The High Price Of Low Prices

Recently, in my home town of Bellevue, Washington, Wal-Mart announced they are opening a Wal-Mart Market store, which is a miniature grocery store version of the original Wal-Mart store.  This announcement came to the chagrin of many Bellevue residents, despite some positive aspects that accompany a newly opening business.  The new Wal-Mart location will bring jobs and provide a small boost to the local economy; however, according to disgruntled Bellevue residents, at the expense of the well-being of local businesses.  

Wal-Mart has an unfortunate knack for destroying small businesses because of the low prices for which they can sell their products.  Wal-Mart’s low prices stem from a number of different cost cutting measures.

Wal-Mart may be the most prime example of disintermediation in business.  Disintermediation removes unnecessary middlemen in the chain of supply.  Wal-Mart acts as their own distribution channel by shipping Wal-Mart-sold goods from the producers, most of which are in China, to distribution centers, and subsequently out to retail stores.  The huge size of the Wal-Mart Corporation has allowed the company to cut out the middleman by creating the necessary infrastructure to be their own middleman.

Perhaps more notoriously, Wal-Mart also cuts costs by being a poor place of employment.  Wal-Mart has gained a reputation for paying low wages, being staunchly anti-union, and providing employees with no added work benefits (such as healthcare, 401k, etc).  Wal-Mart’s poor work environment is reflected in the company’s high employee turnover rate; approximately 70% Wal-Mart employees quit within a year of beginning employment.

The Wal-Mart Corporation has made a concerted effort to shrug off their negative public image by providing consumers with a high volume certified organic products; By 2009, Wal-Mart became the largest distributor of certified organic products.  However, in 2010 the USDA filed a lawsuit against Wal-Mart claiming that they had misused the USDA organic label on products which contained no organic ingredients.  Furthermore, some of the organic products sold by the retail giant adhered to less strict organic certification criteria.

Even though Wal-Mart’s attempt at “going green” was supposed to create a more positive public image of the corporation, the company’s blatant greenwashing shows that they were in no way committed to helping the environment. 

Many consumers have the notion that buying eco-friendly products will somehow save the environment; Wal-Mart is guilty of exploiting consumers with such a mindset.  Consumers can lessen the effect that consuming has on the environment by buying eco-friendly products, but pretending that the largest retailer in the world is trying to protect the environment is a joke.

Amidst all of Wal-Mart’s attempts at becoming a more “green” company, they did not change corporate policies regarding labor or their chain of supply, which both have direct and indirect environmental consequences. 

If Wal-Mart really wants to win environmentally conscience consumers over, they need to start by addressing their workers’ rights issues and start supplying more American made products.  Until that day, I refuse to step foot into a Wal-Mart and urge any environmentally conscience individual to the same.

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