Wal-Mart and the Changing Landscape of Retailing

How has Wal-mart changed the landscape of retailing? Retailing has changed dramatically in the U.S. because of companies like Wal-Mart and because our economy has undergone a transition in sending jobs offshore for economic reasons.

Gereffi (2009) says in an interview that the "global retailers actually have become the most powerful companies in the global economy" creating a power base unrivaled because they are the gateway to products needed by the consumer. He points out that as a result Wal-Mart is now the largest retailer and employer in the United States. From the original mom and pop stores and small chains like Sears that were a staple in the 60's to the 2009 behemoth of a chain like Wal-Mart; retail is different now. White (2009) writes that the low prices of Wal-Mart are the only thing that matter to consumers, other businesses and most stockbrokers. Certainly low price is Wal-Mart's primary marketing point. Period. They do not offer a pleasant, upbeat experience like the Target store chain or a mom and pop down home atmosphere for tool buying like Sears (Warsh, 2006).

Riper (2008) writes that a study done by the Federal Reserve Bank of Minneapolis seems to show that over the last two decades Wal-Mart has actually been good for the economy. They examined a period between 1985 and 2003 noting that personal income along with general employment seemed to grow faster in county locations with Wal-Mart stores.

I think it is debatable if Wal-Mart is good for the consumer in the really long run. Certainly the prices are lower; saving consumers money in the short term. But they then become locked into purchasing only from Wal-Mart to continue these savings. And because Wal-Mart controls the pricing structures they can incrementally increase the prices to the consumer for the product over time when there is little or no competition remaining. This may come true sooner than we think.

If the consumer wants Clorox or Revlon or Kellogg cereal they may someday pay a higher price for these products when Wal-Mart is the only supplier in their immediate area (Riper, 2008). Consider the numbers and that these percentages that are increasing each year. Currently Wal-Mart sells 28 percent of Playtex, 25 percent of Clorox, 21 percent of Revlon, 13 percent of Kimberly-Clark and 17 percent of Kellogg products sold in the U.S.A.. And traditionally Wal-Mart has systematically taken over and become dominant in any retail selling area they move into (White, 2009).

References

Gereffi, G. (2009). Is Wal-Mart Good For America? PBS.org. Retrieved April 17, 2009 from http://www.pbs.org/wgbh/pages/frontline/shows/walmart/interviews/gereffi.html

Riper, T. (2008). Why Wal-Mart may just be good for the U.S.. Forbes.com. Retrieved April 16, 2009 from http://www.msnbc.msn.com/id/22719054/

Warsh, D. (2006). Brave New World? economicprincipals.co Retrieved April 15, 2009 from http://www.economicprincipals.com/issues/2006.12.03/226.html

White, B. (2009 January 5). Wal-Mart Weekly: Nothing in retail matters but low prices. bloggingstocks.com. Retrieved April 16, 2009 from http://www.bloggingstocks.com/2009/01/05/wal-mart-weekly-nothing-in-retail-matters-but-low-prices/