|Bianco, Anthony and Wendy Zellner. 2003. "Is Wal-Mart Too
Powerful?" Business Week (6 October): pp 100-10.
102: "With $245 billion in revenues in 2002, Wal-Mart Stores Inc. is the
world's largest company .... Every week, 138 million shoppers visit
Wal-Mart's 4,750 stores; last year, 82% of American households made at
least one purchase at Wal-Mart."
102: "Over the years, Wal-Mart has relentlessly wrung tens of billions
of dollars in cost efficiencies out of the retail supply chain, passing
the larger part of the savings along to shoppers as bargain prices. New
England Consulting estimates that Wal-Mart saved its U.S. customers $20
billion last year alone. Factor in the price cuts other retailers must
make to compete, and the total annual savings approach $100 billion.
It's no wonder that economists refer to a broad "Wal-Mart effect" that
has suppressed inflation and rippled productivity gains through the
economy year after year."
102: "this staunchly anti-union company, America's largest private
employer, is widely blamed for the sorry state of retail wages in
America. On average, Wal-Mart sales clerks -- "associates" in company
parlance -- pulled in $8.23 an hour, or $13,861 a year, in 2001,
according to documents filed in a lawsuit pending against the company.
At the time, the federal poverty line for a family of three was
102: ""This is a good place to work," says Coleman H. Peterson,
executive vice-president for personnel, citing an employee turnover rate
that has fallen below 45% from 70% in 1999."
"Indeed, the company now faces a revolt of sorts in the form of nearly
40 lawsuits charging it with forcing employees to work overtime without
pay and a sex-discrimination case that could rank as the largest civil
rights class action ever. On September 24, a federal judge in
California began considering a plaintiff's petition to include all women
who have worked at Wal-Mart since late 1998 -- 1.6 million all told --
in a suit alleging that Wal-Mart systematically denies women equal pay
and opportunities for promotion."
102: "In household staples such as toothpaste, shampoo, and paper
towels, the company commands about 30% of the U.S. market, and analysts
predict that its share of many such goods could hit 50% before decade's
end. Wal-Mart also is Hollywood's biggest outlet, accounting for 15% to
20% of all sales of CDs, videos, and DVDs. The mega-retailer did not
add magazines to its mix until the mid-1990s, but it now makes 15% of
all single-copy sales in the U.S. In books, too, Wal-Mart has quickly
become a force. "They pile up best-sellers like toothpaste," says
Stephen Riggio, chief executive of Barnes & Noble (BKS ) Inc., the
world's largest bookseller."
102: "Wal-Mart controls a large and rapidly increasing share of the
business done by most every major U.S. consumer-products company: 28% of
Dial total sales, 24% of Del Monte Foods, 23% of Clorox, 23% of Revlon,
and on down the list."
104: "When Wal-Mart comes in and people desert downtown because they
like the selection and the low prices, it's hard for people in the
antitrust community to say we should not let them do that," says New
York University law professor Harry First."
104: "Wal-Mart was the only one of the top 10 drug chains to refuse to
stock Preven when Gynetics Inc. introduced the morning-after
contraceptive in 1999. Roderick L. Mackenzie, Gynetics' founder and
nonexecutive chairman, says senior Wal-Mart executives told his
employees that they did not want their pharmacists grappling with the
"moral dilemma" of abortion."
106: This year alone, Wal-Mart hopes to open as many as 335 new stores
in the U.S.: 55 discount stores, 210 supercenters, 45 Sam's Clubs, and
25 Neighborhood markets. An additional 130 new stores are on the
boards for foreign markets. Wal-Mart currently operates 1,309 stores in
10 countries, ranking as the largest retailer in Mexico and Canada. If
the company can maintain its current 15% growth rate, it will double its
revenues over the next five years and top $600 billion in 2011."
106: "Vice-Chairman Coughlin's biggest worry is finding enough warm
bodies to staff all those new stores. By Wal-Mart's own estimate, about
44% of its 1.4 million employees will leave in 2003, meaning the company
will need to hire 616,000 workers just to stay even. In addition, from
2004 to 2008, the company wants to add 800,000 new positions, including
47,000 management slots."
108: "The Wal-Mart supercenter -- the principal vehicle of the company's
expansion -- is a nonunion dagger aimed at the heart of the traditional
American supermarket, nearly 13,000 of which have closed since 1992.
Patterned after the European hypermarket, the supercenter is a
combination supermarket and general merchandise discounter built to
colossal scale. Wal-Mart didn't introduce the supercenter to America,
but it has amassed a 79% share of the category since it moved into food
and drug retailing by opening its first such store in 1988. Today,
Wal-Mart operates 1,386 supercenters and is the nation's largest grocer,
with a 19% market share, and its third-largest pharmacy, with 16%.
Wal-Mart plans to open 1,000 more supercenters in the U.S. alone over
the next five years. Retail Forward estimates that this supercenter
blitzkrieg will boost Wal-Mart's grocery and related revenues to $162
billion from the current $82 billion, giving it control over 35% of U.S.
food sales and 25% of drugstore sales."
110: "However, those everyday low prices come at a cost. As the number
of supermarkets shrinks, more shoppers will have to travel farther from
home and will find their buying increasingly restricted to merchandise
that Wal-Mart chooses to sell -- a growing percentage of which may be
the retailer's private-label goods, which now account for nearly 20% of
sales. Meanwhile, the failure of hundreds of stores will cost their
owners dearly and put thousands out of work, only some of whom will find
jobs at Wal-Mart, most likely at lower pay."
110: "Critics also argue that Wal-Mart's intensifying global pursuit of
low-cost goods is partly to blame for the accelerating loss of U.S.
manufacturing jobs to China and other low-wage nations. "It's hard to
tease out, but Wal-Mart is definitely part of the dynamic, and given its
market share and power, probably a significant part," says Jared
Bernstein, a labor economist at the liberal Economic Policy Institute.
The $12 billion worth of Chinese goods Wal-Mart bought in 2002
represented 10% of all U.S. imports from China."