What Is The Walmart Effect Essay

James Le

The Wal-Mart Effect

By Charles Fishman As consumers, most of us go to Wal-Mart because we know it is cheaper than anywhere else. And on top of that it has the convenience of having almost every category of consumer good we want on a day to day basis. How has that came to be and how has that impacted people globally? The Wal-Mart effect explains how in detail. This book is not biased for or against Wal-Mart and only delivers the facts, good or bad. The first Wal-Mart was opened in 1962 by Sam Walton. His idea was to sell everyday item slightly cheaper than anyone else and have them available all the time. That simple idea was intensely focused on year after year until Wal-Mart became the largest store on the planet. To do so Wal-Mart

It's headquarters if filled with sample furniture from vendors trying to peddle their goods through Wal-Mart. It doesn't stop there either. Wal-Mart demands the same of it's suppliers. All suppliers are required to provide a toll free number for consumers at the cost of the supplier. Shifting cost to suppliers to keep prices low has become the norm for the coorporation and at no risk for Wal-Mart since they have all the power. Despite inflation Wal-Mart will demand it's suppliers to sell for cheaper. Since Wal-Mart is usually the largest buyer by a large margin most companies cannot refuse Wal-Mart's order, resulting in cheaper materials used, less features, moving factories overseas, etc. One specific example is that of deodorant. Before the 1990's deodorant came in a cardboard box. Wal-Mart decided that the cardboard box was a waste of money. It cost money to make, to ship, and took up shelf space. Wal-Mart asked the deodorant makers to get rid of the box with the power they have. Now today you will see no deodorant

Maybe both. In a study conducted by Stephan Goetz, a Penn State University professor, and his student worker they found that counties that added a Wal-Mart before 1989 or during that decade had higher poverty rates than other counties. In a different study by Emek Basker, an assistant professor of economics at the University of Missouri, she found that after 5 years of being in a county 30 new jobs are formed. While some people benefit others suffer. It is based on an individual's unique circumstance. I personally feel like Wal-Mart improves my quality of life, though i do not fully know at what cost to others. Another interesting thing about researching Wal-Mart was just how hard it is to get any information on the store. Despite being the largest retailer in the world, very little is known about it's operations. It is very clear Wal-Mart does not want the public to know how it actually operates or deals business with its suppliers. It doesn't stop there though, they strong arm their suppliers in to silence with the threat of losing Wal-Mart's business. Even when asking companies about Wal-Mart that have never done business with Wal-Mart remain silent just in case they want to do business with Wal-Mart at a future