Wal-Mart fascinates me and, in terms of it’s relentless growth in size and scale, it also concerns me somewhat. It clearly has the market power to strongly influence consumption choices and to drive any kind of business practices throughout its’ supplier network, depending on what business goals it wants to accomplish. To fully comprehend just how much Wal-Mart is changing the landscape in all ways, one of the best books on the subject is the Wal-Mart Effect, by Charles Fishman. Over the past couple of years, Wal-Mart has been making a concerted effort to show that it intends to use its market making power for “good”, such as reducing its overall carbon footprint and driving its global suppliers to embrace new sustainability measures. Of course, Wal-Mart continues to be the subject of various lawsuits and criticisms, mostly about the pay rates of its massive labour force and its strong anti-union bias.
Interestingly, as big as Wal-Mart gets, it is actually a “small” player in the overall retail & food market, given the overall size of the market that Wal-Mart is focused on dominating. With an estimated overall retail & food market size for the US of $4.2 Trillion, Wal-Mart’s 2010 results for global sales are $405B. Given that 51% of their stores are in the US lets assume that 51% — or $207B — of its sales are from US stores, both retail and food. So, overall, Wal-Mart has something less than 5% of the overall retail/food market, illustrating just how fragmented the retail/food market still is…
While it is now-a-days somewhat trendy to be “against” Wal-Mart and all that they stand for (Rampant consumerism! Foul labour practices! Butt-ugly architecture! Destroying small-town America!), I am not in that crowd. When one is hard pressed to make limited resources stretch as far as they can, Wal-Mart can play a pretty important role for consumers. Study after study I have seen suggests that Wal-Mart saves consumers billions and billions of dollars per year (one study suggested $257 on annual purchases of $2500, so just over 10%). Having a business model and a size that allows them to sell name-brand items for 5% to 15% lower than their competitors day in and day out is a pretty powerful tonic for your hard-pressed consumer.
Just lately, I have even begun to frequent my neighbourhood Wal-Mart store somewhat regularly. Mostly, it’s because I now HAVE a neighbourhood Wal-Mart to frequent, and also because I came to realize how completely sedentary my home-based office work life has made me. When they first opened up a Wal-Mart about 25 minutes walk from my house, it became a convenient excuse to get some exercise by walking to the new store to check it out. It turns out the walk is a reasonable length, and if I am selective about what I purchase I can carry my groceries home in a backpack with maybe a couple of carry-bags also.
So, now I find that I am heading off to Wal-Mart several times every week and doing small little shopping trips. Of course, there are other retail stores within the 25 minute radius I now walk, however I still gravitate towards the Wal-Mart since — well, I guess because its addition to my neighborhood is the thing that got me out walking in the first place.
I’m now walking a lot more, leaving the car behind when I do groceries, and carrying everything home in a back pack. So, thanks, Wal-Mart, for making me a better “green” consumer…!
a life (still) under construction... 
I am not a fan of Wal-mart for all of the reasons you stated along with the terrible customer service provided at check out. There are never enough lines opened at the check out area despite having room enough for 20 lines. Routinely, I have spent more time in line that I have shopping. Then I started checking out some of those prices, comparing them with Target. Many times the prices are about equal, quality of merchandise tends to be a little better and you get waited on pretty darn quick at checkout. That is my reasoning for ‘Wal-Mart Hate,’ if you would. However, I do understand about that 25-minute walk thing. It is great to get out of the house when you work at the computer all day.
Thanks for your comment. I have noticed the checkout line issue you mentioned; as for the customer service it seems a little bit confused however I chocked that up to new staff and new store jitters… maybe its more systemic than that? I’m not yet a “Wal-Mart regular” so assuming I continue going there, I’ll watch for that. We don’t have Target here yet, although they just announced a big move into Canada by acquiring the Zellers chain (200+ stores) and extensively renovating them. Once they are up and running, I’ll make a point to check them out and see how they stack up. Now, if only they have a store within my 25 to 30 minute walking zone…
I live within a short walking distance of a Wal-Mart as well. I would often just walk there to browse and check it out during the day when I was home with the kids. I am encouraged that they are using their considerable market power (5% of a massive pie is still massive) to drive their suppliers into more sustainable practices. I still think that we overconsume as a population though. When I had my green epiphany in November 2010, and started to get really scared as to where we were all headed, I felt real anxiety one day, walking through my local Wal-Mart. There were aisles and aisles of boxed items, plastic items, toys for young and old… How did all this stuff get here anyway? Where did it all come from? What was the journey and what were the original resources used? It was odd, feeling anxious in a place I had been a hundred times before. I agree that consumers need lower prices and Wal-Mart really helps with that, but consumers also need to consume less!
Hi Sherry,
Your point about “consumers need to consume less” is bang on, however the challenge is that we have a system that effectively rewards companies for driving us to over-consume… as a business selling things, the only way to drive up sales (and hence profits and hence share price for investors) is to either drive your consumers to each consume more, or to add on more consumers. The best, presumably, is some combination of both those things. Hence, a major focus on “getting consumers to consume more” aligns nicely with the profit motives of the modern corporation. I’m planning to blog more about the notion of consumption; in the meantime I just came across this blog that is pertinent to this discussion and is excellent food for thought:
http://blogs.hbr.org/winston/2011/02/ask-customers-to-use-less-of-y.html?cm_mmc=email-_-newsletter-_-strategy-_-strategy021511&referral=00210&utm_source=newsletter_strategy&utm_medium=email&utm_campaign=strategy021511
More on this (hopefully) in a few days time, Sherry.