Wal-Mart's Wrath
Who Destroyed Wal-Mart’s Competitors?
By Daniel Muniz

Now let me get this straight. Does Wal-Mart drive companies out of business?

This is a very important question because the economical and political ramifications are enormous. Right now, the traditional press has an endless supply of stories about companies that have either lost significant market share or have gone under entirely because of Wal-Mart. And they also have an endless supply of negative commentary about the giant retailer itself. In addition, left-wing organizations and unions constantly harp about the evils of Wal-Mart.

And what role has the media played in all of this? For instance, is the press honestly reporting the facts or is it really telling us what they think we ought to believe?

First, let’s take a look at the dichotomy of the question:

Does Wal-Mart drive companies out of business?

I have seen this sort of question in just about every mainstream media source and I have also read so many commentaries about it. But almost every article seems to avoid the obvious. So let’s then start off with some very basic questions.

What does Wal-Mart really need from a customer?

The simple answer is that the giant retailer needs a customer’s money. Even if a customer merely walks around a store or just surfs their web site but doesn’t buy anything, Wal-Mart accomplishes absolutely nothing. Hence, no sales means no money.

What about Wal-Mart’s competitors?

Don’t Wal-Mart’s rivals also need consumers to step inside their store or shop online and then actually buy something?

And what happens to such a competitor if people don’t buy their products or rather, not buy enough of them to generate large enough sales that exceed their expenses. In words, what happens if Wal-Mart’s rivals don’t make a profit?
 

Story Continues Below ê

Today's Top Stories

● Retirement Quiz - The Responsibility of Retirement ● Ban Cell Phones: Do Students Need Phones in Schools? ● Overcrowded Solution - But the Unions Really Hate It ● Victoria’s Secret - Has Sexy Become Too Trashy?

Yesterday's Top Stories

● Bad Example - School Principal Driving Drunk ● Banning Toy Guns - Laws That Go Way Too Far ● Shoplifter Dies - And Parent Files Lawsuit ● Hey S*** Face - Abusive Bill Collectors

Take a look at Toys-R-Us. They were once the dominant toy retailer in the country. Then all of a sudden, they were no longer the leader in that industry. Their sales dramatically declined while Wal-Mart then became the top seller of toys, which is what has happened to a lot of other retailers. But why does the press ignore what really happened?

Did Congress pass a law prohibiting people from buying toys from Toys-R-Us? Did Wal-Mart managers’ walk up to Toys-R-Us stores and put big padlocks on the front doors? Did programmers from Wal-Mart launch Trojans and viruses on the net to prevent people from ever visiting the Toys-R-Us web site?

Are the questions that I just asked totally absurd?

Yes, the questions are ridiculous but that is not the kind of straight forward perspective that you ought to expect from the media. Instead, the press always seems intent on saying that the destruction of so many companies was done at the hands of Wal-Mart. In many ways, this type of irresponsible reporting seems to relegate the consumer as nothing more than an innocent bystander instead of an active participant. And maybe even a victim.

But customers are active participants. They have the money and they spend it. As a result, customers have power! And when customers exercise power, aren’t they the ones who have decided which companies will stay in business and which ones will go under?

Suppose nobody bought products from Wal-Mart, then would they still be in business? But isn’t that what already happened to the competitors to Wal-Mart such as Toys-R-Us?

Didn’t consumers make a conscious decision to either stop buying from Toys-R-Us or at the very least buy a lot less from them and then ended up buying more from Wal-Mart? Or was there some sort of conspiracy involved like people getting a phone call from a stranger telling them that if they bought something from Toys-R-Us, their cat or dog would get run over?

The reason I bring up these silly scenarios in such a facetious way is because the media goes to great pains to gloss over the outcome of competition. These companies were in no way driven out of business by Wal-Mart but by the consumer. Money is power and the consumer exercised their power with their purchasing decisions.

Yet, the press sure bends over backgrounds to make sure that such a conclusion is never inferred.

As a result, what you always get from the media it that it is Wal-Mart’s fault for why other companies are no longer the market leaders. I really don’t think it has dawned on many reporters that the consumer is actually responsible for either the demise of so many businesses or at least their decline in their industry. In essence, Wal-Mart didn’t steal anything to become the market leader; it was given to them by the consumer.

And besides, isn’t that the hallmark of a free economy and a free society?

Isn’t it supposed to be the customer who decides which companies succeed and which one fails?

But the press and Wal-Mart detractors really don’t want to go that far in accusing the consumer even though he or she is actually the culprit. That would mean that the consumer is either stupid or sinister. You don’t see left-wing activists and unions painting consumers as ignorant or evil. If that happened, then public sentiment would go entirely against the leftist establishment and as well as against the media.

The consumer has decided. And it was the consumer who has swelled up the might and largeness of Wal-Mart. If you have a problem with that, then you have a problem with freedom and individual decisions.

We want your opinion! Tell us what you thought about this article. Click the Your Feedback menu item to send us your comments.