Wal-Mart is Not Evil, Just Global

I'm not a big Wal-Mart fan. It has nothing to do with the common charges people make against them, I just think the stores are messy and crowded and the service stinks. They don't treat customers well, beyond providing them with a really low price.

I read this article in the print version of Fortune, and it made some interesting points that may cause some nice debate, so I wanted to highlight them. The first point is that Wal-Mart doesn't really put anybody out of business.

Wal-Mart's critics (including the new movie) dwell heavily on how the company heartlessly drives small-town stores out of business. One never hears the obvious problem with that allegation: that Wal-Mart can't drive anyone out of business. Only customers can do that, and millions of them happily drive right past those little stores because they'd rather pay lower prices. Of course it isn't just Wal-Mart that draws them. Home Depot and Lowe's have been death for small hardware stores, Zales for mom-and-pop jewelry shops, Sports Authority for the old sporting goods retailers. They're all using the plunging cost of computing power and telecommunication to create previously impossible business models that give customers what they want.

And secondly, that WalMart's lack of health coverage for workers is a larger issue that shouldn't be focused just on WalMart.

A big chunk of the documentary concerns the fact that many Wal-Mart workers don't get very good medical coverage-or any at all. Again, welcome to 2005. Everybody's medical coverage is getting stingier because in a global economy, where U.S. workers compete with those in Datang and Wal-Mart competes for capital with every other business on earth, American companies can't continue paying the world's highest health-care costs. Don't blame Wal-Mart; blame America's inability to devise a national health plan that takes the burden off employers.

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  • J

    “I just think the stores are messy and crowded and the service stinks. They don’t treat customers well, beyond providing them with a really low price.”

    I know we kind of had this debate in the Fazolis thread, but does WalMart’s “service” really stink if the only “service” the customer wants is low prices? The fact that the stores are crowded tells me everything I need to know. What’s more interesting to me is that their business model appears to have determined a way to make much larger margins on groceries – I can’t speak for their prices in the Lexington area, but the in the two metro areas I’ve lived in since WM got really big (Dallas and Atlanta) they are not (to put it mildly)the cheapest place to buy groceries. But the ability to get everything in one stop and low prices on non-grocery items has been a profit machine (that Target appears to be exploiting too).

  • Simon G

    Wal-mart isn’t global. Coca-Cola, Microsoft, Ford are global. Ask someone in India, Nigeria or South Africa who Wal-mart is and they won’t have a clue, but they do know those other 3 companies. I think you confuse size with global reach.

  • Leigh Hunt

    Trying to find Rob’s TBE website. Can someone email me the link.

    thank you

  • Fred