How the World's Most Powerful Company Really Works and How It's Transforming the American Economy
By Charles Fishman
Some of you may remember a while ago when I posted a collection of articles from various sources on the destruction of such American institutions as Vlassic, Levi's, etc. I had linked them in the past and my stats page said it was one of my more popular searched pages but the links almost always got moved and quit working. I fixed them several times but the end result always ended up with dead links so I decided to just copy the articles instead of the links. I was surprised however when one of the authors of several of the articles commented asking me to link to a different site which I promptly did. He also mentioned his book on the subject and so here is my review of the book which I finished somewhere above 30,000 feet in southeast California.
I was expecting a rather dry book with lots of facts and figures but found myself completely enthralled with the way Fishman wrote the book in a captivating way and yet presented a wealth of information. In fact, the first chapter alone would have been easier to simply highlight the things not of interest as every sentence made me want to scribble something down in my notebook. Case in point, the first sentence a quote from Sam Walton read, "I'm probably not the best negotiator in the world; I lack the ability to squeeze the last dollar." It certainly was not something I expected from my perceived notions of Sam Walton. In fact, my views of Sam Walton have completely changed from the kindly man who would be terrified at what his company has become to a man who would probably only be surprised that his ideas had come along so far. Sam planted the seeds of almost everything that makes Wal-Mart what it is today.
Fishman does a masterful job of explaining the groundwork of how Wal-Mart grew into what it is today and how it affects the world. He describes the 'Wal-Mart effect' as the, "whole range of impacts resulting from Wal-Mart's way of doing business." Fishman also goes on to say, "Wal-Mart isn't just a store, or a huge company, or a phenomenon anymore. Wal-Mart shapes where we shop, the products we buy, and the prices we pay - even for those of us who never shop there." After reading the book and the supporting evidence, I am certainly a believer.
I thought my long standing hatred of the Wal-Mart experience and general boycott of their stores would exempt me from their effects but Fishman has shown that I still benefit from Wal-Mart whether I like it or not. He used that stick of deodorant that I buy without any packaging other than its own hard plastic container as an example since Wal-Mart was instrumental in eliminating the cardboard packaging that they used to come in. Wal-Mart's effect has caused even those of us who buy deodorant at our local employee owned grocery store to benefit since the manufacturer of the deodorant has eliminated the extra packaging for everyone.
Before reading this book, I wondered if Fishman would change my views on the evilness of Wal-Mart and after reading it, the answer is no. In fact, it reinforced my views on Wal-Mart. It isn't because of one-sided journalism by Fishman because he laid out both sides very well. He has written a book that is neutral on the issue, laying out the facts and thus allowing me to support my views while still getting a better sense of why some people like Wal-Mart and why some have no choice but to shop there. In one chapter, Fishman describes a study that showed households with a baby and a pet are likely to defect to Wal-Mart along with those shoppers who buy store brand stuff. The former set of shoppers buy large volumes and thus go with the one-stop cheaper shopping. The latter set of shoppers already buys cheap stuff anyway so switching over to Wal-Mart is not a big difference. Those likely to not shop at Wal-Mart are households who spend a large portion of their grocery expenditures on fresh produce, seafood and read to eat meals. Something that surprised me is that location made no difference in where a person shopped.
One of the things that I always wondered about since I have seen it both ways was whether Wal-Mart's touting of all the new jobs they create when opening a new store was true. Fishman presented various studies that show that although they do create on average 30 new jobs over a five-year period, a typical plus-sized Wal-Mart can employ up to 500 employees and thus they drain upwards of 470 people from the surrounding area. Another study showed how Wal-Mart raised family poverty rates in a county after building a new store. Yet another study that showed that companies that did a majority of business with Wal-Mart (>25%) had half the profit margin than those companies that did 10% of their total business or less with Wal-Mart. Frightening stuff, yet Wal-Mart has undeniably brought down prices not only at their stores but retailers and even manufactures across the nation.
Probably the only good feeling I got from this book is that Wal-Mart seems to be so addicted to their cutting of costs that they are slowly pricing themselves out of profit. I would still guess that Wal-Mart will still be around in twenty years but this book makes me feel as if it won't be around in the same form as it is now. Fishman also laid out some more good news about how companies can and are successfully competing with Wal-Mart despite all the horror stories of other companies that have literally been run into the ground and shipped over seas. Perhaps in the end, Wal-Mart is its own greatest enemy.
If you read this book and I highly recommend it, I doubt that you will change your opinions on Wal-Mart. But you will most definitely understand Wal-Mart more than you do today and understand how shopping at Wal-Mart is changing the very fabric of our lives, good and bad. I will continue my long-standing boycott of Wal-Mart and hopefully will live long enough to see the beast burn itself out. Until then, I will encourage others to read the Wal-Mart Effect.