Tuesday, November 03, 2009

The Wal-Mart Effect

Foreign Policy --Wal-Mart's debut in a country is a bellwether for future growth. Indeed, Wal-Mart has started operations in 15 countries since 1991, and 13 of them have had boom economies, with an average of 4.4 percent annual growth since Wal-Mart arrived. Over the last five years, the economies of Wal-Mart countries outside the United States have grown 40 percent faster than the world average. So what's going on?

Does the ability to buy giant bags of Froot Loops at cut-rate prices inspire economic growth? More likely, Wal-Mart is simply a smart, cautious investor. "Wal-Mart chooses to go places with a sizable middle class," says Nelson Lichtenstein, a historian who just published a book on Wal-Mart's rise. And Wal-Mart's attention to middle-class growth could pay off for the company in the future. Next up for the Wal-Mart effect, Lichtenstein says: Russia and Eastern Europe.

2 Comments:

At 11/03/2009 11:17 PM, Anonymous Bernard said...

wasn't most of the world expanding quite nicely from 2003-2007? I'm a fan of Walmart's model, but trying to make this correlation is quite flawed.

 
At 11/04/2009 12:45 PM, Blogger Caveat Bettor said...

nice job on CNBC today. your poise really accentuated the kookiness of your counterparty. Slavery in China! Walmart HAS done a lot more than many Nobel prize winners (even in the prizes which still have some cred).

 

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