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…!