How Walmart Stole Christmas from Local Retailers

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According to the Ohio-based Council of Smaller Enterprises small businesses keep 45 cents of the dollar you spent in the local community compared to only 14 cents by national chains, that's why I was particularly disturbed by Walmart's holiday ad campaign to “match any local competitor's advertised price”. It's particularly egregious that they chose to target local retailers instead of well, say, Target. Walmart has long been blamed for the disappearance of small local businesses as it is it's nearly impossible for them to compete with the leveraging power of a giant corporation. So its no coincidence they do not match “Going out of business or closeout prices”. The multinational company uses its market power to keep prices artificially low enough to snuff out the local competition, but once Walmart is the sole retailer in an area or community there's no longer an incentive to keep prices that low. This seek and destroy policy is bad for the consumer, the community and ultimately their own employees.  

“Walmart has taught us that the low price is the correct price and we have lost track of quality in many categories as part of the equation of price.” – Charles Fishman, author of The Wal-Mart Effect

 The “Walmart Effect”  must be a part of any discussions regarding the Fiscal Cliff. Many people may not realize that Walmart not only competes against local businesses but fights for tax subsidies and is one of the largest contributors to expanding Medicaid roles. In Texas, Walmart has been the beneficiary of over $90 million worth of taxpayer subsidies. Coast to coast Walmart has put taxpayers on the hook so it can maximize profits and avoid paying employees liveable wages. A 2004 study by the UC Berkeley Labor Center found that "reliance by Wal-Mart workers on public assistance programs in California comes at a cost to taxpayers of an estimated $86 million annually; this is comprised of $32 million in health related expenses and $54 million in other assistance."  The same study suggested it would cost the average Walmart shopper an additional $12 a year if Walmart didn’t short-change its employees. Across the country, the Tampa Bay Times reported, “Wal-Mart has more workers enrolled in the state Medicaid program than any employer in Florida.”  

In the midst of international strikes by Walmart employees over rolled-back benefits, the company has been linked to a garment factory in Bangladesh that exploded killing 112 workers that was found to be caused by “unpardonable negligence”. The company has also been under investigation by the US Justice Department and Securities and Exchange Commission for possible violations of the Foreign Corrupt Practices Act in Mexico. If Walmart would tolerate such deplorable working conditions outside of the U.S., left to their own devices why should we expect it to be any different here in America? Americans would never allow factories with those conditions to open here, but that hasn’t stopped the company from backsliding towards exploitation of their American workforce as well as taxpayers.

  This is why as consumers we need to be more conscious about our spending, not because companies are immoral but because they are amoral. We must also consider the loss to the community when the local sporting good store, gun store, clothing store, shoe store, grocery store, cosmetics store, et al., are replaced by a giant gray box with an equally giant gray parking lot.

I’m reminded of earlier this year when American Express promoted its “Small Business Saturday”. I didn't understand the concept of spending so much time and money promoting local retailers on this one day instead of talking about how important it really is everyday. Though I have to admit I find myself at Walmart a couple times a year looking for whatever thing I need right at that moment in the middle of the night (or when I can’t find it anywhere else). While Walmart really does provide low prices for fixed and low income people, those who can afford it should help re-empower their local economy by shopping small everyday. Henry Ford ensured his employees could afford the products they sold, but in a shrewd twist of corporatism Walmart employees may not be able afford to shop anywhere else.  

About Author

Joe Deshotel

Joe was born and raised in Beaumont, Tx, but live music and politics brought him to Austin. He has worked in and around government and elections for over a decade including for a member of US Congress, the Texas Legislature, the Mayor of Austin. He currently serves as Communications Director for the Travis County Democratic Party. He is most interested in transportation, energy and technology issues. He also likes Texas Hold'em and commuting on his electric skateboard. Follow me on Twitter at @joethepleb.

1 Comment

  1. Costco?
    Joe, I have disliked the Walmart/Sam's business model and practices for a long time. They have destroyed small town America in my opinion.

    What are your thoughts on Costco? They seem like a corporate discounter that does not seem to overtly target local businesses and exercises some corporate responsibility.  

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