Yves here. It seems my family and friends are weirdos and do not do super-sized shopping in super-sized retailers. The very very few times I have gone with them to a Walmart or a Costco, it has been on a mission, to find one or two items, get them, and get out. One of the Walmarts was so depressing (the staff looked really beaten down) as to be exit-inducing.
Nevertheless, this article presents a very clever analysis that offers persuasive evidence that megastore operators are on to something, Not only do their hypertrophied outlets succeed in stealing sales from competing vendors, but they even flat out get consumers to overspend.
Nevertheless, the “size is ever and always better” is not always true. We cancelled a Costcom membership as a result of the store’s size. My mother’s pricey in-ear hearing aids were less than ideal. The local Costco audiologist was reputed to be best in town and Costco sold very pricey highly tunable (by frequency range) hearing aids at a big discount. But after I got the Costco membership and an appointment, it was too hard for me (with my hips to be replaced soon) and my mother’s aide to get her into her wheelchair in the crazy Costco pickup/dropoff area and push her on hard concrete all the way to the back of the store. It was supposed to require 3 visits (testing, fitting and retesting with purchased hearing aids, and then a follow up visit) and we couldn’t get one done.
I wonder how many mildly impaired or actually handicapped customers react that way. Even though the stores often have motorized go-carts, the are hard to enter and exit plus are undignified. Among other things, they are often used by the morbidly obese and carry that taint.
By Suvrat Dhanorkar, Associate Professor, Georgia Institute of Technology. Originally published at The Conversation
Imagine walking out of a Walmart, Target or Costco. As you push your large shopping cart to your car, you ask yourself: Did I really need all that stuff?
The answer is you probably didn’t.
In a recent study, my co-authors Lina Wang, Sungho Park and I found that the presence of supercenters – large retailers that sell groceries alongside general merchandise – results in a significant uptick in consumer waste due to overpurchasing.
These supercenters often sit on lots in excess of 150,000 square feet. But figuring out how all that real estate affects people’s shopping habits – if it does at all – is tricky. That’s because a lot of factors influence how much people buy on a single shopping trip.
To answer this question, we looked at the impact of the spread of Walmart supercenters across the U.S. over a decade, using a technique called difference-in-differences – an analytical method in which we compared consumer waste trends in counties that saw supercenter launches with “matched” counties that did not. This matching ensured that counties were otherwise closely comparable on socioeconomic factors such as housing, income and education.
Our analysis showed that the launch of a supercenter results in an increase in consumer waste of up to 7%. Furthermore, this increase in consumer waste is larger for new supercenter openings compared with conversions, when existing regular stores are expanded into large-format ones.
Why It Matters
For decades, neighborhood stores across the U.S. were edged out by large-format retailers: department stores, supercenters and shopping malls. Although there is evidence that many of these big-name retailers are beginning to look toward smaller stores, the shopping landscape remains dotted by supercenters.
And these large stores stimulate mass consumption through gradual shifts in consumer behaviors. For example, in their attempt to generate more sales, large-format retailers often underprice smaller neighborhood stores.
Take, for example, Walmart’s “everyday low price” strategy, which is key to its business model. This pricing strategy offers shoppers a largely consistent year-round low price rather than relying on occasional sales and discounts.
Further contributing to overpurchasing is the supercenters’ typical location, which tends to be away from residential areas. Naturally, in their effort to avoid multiple trips, consumers tend to maximize the utility of each visit by making their basket sizes larger.
Unfortunately, this overpurchasing often leads to waste as more goods reach expiration date or sit unused in people’s homes.
While this may be a profitable strategy for retailers, it’s bad for society and the environment and creates billions of dollars in waste. To put this into context, the United States generates close to 300 million tons of consumer waste every year, and then spends billions of dollars managing this waste.
What Still Isn’t Known
Now that we have measured the “supercenter effect,” we are keen to look at potential solutions to this problem. Some existing solutions are based on implementing policies that encourage behavioral shifts in consumers. For example, many cities have adopted a pay-as-you-throw policy that charges people based on the volume of waste generated.
Other solutions are more structural, such as bringing back neighborhood convenience stores and developing stronger circular economy channels. For example, neighborhood convenience stores can play an important role in mitigating the supercenter effect and could allow for smaller, more frequent shopping trips and significantly less waste.
In many cities, initiatives promoting local vendors and stores are gaining momentum. Such solutions would not only encourage sustainable consumption but also have benefits for local economic growth by promoting small businesses that have historically accounted for 62% of net new job creation.
A second solution entails leveraging the “reuse economy,” which can provide a back-end channel for circulating surplus and used goods. While both offline and online reuse channels exist – through the likes of thrift stores, food banks and Facebook Marketplace, for example – they currently remain vastly underused.
Identifying and aggressively implementing such solutions might turn out to be both economically meaningful and environmentally beneficial. But more work needs to be done to figure out which solutions are more effective, and why.
the market has moved on from the hypermart—the new frontier is home delivery via subscription model (Amazon Prime/Whole Foods, Walmart +, Costco Groceries, etc), often/usually delivered by non-union, off-the-books (as in no health care or workers comp) “1099/gig” app workers.
In essence, the old hypermart is pivoting into a distribution/fulfillment node that happens to be open to the public.
Arguably, better for home-bound seniors and disabled as $9.99/month for unlimited grocery deliveries over $35 is a pretty good deal. Gas + time costs. (Break-even/loss/barely profitable leader so that you spend all your discretionary money at your grocery provider).
Bad deal if you are the gig worker delivering the order (a/k/a highly dependent on fickle tips), or if you are a union employee at the legacy national grocery chains—people who might never buy their groceries at the local hypermart, likely will consolidate their spending at one website.
Grocery delivery, even with a sizable tip, has been a huge money-saver for me, as I simply order what I need for the week’s meal plan and rarely anything else. It’s had health benefits too, as I almost never have snacks in the house other than fruit or sometimes cheese. I realize that by participating in the gig economy I’m part of the problem but I would much rather pay the shopper than spend that extra money on food I don’t need and would likely waste.
Yes, similar story here. For years I’ve been trying to find sources for my purchases other than Amazon. Hard task. Once or twice I ordered on eBay but my item came through Amazon.
In August I got hit with sudden sciatica in my left leg that limited my range of walking into tens of yards. No shopping in stores for me. I live alone. First I entered new realms and did a couple doordash meals to keep me alive.
Then I tried Whole Foods delivery from my local store on lots of items I would normally buy to do my normal cooking of meals. Asked for a delivery with a window. Worked fine except one time I saw the delivery person ready to deliver across the street. Had to yell at her.
I did notice that the quality of some items in my order, celery, onions, cucumber, peppers seemed better than what I usually found when I had gone to the store. Guess maybe my order cut to the front of the line.
This online shopping and delivery of food items saved my ass. I’m not proud of supporting Amazon but I became a Prime member to ease the process and order timing whiile I was in my needy state.
If I get healthy again maybe I’ll go back to avoiding Amazon. For now I’ve made a small deal with the devil because it filled a need I didn’t have before.
Oh and If I’m going to order online, I wish Trader Joes had that option too.
Are the groceries they deliver just as good quality as if you had been in the store to pick out your very own grocery specimens in person?
My inner cynic tells me that the Jackpot Programme is addressing this problem even now. The shrinking of disposable income available to the “lower classes,” the 90% of the public that does not share in the Rentier Economy, will of necessity drive down “excess” consumption. This added to population declines driven by enforced precarity and medical provision dysfunction will overall reduce stresses upon the Ecosphere.
I never suspected that there would be a Silver Lining to the Age of Lead.
Amazon Prime and Walmart+ subscriptions are 50% off for customers on SNAP.
Someone’s crunched the numbers at HQ. There is purchasing power out there to be hoovered up—(essentially, a zero-sum game pulling money away from local brick and mortar stores)
Serfdom is profitable!
Haha, yeah and 50% of those SNAP recipients are employees of Malwart and/or Primevil
There are already huge downward pressures on the US population, and the world population as a whole. Most countries will be shrinking in population before 2100, and the projections for growth keep getting smaller, and smaller. The US recently hastened the date where births will equal deaths to 2032 for example. Immigration in the US is slowing and will soon cause our birth rates to decrease even more. So the adjustments to the world population are happening in real time.
This is the thesis of Empty Planet
https://www.penguinrandomhouse.com/books/545397/empty-planet-by-darrell-bricker-and-john-ibbitson/
Population is not shrinking in Africa, birth rates are very high. when Russia and China go in to develop resources, they are also developing markets that will grow.
It isn’t Silver for you or me if you or I are among the Jackpotted. And considering that the Jackpot Plan is about stealth-reducing population, any Silver Conservation Lining is purely accidental and unintended.
Even more so when we remember that the same or higher levels of conservation would be achievable by Jackpot-free methods.
“fuels overconsumption”….
probably another frontier in retailing—-game-ification of shopping apps. Temu loves doing this…..and presumably it must be working despite being as tacky and annoying to yours truly.
Micro-dopamine hits like a personal pachinko machine on your phone every time you buy $15 worth of widgets, lmao
Any miniscule nickle and dime savings are not worth the sacrifice of time or the trauma that is the Walmart or CostCo experience. But yes, the way they treat their customers and employees is atrocious and I won’t support such things on principle.
What’s interesting to me is Soviet-style long lines of impoverished babushkas sharing tea, vodka, bread and cheese with same-suffering line-neighbours have been replaced with similar big stores, but American-style lines of hostile Karen’s and Ken’s who share nothing but hate, would sooner kill their neighbours for merely existing. One of these two will not survive a zombie apocalypse.
Also, in Canada a reason the big supercentres have been successful is small stores have been by-lawed, regulated and NIMBY’d out of existence, on top of unsustainable leases: https://www.theglobeandmail.com/opinion/editorials/article-the-local-corner-store-melts-away/
Doesn’t CostCo treat its employees rather better than Walmart? Isn’t that part of the reason for Wall Street’s hatred and resentment for CostCo?
This is from The Street which is part of the Wall Street Journal.
“Costco has a massive labor problem nobody is talking about
The warehouse club has angered a group that could cripple its operations.”
https://www.thestreet.com/retail/costco-faces-backlash-amid-wage-battle-
Perhaps the pre-Old and the Healthy could keep shopping at CostCo specifically IF they draw up rigid needed-item shopping lists ahead of time and go in on a mission to strictly stick to the list.
Restoring the medium-to-small store ecosystem would be good in the long run.
In the meantime . . . Better CostCo than Walmart. Better CostCo than Amazon.
Economics IS War.
Every dollar is a bullet on the field of economic combat.
It’s a bit frustrating that the study is does not specify the type of waste produced, or if they are measuring by weight or volume. It’s possible that much of that additional waste is just that people buying in bulk are also using the original transport packaging (i.e. cardboard boxes), so transferring commercial waste to domestic waste, without resulting in an actual net increase. It’s also not clear if the the waste is additional food waste or whether they are just buying more stuff which is then thrown away.
But in general, all retailers try to get you to buy more than you need – even local shops do this by (for example), putting tasty treat snacks beside the cash register, or putting special offers by the entrance door. Its not clear to me why big box retailers are more successful at this than anyone else – the exception being of course Ikea, which seems to have mastered the art of getting everyone to buy more than the came for. It certainly works on me.
Now and then, there’s an item I need that I can only find at big box stores: powdered dishwasher detergent is one example. On principle, I refuse to buy the way over-priced “pods.” I’m with Yves: Walmart sells their own brand of powdered detergent, but just the experience of going there, from parking through check-out, is so frigging depressing that when I discovered Target had started carrying dishwasher powder, I immediately switched and gladly paid more (although nowhere near the price for pods). It’s not as if shopping at Target is a great experience or anything, but at least I don’t feel as if I have to rush home and take a shower as soon as I leave the store.
There used to be supercenters called “cities” and you could actually live in one and be surrounded by it 24/7., you could get anything you wanted with a quick walk or subway ride. Now it’s all Amazon. Cities are just oversized suburban malls with more dirt.
Nostalgia perhaps, I think I would like to go back to what I remember of my childhood in 1950s.
The automobile is the main killer. Everyone wanted one and many could now afford one. No longer a need to live very close to your job. Developers saw the market, built radial roads with clumps of new houses.
The suburbs. Cities became amorphous large blobs.
Problems we would like to solve like public transit that worked within the gone cities but now not well in the blobs. The central city businesses lost traffic and mostly died.
I think in Europe the cities are very old, long before cars. I think the blob change is less pronounced so maybe they can do better than the US with a given level of effort.
Yeah, I didn’t even mention sophisticated internet connections to people anywhere. I don’t have a metaphor for that but definitely not the 50’s town. Now the challenge seems to be truth vs propaganda.
I’m very fortunate in where I live. I just returned from the Farmers market two blocks from my house having bought fresh fruit and vegetables, cheese and jams, nuts and dried fruits, and crackers and tuna. Everything is very fresh and not expensive. And the shopping experience is pleasant!
Electrified cats-cradle spider web?
Well, in Hawaii you just need to walk through Costco and compare prices to Safeway and you’ll understand why the Costco parking lot is always full. The local Walmart has been reconfiguring to devote more space to food (at the expense of hardware, paint, auto, sports).
I do most shopping at .mil commissary. Mainly because per policy transportation costs are rolled up system wide and applied as overhead, so the stores at say Ft Belvoir in NoVa effectively subsidize stores overseas or in the boonies. But for many things can’t compete with Costco. All sales in town are subject to 4.7% excise tax, but commissary also adds 4% for capital improvements.
I guess I’m not elite enough to look down on Walmart shoppers. I frankly don’t get the negativity? It’s a store. You get a cart, go down the aisles, then check out. Like every other grocery I’ve ever been to. And you bag your own since in Hawaii, it’s illegal for a store to give you a plastic bag to hold your stuff.
Sure, a Wegmans or Publix is going to give you that “upscale” feel if that’s what you need, rather than an Aldi.
Re: the “negativity.” It’s the exploitation of Walmart employees (most of whom have to be on food stamps to survive), the customers (likewise) and the environment of superstores (inside and out) that depresses me. IMHO, life in 2025 is depressing enough.
There’s a ‘people of Wal*Mart’ website, but no ‘people of Target’ website showing off freaks avec shopping carts.
I have a choice of 2 Wal*Marts in Godzone and they are bright and cheery fully stocked places with happy employees from what I can judge after a couple of decades of shopping there.
Don’t really get the anger, it isn’t as if Target is any different in what they have up for offer, but nobody ever vilifies them.
I much prefer Grocery Outlet, its a shopping adventure.
The argument that consistency in pricing is bad and encourages overconsumption is hooey. Sales are what encourage overconsumption, when you either 1) stock up, knowing the sale will end before your demand for the product does, or 2) must buy multiple units of the item to get the sale price.
And how is it worse than the alternative? Here in the PNW our dominant supercenter, Fred Meyer (along with, I presume, all of Kroger’s other demon spawn and agglomerates) practices anything but consistent pricing. Trying to figure out the price of anything requires wading through a blizzard of bullshit, and it’s only getting worse.
“This price you get because it’s on sale”
“This price you get but only if you buy twelve”
“This price is just because we like you”
“This price is for one, but we want you to think that you have to buy three”
“This price is only if you have the card”
“This price is only if you download the app”
“This price you get because it’s overstocked”
“This price is because it’s about to expire”
And, my personal favorite:
“This sale ended three weeks ago but we’re going to leave the tag up because we doubt you’ll notice the expiration date printed in 5pt font and partially obscured by the lip of the tag holder.”
That said, when I catch those last ones at the register, I have a tendency to abandon my cart and rage-quit the store. So I guess the argument that steady prices encourages more consumption has some merit? I can’t be the only person who has had it with this attention-span arbitrage.
Of course it’s not like retailers with more upfront pricing strategies aren’t up to their own shenanigans. The 4oz of Spanish charcuterie at my neighborhood Trader Joes, that they “forgot” to put a price tag out for? Yeah, fifteen dollar. It was almost worth it
We have a Costco membership, but we don’t come out with tons of stuff. We tend to be there for a very short list of things and get in and out as quickly as possible. What motivated the membership was seeing the insane cost of car batteries at everywhere but Costco. The price of the first battery, and the cost of membership was still substantially less then the cheapest battery anywhere else. Since we have more than one vehicle, I went back for another one a few months later. I find the place overwhelming so if I’m there anything I’ve bought won’t require a cart to carry out.
In our small town (next county over from Costco), Walmart has all but crushed any alternatives for groceries, clothes or anything that might be considered a basic. The only other grocery store left is a Save-A-Lot. Because there is no real competition, Walmart is very expensive. Not much in the way of savings at Save-A-Lot either. People here hate going to the Walmart so much they’ll go to Save-A-Lot for groceries unless they have absolutely no choice. Our Walmart also has visibly low morale, and considering how low the workers are paid and how badly treated this is no surprise.
Unlike Costco, it is very rare to see anyone at Walmart or Save-A-Lot with a full cart, very few people in my town have that kind of money.
Idiocracy nailed the experience (and why I do not go to the supercenters):
https://www.youtube.com/watch?v=ZIFCWpn4qQ4
Went to Costco today. A 60 mile drive that we do 2-3X/year. Saved a lot on stuff we actually need and use, such as paper goods, organic olive oil, cheap but good wine, disposable rubber gloves. . . you get the picture. The keys to our approach: 1) Always have a shopping list; 2) Have space at home for storing larger packages (ie. toilet paper) or bulk and frozen goods; 3) Cultivate self-discipline; and 4) Allocate a rigidly specific amount to frivolous/luxury items. For the latter, it was Christmas presents and a couple of well-made, inexpensive articles of clothing.
Like you, we only go to Costco 2-3 times a year since it is 130 miles round trip.
I really wanted to stop the membership, but just the savings on kitty litter alone more than pays for our membership. We also go with a list in hand of items to buy along with a firmly set limit on any off-list purchases.
Our last trip, we spent $300. The cost to buy elsewhere? At least $500, but only if you were careful to shop the local sales.
Got rid of my Costco membership years ago, just don’t buy enough of what they sell which is increasing just Asian made consumer goods headed for the landfill to justify the membership fee.
I just have friends buy me a $200 gift card, gets me in/out with what I need and not buying stuff I don’t. That card lasts me months.
Can a non-member buy someone a CostCo gift card? Can a non-member buy their own self a CostCo gift card? Does CostCo have any rules saying they can’t?
And if not, can a member buy a non-member a CostCo gift card? ( For which the non-member would pay the member back, as a friendly workaround?)
Gas at Costco this past weekend was $.40 less than the average other stations in my town. Similar pricing within the box. Unlike Walmart, the employees seem happy and not beaten down. I follow shopping list discipline. They carry coffee from a small regional roaster…no one else in my town carries that. A long time ago the Costco contract gave Earthbound Organics that allowed them to thrive as a business. I go to WalMart and Aldi for some groceries out of class solidarity to remind myself to stay pissed off about our 2nd Gilded Age class and income maldistribution. I go to the excellent food coop in a town an hour away occasionally. I won’t enter a Whole Foods, also an hour away.
Big box stores are used by a lot of elderly for indoor exercise. Pushing the cart helps with balance. The tell is a geezer walking slowly with one item in basket.
I lament the disapperance of small grocery stores owned by the neighbor down the street. That ship sailed a long time ago.
I first darkened the door of a Costco almost 40 years ago. What I recall most clearly was a sort of shock upon encountering a pallet load of Vachon cakes (Jos Louis, I think). Prior to that I had only ever seen at most a handful in one place, say at a convenience store. That and gigantic tubs (gallons or more) of mayonnaise, peanut butter and ketchup. It was all more than a little nauseating.
My wife has a membership, but I avoid the place because I loathe the utter madness of the parking lot.
Walmart I have gotten used to. In 2009, against furious local opposition, they dropped a SuperCentre which is about a 10 minute walk away on what used to be our closest grocery store (The Barn — a chain founded in Hamilton in the ‘70s). At first I was furious and refused to use it as a matter of principle. But after about five years or so the obvious convenience of the location overcame my feeble moral fibre. I don’t use it for much — mostly for snacks I shouldn’t really be eating anyway (and often hide from my wife) or seasonal items like Halloween candy. The one really useful feature is an automated blood pressure machine tucked away in a far corner of the in-house pharmacy. Unlike the ones at our local Shoppers outlets (a gigantic pharmacy chain that is part of the Weston empire) which are always lined up with patrons even older than me, this one is always available when I stroll in for my monthly readings.
I still feel vaguely guilty whenever I go, but the moment passes. If there were closer options, I would use them, but the so-called “convenience” stores aren’t — if anything they’re further away, and definitely far more expensive — and the next closest grocery store that isn’t some foolishly expensive specialty store (health foods or European delicatessen) is a half hour’s walk at least. So I am kind of stuck unless I want to drive.
So it goes. At least I haven’t yet been reduced to taking delivery, so for that much I remain grateful.
I enjoy Costco, and being in Houston, drive by several every day. I particularly take advantage of the simple food court; just over $6 for two very tasty hot dogs, drink, and a cookie can’t be beat!
We’ve also found their travel deals to be very competitive and frequently rent cars on weekends trips.
I like to people watch in the stores and try to imagine what someone plans to do with all that bottled water and toilet paper! Their meat section is great for a wanna-be barbeque, Weber grill expert such as myself.
I never go to Costco or Walmart – went once or twice with a friend who had a membership to Costco and once to Walmart for something I needed at the time and the store was the only place nearby where I was to get it – no recollection of what that was. These stores are depressing and weird. I enjoy shopping now only in small towns with little stores that have unique items, whether that’s clothes, baked goods, European food items and these visits are only occasional since most of their items are expensive. Food shop at a local Food Lion and the rest of our needs from mostly Amazon or Chewy for the cat stuff. Delivery service has made a huge difference in time saved and being able to find exactly what we want. Going to a Home Depot for example is a waste of time if your air filter or whatever is not very standard sized. I am not happy about giving Amazon and other corporate stores money but my time is valuable so I’m not going to spend weekends traveling to stores and walking around aisles and standing in lines. Oh and Chewy’s customer service is outstanding. If something breaks like a bag of kitty litter, I get a new bag sometimes the next day no questions asked.
The big C always felt to me like a store for giant people. I expect to see 8-foot-tall Grey Aliens drifting around, pushing giant baskets and loading up on TV sets and “roast duck for 50 people”. (Seriously, check out the pre-roasted duck quarters.)
The big C and big W are deliberately ugly, to tell blue-collar shoppers “this is for you”.
Target (tar-szay) deliberately went for a friendlier look.