Wal-Mart Please Explain: Every Time

Wal-Mart

Please explain: Every time Wal-Mart announces a location for a new store there is great public outcry. But rarely can you find an instance of a recently opened Wal-Mart not being filled with shoppers.

Attention Wal-Mart Shoppers." Hear this image, and almost instantly, a certain type of consumer springs to mind -- someone who is overweight, from the Midwest, with little sense of style. Yet the same people who disdain Wal-Mart shoppers and the idea of Wal-Mart in general, will often find themselves shopping at Wal-Mart, taking advantage of its famously advertised low, low prices, all of the time. 'I may shop at Wal-Mart,' they tell themselves, but 'I am not a typical Wal-Mart shopper. I only go there because I am so busy, and pressed for time because of my hectic lifestyle.' Why go to five different stores, when Wal-Mart has the Cheerios you need for your toddler at the lowest possible price? Even consumers who might disdain the actual clothing sold at Wal-Mart as too downscale, and prefer to create their image with clothing sold by fashion designers rather than a department store, still need groceries, household goods, and electronics, and the economic law of supply and demand suggests that demand increases as prices decrease.

Wal-Mart is able to provide such low prices, even on popular name-brand goods, and still generate a profit for the company by keeping input costs low, including the cost of labor. This is another reason that every time a Wal-Mart opens in a new location, people are often seen picketing the site. Wal-Mart employees work for the minimum wage, often with inadequate benefits, and the company discourages unionization. Most consumers would say that such treatment is unfair, and they might even generously state that in theory they are willing to pay a few cents more, and travel a bit farther, to ensure that all of the employees of an organization receive a living wage and benefits. Until then, however, they are more than happy to reap the rewards of Wal-Mart's employee policies, and receive cheaper goods and save money. They rationalize this behavior, stating that it is up to the company and its employees to decide upon ethical policies and one person's individual economic decisions can't change a multibillion dollar corporation alone. One person refusing to shop at Wal-Mart will not make a difference. However, because Wal-Mart can always find more minimum wage workers, like young people or recent immigrants, who are willing to work for low wages with no benefits, Wal-Mart has no incentive to alter its employment policy, as it has proven a successful formula, in most areas of the United States and many nations around the globe.

The areas where Wal-Mart has failed to prosper in the United States tend to be urban locations, where people see shopping as a communal experience, such as in New York City, where people can easily walk from shop to shop, from the florist's to a cheese shop. Wal-Mart provides brand-name, standardized goods that many consumers rely upon, but are often not especially unique. This is why women who might go to Wal-Mart for diapers and paper towels, which have very little resonance or social cache in terms of brand loyalty, but may go to other stores for clothing, fragrance and toiletries.

However, although the goods and the shopping experience itself often seem faceless and standardized at Wal-Mart, the lure of low prices is hard to avoid. Paying less for paper napkins frees up consumer dollars to pay for higher-end items elsewhere, like lattes at Starbucks, or other luxury goods. In the suburbs, where consumers have little access to public transportation, the ability to do one-stop shopping for low-price goods makes up for the lack of ambiance at Wal-Mart and a lack of a personal connection with the sellers and owners of the establishment. True, people who picket new Wal-Marts might do so under banners that proclaims that the elimination of local purveyors of goods will damage the community in the long run. Many residents may agree. But once Wal-Mart moves into town, the mentality of 'it's too late to do anything about it now, it's already built' or 'what difference can one person's purchase of a box of laundry detergent make in the long run' begins to take hold. Also, the stores in the suburbs may also be chain stores, although locally or regionally based, rather than nationally-based chains like Wal-Mart. Consumers do not feel the same connection to these establishments, they way they might to old-fashioned mom-and-pop stores, or corner urban bodegas.

One further irony of Wal-Mart's employee policy is that even employees who are angry at the company they work for, who are being most hurt by its practices, may still shop at Wal-Mart. This is not because Wal-Mart offers good employee discounts, but because these consumers are usually on the lowest rungs of the economic ladder, and do not have the luxury of refusing to buy inexpensive goods for ethical reasons, given the size of their paychecks. The Wal-Mart hiring practice essentially creates a community of captive, low-wage consumers. And as society grows more expensive to live in because of the rising price of fuel and as the standards of consumer status become even more expensive, middle-class consumers begin to feel poor, and justify skimping on essentials and buying essential goods from less ethical sources. They do this in the interest of 'keeping up with the Jones' and to increase the disposable part of their incomes by shopping at discount stores for basic products.

This economic analysis may seem to suggest that the Wal-Mart juggernaut of success is nearly unstoppable. However, it should be noted that this is not always the case. First of all, some consumers, for certain goods, may associate low prices with low quality. Perhaps this is why Wal-Mart has succeeded with brand name goods, because people can be assured of the fact that the Pampers they buy at Wal-Mart will be of comparable quality to the same brand they buy at the slightly more expensive local supermarket chain. In contrast, luxury goods have an inverse relationship between price and consumer demand. But beyond the allure of such luxury goods, Wal-Mart has struggled in some countries with different buying habits and priorities, such as Germany, Japan, and South Korea (Landler & Barbaro, 2006:1). For example, the franchised standardization of employee manners, which proved so successful, not just for Wal-Mart but for other franchises such as McDonald's infamous "Have a nice day" did not translate well to Germany, where excessive smiling is seen as being flirtatious.