With annual revenues exceeding US$400 billion, Walmart is a retail colossus and at present the world's largest corporation. Walmart is a budget retailer that sells an unusually wide range of consumer goods in its enormous big-box stores, which first appeared in the U.S. South and Midwest in the mid-1960s. Since then, they spread rapidly across North America and, in various guises, Walmart now operates throughout Europe, Asia, and in certain parts of Africa. This rapid ascent has attracted a considerable level of attention from both critics and admirers. Whether the object of praise or blame, Walmart has attained an iconic status. Alongside the International Monetary Fund, the World Bank, Wall Street, Google, Nike, and Facebook, Walmart features prominently in contemporary discussions about the organization, culture, and ethics of the global economy.
Walmart was founded in 1962 by Sam Walton in Rogers, Arkansas. Walton pursued a budget retail strategy from the outset, sourcing from only the cheapest suppliers and locating Walmart stores outside regional centers. Walmart's organizational culture bore the mark of its founder and its rural origins. Walmart praised small-town and (to some degree) Christian values, including loyalty, hard work, conformity, and patriotism, and it maintained a gendered division of labor such that most service-oriented employees were women while most managers and executives were men. Although it has changed significantly since its establishment, Walmart continues to reflect important features of its early beginnings.
Over the past fifty years, Walmart has grown rapidly such that it now employs upward of 2 million people across the world in 8,692 stores. Were it a national economy, Walmart would be roughly the size of Sweden (though growing at a faster rate), and it would be one of China's leading trade partners. While discussion about Walmart's growth continues, business analysts generally suggest three factors as crucial to its success, namely, Walmart's early adoption of advanced information and logistics technology, its capacity to restrain labor costs, and its skill in micromanaging suppliers.
In contrast to its unqualified success in North America, Walmart's international performance has been mixed. Although Walmart has been highly profitable in the United Kingdom (where it owns Associated Dairies [ASDA]), Walmart entered and then abandoned the German and South Korean markets, and its performance in Japan, Hong Kong, and Indonesia has not met expectations. This uneven record has caused analysts to question whether Walmart's business model can adapt to different kinds of markets, particularly those characterized by unique consumer cultures or regulated by higher labor standards than those typical in North America. This question is likely to be answered in the near future since Walmart has recently made significant inroads into India and South Africa.
There is reason to question whether Walmart deserves the degree of attention it has attracted. In relative terms, Walmart is not the largest corporation in U.S. history. As a proportion of U.S. gross domestic product (GDP), Walmart is smaller than General Motors was at its height during the mid-1950s. Further, Walmart may have perfected, but it did not invent, budget retailing. Many of the principles of budget retail were formulated by Walmart's competitors in the first decades of the twentieth century, and the largest stores of that era dwarf Walmart's much maligned supercenters. However, Walmart is noteworthy for the dominance it has achieved within the retail sector; Walmart's current revenues are greater than those of all its major competitors combined. This achievement has been enormously consequential for North America, specifically its labor standards and the manufacturing sector in general.
Walmart signifies and is partly responsible for a major shift in the structural organization of the global economy. Until recently, the world's most powerful corporations were manufacturers. Their position has been undermined by the agglomeration of retail firms, such that a small number of retailers are now responsible for the bulk of all sales. Walmart is the poster child of this process. As the major supplier of clothes, toys, sporting goods, and groceries to the United States, Walmart exerts an enormous influence on its supply chains, making crucial decisions about what manufacturers produce, where their goods are produced, and how they are produced, stored, transported, and so on. Because Walmart possesses market data that are more accurate and timely than those of its suppliers, many of which are leading transnational firms in their own right, Walmart is well placed to justify the production-level demands it makes. In sum, Walmart wields an unprecedented level of influence on the global organization of manufacturing and on the communities whose livelihoods depend on it.
To ensure the “everyday low prices” exalted by the firm's long-standing motto, Walmart maintains high levels of labor discipline. In particular, it holds wages and benefits at minimal sustainable levels. For this reason, most Walmart employees (known in the firm as “associates”) earn considerably less than the employees of other retailers. Walmart contains wage growth through a range of methods, most notably by upholding the nonunion position that accompanied its founding. The consequence of this labor policy is that many U.S. employees of Walmart earn wages below the poverty level, and a disproportionately high number of Walmart employees and their families qualify for various forms of welfare assistance.
It is for these and related reasons that commentators suggest that the Walmart business model is eroding the achievements of the New Deal and drawing the United States into a “race to the bottom.” If U.S. firms were once celebrated for balancing operational efficiency with labor standards (such that entry-level employees could sustain a middle-class lifestyle), then the precedent set by Walmart is that operational efficiency should trump all other concerns. The deleterious effects of Walmart on labor standards have been well documented in the United States, but these effects have been mediated in other developed nations by labor unions and government regulations. Walmart's response to this now familiar set of claims is that its low prices save consumers billions of dollars annually. Furthermore, these savings are particularly important for consumers with a lower social class status, so justifying Walmart's historical claim to be performing a kind of Christian service.
Gendering of Public and Private Space, Global Institutions, Globalization, Political and Ethical Consumption, Price and Pricing Mechanisms, Self-Service Economy, Shopping, Social Class, Supermarkets
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