In Defense of WalMart

There's a lot of bad feelings out there towards America's largest retailer. People argue it kills the "mom and pop" businesses and contributes to suburban sprawl. I'm not so convinced--in fact I think there's a lot of good WalMart does that goes under appreciated.

First let me say I don't work for WalMart and have no relationship with them at all, except I buy stuff there. I don't think they're perfect and I'm sure if we dig we won't have to go far to find genuine controversy, as with any big organization. But I do think people slam WalMart unfairly.

One of the most common complaints people seem to have with WalMart is that it pressures the locally-owned small retailers out of business. This is bad, the thinking goes, because it takes away good jobs and replaces them with "McJobs" at WalMart.

This line of thinking has a big problem, namely that mom 'n pop main street stores were in decline long before WalMart showed up. And while most WalMart jobs are certainly unglamorous low-level jobs there is a management track. If you worked at a mom 'n pop store and weren't a relative of the owner then good luck moving up the ranks at all.

The truth is that the only businesses WalMart forces under are weak ones that can't adapt. Too harsh? I've noticed that WalMarts have a "reef effect". Around them spring up strip malls full of little locally-owned stores and restaurants. Of course if you want to live you had better be smart enough to stay out of WalMart's way!

In my neighborhood WalMart opened a superstore (groceries). Immediately the incumbent stores, Albertsons, Tom Thumb, and Kroger started to compete. Albertsons tried to stick to basic groceries and compete on price. They didn't last long--store closed. Kroger thrives by moving its product coverage outside of WalMart's, which carries lots of basics but few extended product lines. Tom Thumb does well by moving upmarket and focusing on service. You can indeed compete, or at least coexist, with WalMart if you're smart.

Another example: my local Ace Hardware store. Its located less than a mile from WalMart and Home Depot yet it does good business. Why? Service for one. I don't have look over acres of store for help. It also works because I can run in and out faster than a big-box. I would argue that both retail models have their advantages and efficiencies in the community and needn't be mutually exclusive.

I also don't agree that big-box retail contributes to sprawl. These big box stores like WalMart are full of products, like the old general stores. So if they didn't exist this product would be distributed over a wider area in smaller shops. Centralizing everything in a contained retail area may highlight the large big-box stores and make them an easy target for simplistic scorn but to my eye its more efficient than scattering the same product volume all over town. Logically that's why the model is successful. Carry the argument further to say these big box retail areas provide a nexus around which apartments and housing are grouped. If the WalMarts were gone then what would group suburban development at all? You really would have some big sprawl issues then.

Then there's health care. WalMart has done a lot to drive down the cost of generic drugs and expand their use. The company is now preparing a pilot program to put clinics in some stores. I see this as the future of basic health care. The government seems useless to address our problems so it will take a WalMart to make any meaningful change. If people who currently have no health insurance can someday go to their WalMart clinic and see a doctor for $30 or $40 then isn't that much better than where where we are now?

WalMart isn't perfect. I have issues with how their purchasing power carries capitalism to an extreme by supporting Chinese manufacturing and the many anti-competitive aspects that entails. There are many reports of employment issues in the media. I do think however that they deserve credit for the good they do that often goes unnoticed by those so quick with their words to tear them down.