The Bad Side of WalMart

This article from Fast Company magazine is a more in depth look at WalMart than the one I linked to in this post (check out the comments too). The article is about the same dilemma we have been discussing for some time – how WalMart benefits consumers but is bad for suppliers and most employees.

Therein lies the basic conundrum of doing business with the world's largest retailer. By selling a gallon of kosher dills for less than most grocers sell a quart, Wal-Mart may have provided a ser-vice for its customers. But what did it do for Vlasic? The pickle maker had spent decades convincing customers that they should pay a premium for its brand. Now Wal-Mart was practically giving them away. And the fevered buying spree that resulted distorted every aspect of Vlasic's operations, from farm field to factory to financial statement.

Indeed, as Vlasic discovered, the real story of Wal-Mart, the story that never gets told, is the story of the pressure the biggest retailer relentlessly applies to its suppliers in the name of bringing us "every day low prices." It's the story of what that pressure does to the companies Wal-Mart does business with, to U.S. manufacturing, and to the economy as a whole. That story can be found floating in a gallon jar of pickles at Wal-Mart.

Some of the supplier situations are examined in detail, which is interesting. It was also blogged about here, and got the most comments I have ever seen on a Fast Company post. Most of the comments are negative towards WalMart. The tide is turning. People are getting sick of WalMart, and are looking elsewhere even if it means paying a couple percent more for things. I think we are only on the front end of this movement, and in a few years WalMart will be having serious customer satisfaction issues. I doubt they are going out of business anytime soon, but don't be surprised to see either major changes or lost market share in the next few years.

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On a similar note, I questioned why Levi's partnered with WalMart earlier this year.