This first appeared as "The Wal-Mart monopoly" by Bre Walt in Winter 2006-2007 issue of The New Socialist. It is a review of this book:




Bre Walt is a freelance writer and an honours English student at the University of Guelph. She is an executive member of the student union and founder of the group "Students Against Corporate Control", which fights for social and environmental justice. Bre is currently writing her thesis on the privatization of post-secondary education.


JMBR: My comments are in red, inserted into Bre Walt's original text.



Contributing authors in this book of critical essays paint a damaging portrait of the world's largest corporation. The book details the technological precision of the company and how this leads to unequal power within the retail market and supply chains. Among other things, the book details the vast amount of data collected and retained by Wal-Mart and the ways in which the company opposes and quashes union activity, women's equality in the workplace and worker's rights worldwide.

The company, whose head office is in Bentonville, Arkansas, is the world's largest corporation. In 2004, seven cents of every dollar spent in a US store was spent at Wal-Mart. With sales over $ 300 billion per year (likely to top $ 1 trillion per year within a decade), and more than 5,000 megastores worldwide, the heirs of Wal-Mart founder Sam Walton (who died in 1992) own 39 percent of the company. This makes them twice as wealthy as the family of Bill Gates. Wal-Mart's profits rose from $ 33 billion a year in 1991 to $ 191 billion in 2001. The corporation is also the largest US employer, despite its poverty level wages.



JMBR: The profit numbers are secondary: the gross sales of $ 300 billion tell the story of how much Americans are spending - in other words consuming in goods with their dollars. By comparison the US spent approx. $ 200 billion on education (US Dept. of Education). That means American consumers are investing $ 100 billion more in consuming than they are in investing in the development of the next generation of professionals. (Every doctor, every medical researcher, every nurse begins as a primary school student: the quality of education they receive at this level will directly affect their potential career options; in short fewer doctors, researchers and nurses will be educated as a result of consumer driven under-investment). And this is only through one big-box retailer.



Wal-Mart shuffles ten of thousands of products around the world daily to meet demand in its 3,600 domestic and 1,600 international stores. Although this colossal demand for products creates new opportunities for suppliers, it also allows Wal-Mart to pressure smaller companies to continously adapt and restructure their business models around Wal-Mart's strict demands.

Wal-Mart is arguable the world's largest marketing channel for consumer products, bringing in about 20 million consumers per day to its retail stores. This consumer volume creates such exposure for products that many companies, once involved, become dependant upon Wal-Mart for their continued prosperity. One of Wal-Mart's principles, well known to suppliers, is called "plus one." It means that every year the price must be lowered or the quality improved for each of the hundreds of thousands of products the company handles. The competition is so fierce that more than 500 large vendors have established permanent sales offices near Wal-Mart's Bentonville headquarters and tens of thousands of global suppliers attend its global purchasing fairs.



JMBR: Wal-Mart makes the rules of the game, and then ties down suppliers making them, in effect, feudal vassals to Wal-Mart's "Lordly" manor. Give fealty (in lower prices through off-shore sourced goods) or perish: because Wal-Mart has destroyed the alternative. Now ask yourself, if Wal-Mart is the only channel, what does that do for your choices as a consumer? Do you have any?



In order to maintain a monopoly on the retail market, Wal-Mart uses some of the most advanced technology to control almost everything in each individual store from corporate headquarters. From this office, every Wal-Mart store in the world has its temperature controlled and its data warehoused. The information stored in this facility contains detailed internal operational data, serving as the backbone for the retail link, and is by far the largest private collection of data in the world, second only to the Pentagon. It collects and organizes data from 140,000 point-of-sale systems around the world and records over 20 million customer transactions per day. Containing about 500 terabytes of information, this data network has twice the amount of information currently available on the world wide web: and it is proprietary information (Wal-Mart owns it).


JMBR: That's information about you and me that they collect for their own private use. Information collection on that scale is second only to that of the government itself, and unlike the government's files, those of Wal-Mart - as a private corporation that "owns" the data it collects - are not accessible under Freedom of Information regulation. How many of you are comfortable with that one-sided situation?



By collecting such vast amounts of consumer information, Wal-Mart is able to deliver percise quantities of product at the right time. The delivery time to wal-Mart's distribution center is generally around fifteen minutes. They know what consumers want, what price they are willing to pay, and how to get the product to them in time.

Wal-Mart has perfected the of lowering prices while increasing profits, and it comes at the cost of substandard labour conditions for its 1.5 million "associates". For instance, twenty-eight hours per week is considered full-time employment. There is a scheduling program run off a Bentonville computer that schedules all Wal-Mart employees based on typical store and customer trends. This leads to some employees being overworked, since someone has to cover areas where not enough staff are scheduled. Work schedules change frequently, making everyday life difficult for those at the bottom and leading many to simply quit.



JMBR: The computer controls the lives of the people. Should human lives be made to conform to the impersonal calculations of machine mathematics. If so, then what sort of world does that become?

Turnover at wal-Mart is 35 percent per year for full-time employees and 56 percent for part-timers. These high turnover rates lead to inadequate training - mostly done on a computer - and managers being short-handed for staff. Mary Roland, an assistant manager, is fed-up and says: "At Wal-Mart, you are expected to do the work of three people." After 10 p.m., workers are locked in the store and cannot leave - even for emergencies like a sick child. According to Wal-Mart worker Katie Mitchell, "after you kicked and screamed the supervisor might let you out the back door, which was far from the parking lot where employee's cars were parked and was unlighted."

To keep their jobs, managers do what they are told by executives in Bentonville. Jed Stone worked at Wal-Mart from 1983-1991 while Sam Walton was still CEO. Stone says Wal-Mart is different from anywhere else he has worked in that executives continually warn managers that if they do not increase sales and reduce costs someone else "could have their job any moment." Stone also says that in order keep the shelves stocked and the floors shiny, he has to break the rules by having employees work off-the-clock to avoid paying overtime.

Laverne Coates worked at Wal-Mart in Ohio for several years. After attempting to take time-off to tend to her dying sister, she was told by her supervisor that her "sister would die without her just as well." Coates was also penalized for showing an interest in joining a union and for calling in sick to work one day. She later discovered that she had nine warning pink slips in her file that she did not know about, resulting in her firing.



JMBR: How much does Wal-Mart really care if this is the way it treats its own people. How an organization treats the people who fufill its mission tells you a lot about its real attitude about the larger community, and in many ways its customers. Now ask yourself, is this how you want to be treated by an employer? Would you like your kids treated this way? If it is not acceptable for them, then why is it for other people's children to be treated this way? And what society does this behaviour produce? Is that what you want to encourage with your dollars?



The management teams have a meeting each Friday in a large ampitheater where they watch a broadcast of the CEO and VPs talking directly to the audience about the week's successes and problems. A manager whose store has sent in a payroll with overtime is named and shamed in front of the entire audience.

Wage abuse lawsuites against Wal-Mart are common, with 38 as of 2004. Furthermore, Wal-Mart is named in the latest civil rights class-action suit in U.S. history: Dukes et al v. Wal-Mart Stores Inc. This suit charges the company with discriminating against women in promotions, pay and job assignments.

Lead plantiff Betty Dukes worked at Wal-Mart for nearly nine years, yet was making less than $8.50 per hour. As late as 2003, a year-and-one-half after the suit was filed, data produced by Wal-Mart showed that men hired within the last few years in the same job as Dukes were making more per hour. Ramona Scott, who worked at Wal-Mart for several years and had access to payroll records, noticed that men generally made more than women who had as much or more seniority. The male store manager that she asked about this said, "Men are here to make a career and women aren't. Retail is for for housewives who just need to earn extra money." This store manager's successor later told Scott that if she wanted to get along with him, "she would have to behave like a wife."



JMBR: Now doesn't this sound like fundamentalist, neo-conservative rhetoric on the "role of the family", and the anti-woman trend generally? How many single mothers, or low income spouses work at Wal-Mart? How many of them don't have the option of being "housewives"; not if they don't want their families to starve or go without medical care and education? And how much "wifely" behaviour is expected?



With some store managers setting wages and no system in place for promotions, a federal judge working on the suit explains that, "Women working at Wal-Mart are paid less than the men in every region, pay disparities exist in most job catagories, the salary gap widens over time even for men and women hired in the same jobs at the same time, women take longer to enter into management positions and the higher one looks in the organization, the lower the percentage of women." While the vast majority of Wal-Mart managers are drawn from the ranks of hourly employees, and women make up over two-thirds of those hourly ranks, women receive only one-third of all promotions to management positions.

Despite the incredible boom this company has seen over the last decade, there will be an eventual decline of the current form of warehouse-sized retail outlests. Companies like Wal-Mart that depend on customers driving to their retail locations, and that source the vast majority of their products from half-way around the planet, will be forced to change drastically in the coming decades if they want to survive. The decline in global petroleum reserves and the passing of the global peak for oil production will force economies to become increasingly local in almost every aspect of their operations. The reliance of these companies on cheap, fast and long-range shipment of goods is so paramount to their survival that without them "business-as-usual" becomes an oxymoron. My only criticism of this book is that the authors and editor omitted this one crucial aspect of the essence of Wal-Mart.



JMBR:"Low, low prices" are dependant upon cheap oil and relatively safe and reliable logisitical channels. Cheap oil is a thing of the past, and the cruch is closer than most people realize. The fact that the "global economy" has developed in tademn with the interests of oil producers and oil consumers, and alternate energy sources have been frozen-out or relegated to the fringe, serves to highlight a weakness in the Wal-Mart model.

But more significantly, the age of "terror" and the increase in the diffusion of global power means that the security of supply routes will decline over the next decade. Terrorism aside, the rise of China as a military power (China has identified as a priority the building of a "blue water" fleet that can challenge any "potential adversary" [and only the US Navy comes close here] in force on the open oceans). China is set to become a world naval power. Since Wal-Mart's sources of supply are in Asia, this means they will be highly susceptible to any struggle for the balance-of-power on the seas. This does not just mean any potential Chinese threat, but the reaction of local governments to any Chinese assertion of authority over the area.

Then comes the question of source country economies. North Americans decry the export of our jobs overseas: Lou Dobbs has made a career of it. Yet, the jobs that have been "exported" to places such as China and India are highly dependant upon economic success in North America. Much of China's economic growth has been as a result of meeting North American demand. Should that demand fall-off, either as a result of recession or other economic or political issues, these countries will feel the effect even more keenly. In places, such as China and India, where the legitimacy of the governments in power has largely been made on economic success and not political credibility, a long-term economic problem could sow the seeds of revolution or upheval from either the right or the left. The quickest result would be cutting-off sources of supply for goods and services which we have "exported" and no longer possess at "home". Who will replace our stove, or computer, if the source of manufacture is no longer available and we no longer have the resources to replace them at home? What happens to the availability of food if the networks of distribution begin to break down as a result of bankruptcies or "rationalizations"? (Having already been "rationalized" into overall control-by-dependence upon a few large users.)

Our passive (and very active) collaboration with the development of the Wal-Mart model has left us acutely vulnerable: unless we take the necessary and responsible steps to begin caring for our own needs in an equitable and sustainable manner.

What are we to do about this behmoth of monopoly? Through stealth (at first), and now with consumer assistance through "low price rollbacks" and by marketing itself as the "common person's retailer", Wal-Mart has gained a stranglehold on the North American economy. How many skilled, high quality jobs have been replaced by low paying service jobs? How many manufacturing skills have been lost permanently because they are not currently needed in the "outsourced" economy? What happens when we need them again? What happens if (or when) Wal-Mart's overseas sources of supply dry-up either as a result of competition, war, oil shortages or the economic collapse of foreign economies? Who will provide for us then?

Part of he answer is to focus on self-reliance; the time will come when, having put our eggs in the one basket, it will be dropped, and we will be left with shattered "yolks" and "shells". Not even Wal-Mart can supply cheap goods when the sea lanes are closed by war, or transportation is imperriled by a shortage of oil. That is the time when the lesson of what we have allowed to happen to our economy will hit hard: hardest of all to those who have not taught themselves basic skills of self-reliance.

I do not shop at Wal-Mart; I make every effort to find a more local alternate source where I can, or a substitute to what I need from a local source. Sometimes this costs me more in dollars, but the payback for me is in the certain knowledge that I have not contributed my dollars to Wal-Mart, nor my consumer information to its mega database. Mine is not a perfect solution for everybody, but it is a beginning. And, in sourcing alternatives, I have found secrets for making do with alternatives to mass-market products, either by learning new skills or by re-thinking my consumist desires. I constantly ask myself, do I need all that crap? The usual answer is no - or - revitalizing the older stuff I already have rather than discarding it for something new.

The example of Wal-Mart, together with the wider issue of globalization and the "economies of scale" that are its by-products, have persuaded me of the need to develop our own local co-operatives that produce the goods that we need in a way that we can best use them on our front door and not half-a- world away. Skilled artisans should be valued and encouraged; local enterprise should be the focus of our concerns. The dignity of all should be reinforced not only through the development of their talents, but also through the ethical treatment of individuals in all aspects of their lives, including the workplace.

A goal then is to identify those skills we have, and that others in our local communites around us have, and to develop ways to produce and distribute those goods in a method that will support our needs, and bring dignity to our economic relations. Our independence begins with our ability to provide for ourselves, and to sustain our communities in providing for our wider needs.

Globalization is the monster that produces for consumption, and devours all who stand in its path. Wal-Mart is not the only player in this, it has been one of the most successful. As such what it does stands as a stark warning for our future. Choose dependence or Choose independence. Ultimately that is what it comes down to. When you shop at Wal-Mart and contibute your dollars to this devouring collosus you make a choice; the question being is it the choice you really want to make?



Hosted by www.Geocities.ws

1