Monday, February 18, 2013

Who Is Afraid Of The Big Bad Wolf ?

For as long as I can remember, the biggest and most treacherous animal out there,
in the “retail” marketplace has always been Walmart.  I think books—many of them have
been written about the “big bad wolf,” that many have labeled Walmart to be, claiming that
they have been so successful in attracting customers, they have decimated so many small and
independent businesses, that they are a “jobs killer,”, as their detractors have claimed.

As someone who has retail locations, Box Brothers has been in business for a long time, but while
everyone is entitled to their opinions, I for one, do not share this opinion, that Walmart is the “big bad
wolf out there, as if they are all of that, as some claim, how come no one complains about the marketing
tactics of Target, or even the goings on with some other large national chains, like Home Depot, for example.

My premise is that while businesses, retail and otherwise, have gotten not only larger, more complex, but
also more dominant in this society, than at any other time since the inception of the series of rules normally
referred to the Antitrust laws of the United States.   My point is that, for whatever reason, these laws are not
working as they should to protect the American consumer and the American small businessman.   Further,
it is also my contention that Walmart has other detractors, unions for example, as the national supermarkets
simply have higher costs of labor than does Walmart, or even Target.  But why Target is never the target of these
groups, is beyond me and the point of this blog.

For example, this past week, I got some emails from Home Depot, and guess what business Home Depot now wants to be
in, this week?   Flowers—yes, I was solicited from Home Depot to buy roses for Valentines Day on February
14, 2013.   From a warehouse that sells lumber, nails, and everything else under the sun, except groceries.

Leverage is not just a television show, I guess, it is what large firms do to make sure they hammer on smaller
competitors to make sure they out muscle them, out market them and convince potential customers that they
are all that.  In that vein, I also saw a story about Home Depot being the place that is going to hire so many new
employees this year, that they alone will pull this region out of its unemployment doldrums….They used an employee
from the local Home Depot, and they put on a 30 second clinic in how they were such a great place to work, etc, etc, etc.

So, why does not our media ask Home Depot what the starting salary is for these positions, how many people they let
go last year, and how many of those who they are hired are in upper management, today.   And even more telling, how
many of those employees can afford to buy a median priced home in Southern California, or even Las Vegas, for that
matter?  The answer is no one working at Home Depot can even afford to rent a median priced apartment in many parts
of Los Angeles, or Las Vegas.   The same holds true with Target, 95% of all of their employees on the floors of their stores,
make less than $12.00 per hour, with little to no benefits.

If I may, my personal experience is one I would like to offer, to show how sometimes truth can be trampled.   I went to Home Depot
to get some Poinsettias at the start of the holiday season.  I went to Home Depot per their heavy advertisements
offering them, at a good price.   So I went there an hour after the start of the sale, they were sold out.   I asked this
same woman who did the tv spot for them, and she told me that they only got a few and were sold out before the
sale even started…….this from one of the world’s largest retailers and the lady laughed at me, saying what did I
expect.   I told her, that I expected the largest hardward store in the world to make good on their offer as I saw
it as a way to simply get me to their store to buy something else… she walked away and that is the extent of the
help and customer service I have had at Home Depot, as their service stinks.   Why is bait and switch not relevant for
Home Depot, as their TV personality said it to me and called me a fool to think otherwise.   I guess it’s fair for them to
do as they please.

If you follow this line of reasoning, they are justified to go after the flower guys, as why not, the supermarkets hammered
the small independent flower guys years ago (did anyone notice, or care?), but the supermarkets did not get blamed for
hurting the small mom and pop flower stores that were hit with competition from well healed money interests, such as
Safeway and Kroger, a couple of behemoths in their own right.  But Safeway and Ralphs (and Walmart) do not presently
have any presence in the flower delivery business.

What is common among all large businesses, is that they have forgotten their humble beginnings, and moved onto
what they consider, as, greener pastures: another way of saying they can hammer competitors that are small independently
owned businesses easier and faster, than they can larger for well healed ones.   So they all hammer on the small guy, who
has no leverage and today, it is my feeling that the American consumer has simply confused price and service and forgot about
service.  How else can you understand just how large these firms have become so dominant and omnipotent?

What I do not get, is that I have yet to find any of these large firms, that dominate American Business, that are open,
accessible, fair and reasonable—but most importantly, they all would rather hire a focus group to hear what they think
their customers want, instead of simply being brave enough to simply meet their customers and ask them to their face. 


Cause these decision makers, are so far removed from their actual places of business, and their customers, they would not even
know what to ask or how to answer a question from a customer.   If you own a business, why would you not want to meet and greet
your customers, or speak to them about what is right or wrong with your firm?  Instead, you hire surrogates to come up with what you
can find out on your own, again, I ask why?

Today they make a TV show called Undercover Boss, and no one says how dumb it is that these owners/CEO’s have to
hide their own identity in their own firms, to learn what is going on….so we have now, an entertainment focus group….
how appropriate and no one has the balls to come out and say, is this the best that you can do?

Perhaps the more important question is why do we, as a people, spend our money with those firms who do not care about
them as customers, or who, are even willing to speak to their customers?  Ever try to speak to someone at American Express
who was not a $10.00 per hour employee at a phone bank in El Paso, Texas?  Ever get a letter from American Express from a
corporate officer who had no return address, phone number or a way to engage him with a question? 

How about at Home Depot?   Once I was enticed, as a customer of ADP, the world’s largest provider of processed payroll services,
and they said if anyone ever had an issue with any part of their service, I could call up their corporate offices and speak to one of
their officers.   It worked, I signed up and when I had a problem with one of their phone room people who messed up some of my
employees checks by being negligent and careless, I got put on hold, and they never called me back, they had no idea who was to speak
to me or anything.  It was a pure lie.   And they benefitted by their lies, and then like other large dominate firms, they just spend more
money on branding, trying to get all of us to believe how great and benevolent they are.

As I said earlier, the antitrust rules are not working today, as intended, as large companies are the only firms who can go do work
in China, or Mexico, or some other place with low cost labor, not small businesses, and we have seen a general lack of competition
in trucking, package shipping (only 2 national firms do all of the private transport in the United States), hardware, appliance sales,
and this discussion leaves out the large dominant online firms—that’s for another day.

What is troubling is that when these large firms get comfortable maintaining their market share, they refrain from competing as they
should, and that will lead to some stagnation in our economy, I believe, as they become allegiant to maintaining the status quo, and
not taking any competitive risks.   Since only large firms can have access to money or capital today, this is a hidden plaque on all of us
in America today.  The only new entrepreneurs we will have will be those whose family had the money to get them going, as the large
businesses out there just want to divide a market and maintain it, just like the oil companies, do, and so long as our government allows
this kind of thing to keep going on, the divide between middle class and the wealthy will only get bigger, as this last recession has clearly

By looking at this picture fairly, and I have no hope this will be done any time soon, that    

Mark S. Frydman
Box Brothers Corp.

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