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During the past 20 years, the author has watch China move from being a developing country into an industrial superpower
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Get Four
|  | APRIL 15, 2004
By Wendy Zellner Analyzing the "Sins" of Wal-Mart [Page 2 of 2] "DESPERATELY AFRAID." Wal-Mart has argued that its wages and benefits are competitive with others in retailing. And given its ambitious growth plans, it contends, it would be self-defeating to treat workers as badly as critics say it does. Professor James Hoopes of Babson University, a conference participant, says "Wal-Mart is desperately afraid of the reputation it's getting as a bad employer." Some conference goers took solace in the presentations on Wal-Mart's sometimes bumbling efforts abroad. Julio Moreno, a University of San Francisco history professor, called Wal-Mart's performance in Argentina "disastrous." He credits that in part to the retailer's initial obliviousness to the building fiscal crisis in that country and inflexibility in the store formats Wal-Mart used there. On top of that, it faced stiff competition from French retailer Carrefour. Even in Mexico, where Wal-Mart is now the largest retailer, with about 7% of total sales, there are reasons to believe its future gains won't come easily, predicts Chris Tilly of the University of Massachusetts in Lowell. "Wal-Mart actually charges higher prices than the small stores" in Mexico, some 5% to 15% more, figures Tilly, based on his studies there. SIMILAR FATE? Mexican shoppers don't have the "culture of convenience" and are more likely to care about the freshness of their food, prompting them to shop from street vendors, mobile markets, and other small venues. And many consumers say they don't see a difference in the service, prices, or assortments of the big chains, he says. "I think the future of Wal-Mart in Mexico is going to be marked with a question mark." What about its future in the U.S.? Historian Strasser points out that Wal-Mart is hardly the first retailer to depend on low-cost labor or to face strong resistance. Woolworth openly boasted of its high turnover and low pay. Sears (S ) was so concerned about an anti-mail-order campaign in 1906 that it started shipping its packages in plain-brown wrappers. Through the 1930s and '40s, anti-chain-store legislation proliferated across the country, and A&P fought a massive antitrust case. Today, those campaigns are long forgotten. But Sears and A&P are shadows of their former selves, while the Woolworth stores have vanished. Is Wal-Mart destined to suffer the same fate? Strasser notes that Wal-Mart's size relative to the economy and its suppliers is much bigger than anything seen before. But, she says, "Wal-Mart's success is stimulating countervailing forces." INNER CONFLICT. Whether those forces change or slow Wal-Mart remains to be seen. And that's in part because Wal-Mart's success puts so many people in conflict with themselves. Strasser cites her hairdresser as a case in point. As a small-business owner, he wants to oppose Wal-Mart. But still, he has bought seven low-price bikes from the chain so every member of his household can enjoy one. That seems like the stuff of which Wal-Mart ads are made. Strasser appears sympathetic but then asks a question that might make many a shopper squirm: "Shouldn't kids learn to share? What's happening in a culture where everybody gets to have his own bike because they're so cheap? How do we move beyond the single-minded self-interest of price?" That's a debate that's now echoing far beyond the serene world of Santa Barbara.
 Zellner is BusinessWeek's Dallas bureau manager Edited by Patricia O'Connell Get BusinessWeek directly on your desktop with our RSS feeds.  Add BusinessWeek news to your Web site with our headline feed. Click to buy an e-print or reprint of a BusinessWeek or BusinessWeek Online story or video. To subscribe online to BusinessWeek magazine, please click here. Learn more, go to the BusinessWeekOnline home page  | | |
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