Wm

[jediron]

Since we have been bandying about the merits or not of WM, are
they now a monopoly in the Optical field?

Because we are not just talking of WM, you must also include there Sam's club Opticals, which in there own right are very large optical departments. Some are wholly owned by Sam's while others are leased departments.

But the question is still there, is WM a monopoly? What are Sears
and Lenscrafters going to do? Will they be like feas on a dogs back terrified that the next scratch will do them in or will they fight untill the end? Because if you have seen WM's trademark, that is to go into area and basically wipe out all competition, then you need to be afraid.

What is you opinion?

Remember opinions are like armpits everybody has two of them.

"It was the best of times and the worst of times"
Charles Dickens "Tale Of two Cities"
:bbg: :D

[Jedi]

Jediron
You might what to check the definition of a monopoly.

Monopoly
Exclusive control by one group of the means of producing or selling a commodity or service.

With that said, WM is not a monopoly, and I don't even think all the chains combined have 30% of the marketplace.

[chm2023]

Latest, or one of the latest issues of Vision Monday has a report on the size of the chain segment, and of specific chains. Higher than 30% for all chains, closer to 50% if memory serves.

[Chris Ryser]

Largest U.S. Optical Retail Chains Grab More Market Share in ’02



NEW YORK—How did optical’s largest retailers stack up in eyewear/eyecare sales last year? Their ups and downs in revenues and store counts are revealed in The VM Top 50 U.S. Optical Retailers report, an exclusive survey of the industry’s top performers.


The VM Top 50 are strong retail players, getting stronger. In 2002, these 50 chains had combined sales of just under $5.9 billion, capturing 36.5 percent of the $16.15-billion U.S. retail optical market, as estimated by Jobson Optical Research.

And the biggest of the big continue to build clout. Last year the Top 10 optical retailers picked up nearly two market-share points, representing 29.1 percent of that total retail market.

VM has compiled the VM Top 50 U.S. Optical Retailers ranked by domestic net sales for calendar year 2002 into a unified company-by-company chart. Click here to see the PDF file (you will need free Adobe Acrobat Reader software to look at this chart).

Editor-in-chief Cathy Ciccolella gives you a bird's-eye-view of optical's top retailers in 2002, and explains differences between this year's and last year's compilations in a special Editor's Note. Click here to read the article.

For a look at VM's Top Ten U.S. Optical Retailers, click here for details on all ten of the companies' snapshots.


Mass Merchants Gain Share in Optical: Click here to see how mass merchants and warehouse clubs grew despite an uncertain economy last year.

For a look at the methodology used to create this year's survey, click here.


Vol. No: 17:09Issue: 5/12/03

Look it up at Vision Monday's Website


http://www.visionmonday.com/index.asp?page=4_11361.htm

[Jedi]

Thanks Chris,
Do you have any idea about the breakdown of the marketplace in Canada, as well as provincially?

Just a side note, I've never considered any of the chains competition, even the independant office a block away , I don't consider competition. The reason is, in our office we provide product that those other offices cannot carry, provide outstanding service by the Doc and the other staff and we rely on word of mouth and referrals, by a loyal customer base.

[Cindy Hamlin]

Jedi said:
Just a side note, I've never considered any of the chains competition, even the independant office a block away , I don't consider competition. The reason is, in our office we provide product that those other offices cannot carry, provide outstanding service by the Doc and the other staff and we rely on word of mouth and referrals, by a loyal customer base.

Jedi,
Since I work in a Wal-Mart (NVI) I appreciate your comment above. As long as you do what you do well and people are happy they won't leave!

Inevitably there are the ones that aren't happy or feel something is lacking and try it out, but some of them won't find it the same and will be back. There are many of us, myself included, who don't care about the cost as long as we feel good about the experience! There are a lot of places I go that are pricier, but I am catered to and continue to go.

Do what you do, do it the best and the end result is inevitable!
:D :D No matter what chain is in your backyard!

[jediron]

Sorry Jedi if I mislead you.
But in economics a monopoly has different meanings. First you can have a classic monopoly where one person or company controls the flow of goods.

Second you can have a complex monopoly where a number of persons or companies together control the supply or acquisition of goods or services of a particular desciption. There are other
monopolies for which a lot of the antitrust laws are set up for.
For this forum I kept the discussion of a monopoly in economics
simple. For that reason I did not include a discussion of micro or macro economics so we would not get sidetracked.

As you so eloquently put in your reply with the VM article, you will notice WM and Sam's Clubs are growing quite rapidly. In fact they
are at Number 3 and climbing. So my question was not out context. But I ask where will WM and Sam's be in 5 years?


:bbg: :D

[Johns]

If you spend all your time looking in the rear-view mirror, you're going to crash. Focus on the road ahead, and what you do best. You don't want to compete on their level. Besides, you don't have room for a garden center.

Jedi's on the right track.

[Jedi]

Jediron
I don't believe that you mislead me, I too have dabbled in economics during my college years. If we look at the stats posted in VM again, whether one firm or multiple firms have 36.5% of the marketplace, they are still a long way off from being any sort of monopoly.

I do feel that they will pick up more market share in the upcoming years but I can forsee them going back to a simpler form of retailing. Something I remember from grade school K.I.S.S.
keep it simple stupid. It's a complex business running an optical, automotive, photlab, massage parlor and roller coaster under one roof and still sell regular old goods to people too. In my own experience I managed a major video store, our store was a franchise that eventually was purchased by the coporation. Upon purchase the coporate office started sending us liscensed toys, music, ice cream, and lot's of **** irrelevant to a video store. Fast forward 5 years later, all that garbage is gone. People were to overwhelmed by the store and just left. Apply this example to Walmart and who ever else and I think a long future for those opticals will not happen. Just my Swammi coming out, I did in fact predict Ruben to win.;)

[Chris Ryser]

Jedi said:
Thanks Chris,
Do you have any idea about the breakdown of the marketplace in Canada, as well as provincially?

Jedi,

You should know that we, in Canada are a little handicapped when it comes to an industry that is not considered important by our Federal and Provincial Governments. I have spent a lot of times going to government statistics to find anything touching the word optics. Result ......................ZIP

In the USA you can go to statistical websites in the government and find just about everything.
In 1998 I found the information that frame sales were down 28% and lenses 19%.

In Canada this profession does not make any official statistic.

No wonder that the old saying..............." when the USA gets a cold, Canada catched pneumonia"............ must have some truth in it.

[jediron]

Johns I never said Jedi was wrong. I just wanted to give the reasons I used monolopy in reference to WM. Now if I m looking in the mirror so be it. Frankly I don't see it but thats your opinion
and your entitled to it. But Johns I thing you have been spending to much time in your garden, you've smelled to many roses and it's clouded your mind and vision.:bbg: :D

[paw]

It's true that the number of WM stores are increasing at a fast pace, and therefore their optical market share will increase with it. However, I feel that the market share increases will be at a slower and slower pace, because the more WMs they build, the more they will be stealing customers from themselves.

For example, a WM is due to be built in our small town in 2 years. I'm sure they will take some of our local market share from our practice -- which will increase their overall market share, but I'm also sure they will be taking some market share away from the WM 40 miles away that everyone drives to now.

Lenscrafters is in first place, Cole Vision is in second place, and WM is in third place. No, I wouldn't call WM a monopoly, but it is amazing that a third place chain is the one everyone worries about.

[Chris Ryser]

paw said:
No, I wouldn't call WM a monopoly, but it is amazing that a third place chain is the one everyone worries about.

As you said, the open or have another one 40 miles away.

After a year or two and AFTER having killed all Ma + PA businesses in a diameter of 40 miles they realize that the store does not produce as much as calculated and expected, they close it again. That is a fact and has been reported numerous times.

Something to worry about!

[jediron]

Jediron said:
Because if you have seen WM's trademark, that is to go into area and basically wipe out all competition, then you need to be afraid.

So Paw and Chris I agree with you. WM will go in an basically wipe all competition until it's only there store left.

The reason I chose WM to watch out for (Paw) is quoted above. They don't care if they have to go against Lenscrafters or Cole. Look what happened to K-Mart when they tried to take on WM head first. K-Mart was no small entity with gross revenues in the neighborhood of 28 to 35 billion between 1990 and 1995. I understand K-Mart had other problems but they did try to lock horns with WM and lost.
:bbg: :D

[paw]

Chris said, "After a year or two and AFTER having killed all Ma + PA businesses in a diameter of 40 miles they realize that the store does not produce as much as calculated and expected they close it again."

I believe this is WM's game plan. A company that big and successful doesn't miscalculate. They know that they kill Ma & Pa business, that's the point. If they have to open a store and then close it later, that's just a business expense -- that's what it takes for them to grow.

That is precisely WHY I don't shop there. I don't want to have anything to do with the Saddam of merchandising.

I will admit we are apprehensive about WM coming in. I'm sure we will take a hit, but how big, who knows. But we are a different animal than WM optical, so hopefully that will be what saves us. Time will tell.

[chip anderson]

If I were a communist and wished to destroy the American Economy (Small business) I would start Wal-Mart.

Don't know what I will do when I need a dingus for the whatset on the potty and all the small hardeware stores are gone. Believe it or not, Small hardware stores could usually help you with a decription like this. Try getting help from the crack babies employed at Wal-Mart.

Have you ever noticed that although they claime to try to use US goods whenever possible, the security carts are Kawasaki, not Cushman.

Chip.

Of course if we didn't go there, they would not survive. We frown on their optical department and buy tons of other goods there. Can't understand Paul Harvey taking them as an advertizer.

[jediron]

Paw said:
That is precisely WHY I don't shop there. I don't want to have anything to do with the Saddam of merchandising.

Now I m no WM supporter but to call them the Saddam of merchandising is I think going a bit far. Sure they are killing off mom and pop store's but I have not seen any put in shallow graves YET!
:bbg: :D

PS. "It was the worst of times it was the best of times"
Charles Dickens "Tale of two cities"

[jediron]

Chip I won't say I don't shop there, eventhough it is very infrequently. But what I noticed was, they advertise made in America when most if not all came from Indonesia.

WM :finger:

[Texas Ranger]

I hear a lot of "groanin' " about how WM has impacted our businesss, look, they are there, I think I have 6-7 in my area, thye just closed one to open a new one, and cut back jobs in another one, and a couple of them compete with the Sam's Club, next door, now that's strange.
let me give you a different paradigm; ask ypourself, "who makes your client go to WM?" what or who blinds your client so much that he has the "perception" that he can get the same product for less there, that it's the same quality of frame. lemses, competent staff?"
what makes your optical business "unique" to your client? Have you taught your clients why they should come to you/ have you always expressed your sincere appreciation for their patronage, or are you just like every other shop in town? people really don't want to change, they want to do business with someone they trust, where they can feel safe about their family's eyewear fitting, don't they;
well, do your clients feel safe with doing business with you? what can you do to make them trust you? how do you build relationships that last, that people will come to you, even when the economy is down and they think they should save money by shopping around. you can't be the cheapest and do the best work, but don't think everyone in the eyewer consumer market jsut wants the cheapest product they can get; several years ago, a mass survey showed that "price" was the number 6 reason for an eyewear purchase, and one-hour service was either 5th or 7th. so find out how to compete with "yourself", and you'll find out how to win and keep customers, and when you wonder why those big chains are doing so well, look at third party insurance plans that have no-compete "arrangements" with them. would eyewear consumers go there if their prices were legitimate, without the fact that their employer or group insurance plan provided them with such an "eyecare benefit". most are just too illiterate to know when they've been had.... so, our problem is not with WM or any of the big retailers, it's with ourselves and third party insurance. it's like a magician, doing something with both hands at once, where you can only see one of them.. accept the fact that WM is just there, you are your toughest competitor, get out of the box, look at your operation from the outside in, what could you do? then develop a plan, and do it!!!

[paw]

Texas Ranger, I enjoy your posts, but you really need to use paragraphs! It makes for easier reading.

Nope, the Saddam of merchandising is what they are. Ruthless, and out for gain for themselves at the expense of those around them.

Sure, there are ways to compete -- otherwise there would be no stores but them. Even so, I am looking forward to the day (however far away that may be) when, like IBM, they collapse on themselves.

[Johns]

Jediron:

I didn't say anyone was right or wrong

[Pete Hanlin]

I didn't say anyone was right or wrong...
Consider it the ultimate compliment, Johns- you are now being vicariously credited for postings (it happens from time to time)! I noticed you were mistakenly quoted earlier in the thread as well...

Concerning WM, I have a horrible confession to make. I actually shopped there over the weekend. Yep, I needed some suntan lotion, some 10w30 oil and filter for my car, and a metal file, so it was off to the conveniently located SuperWM just down the block.

Therein lies WM's success by the way- where else could I have zipped in, purchased three entirely different items at a decent price, and zipped out? They are convenient and cheap- and that sells today.

To the original point, however- Is WM a monopoly? I think not. Surely they are no more of a monopoly than Pearle was in the 80's (remember how they were going to put everyone out of business). Let's see, the 90's was LensCrafters and/or LASIK... Now a new millenium appears to have brought a new favorite whipping boy for the downtrodden OD and LDO who is just trying to make a living in the ophthalmic field.

WM is not a monopoly. Among suppliers of ophthalmic goods, they aren't even the closest to a monopoly (I don't believe there ARE any monopolyesque companies in our field just now, but there are at least two that spring to mind before WM).

If you want to see a classic monopoly, look at Microsoft. Almost all companies try to succeed at the expense of other companies. Certainly large companies use their size as a weapon (which is only fair, because size is also a hindrance at times). However, to become a monopoly (IMHO), you have to fulfill several requirements:

• Control the sales, manufacturing, and delivery of all the products involved in your business
• Have enough resources to take losses in markets long enough to eliminate competition
• Unfairly compete by actively denying your competition the opportunity to sell his/her goods
• Create a situation that is detrimental to consumers by eliminating free choice

Microsoft meets four of these requirements, WM does not meet the latter three.
Finally, even in the case of Microsoft (which may be the one true monopoly of our times), a case could be made that the monopoly benefitted the consumer. Yes, Apple might have had a better product- but Microsoft ensured that one standard for PC programs would emerge- which allowed for massive amounts of programming to be funded and delivered to the public.

What IS WM, then? One could argue that they are the epitomy of the successful company in a capitalistic society- and therefore, inherently American!

[Johns]

I don't think WM is a monopoly; they are just very good at what they do.

The very reason that Pete enjoys shopping there however, is the same reason many other people don't like it. Some find it too bothersome to park in the big lot, walk all through the many departments of the store, then wait behind 7 or 8 other people to check out, all for a few items. Even for a savings.

Mom & Pops are great for quick stops, even if they cost slightlt more. The problem is that they need the big shopping trips that people make to survive, and they're not getting it.

[jediron]

Pete and Johns you again missed the point. If you go into the Anti trust laws and look up monopoly you will see there are different definitions for not all but a lot of the groupings. In fact most countries have different definitions for monopoly.

In England If I remember correctly if a company controls 25% of a certain idem it's considered a monopoly. The exact quote is:
"a scale monopoly where one person or firm accounts for at least 25 per cent of the supply or acquisition of goods or services of a particular description in the United Kingdom or a part of the United Kingdom;
a complex monopoly where a number of persons or firms together account for at least 25 per cent of the supply or acquisition of goods or services of a particular description in the United Kingdom or a part of the United Kingdom and engage in conduct which prevents, restricts or distorts competition".

I will not belabor the point anymore, if you can't see beyond the looking glass that a monopoly can have and does have many difinitions then you are destined to find Alice when she is ten feet tall.

The one thing that you forget is they (WM) have a long term goal and they have the money to wait all out. With revenue in the neighborhood of 200 billion WM can sit and wait while they continue to add 200 or plus stores per year. Then in five years we will see Pete and Johns whining about what went wrong.
:bbg: :D

[chm2023]

One of the benefits of getting old is gaining perspective: remember K-Mart? Sears? General Motors? All are still around but very different from their peak. Nothing lasts forever. I agree with Pete that Walmart is not a monopoly, not close from the consumer end. There is an argument that they have the affect of a monopoly on some suppliers in some categories.

Have to give the devil his due--WM has developed a powerful model based on operational excellence and delivers low prices. They own this real estate in the consumer's mind--lowest prices on lots of commodity or at least fairly undifferentiated stuff. People shop at WM for price and convenience, not because they expect exceptional stuff or service. As many other OB folks have stated, this is where the independent has an enormous edge. I have always thought that independents who are concerned about competing with WM on price need to find another line of work.