Grocery Outlet KO’s Corvallis Walmart: Advocate Price Comparison Tells All

There is often plenty of available parking at Corvallis' new Walmart.

From accusations of predatory pricing, forced overtime, sexual discrimination, workers collecting foodstamps to survive, and the clear-cutting of small businesses wherever they set up shop, Walmart is fraught with controversy. Despite this backstory, a Walmart opened in Corvallis on March 29.

Surrounded by a veritable panoply of grocery stores, it’s a peculiar move. None of the managers of the markets in the vicinity were permitted by their corporate overlords to comment on their newest competitor, but the general consensus was that Walmart is so far having virtually no effect on its neighbors.

One of those neighbors stands out from the rest as the only one that’s not a corporate entity. Located across the road, Grocery Outlet is the proverbial mom-and-pop establishment. Owners Terry and Jan Neumann work the floor of their store full time. It is not uncommon to see Terry walking the aisles with a pricing gun. These are not lazy corporate fat cats; they’re hard-working folks who’re not afraid to get their hands dirty. By contrast, according to Forbes, the six Walmart heirs have a combined net worth of nearly $100 billion—equivalent to the total net worth of the bottom 30 percent of Americans. Needless to say, you won’t likely see them working the floor of their stores.

Also in contrast to Walmart—which offers communities low-paying jobs in exchange for shuttering local businesses—Oregon native Terry and his wife Jan are avid contributors to the community.

“We help every school; we try to put back in the community as much as we possibly can afford. That may be a small donation, it may be a large donation,” Terry said.

As an example, Terry and Jan helped Habitat for Humanity by stocking the pantries of newly constructed homes with $200 to $300 in groceries: two last fall, and two more this coming June.

Not a franchise, Terry and Jan are owner-operators of the Corvallis Grocery Outlet, which they’ve owned since 1997. The larger Grocery Outlet company is their major supplier, not corporate overlords. As Terry says, “It’s kind of the American Dream.”

Walmart is often able to destroy local mom-and-pop businesses by undercutting prices. Grocery Outlet, however, has its own unique business model, allowing it to buy directly from manufacturers at rock-bottom prices. So, how do they compare?

In a random analysis of 55 commonly bought grocery items conducted by The Corvallis Advocate, an interesting picture appeared. Out of the 39 items that were identical in both stores (many of the excluded 16 were sold at both locations, but in different sizes), 30 were cheaper at Grocery Outlet, but only nine were cheaper at Walmart. These nine items averaged $0.49 less. Four were only a penny cheaper. On the other hand, the 30 items less expensive at Grocery Outlet averaged $0.67 savings. Sure, you can buy a 32-ounce jar of Smuckers Strawberry Jam for a penny less at Walmart, but you’ll pay $17.97 for a three-liter Black Box Wine that you could buy at Grocery Outlet for $10.99, supporting a true mom-and-pop business in the process. Beyond the bottom line, as Jan says, “Our people, I think, are friendlier.” Walmart, however, is notorious for underpaying and overworking their employees.

Perhaps Corvallis is the line in the sand Walmart shouldn’t have crossed. The only logical reason for opening a grocery store in an area so saturated with them is in the hope that the usual Walmart effect—putting surrounding local businesses out of business—will pave the way for Walmart to dominate the market. Corvallis may be the place where that finally fails.

 

By Seth Aronson

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11 thoughts on “Grocery Outlet KO’s Corvallis Walmart: Advocate Price Comparison Tells All

  1. If you started receiving pesky junk mail from the new Walmart, here is how to stop it. The company that sends it out is a contracted marketing company called Valassis. Their phone number is 860-285-6100, if you’d like to opt out. Also if you in general want to stop junk mail, the website to go to is https://www.dmachoice.org/. Reduce wasted paper!

    1. Thank you Beth! I have been wondering how to get rid of those stupid ads for a store I will never enter! Argh – such a waste.

      The first one said the store was at the corner of 9th and Circle. Nothing like having your ad send people to your competitor!

  2. This article doesn’t have much in the way of facts. It also makes many references to culturally established opinions (Walmart is notorious for underpaying and overworking their employees). Comparing a small shop to a large shop like Walmart – the small shop is always going to come out ahead because they’ve had fewer chances to make the mistakes that receive national attention. We’re talking about multiplying the risk for one store to be ‘underpaying’ or ‘overworking’ and then broadcasting that label to all other stores. I’m not saying you shouldn’t support local business, I encourage supporting local business BUT at the same time – I don’t have a problem when someone comes in with a business model that is offering the community more jobs and more stability. Large corporations are far less likely to close up shop when the economy dips which makes a community more economically stable.

    Do smaller shops have a harder time competing with Walmart. Yes, does that make this not fair? I don’t think you want to say that. I don’t think we want to live in a world where our purchasing options are based on whether or not the shop is pricing things fairly compared to what every other store is able to price it for.

    I’ll shop at Grocery Outlet and I’ll shop at Walmart. That doesn’t make Walmart “evil” or Grocery Outlet magically “better” it makes this America. It’s what makes is so that we’re not still doing trade and barter at a local market where there is only one seller of the things you need to live on and you’re forced to pay whatever price that person wants to charge.

    1. …Well put, Cassie, but it has been well established that WM pays the lowest wages + no medical insurance, such that its employees often have to use food stamps and the Emergency Room in place of preventive care. The community at large takes on those costs. Because WM can undercut other’s prices it drives other businesses out of business. I want to live in a world not driven to the lowest possible level by greed.

    2. I have to disagree that ” Large corporations are far less likely to close up shop when the economy dips which makes a community more economically stable. ” On the contrary, many small businesses make for a much more stable and competitive economy. When corporate or very large employers pull out or downsize (ie: Penney’s, HP), they can leave huge holes and depress the economy. They can also harm the tax structure by blackmailing local governments. It’s funny how the game of Monopoly was created to illustrate the impracticality and stupidity of unregulated capitalism and then became a primer for it.

    3. I agree wholeheartedly, Cassie. Competition in the marketplace is a good thing. Plus, I prefer to live in a community with choices. My husband and I have t shop in Albany and Salem far too often because we can’t find what we want locally, or at the price we can afford. The simple bottom line for me is: If you don’t like Walmart, then don’t shop there.

      This is not the only business in the area that pays low wages and no benefits. People tend to forget that a company isn’t required to pay any benefits at all, if they so choose. They do so because it creates a competitive benefit package and lures qualified employees to their company. If you think the salaries at Walmart are too low, then don’t work there.

  3. Which city official caved and let Walmart in, and how much did they paid for approving the deal?

    1. There was no caving in. Walmart took advantage of a zoning loophope – they built their store on the previously installed foundation for a cancelled store. Because the foundation was already in place, and the property was approved for a retail outlet, as long as Walmart used it without modifying the size or the approved configuration of the parking and such, they were in. Nothing that anyone could do to stop them.

  4. Frankly, there are a lot of places we shouldn’t shop, and Walmart is just one of them. Not all large retailers pay American workers as poorly as Walmart does, but that doesn’t mean those companies are ethical… it’s incredibly important to be aware of the business practices (national and global) of the retailers we patronize.

    This is where cutting corners gets us:
    http://www.nbcbayarea.com/news/national-international/NATL-Rubble-Accountability-Bangladesh-Factory-Collapse-206194101.html

    Let’s keep buying local, and make/reuse what items we can. My mother made her own clothing when she was my age, and I can, too.

  5. Teresa, what you are saying makes no economic sense. With the cost of gas currently, it is often less expensive to buy locally at a slightly higher price than to drive to Salem or Eugene to save a few dollars. At today’s gas prices, a trip to Salem in a vehicle that gets 20 mpg would cost at least $15, not taking into account the wear and tear on the vehicle. It is one thing to drive to find an item you can’t find elsewhere, but to drive out of your way to save a little while spending a lot isn’t good business.

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