Costco Forced to Close Doors to Keep Smaller Retailers Open

Note: The story is from Korea.

Costco surrenders

US retail giant to close Daegu store every 2nd, 4th Sundays

The Korean unit of American discount warehouse Costco has decided to close its store in Daegu on every second and fourth Sunday, a decision viewed as the firm’s surrendering to pressure to abide by an ordinance meant to protect the livelihoods of smaller retailers.

The company has come under fire for months for ignoring the restriction, arguing it goes against freedom of business. The government hit back with financial penalties and tough inspections of Costco stores over its food safety and management system.

Adding to the pressure were boycott campaigns by civic groups and criticism by the media.

Here's a story of the smaller retailers being protected by government ordinances, in which their large big box competitors have to limit the amount of hours they can stay open.

I thought this one was interesting because you often hear of Walmart taking over towns and people complaining they are the only places left to shop. Mind you, this all happened in Korea.

My take is that it could be good or bad. By limiting the operating hours it could give an incentive for other smaller businesses to charge more since they know they will be the only place open on certain days. But even that seems like a stretch. I only offer that alternative opinion, because whenever a government gets involved with business, there always seems to be a loser, and often its the consumer.

If this helps protect small businesses and also choice for consumers, then by all means...

Thoughts?


Source

reply to post by boncho


Good ...... I like the fact that a corp. doesn't get their way all the time.

I've seen too many Mom & Pop stores close when Wally World moves in.
There is no way that they can compete with their prices.

Where a small store orders a case of a certain product, Wally World/Costco order millions of a particular product and then sell them cheaper than what a small store can buy it for.

I know from personal experience....years ago when we were in the Western business, before Clinton passed the NAFTA bill, we were able to sell many mexico products reasonable and make a decent profit.

But then after NAFTA passed, Wally World was importing products and selling them at our whole sale prices.
There was no way we could compete with them. They didn't even try to be comparable to other stores prices.
It's just a cut throat type of mentality with them.

Needless to say, we discontinued many products thanks to them. It just wasn't feasible for us to carry the products any longer.
[we are no longer in that particular business]

So many stores have gone out due to those larger stores.
It's impossible to compete with their cheap prices.
Even many chain grocery stores are having a hard time competing.

It would be nice if the small business stores in our country were protected like they are trying to do in Korea.
I think it's a great idea....

To be honest, I doubt it will have little effect, if any. People that like to shop for bulk, and did so sundays, will just change their shopping day if possible. Certain things are way cheaper at costco, so I buy them there when possible. Paper towels, boxes of canned goods I usually buy there for example. Stuff with short shelf life, such as produce and meats, I get at the local supermarket here, I have to drive an hour to get to costco, so I only make a trip to the city maybe once a month, and combine all my needs into one trip.

Costco isn't forcing people to shop there. The government is forcing people to NOT shop there. If other businesses cannot compete at a price-point they need to look at alternatives like exceptional customer services (like home delivery) that Costco cannot provide.

I am certain all those businesses will slowly go under because they can't find a way to attract customers without government intervention.

Originally posted by GreenGlassDoor
Costco isn't forcing people to shop there. The government is forcing people to NOT shop there. If other businesses cannot compete at a price-point they need to look at alternatives like exceptional customer services (like home delivery) that Costco cannot provide.

I am certain all those businesses will slowly go under because they can't find a way to attract customers without government intervention.

edit on 2-12-2012 by GreenGlassDoor because: (no reason given)

I think you need to consider how Walmart and the like gained their foothold to begin with. They could never have done it without lobby efforts with government.

In the West, they are the ones that unfairly put small companies out of business by getting the government involved in consumer trade

Walmart has also fought unions to the death...

The best customer service I have found is with a little independently owned store just around the corner to my home. The last time I was at Walmart I nearly called the police after a dispute where one of their employees tried to defraud me...

Costco on the other hand, I have always liked because it was focused more on wholesale and not all people need what they are offering. They have just benefited a certain demographic. I don't know how they operate in Korea though...

reply to post by boncho


When did the government ever make you shop at store? You're trying to make this thing about something else.

reply to post by GreenGlassDoor


The thing is, big business does not abide by free market practices either when they lobby politicians with money to favor them over others.

Its nice to see the small business have a chance. Otherwise, to make it fair across the board, we could outlaw lobbying and kickbacks. The big boys would never go for that though.

Originally posted by GreenGlassDoor
reply to post by boncho

 

When did the government ever make you shop at store? You're trying to make this thing about something else.

Walmart put other companies out of business.

Example:

Major retailers like Target and Walmart may be able to keep the connection between their products and a war-torn African country under wraps.

Thanks to their lobbying efforts, big retailers will likely be exempt from a rule, finalized by the Securities and Exchange Commission Wednesday, which requires public companies to disclose whether their products contain “conflict minerals” from the Democratic Republic of Congo, the Wall Street Journal reports.

www.huffingtonpost.com...

Other bills Walmart lobbied for:

H.R.3179 112 To improve the States' rights to enforce the collection of State sales and use tax laws, and for other purposes. 22
S.1832 112 Marketplace Fairness Act 19
S.1843 112 Representation Fairness Restoration Act 6
S.1549 112 American Jobs Act of 2011 6
H.R.3094 112 Workforce Democracy and Fairness Act 6
S.J.RES.36 112 A joint resolution providing for congressional disapproval under chapter 8 of title 5, United States Code, of the rule submitted by the National Labor Relations Board relating to representation election procedures. 6
H.CON.RES.112 112 Establishing the budget for the United States Government for fiscal year 2013 and setting forth appropriate budgetary levels for fiscal years 2014 through 2022. 5
S.1660 112 American Jobs Act of 2011 5
S.1813 112 A bill to reauthorize Federal-aid highway and highway safety construction programs, and for other purposes. 5
S.1882 112 Fair And Immediate Release of Generic Drugs Act 3
S.21 112 Cyber Security and American Cyber Competitiveness Act of 2011 3
S.27 112 Preserve Access to Affordable Generics Act 3
S.413 112 Cybersecurity and Internet Freedom Act of 2011 3
S.799 112 Commercial Privacy Bill of Rights Act of 2011 3
S.936 112 American Infrastructure Investment Fund Act of 2011 3
H.R.1081 112 Consumers Payment System Protection Act 3
H.R.2577 112 SAFE Data Act 3
H.R.2701 112 Main Street Fairness Act 3
S.1452 112 Main Street Fairness Act 3
S.1207 112 Data Security and Breach Notification Act of 2011 3
H.R.3253 112 International Megan's Law of 2011 3
H.R.5978 112 Equal Employment Opportunity Restoration Act of 2012 3
S.3317 112 Equal Employment Opportunity Restoration Act of 2012 3
S.3521 112 Family and Business Tax Cut Certainty Act of 2012 2
H.R.7 112 Surface Transportation Extension Act of 2012 2
H.R.3210 112 RELIEF Act 2
H.R.1063 112 Strengthening Medicare And Repaying Taxpayers Act of 2011 2
S.AMDT.2151 112 2
S.3187 112 Biosimilar User Fee Act of 2012 2
S.3240 112 Farm bill 2
S.2237 112 Small Business Jobs and Tax Relief Act 2
S.1619 112 Currency Exchange Rate Oversight Reform Act of 2011 1
S.308 112 Trade Extenders Act of 2011 1
H.R.2460 112 Creating and Restoring U.S. Investment and Stimulating Employment Act 1
S.1152 112 Cybersecurity Enhancement Act of 2011 1
H.R.3610 112 Streamlining Workforce Development Programs Act of 2011 1
H.R.3630 112 Temporary Payroll Tax Cut Continuation Act of 2011 1
S.1258 112 A bill to provide for comprehensive immigration reform, and for other purposes. 1
S.3414 112 A bill to enhance the security and resiliency of the cyber and communications infrastructure of the United States. 1

www.opensecrets.org...

Did you think all these lobbying efforts was just to be a concerned corporation. Jesus, give me a break.

The reason companies like Walmart got big is because they lobby for rule changes that seems like its for something else while they take a direct benefit. And big surprise the bills they push for hurts their competitors.

So yes, by giving unfair advantage to certain corporations, the government has forced where many can shop.

reply to post by jacobe001


Please consult your state's directory of registered lobbyists. The one for California is as thick as the phonebook. Many small businesses that are more than a mom and pop operation are affiliated with a lobbying concern.

If you ever play politics for real you will see that lobbying is something that occurs on all levels, to anybody who has skin in the game. Politicians don't know enough about everything so they get a lot of input from lobbyists who come on behalf of some concern.

The bottom line is you are wrong about lobbyists and who does it.

reply to post by boncho


The minerals MAY come from a conflict zone? That isn't anything substantive.

Target and Wal-Mart have business concerns and opinions about laws that will affect them? What's your point?

You are trying to deflect this into something else again. Nobody is forced to shop at those stores. In Korea they are being forced to NOT shop there.

It's an odd attempt to address the issue of smaller businesses being hurt by the competition from Costco. However, I do wonder if this is a case of unfair competition. It begs the question, do companies like Costco have an unfair competitive advantage due to their size and ability to get better deals on the goods they sell?

reply to post by AutomaticSlim


Absolutely not. They get better pricing now, but they started small too.

Jim Sinegal, the guy who founded Costco, was dumped into an orphanage by his mother and started his professional life as a grocery bagger. He eventually went up the ranks to become executive VP. Realizing he had a knack for the distribution game founded his own company. Costco is successful because of the business model he developed.

These stores will eventually be beaten. Look at K-Mart, King's, Gimble's, and Woolworth's. Somebody devloped a better model and knocked them out.

Just becuase someone started a business doesn't mean it must be successful or we have to visit it. It is irksome to see people cry unfair as if they are doing something wrong.

reply to post by GreenGlassDoor

You are trying to deflect this into something else again. Nobody is forced to shop at those stores. In Korea they are being forced to NOT shop there.

Korea doesn't even have to allow Costco to operate in their country, or they could be like many other countries and require ownership rules, ie. Egypt, where any company has to be controlled 51% by a national.

The minerals MAY come from a conflict zone? That isn't anything substantive.

If I am a local manufacturer that is not allowed to by materials from a conflict zone, but Walmart is, Walmart has an unfair advantage. Simple as that... (Lower cost through lobbying efforts)

reply to post by GreenGlassDoor

These stores will eventually be beaten. Look at K-Mart, King's, Gimble's, and Woolworth's. Somebody devloped a better model and knocked them out.

Just becuase someone started a business doesn't mean it must be successful or we have to visit it. It is irksome to see people cry unfair as if they are doing something wrong.

I actually agree with you on this one. In some cases of the larger retailers though, they are not run by their founders anymore and have taken on a life of their own.

Some get clear cut unfair advantages through subsidies and tax breaks, and that's what separates the free market (which you are arguing for and I am not against) from something entirely different:

In the case of Wal-Mart, it is not capitalism. Wal-Mart has an unfair advantage. Nationwide, Wal-Mart has received $1.008 billion in subsidies. In Illinois alone, Wal-Mart has received $100 million in subsidies as school districts have been making drastic budget cuts. How can it be capitalism when the government is paying a company to set up shop? When the Wal-Mart in Cameron, Mo., receives $2.1 million dollars to open its doors, how is the local mom and pop shop supposed to compete?

www.northern-iowan.org...

In the case of Costco in Korea, it's not a Korean enterprise, many countries do not let companies operate with impunity. It's one thing if you are buying or selling materials or wholesale goods to countries, but retailers are something entirely different in my opinion.

reply to post by boncho


Places with ownership rules don't have a Costco, do they? They're also places that have a low standard of living and partisan violence. The consumers in those nations do not get the access to goods and will live in an economy that has such volatility as a result. Fun fact, the grain shortage in Russia caused food prices to spike and the Egyptians overthrew their government. Now the Muslim Brotherhood is in power. So what's so good about their rule again?

You do know the definition of "may" right? So Wal-Mart isn't importing or have an unfair advantage. Somebody is making an accusation but lacks the proof. Maybe because it is not true.

More dishonest news you're citing. Subsidies from what? The state of Illisinois or the Federal government? The reality is the small business initiative allows small businesses to be awarded contracts that other larger businesses cannot bid on, plus there are a number of small business programs to subsidize small businesses. To whine about businesses subsidies (such as those that fund job training) and the defunding of schools (often paid for by local property and sales taxes) is to lack the fundamental understanding of what each does. Local news people should know the different.

reply to post by GreenGlassDoor

The consumers in those nations do not get the access to goods and will live in an economy that has such volatility as a result. Fun fact, the grain shortage in Russia caused food prices to spike and the Egyptians overthrew their government. Now the Muslim Brotherhood is in power. So what's so good about their rule again?

All the progressive Egyptians I knew lauded their former system, and it their opinion they had a very successful system in the past. The bread subsidies helped the poor and their protectionism stopped foreign companies from coming in and taking over the few industries they had. As far as their revolution, that had more elements from outside the country than it did internally.

More dishonest news you're citing. Subsidies from what? The state of Illisinois or the Federal government?

To be honest, I don't have the time or urge to tread through walmart material as its one of the ones that is extremely difficult get to the bottom of. (There are plenty of smear campaigns online which makes it difficult to find good sources.)

I will have to respectfully lay my argument to rest as I think you have bested me here. I do believe the position I held is worth taking a further look into, but at the same time I do not wish to argue something I cannot bring facts and a proper argument to.

Cheers,

B

And your post only goes to prove any company... big banner or mom and pop ... can benefit from this legislation.
I can now go to bed, and rest assured, the local liquor store can sell products from the Congo, just like WalMart can.

And maybe you should take a look at some of those bills WalMart lobbied for.... Many of those are cornerstone to the Obama plan for the future...


REALLY!?!?!? How can you be against ANYONE, WALMART or SUPER7MART11 even asking for the Obama administration to do their job and create a "BUDGET"?

Originally posted by boncho

Originally posted by GreenGlassDoor
reply to post by boncho

 

When did the government ever make you shop at store? You're trying to make this thing about something else.

Walmart put other companies out of business.

Example:

Major retailers like Target and Walmart may be able to keep the connection between their products and a war-torn African country under wraps.

Thanks to their lobbying efforts, big retailers will likely be exempt from a rule, finalized by the Securities and Exchange Commission Wednesday, which requires public companies to disclose whether their products contain “conflict minerals” from the Democratic Republic of Congo, the Wall Street Journal reports.

www.huffingtonpost.com...

Other bills Walmart lobbied for:

H.R.3179 112 To improve the States' rights to enforce the collection of State sales and use tax laws, and for other purposes. 22
S.1832 112 Marketplace Fairness Act 19
S.1843 112 Representation Fairness Restoration Act 6
S.1549 112 American Jobs Act of 2011 6
H.R.3094 112 Workforce Democracy and Fairness Act 6
S.J.RES.36 112 A joint resolution providing for congressional disapproval under chapter 8 of title 5, United States Code, of the rule submitted by the National Labor Relations Board relating to representation election procedures. 6
H.CON.RES.112 112 Establishing the budget for the United States Government for fiscal year 2013 and setting forth appropriate budgetary levels for fiscal years 2014 through 2022. 5
S.1660 112 American Jobs Act of 2011 5
S.1813 112 A bill to reauthorize Federal-aid highway and highway safety construction programs, and for other purposes. 5
S.1882 112 Fair And Immediate Release of Generic Drugs Act 3
S.21 112 Cyber Security and American Cyber Competitiveness Act of 2011 3
S.27 112 Preserve Access to Affordable Generics Act 3
S.413 112 Cybersecurity and Internet Freedom Act of 2011 3
S.799 112 Commercial Privacy Bill of Rights Act of 2011 3
S.936 112 American Infrastructure Investment Fund Act of 2011 3
H.R.1081 112 Consumers Payment System Protection Act 3
H.R.2577 112 SAFE Data Act 3
H.R.2701 112 Main Street Fairness Act 3
S.1452 112 Main Street Fairness Act 3
S.1207 112 Data Security and Breach Notification Act of 2011 3
H.R.3253 112 International Megan's Law of 2011 3
H.R.5978 112 Equal Employment Opportunity Restoration Act of 2012 3
S.3317 112 Equal Employment Opportunity Restoration Act of 2012 3
S.3521 112 Family and Business Tax Cut Certainty Act of 2012 2
H.R.7 112 Surface Transportation Extension Act of 2012 2
H.R.3210 112 RELIEF Act 2
H.R.1063 112 Strengthening Medicare And Repaying Taxpayers Act of 2011 2
S.AMDT.2151 112 2
S.3187 112 Biosimilar User Fee Act of 2012 2
S.3240 112 Farm bill 2
S.2237 112 Small Business Jobs and Tax Relief Act 2
S.1619 112 Currency Exchange Rate Oversight Reform Act of 2011 1
S.308 112 Trade Extenders Act of 2011 1
H.R.2460 112 Creating and Restoring U.S. Investment and Stimulating Employment Act 1
S.1152 112 Cybersecurity Enhancement Act of 2011 1
H.R.3610 112 Streamlining Workforce Development Programs Act of 2011 1
H.R.3630 112 Temporary Payroll Tax Cut Continuation Act of 2011 1
S.1258 112 A bill to provide for comprehensive immigration reform, and for other purposes. 1
S.3414 112 A bill to enhance the security and resiliency of the cyber and communications infrastructure of the United States. 1

www.opensecrets.org...

Did you think all these lobbying efforts was just to be a concerned corporation. Jesus, give me a break.

The reason companies like Walmart got big is because they lobby for rule changes that seems like its for something else while they take a direct benefit. And big surprise the bills they push for hurts their competitors.

So yes, by giving unfair advantage to certain corporations, the government has forced where many can shop.

edit on 2-12-2012 by boncho because: (no reason given)

Furthermore, your post did absolutely nothing to prove your claim that "Walmart put other companies out of business":

Originally posted by boncho
Walmart put other companies out of business.

Example:

Major retailers like Target and Walmart may be able to keep the connection between their products and a war-torn African country under wraps.

Thanks to their lobbying efforts, big retailers will likely be exempt from a rule, finalized by the Securities and Exchange Commission Wednesday, which requires public companies to disclose whether their products contain “conflict minerals” from the Democratic Republic of Congo, the Wall Street Journal reports.

www.huffingtonpost.com...

Anyone willing to listen to you well-deserves to feast on the ignorance you're feeding.

And the fact Costco has to close their doors for 2 days a month tells me only one thing:

The government is pandering to the locals.

As mentioned, people who would normally shop Costco are going to shift their shopping days a little bit. It's not going to force anyone to shop local markets on those days.

And face the truth... if you really need 100 pounds of Tilapia or Milanesa on any particular Sunday, your chef is an idiot for not thinking ahead.

reply to post by abecedarian

Furthermore, your post did absolutely nothing to prove your claim that "Walmart put other companies out of business":

Anyone willing to listen to you well-deserves to feast on the ignorance you're feeding.

I was posting a rough example of how a big company with lobbying and legal efforts could gain an unfair competitive advantage over another one. Did you have trouble picking that up? Or do you need it in simpler English?

If Walmart, Costco, et al. Manufactures something out of a restricted zone, and company "B" cannot manufacture out of the same zone, leading to cheaper materials for Walmart, it gives them an unfair advantage.

Notice it's all in the wording.

An earlier version of the proposal, part of the 2010 Dodd-Frank financial reform law, would have mandated that retailers selling products under their own brand name abide by the rule, according to the WSJ, but the final version allows a loophole for companies that don’t directly manufacture their products. Goods ranging from smartphones to light bulbs may be made with conflict minerals.

I wasn't giving a clear cut example, I was offering how it would happen. Anyone with a little insight should have been able to see that.

I was really going to lay this one to rest as I only had a very rough and loose thought for the basis of my argument. My opinion formed a couple years ago while competing with a couple retail giants. Although the specifics are lost on me today. However, perhaps I should look back into the issue so we can have a proper debate.

Since I'm exuding ignorance and all...