Wal-Mart's Popularity Paradox: Low Prices vs. Ethics

Introduction: The Wal-Mart Paradox

"Attention Wal-Mart Shoppers." Hear this phrase, 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 there, taking advantage of its famously advertised low, low prices, all 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 clothing sold at Wal-Mart as too downscale — and who prefer to craft their image with clothing sold by fashion designers rather than a department store — still need groceries, household goods, and electronics. The economic law of supply and demand suggests that consumer demand increases as prices decrease, and Wal-Mart has mastered this principle more thoroughly than perhaps any other retailer in history.

Low Prices and Labor Costs

Wal-Mart is able to provide such low prices, even on popular name-brand goods, and still generate a profit by keeping input costs low — including the cost of labor. This is another reason why, every time a Wal-Mart opens in a new location, people are often seen picketing the site. Wal-Mart employees frequently work for the minimum wage, often with inadequate benefits, and the company actively 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 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. They rationalize this behavior by stating that it is up to the company and its employees to decide upon ethical policies, and that one person's individual economic decisions cannot change a multibillion-dollar corporation alone. One person refusing to shop at Wal-Mart, they reason, will not make a difference. However, because Wal-Mart can always find more minimum-wage workers — young people or recent immigrants willing to work for low wages with no benefits — the company has no incentive to alter its employment policy, a formula that has proven successful across most of the United States and many nations around the globe.

Consumer Rationalization and Community Impact

The areas where Wal-Mart has failed to prosper in the United States tend to be urban locations where people view shopping as a communal experience — such as New York City, where residents can easily walk from shop to shop, from the florist to a cheese shop. Wal-Mart provides brand-name, standardized goods that many consumers rely upon, but these goods are often not especially unique. This is why a woman might go to Wal-Mart for diapers and paper towels — products that carry very little social cachet in terms of brand loyalty — while visiting other stores for clothing, fragrance, and toiletries.

Although the goods and the shopping experience itself often seem faceless and standardized at Wal-Mart, the lure of low prices is hard to resist. Paying less for paper napkins frees up consumer dollars to spend on 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 compensates for the lack of ambiance and the absence of a personal connection with store owners. True, people who picket new Wal-Marts might do so under banners proclaiming that the elimination of local merchants 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?" begins to take hold.

Furthermore, the stores that Wal-Mart displaces in the suburbs may already be chain stores, though locally or regionally based rather than nationally based. Consumers do not feel the same connection to these establishments as they might to old-fashioned mom-and-pop stores or corner urban bodegas, making it easier to rationalize shopping at Wal-Mart instead.

Conclusion: Rethinking Consumer Responsibility

Wal-Mart's failures abroad illustrate that its domestic dominance is not guaranteed either. To ensure that Wal-Mart — and the attitudes toward employees that it embodies — does not become the sole model for American retail, consumers must rethink the way they view their social responsibilities, the ways they shop, and the criteria by which they choose where to buy goods. The economic forces that drive shoppers through Wal-Mart's doors are powerful and real, but they are not irresistible. Cultural values, community priorities, and a willingness to connect individual purchasing decisions to broader social outcomes can, as international examples suggest, produce different results. The paradox of the Wal-Mart shopper — protesting outside on Monday and filling a cart inside on Tuesday — is ultimately a paradox of consumer culture itself, and one that only consumers have the power to resolve.

Works Cited

Landler, Mark, and Michael Barbaro. "Wal-Mart Finds That Its Formula Doesn't Fit Every Culture." The New York Times, 2 Aug. 2006.