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Saturday, Jun 3, 2023

The Lure of Cheap Razors

Mixed feelings. Perhaps you have them too? Observing the fight over a planned Wal-Mart in my hometown of Burbank leaves me just that way. And, I think, with good reason. I mean, really, who doesn’t like low, low prices in an economy when most households are stretching it with two jobs minimum, braving interminable Costco lines on Saturday and forestalling replacing those threadbare tires? When Wal-Mart announced plans to build a discount store at the site of a closed Great Indoors in the city’s Empire Center it almost seemed like economic poetic justice, too. Remember the Great Indoors? It was a fancy, overpriced home- furnishings chain aimed at the second-mortgage crowd that could never fill its parking lot. Of course, when the housing bust hit, that was the end. Last year, owner Sears Holdings Corp. mercifully pulled the plug on the whole affair. But I can sympathize a bit with the critics who complain, some bitterly, about the Bentonville, Ark. behemoth. It didn’t become the world’s largest retailer, with some 8,500 stores racking up close to a half trillion dollars in annual sales, by always playing nice. Those cut-rate razors come at a cost. Over the years, countless stories have been written about the effects of its pricing power on its suppliers, as well as local stores in the communities where it operates. Then there are the grocery union workers desperately trying to save local markets where there wages are livable, not the $26,000 or so that a typical Wal-Mart worker might make working full-time. You know, I’ve always thought that Wal-Mart might take a lesson from American industrialist Henry Ford, who famously doubled the wages of his factory workers in 1914 to $5 a day so they could afford to buy one of his Model T cars. That move was critical in helping create the middle-class consumer economy we live in today. Don’t think such a move would help today? Consider this: the company is by far the largest private employer in the United States with close to 2 million workers. I doubt Wal-Mart would need to double its wages to improve its workers’ lives and appease it critics – try 10, 15, 25 percent. And a company with net income in the $17 billion range and a dozen members of the founding Walton family on the Forbes 400 list could afford it. But let’s be real. It’s not gonna happen, even though those gripes have helped stymie the growth of Wal-Mart in union- and Democrat-dominated Los Angeles County. The company has run into countless legal and political roadblocks in its effort to open brand new stores built from the ground up. So a few years ago, it thought up another tactic. Why not open stores in shells like the closed Great Indoors, where cities would be forced to issue building permits since no discretionary approvals would be needed? No more visits to city council hearings packed with union members and other opponents. Less chance for stores to get bogged down in interminable legal delays. That’s the tactic Wal-Mart tried in Burbank. It’s a tactic that cities, in desperate need of retail sales tax revenue, thought they liked too. It allows them to throw up their hands and not get sued. “What, don’t like Wal-Mart? Well, there’s nothing we can do about it. It’s their legal right to go in there.” That was Burbank’s tactic, too. Well, it got sued anyway and lost. As our front page story by writer Joel Russell notes, a L.A. Superior Court judge ruled that the city failed to follow its regulations in giving ministerial approval to Wal-Mart’s planned store. The judge decided at least some environmental assessment was warranted and long-planned road improvement near the Empire Center were overdue. As a Burbank resident, I will attest to the road problems. The main thoroughfare serving the Empire Center looks like it was built before Henry Ford raised the wage of his employees. I’m pretty sure the ruts are the reason my SUV needs new struts. And as for the traffic? There’s an intersection at a nearby Costco that didn’t function when the Great Indoors was barely filling half its parking lot. It’s better now that the store closed, but I was dreading a packed Wal-Mart. But like I said, my feelings are mixed. So, when and if that Wal-Mart opens, I’ll be there. I love my Gillette Fusion razor, and I’ve never seen cheaper replacement blades elsewhere. I mean, who doesn’t like to save a buck? Laurence Darmiento is editor of the Business Journal. He can be reached at editor@sfvbj.com.

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