On Tuesday at the Wal-Mart media bonanza, Wal-Mart Stores Vice-Chairman John B. Menzer spoke of the company’s “culture of change” that is dedicated to cutting costs in order to better serve the consumer.
But does focus on cutting costs represent any so-called “change” for the company? Only if by “change” you mean “the sound of more money in the registers.” Even before Wal-Mart was the retailing behemoth it is today, it was putting money ahead of morality.
The New York Times reported in 1981 that the company denied its “efforts to deal directly with some large manufacturers, rather than through reps … is a patent effort to get a lower cost by eliminating the commission typically paid to them.” Yet by 1992, a key strategy to lowering costs was dealing directly with manufacturers and “cutting out the middlemen” – a strategy that saw the company hit with a lawsuit. In 1993, the company was forced to pay hundreds of thousands of dollars in damages to pharmacies after being found guilty of pricing items below cost in an effort to push other retailers out of business.
The strain of Wal-Mart’s “always low prices” was already being felt in small-town America by the late 1980s. Said one small businesswoman in Independence, Iowa, “we can’t compete against the richest-man-in-the-world’s prices. You just try to do the best you can and hang on to your loyal customers by providing service.” [New York Times, 04/02/1989]
Wal-Mart’s concern for providing the lowest possible price may benefit the consumer – and executives and shareholders’ pocketbooks – but it comes at a tremendous cost to the American social fabric. By ignoring environmental standards, paying poverty-level wages and refusing benefits in the name of maximizing efficiency and minimizing cost, the corporation represents the triumph of income over the individual.