Essay on WalMart and Retail Business

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University of California, Santa Barbara
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Anything good for WalMart is also good (to a large extent) for America. Like General Motors (GM) in the 19060s and 1970s, WalMart is the pride of Americas retail business both domestically and on the international stage. The giant retailer employs 1.4 million workers, accounting for 1% of the working population in the United States (Blodget, 2010).This staggering number of employees matters a lot to the economy. For instance, the mentioned number of workers pays taxes running into millions of dollars which are essential for the socioeconomic progress of the country. Unlike GM whose dominance in the automobile market declined partly because it failed to pay more attention to the needs of the customers in its products(Helper & Henderson,2014), WalMarts prime emphasis on quality and affordable products at its stores(Lohr,2003; Andrews,2014) makes it a huge assets for the current US population and the posterity.

Quality and affordable prices have a significant positive impact on consumers. Through its immense market influence, WalMart has managed to negotiate (and sometimes compel) its suppliers to uphold utmost efficiency in terms of delivery of its products to its stores (Lohr,2003; Ziobro & Ng,2015 ).The retailer's economy of scale also enables it to reduce prices without causing harm on its profits and foothold in the retail sector. For instance, in markets where the WalMart has entered, prices drop by between 10 and 15 %(Lohr; 2003; New York State Government, 2013).A reduction in prices over time can have a significant positive effect on low-income Americans as less of their disposable income is spent on purchasing essential goods. However, this is not the case regarding workers.

Despite providing jobs for 2.1 million people in the US and other parts of the world (Andrews, 2014) and being a signatory to the Fair Food Program Agreement(Dean,2014), there is adequate evidence to suggest that WalMarts business practices reduce employment and also undermine the interests of workers. As noted earlier, the retail pushes suppliers to comply with its efficiency standards. This pressure has caused job cuts among suppliers as they strive to meet low- price-oriented standards set out by WalMart. Some of these suppliers have been driven out of business or opted to shift their businesses to countries such as China (New York State Government, 2013; Lohr, 2003). Besides, WalMart has been identified as one of those companies that underpay their workers due to its overemphasis on lower prices for its customers (Lohr, 2003; Tabuchi, 2016).This amounts to exploitation and does not promote the welfare of workers. As Dean(2014) posts, the food industry can be fully democratized if workers are paid well since there is no economic sense in paying workers lowly and transfer the rip-off to consumers. However, its entry into organic food business is likely to translate into improved profits for those farmers that engage in such line of agricultural production (Andrews, 2014).It is also worth noting that globalization is affecting business models of WalMart. For instance, the company has closed several stores to due to stiff competition from e-commerce-oriented retailers. Besides, it has increased its foothold overseas to sustain its revenue (Tabuchi, 2016).This is likely to avoid situations like those that led to the decline of GM.

On its impact on other stakeholders, WalMart has had adverse effects on small businesses and communities. A large number of businesses have been forced to close down because of the low prices that are offered by WalMart. Others have filed for bankruptcy or moved overseas to avoid the economic pressure from the retailer (New York State Government, 2013; Lohr, 2003).Small businesses are the backbone of any economy and, therefore, an economic system that undermines small businesses should not be encouraged as interests of the citizens are diminished in favor of a few rich individuals. At the same time, interests of communities are undermined in the sense that underemployment promotes poverty and deprivation.

Due to its impact on small businesses and wages, WalMart should not be allowed to open stores in New York City. There is declining trend of job creation in New York City, and the middle class in the city also continues to decline. Small businesses are also the main source of livelihoods for residents of the city (New York State Government, 2013).According to the state government, the entry of WalMart is likely to reduce the wages in the city, diminish spending on the existing retail outlets by residents of the city. The retailer also has a substantial number of associates on publicly-subsidized medical services. The mentioned factors are likely to hurt small businesses as well as further burden the taxpayers of the state. Overly, WalMarts entry into the city would endanger the livelihoods of the city's residents.

Corporate social responsibility (CSR) has become an obvious expectation for organizations in modern business management.CSR helps conserve the environment while building the image of business institutions. Undoubtedly, the entry of WalMart into organic food production is a huge boost for environmental conservation initiatives. Although the entry of WalMart into sustainable business ventures is purely motivated by profits, the demand for organic food created by the retailer means that more farmers will embrace organic farming which, in turn, will have positive effects on the environment in the long run.


Andrews, E. (2014). Why you should be skeptical of WalMarts cheap organic food. Retrieved from

Blodget, H. (2010). WalMart Employs 1% Of America. Should It Be Forced To Pay Its Employees More? The Business Insider.

Dean, A. B. (2014). "Our Food Is Dishonestly Priced": Michael Pollan on the Food Movement's Next Goal of Justice for Food Workers. Retrieved from

Helper, S., & Henderson, R. (2014). Management practices, relational contracts, and the decline of General Motors. National Bureau of Economic Research. Retrieved from

Lohr, S. (2003). Ideas & Trends: Discount Nation; Is Wal-Mart Good for America? The New York Times [New York].

New York State Government. (2013). Wal-Mart Means Fewer Jobs, Less Small Businesses, More Burden on Taxpayers. Retrieved from

Tabuchi, H. (2016). WalMart to Close 269 Stores as Retailers Struggle. The New York Times [New York].

Ziobro, P., & Ng, S. (2015). Wal-Mart Ratchets Up Pressure on Suppliers to Cut Prices. Wall Street Journal.

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