The Walmart Effect
Wal-Mart effect n. The economic effects attributable to the Wal-Mart retail chain, including local effects such as forcing smaller competitors out of business and driving down wages, and broader effects such as helping to keep inflation low and productivity high. Also: WalMart effect.
I was reading the news yesterday and came upon another example of the Walmart effect. We have been seeing the results of Walmart's expansive growth for decades. Walmart moves into a town then one day you notice that all of the mom and pop stores are going out of business. They cannot compete with the lower prices of Walmart and are forced to close their doors.
It's funny how people saw this happening and just made comments in passing. It didn't really unsettle anyone. Who cares, it's just old man Jones little general store down the street that had been in business since the old timers went there to enjoy a malt after school. The problem is there are literally hundreds of Mr Jones all over the country who are either retired or in the ultimate show of humiliation, handing out carts and saying "Welcome to Walmart"
Well the Beast that is Walmart has an appetitie that cannot be satisfied. However we are not talking about little mom and pop shops anymore. It's the electronic store chains that are now falling victim. Circuit City is facing a buy out by Blockbuster (Investors are not taking a number and getting in line), REX will be closing half of their stores, even Best Buy is looking at downsizing and layoff's because of Walmart's Black Friday tactic of offering LCD and flat screen TV's under $1000.
Now it's nice to know you can get a Flat screen TV so cheap and other things so cheap too but think about the effects. When we had Mr and Mrs Jones entering the workforce looking for jobs the economy was able to absorb the hit. Now we are looking at literally hundreds of workers entering the workforce many of them will end up at Walmart. Employees of Walmart who are working in the stores are not even making a living wage in many cases so we the taxpayers get to subsidize them through government programs.
Most of us are already feeling the bite of higher gas prices. I'm not talking about at the pump either, but in the higher cost of all consumable products. The prices are rising because somewhere in the trip from production to consumption you have truckers. Truckers who are spending well over $1000 a month just in fuel. Those fuel costs are factored into what you pay for products. So the economy is taking not only the hit from higher gas prices but also the hit from unemployment.
Unemployment caused by the import of cheap Chinese (sweatshop)goods, the closing down or outsourcing of jobs and the death of many viable small businesses as a direct effect of Walmart.
Considering Sam Walton's insistence on buying and selling American (Remember Walmart's store brand was American Fare), I'd like to have a seance and channel his spirit to ask him what he thinks about his Frankenstein Monster now.
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Comments (32)
Cheryl Baumgartner12
Medical Billing/Coding/Insurance
Karl the problem with Walmart is the ruthless underhanded tactics they are using. They are using the common consumer such as you and I to further their plans. It's hard to say it's a monopoly when the game has been played on all hole cards. There's really nothing a watchdog group can point to, Walmart just "Gave the consumers what they wanted".
The consumers wanted it because it's much cheaper and cost effective to go to one store for all of your shopping than to go to two or three. And y
Arthur Webster7
Just plain honesty
Walmart ruthlessly set out to destroy all competition
But isn't that exactly what I said - but in a more roundabout way?
Every business, in every sector, everywhere in the world attempts to create a monopoly for itself.
No business, in any sector, anywhere in the world has a social conscience. (Even those that try to grow by claiming that they do!)
Karl Rose6
Well you make a good point Cheryl, about something I missed the other day. If Walmart is going to be the ONLY gmae in town, what happened to the MONOPOLY laws? aRE THE LOCAL OFFICIALS GETTING bribed OR WHAT?? Pac-Bell tried to be the ONLY phone company in Calif some years ago but was slapped with HEAVY fines by BOTH the state gov't as nte FEDS. A T & T suffered the SAME fate trying to be the ONLY US phone carrier and they ARE STILL paying for that mistake. It seems like the 'watchdog' was tossed
Cheryl Baumgartner12
Medical Billing/Coding/Insurance
Arthur I beg to differ with you on this one.
If it was just a case of making things convenient I wouldn't argue with you but Walmart ruthlessly set out to destroy all competition. Even knowing what would happen with the plasma TV promotion back in November they did it because they want to be the leader in the electronics industry like they want to be in everything else. In this case leader does not mean lead the way but be the only game in town. This was not a monopoly that occurred from c
Arthur Webster7
Just plain honesty
it's about the detrimental effect Walmart has had on our economy
Really?
I don't think so.
Wal-Mart have created a business model that works. Businesses are not obliged to take into consideration any detrimental effects their activities might have on the local community (indeed, manufacturers in America have to do no more than pay lip service to polution control).
Local communities have cut their own throats by accepting and adopting a centralised shopping locale rather than a divers
Jeff Greene8
Online Marketing Specialist/Consultant
I well remember that article, Cheryl... Great Job! :)
Cheryl Baumgartner12
Medical Billing/Coding/Insurance
Honestly Walmart couldn't care less for their employees, or anyone else. All they care about is the almighty dollar and how many of them they can collect. If this was a caring company they would not have attempted to take money from a disabled employee
http://www.apsense.com/subject/27674.html
It took a court battle and massive publicity to check their greed.
Jeff Greene8
Online Marketing Specialist/Consultant
The sight of once-proud small town business owners now wearing Walmart uniforms is jarring and sad...
Cheryl Baumgartner12
Medical Billing/Coding/Insurance
Lot's of people like Walmart. So what? It's not about whether you like Walmart, it's about the detrimental effect Walmart has had on our economy. Competition is dead. American manufacting is dead. Competitive pricing is dead. One of those nasty little Walmart tricks is to drive it's competition out of business by undercutting prices and then raising their own prices. So Walmart's little self contained world is thriving.
Since they aren't paying outside truckers who are passing the cost on
Arthur Webster7
Just plain honesty
The Wal-Mart effect.
Sounds like a science fiction movie title, doesn't it?
There are three prices we pay for corporate greed and public indolence:-
1 - less choice in where to buy what
2 - less choice in where what we buy comes from
3 - no choice at all as far as after sales service goes - there isn't any.
These three prices are the price we pay for our own stupid short sightedness and greed.
They say you never miss something until you no longer have it, you no longer have
Jeff Greene8
Online Marketing Specialist/Consultant
They are going into the business of Health Care, too Cheryl...
You already know how I feel about this kind of thing from your comment on my Bonfire Burning Stick Post:
http://www.apsense.com/subject/27159.html
I was being a bit sarcastic then, but these days I am very concerned about this type thing--
Competition is the Lifeblood of Industry and Innovation Walmart's "Conquer by Bullying and Beatdowns" is precisely the type of thing that will lead to Mono- Opticalism (My Word), in
Karl Rose6
I LIKE WALMART! Ans SO WHAT about those employees, if they do NOT like working for wal-mart then go GET ANOTHER JOB!!!! ANOTHER THING, walmart has it's OWN set of truckers THEIR truckers DO NOT PAY ONE RED CENT out of THEIR pockets for gas. Wal-Mart PAYS fr THEIR gas. So the wal-mart truckers have it pretty good in my opinion>