Pest Walmart


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Pest Walmart

  1. 1. Wal-Mart, 1970-1985
  2. 2. <ul><li>Fiscal Policy has been heavy on spending </li></ul><ul><ul><li>The average spending deficit in this time is 2.95% of GDP, and trending upwards </li></ul></ul><ul><ul><li>The focus on growth of the economy leads to massive subsidies to incentivize Wal-Mart’s expansion </li></ul></ul>1970-1985 Source:
  3. 3. <ul><li>Monetary Policy </li></ul><ul><ul><li>Interest rates throughout this time period trend upward from a low of under 4% to a high of just above 18% </li></ul></ul><ul><ul><li>The dips in rate made it easier for banks to lend Wal-Mart the money it needed to lease new stores, and correlate with high growth periods </li></ul></ul><ul><ul><li>1971-1973: begins operations in Tennessee, Kentucky, and Mississippi </li></ul></ul><ul><ul><li>Early 1980s: continued westward expansion beyond Texas </li></ul></ul>1970-1985 Source:,,id=98123,00.html
  4. 4. <ul><li>Tax Laws </li></ul><ul><ul><li>IRS data from 1969-1989 shows an increase in average salary per tax return from $7,382 to $25,795 </li></ul></ul>1970-1985 <ul><ul><li>The same data shows a growth in low to lower-middle class families (the kinds of families that would benefit from discount retailers)‏ </li></ul></ul><ul><ul><li>The chart to the right shows the drop in individuall tax rates dropping during the Reagan administration </li></ul></ul>Source:
  5. 5. <ul><li>Trade Policy </li></ul><ul><ul><li>Starting in 1976, the Importation of Goods surpassed the Exportation </li></ul></ul>1970-1985 <ul><ul><li>This is due largely to the work of President Nixon and Henry Kissinger, who worked in 1970 and 1971 to kick start trade with China </li></ul></ul><ul><ul><li>This leads to the U.S. and China naming each other most-favored-nation status when they sign a three year trade agreement in 1979 </li></ul></ul>Source: Source:
  6. 6. <ul><li>Gross Domestic Product </li></ul><ul><ul><li>The Real GDP of the U.S. nearly doubles in this time period from 3 trillion to 6 trillion 2000 US dollars </li></ul></ul>1970-1985 <ul><ul><li>In addition, a prolong recession heading into 1976 heralded a period of stagflation, leading to a spike in the levels of people living in poverty </li></ul></ul>Source: <ul><ul><li>Meanwhile, Wal-Mart hits $1 billion in sales in the shortest time period in U.S. history </li></ul></ul>
  7. 7. <ul><li>Gross Domestic Product Growth </li></ul><ul><ul><li>The Real GDP growth rate of the US reveals the recession heading into 1979, and the prolonged periods of decline through 1980 </li></ul></ul>1970-1985 <ul><ul><li>With many more Americans living below the poverty line, discount retailers prospered – especially the discount retail king, Wal-Mart </li></ul></ul>Source:
  8. 8. <ul><li>Unemployment Rate </li></ul><ul><ul><li>Unemployment rates followed the course of the economy, with levels rising to unprecedented levels. </li></ul></ul><ul><ul><li>With less money coming in to American families, the demand for discounted goods and their retailers grew. </li></ul></ul>1970-1985 Source:
  9. 9. <ul><li>Consumer Confidence </li></ul><ul><ul><li>The Michigan Consumer Sentiment Index is a measure of the confidence the consumer has as compared to December 1966 </li></ul></ul><ul><ul><li>In these hard times, American families looked to the discount retailers not only more often, but for more of their goods purchases </li></ul></ul>1970-1985 Source:
  10. 10. <ul><li>There was a shift in brand loyalty due to the fair standard in labeling act, shifting consumer confidence to brands rather than retailers. This led to a rise in the success of Wal-Mart as the lowest cost purveyor of consumer goods </li></ul><ul><li>Huge population boom as the baby boomers of the 50’s and 60’s grow up to have jobs, homes, families, and consumer needs. </li></ul><ul><li>A backlash to the hippie movement of the 60’s and 70’s led to the rise of the “generation me” which came with a focus on materialism </li></ul><ul><li>The movie industry made a comeback after being hit hard for decades by the rise of television – along with these new blockbuster movies came big sales in movie merchandise (Star Wars, Jaws, etc…)‏ </li></ul>1970-1985 Source:
  11. 11. <ul><li>Wal-Mart was quick to adopt new tech as they were developed and adapt them to their operations </li></ul><ul><ul><li>1975 – Wal-Mart Leases an IBM computer to keep track of inventories at the distribution, supported by a network of over 100 stores recording POS data at the register </li></ul></ul><ul><ul><li>1977 – Wal-Mart adds the capability to order from their suppliers to their growing computer network </li></ul></ul><ul><ul><li>1983 – One of the first retailers to adopt bar codes for scanning POS data </li></ul></ul>1970-1985 Source:
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