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Originally Posted by Rufusboi
Why do we blame wal mart for killing small businesses? Why don't we blame shoppers for abandoning small businesses in favor of wal mart. No one makes anyone shop at wal-mart.
Rufus
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It's a good question. Consumers are getting both needs and wants met. They get a product at a price they can afford. And WalMart continual tries to lower the price. Fine. The reality is that lower cost has to come out of somewhere.
My understanding is (and based on the article I referenced in the OP) it has to do with what WalMart is doing to manufacturers of products. Basically, they are forcing them to create them and sell them at below cost if they want to reach the audience that WalMart has built. Yes, they are aggressively competitive but at what cost in the long run?
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Source: Harper's 2006
Yet since 2004, Kraft has announced plans to shut thirty-nine plants, to let go 13,500 workers, and to eliminate a quarter of its products. Most reports blame soaring prices of energy and raw materials, but in a truly free market Kraft could have pushed at least some of these higher costs on to the consumer. This, however, is no longer possible. Even as costs rise, Wal-Mart and other discounters continue to demand that Kraft lower its prices further. Kraft has found itself with no other choice than to swallow the costs, and hence to tear itself to pieces.
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This kind of behaviour has, IMO, a ripple effect that is felt. The 13,500 workers likely lost decent jobs and if they work at WalMart they are at a far lower pay scale than before. We are creating an environment where, to get lower costs, we are going to abuse workers and pay them at a substandard level.
Part of it, certainly, is due to the over-drive consumerism that exists here. But part of it is because of the nature of WalMart. And yes, others do it -- after seeing what WalMart was doing and seeing that no one stopped them (attempts by various gov'ts ended up being settled out of court with a few tossed).
This study, done in 2004, details some of the hidden costs of WalMart. I suspect that we're paying more for WalMart than we realize.
Now, do I recognize that some good can come from them? Yes. There is always the possibility. I also don't think they are the only ones. Many people hire those with various disabilities and various age ranges. To be honest, and perhaps it's a sign of the difference between Can and the US, I don't see how WalMart is viewed as better at this than other organizations. I also wonder how much of the hiring choice (as in who and what type of person is hired) is more of a regional effect rather than a corporate wide policy or attitude.
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Source: Harper article referenced above.
But the issue before us is not how Wal-Mart grew to scale but how Wal-Mart uses its power today and will use it tomorrow. The problem is that Wal-Mart, like other monopsonists, does not participate in the market so much as use its power to micromanage the market, carefully coordinating the actions of thousands of firms from a position above the market.
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Walmart, to me, is the Microsoft of goods and services.