like Shoprite and Stop and Shop. The fact is that it is much cheaper to shop for everything in New Jersey, and it is the stinking NYC retail environment that the Post should be examining-and that's why we are losing hundreds of thousands of shopping trips a year to the Garden State. This is true also of supermarkets in Rockland where we used to live-and the Shoprite in Nanuet where we used to buy our groceries will yield the same bargains that Walmart provides, but will also be paying its workers a fair wage and benefits.

What the Post leaves out, is just how the city's high tax and regulatory environment-along with skyrocketing rents-makes NYC an extremely expensive place to do business. Mike Bloomberg has simply piled on to these costs in his nine year misrule-beginning with his disastrous real estate tax increase in 2002 that was passed on to local retailers as a 25% rent increase. Of course, the pass-alongs don't end with the retailer, and are reflected in the price of all of the goods sold here.

But the Walmart flack claims that all of the company's prices are the same, no matter where a store is located: "We don't think New Yorkers should have to pay more just because they live in a big city," said Walmart spokesman Steve Restivo. "That's why a Walmart store in Manhattan, Kansas, would charge the same price for Cheerios or diapers as a Walmart store in Manhattan, New York."

Now we know that this policy-and the Restivo statement-isn't always true-since we have seen how the Walmonster uses predatory pricing to eliminate its competitors when it enters a new market; only to raise them when it thins its retail competitor herd. And we don't have any Walmart in the city yet, so we don't know if the retail giant will simply absorb all of the additional costs here without any customer pass alongs-we are supposed to simply take the word of a company that has raised lying and the chiseling of workers to an art form.

But let's say that a Walmart supercenter in East New York would be able to do just that-be consistently 33% cheaper than its supermarket competitors. How long then would the 14 other markets in East New York be able to last? What about those shopping strips where the 14 supermarkets markets provide the traffic for the other retail stores? What about the local suppliers-shut out from Walmart-who will no longer be able to stay in business supplying the locals? And lastly, what about all of the workers-union and not-who will lose their jobs as the Walmart economies of scale do all the business with half the number of workers employed at these other companies?

What we will witness is the destruction of NYC neighborhoods, and the small businesses that make NYC the diverse and unique place that it is. And once the competition is basically routed, do you really think that Big Wally won't go on a profit taking binge-and raise prices like it has in so many other communities once it has established a dominant market share?

The Walmart invasion, then, is a direct threat to the quality of life of all NYC neighborhoods-and the small business sector that drives a good percentage of the local economy. In our next installment we will examine how these economic devastation will be exacerbated by an environmental disaster-as auto-dependent Walmonsters drive shoppers out of their local stores and onto the rods and highways where the mayor's malls are located.