Is Walmart Too Powerful?
Is Wal-Mart Too Powerful?
In business, there is big, and there is Wal-Mart. With $245 billion in revenues in 2002, Wal-Mart Stores Inc. is the world’s largest company. At Wal-Mart, “everyday low prices” is more than a slogan; it is the fundamental tenet of a cult masquerading as a company. Over the years, Wal-Mart has relentlessly wrung tens of billions of dollars in cost efficiencies out of the retail supply chain, passing the larger part of the savings along to the shoppers as bargain prices. A total annual savings approaching an astounding $100 billion.
Wal-Mart’s marketplace clout is hard to overstate. In household staples such as toothpaste, shampoo, and paper towels, the company commands about 30% of the U.S. market, and analysts predict that its share of many such goods could hit 50% before decade’s end. Wal-Mart also is Hollywood’s biggest outlet, accounting for 15% to 20% of all sales of CDs, videos, and DVDs. The mega-retailer did not add magazines to its mix until the mid-1990s, but it now makes 15% of all single-copy sales in the U.S.
This year alone, Wal-Mart hopes to open as many as 335 new stores in the U.S.: 55 discount stores, 210 supercenters, 45 Sam’s Clubs, and 25 Neighborhood markets. An additional 130 new stores are on the boards for foreign markets. Wal-Mart currently operates 1,309 stores in 10 countries, ranking as the largest retailer in Mexico and Canada. If the company can maintain its current 15% growth rate, it will double its revenue over the next five years and top $600 billion in 2011.
The Wal-Mart supercenter—the principal vehicle of the company’s expansion—is a nonunion dagger aimed at the heart of the traditional American supermarket, nearly 13,000 of which have closed since 1992. Today, Wal-Mart operates 1,386 supercenters and is the nation’s largest grocer, with a 19% market share, and its third-largest pharmacy, with 16%. Critics also argue that...
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