by Joe Kirkpatrick

Recently, there have been  many articles, documentaries, a book, and now a movie about how Wal-Mart is  ruining  America's  economy.  Wall Street has paid  attention as the value of Wal-Mart stock has declined about 30% since 2000.  Recently, some communities have even put  up a successful fight and actually been able to keep Wal-Mart out of their  towns. 

Let's begin by looking at where Wal-Mart came from, and how they got to be the world's largest retailer.  Back in the 50's, the Walton family owned several Ben Franklin five and dime stores.  Discount chains such as K-Mart were beginning to emerge, and the Walton's found the marketing strategy that Ben  Franklin used with their stores was just not going to be a match for these new  aggressive retailers.  Sam Walton  went to the Ben Franklin headquarters, and urged the leaders to re-vamp their marketing, but they refused.  Sam Walton and his brother, who co-owned the stores, decided to leave Ben Franklin and go independent.  Their philosophy from the beginning was to buy in quantity, run a low overhead with no frills, and sell at the cheapest profitable price across the board.  It was a simple, easy to understand  philosophy, but unfortunately, has been too hard for their competitors to  understand, even now as  Wal-Mart dominates them all.  As the Walton's discount stores were beginning to expand, they were looked upon by giants of the day such as Sears  and K-Mart as a bunch of ignorant hillbillies, and were the brunt of

jokes in many boardrooms.  I heard one  journalist on a documentary about Wal-Mart say it best:  "Sam Walton came in under their radar, and by the time he hit, it was just too late for them to do anything about  it."

"Everyday Low Prices?"  What part of that statement do Sears and K-Mart not understand?  I don't know  whether it is true or not, but I once heard the K-Mart circular in Sunday's newspaper cost about 8% of their total revenue. At times, I have compared prices between  K-Mart and Wal-Mart, and usually, K-Mart is 15-20% higher.  That means an item K-Mart sells for $100, is probably available at Wal-Mart for $80 - $88 -  that is a big difference!  And, it's just not K-Mart and Sears that  don't get it.  The other day, I had gone to Ooltewah to the bank, and remembered I had run out of deodorant that morning.  I had a few minutes before the bank opened, so I ran over to Bi-Lo and bought a can of deodorant for $4.19 plus tax.  I had gone there since it was before work, and I didn't think I would have time to get to Wal-Mart.  That night, I ran to Wal-Mart to check their price for this story, and they were $2.97 - a 29% difference on one small  item!  Well, I'm no rocket scientist, but I don't think you have to be to figure out why Wal-Mart is taking over.  "Everyday Low Prices" - that  is what people want.  K-mart gave us blue light specials instead.  When  that didn't work, K-mart put costly circulars in virtually every Sunday paper in America.  When that didn't work, they gave us  clothes with Jacquelyn Smith's name sewn in them.  When that didn't work, they gave us  Martha Stewart.  When that didn't work, they merged with Sears.  When that merger was announced, I thought when all else fails, try taking two wrongs and putting them together in an attempt to make one right!

Since the merger, the companies performance has been lacking, and  Cleveland's own Alan Lacy has now been demoted from his position as CEO. 
Bi-Lo, Food Lion, and  other grocery stores are also losing ground to Wal-Mart, and their bright solution is to give customer "bonus cards."  I personally hate those things - that's  just one more thing in my already hectic life I have to keep up with.  Hey, I'm a consumer and they need my  business - why should I have to have a card to get their best price?  A while back, Bi-Lo had a pre-packaged shrimp tray that was normally over $20, but with their "bonus card," it was  $16.99.  I went to Wal-Mart, and their "everyday low price" on the identical item was $15.99.  Generic Raisin Bran at Food Lion last  week was $1.99 with their card - Wal-Mart's was $1.89 without any card.  No doubt the executives at Bi-Lo and  Food Lion are sitting around scratching their heads (and possibly other parts of  their bodies) trying to figure out why Wal-Mart is taking so much of their business.  Why?  Because they just cannot seem to grasp  Sam Walton's very simple philosophy of "everyday low prices." 

Now, I agree Wal-Mart has put the small local retailers out of business, and that is sad, but that is a  reflection of today's economy.  As the owner of one of those small retailers who is hanging on by a thread, I know how it feels.  However, if it wasn't  Wal-Mart, Target would probably be doing the same thing.  Basically,  America was  built on a system of free enterprise, and Wal-Mart is the most successful  example of that system. 

I feel much of the criticism aimed at Wal-Mart is not because they have treated employees, women, and their suppliers any worse than their competitors have, but simply because they are at the top of their game - everybody always loves to take hits at the  man on top!
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