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Impact of Walmart: Does Wal-Mart have a responsibility to the small retailers it puts out of business? Why?

Large discounts stores and superstores can wield enormous power and impact on a local community. When a mega retailer like Wal-Mart enters a town, especially a smaller one, it often drives nearby small retailers out of business and sends downtown business districts into a nosedive. Wal-Mart founder Sam Walton was alive, he responded as follows: "quite a few smaller stores have gone out of business during the time of Wal-Mart's growth. Some people have tried to turn into this big controversy, sort of a "save the small Town Merchants" deal, like they were whales or whooping cranes or something that has the right to be protected. Of all the notions I've heard about Wal-Mart, none has ever baffled me more than this idea that we are somehow the enemy of small town America. Nothing could be further from the truth. Wal-Mart has actually kept quite a number of small towns from becoming extinct by saving literally billions of dollars for the people who live in them, as well as by creating hundreds of thousands of jobs in our stores. I believe millions of people are better off today than they would have been if Wal-Mart never existed. I don't want to be too critical of small town merchants, but the truth is that a lot of these folks just weren't doing a very good job of taking care of their customers. Whenever we put a Wal-Mart store in town, customers would just flock to us from the variety stores. With our low prices, we ended an era 45 percent markups and limited selection. We shut the door on variety-store thinking."*

Q1. What is your assessment of Sam Walton's remarks? Explain

Q2. Does Wal-Mart have a responsibility to the small retailers it puts out of business? Why?

Q3. What does the future look like for small retailers in America? How can they compete with retailing giants like Wal-Mart? In Detail.

See www.emich.edu/public/geo/557book/c313.impactwalmart.html

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Q1. What is your assessment of Sam Walton's remarks? Explain

Sam Walton has the right notion, in terms of benefits for CONSUMERS. Lets put ourselves in the mind of Sam. You live in a small town. There is a population of 20,000. There is 1 grocery store, 1 hardware store, 1 pharmacy.... Since all of these stores have a monopoly (they are the only one selling their product), they can then put the price at what ever level they choose. As the quote said, some people were gauging their customers and making as 45% profit. This policy is good for BUSINESS. Remember the reason why businesses are operational is to make money.

Enter Wal-Mart. Wal-mart does billions of dollars of business a day. They negotiate with suppliers to get the cheapest price on all goods. Since merchandise moves so fast, Wal-Mart has no need to set up 45% mark-ups, in fact, their markups ...

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