You really can’t beat Wal-Mart’s low, low prices
“Our hands were somewhat tied, legally,” former Mayor Joe Atkins said.
Reno’s leaders, at the pleading of northwest Reno residents, arguably tried just a bit harder. In November 2000, the Reno City Council nixed the project, citing traffic concerns. Hooray for local government.
But Wal-Mart took the city’s decision to court, threatening to sue for $1 million a month in lost business.
A million a month? The trench project would be bankrupt.
The council caved.
A week ago Wednesday, after some last-minute paperwork, another sterile new Wal-Mart opened in northwest Reno. Those opposed to the project say they won’t be shopping there. Others couldn’t care less.
Yawn, ho-hum. So what? Talk of predatory pricing is, like, so mid-1990s. Sure, a few collapsed businesses tried to sue Wal-Mart for selling Crest toothpaste and other stuff at below the price it paid. They lost.
U.S. enforcement guidelines define predatory pricing as occurring when “a dominant firm charges low prices over a long enough period of time so as to drive a competitor from the market or deter others from entering and then raises prices to recoup its losses.”
But enforcement doesn’t happen.
And predatory pricing works. At Christmas, say, parents are in the market for Bikini Wax Barbie. Wal-Mart has 3,500 stores nationwide, and Wal-Martians buy toys directly from toy-makers. That’s how the company negotiates a low, low price per unit. So right off, it can offer Bikini Wax Barbie for less than, say, KB Toys and FAO Schwarz can.
And to ensure grinding the competition into gory pulp, Wal-Mart goes a step further—offering items at below its own cost.
That’s the free market, we’re told. Surely it works for everyone. We save a few bucks on Barbies, and Wal-Mart, to its stockholders’ joy, reports sales in 2003 of $244.5 billion.
In the meantime, both KB Toys and FAO Schwarz are filing for bankruptcy, and both are excoriating Wal-Mart. In several national stories, analysts are quoted saying, “You can’t compete with Wal-Mart and win.”
If given enough leeway by federal, state and local governments (who feel powerless against the giant), Wal-Mart will likely crush every grocery store, optometrist, beauty parlor, photo lab, drug store and clothing retailer in the nation.
What will happen to low, low prices when the only store left is Wal-Mart?
If Wal-Mart had a great reputation for treating its employees well, the coming realm wouldn’t be as horrifying. No such luck.
An audit of 25,000 Wal-Mart workers uncovered thousands of labor violations at 128 stores across the country, including 1,371 child labor violations, The New York Times reports this month. Minors were working too late, for too many hours or during school hours. Workers missed 60,000 breaks and skipped meals on 16,000 occasions, a violation of labor regulations in most states.
Also, Wal-Mart’s been in the news for locking its workers in stores overnight, a policy that endangers sick or hurt workers who’ve no way to get out and to the hospital when needed. Wal-Mart’s been sued for rejecting pregnant and disabled job applicants. In Florida, 230,000 employees are involved in a class action suit against Wal-Mart for failing to pay low-level workers for extra work performed on breaks, during lunch and after they’d clocked out.
How low can you go?