Tuesday, April 24, 2007

Wal-Mart: Equal Opportunity "Crusher"

Wal-Mart opponents (WakeUpWalMart, WalMart Watch, Lets Stop WalMart, etc.) get a lot of public sympathy and support by accusing Wal-Mart of "crushing Mom and Pop stores," although it's really the local consumers who "crush the Mom and Pop stores" by shopping at Wal-Mart for low prices. See my article on how "consumer greed" for low prices puts high-priced downtown merchants out of business when Wal-Mart comes to town.

An article in Business Week "How Wal-Mart's TV Prices Crushed Rivals," says that "it is becoming apparent that Wal-Mart's calculated decision to break the $1,000 barrier for flat-panel TVs last November triggered a disastrous financial meltdown among some consumer-electronics retailers over the past four months."

The Business Week article illustrates the fact that Wal-Mart's should be given credit for being a non-discriminatory "equal opportunity crusher," because its low-price strategy crushes higher-priced large, "greedy," multinational corporations like Best Buy, Circuit City, CompUSA, FAO Schwartz, and Winn-Dixie just as it "crushes" high-priced downtown merchants and Mom and Pop stores.

Bottom Line: Consumers benefit from Wal-Mart: a) directly from Wal-Markt's own everyday low prices, AND b) indirectly from the competitive pressure Wal-Mart puts on its rivals, both small and large, to lower their prices - or go out of business.

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