Wal-Mart: The Price That’s Not Shown

A couple of weeks ago I was talking to my mom about the newly remodeled Super Wal-Mart that was reopening in Fargo that day and was reminded of an excellent article I read about the company in my favorite magazine, Fast Company. Titled The Wal-Mart You Don’t Know, this very good article from December 2003 does an amazingly good job of detailing the hidden costs of those “everyday low prices” Wal-Mart likes to give you. The gist: Wal-Mart is so big a retailer that companies wanting to sell products through their stores must conform to the retailer’s every wish, which includes meeting yearly demands of across-the-board price decreases. It is this pressure that leads to many of the problems, including suppliers offshoring manufacturing jobs overseas to China and being forced to use cheap, low quality ingredients in food items as a way of driving prices down.

My conversation also brought to mind a blog posting I read just over a year ago from a PHP developer named Jeff Moore. In it, Jeff talks about the aftermath of the arrival of Wal-Mart six months earlier. The part that struck me most was the fact that Wal-Mart’s low cost/low quality grocery items were pressuring local grocers to follow suit. It’s that issue that I’m most worried about when I hear rumors of a Super Wal-Mart replacing our aging regular Wal-Mart store here in Grand Forks.

As a student of business, I find myself torn when it comes to Wal-Mart. One the one hand, I really have to admire the fact that they are really good at what they do and have developed some amazing business processes as a result. On the other hand, I can’t ignore the fallout from the retailer’s demands to continuously lower prices and that caused when a new Wal-Mart store moves into a community. On a personal level, Casey and I hate shopping at pretty much every Wal-Mart because of the maze-like parking lots, cramped shopping isles, and poor customer service we’ve experienced. We’ve become huge fans of Target in the last several years and can often be found at our local Super Target several times a week. The isles are wide, the people are friendly, the produce is great, and you can get sushi! What else can you ask for?

As long as I’m talking about Wal-Mart, I thought I’d post a link to a video segment from an episode of the Daily Show from January of this year. It’s really funny, but there’s a lot of truth under all of that sarcasm! Here’s a quote from the introduction:

The retail giant has launched a massive PR campaign to combat a recent wave of negative stories, ranging from being sued for allegedly making employees work off the clock, to being sued for allegedly paying female workers less than men. To being sued for allegedly hiring illegal aliens. And it’s also building a super store next to an ancient Mexican pyramid. And another one over a Hawaiian burial ground. And, I guess you could say they’ve destroyed the fabric of small town America. On the positive side, $3 for a refrigerator? What?!?! That’s awesome!!

And, my favorite line:

Work at Wal-Mart – it’s better than getting kicked in the nuts!