According to a report in Advertising Age, Wal-Mart Watch, a group following the public actions of the retailer, is claiming one of the company's advertisements is giving false information. The article says the group is protesting the commercials based on the results of a Global Insight study commissioned by Wal-Mart. Reportedly the study indicates the economic impact of the company's low prices saves working families about $2,300 a year. The statistic is used in advertising (generated by Wal-Mart's corporate-affairs department) along with the lines: "It's been said that when Wal-Mart comes to town, it's like getting a nice pay raise. ...which buys a lot of things—and a whole bunch of freedom." The group is filing formal complaints in two states.
I think Wal-Mart Watch is wrong. I am a believer in that statistic because I live it. If I buy paper goods at the supermarket during grocery shopping, I spent $10 - $20 more on those specific items than if I purchase those things at Wal-Mart. Just the paper goods, at a $10 weekly savings, add up to $520 saved in a year. Slippers, t-shirts, watches, DVD movies, batteries, toys, camping goods, art supplies, sewing supplies, light bulbs, you name it, most thing are less expensive at Wal-Mart. The stores have ultra-customer friendly return and exchange policies, and lately, have been constantly upgrading services and merchandise.
Wal-Mart found a hook: sell decent quality goods, purchasing in huge volumes to get the absolute best prices, and pass those best prices onto the consumer; mix warehouse-type stores with conventional retail outlets, letting the overhead savings of one subsidize the staffing of the other; put a cornucopia of goods under one roof for one-stop shopping; and open early and close late. The combination made it the friend of families with median or below household incomes (most of us), and jobs and children that leave them with little time for store hopping to get the best prices.
The company's strategy works because it is friendly to the consumer, you know, the person you need to separate from their cash in order to make a profit.
Despite all the things about Wal-Mart that can and should be better—especially with employee relations—the real problem is sour grapes. Wal-Mart has economic muscle that puts most other retailers in jeopardy and those companies can not bulk up fast enough to actively compete in the Wal-Mart-dominated market. Many see bringing down the behemoth as essential to their survival.
But is that really the fault of one business or the fault of the rules of capitalism and a free market economy?
Many of my friends refuse to shop at Wal-Mart. To their credit, the reasons revolve around the negative reputation the company has regarding employee treatment. While I wish most companies would pay lower-level employees significantly better (believe me, Wal-Mart is not the only one needing to improve in the wage/benefit department), we choose where we work and also choose to stay. Do I wish Wal-Mart employees made more money and had better benefits, and the store still had the best prices? Absolutely. Would Wal-Mart pay better if no one was willing to work for those wages? Absolutely. Will Wal-Mart pay better wages if everyone stops shopping there? Not likely.
Wow, this was never intended as a "virtues of Wal-Mart" entry, just one to say we can't be mad because Wal-Mart figured out how to play the game within the rules and win. But, if that result is really the problem, we need to evaluate the structure of capitalism and the free market economy, not one company.