CHICAGO, October 7, 2012— I recently read a screed on why Walmart matters. It was the typical left wing propaganda bilge. The criticism was the typical rehash of all the complaints about Walmart. It was probably cribbed from some union’s talking points.
Walmart is a case study of how American business is supposed to work. Its history is the American success story. Sam Walton started with a small five and dime franchise store, Ben Franklin, and turned it into the conglomerate called Walmart. He worked hard, dreamed about ways of doing things better, and did them. He was persistent and consistent in his business methodology.
Walmart is the convenient enemy of the progressives, liberals, or whatever they call themselves these days. The company is the target of what they and greedy power hungry unions believe is wrong with American business. It does not do whatever it is they want it to do.
A history of false myth was created around the company. Lefties love to rewrite history to fit their narrative. It sounds so much better than facts.
Over 100 million people shop at Walmart every week. Walmart is the largest grocery outlet in America by sales volume. They employ over 2 million people and are the largest employer in 25 states. Over 90% of Americans live within a one half hour drive of some type of a Wal-Mart store.
Most American shoppers shop at Walmart on a regular basis for the things they need or want. They want good merchandise or groceries at the lowest cost, especially in these tough economic times.
Consumers by and large do not worry about the employees of Walmart, just like they do not care about employees at other businesses they patronize. Consumers want friendly service and stocked shelves.
Walmart sells multiples more merchandise than their retail competitors. Detractors claim most of that merchandise is made overseas, costing American jobs. Evidently they do not care that Target, Sears, Kohls, Kmart, Costco, or other major retailers sell goods made overseas. Maybe they do not look at the labels wherever they shop. Most of the merchandise American consumers buy is made overseas. This is the reality.
Not incidentally, the largest corporation in America, Apple, makes its products in China, the place unions and bleeding hearts call the evil empire. Yet liberals line up to buy the newest iGadget. Steve Jobs is given godlike status. The Walton family is treated like devils. Go figure.
The one figure the whiners harp on is Walmart’s anual revenue, over $400 billion. They keep throwing that around as if it means something. They really show their ignorance and appeal to the naïveté of their audience. Revenues are sales and gross income, not profits. Walmart earns over $400 billion a year gross. Their actual after-tax profits are 3.5 percent, or roughly $14 billion. They spend over $386 billion a year to earn $14 billion, a paltry return.
An easier way to understand this is, a small business revenues are $400 thousand. At 3.5 percent, the profit would be $14 thousand. Who would or could run such a business?
Walmart’s business model is based on a 3.5 percent profit margin. The only way to make that work is scale. Where others earn money from dollars Walmart earns theirs from nickels and dimes on a large scale.
The whiners protest the way Walmart treats and pays their employees and the lack of benefits. No one is forced to work at Walmart. Walmart does not hide anything from their prospective employees. People know exactly what they are getting when they work at Walmart. They are getting a job. They are trading time and work for money.
Walmart should only worry if they cannot get people to work to work for them. So far, that is not the case.
Walmart, like most companies, has policies, procedures, and a corporate culture. You either accept them or you work someplace else. They, like all employers, set the rules and culture. The employer runs the company, not the employees. What is so hard to understand?
Walmart is a non-union company. This causes major problems for retail sector unions. As one of the largest employers in the nation, the unions are losing out on dues, the only thing they care about. They need that money for their executive salaries, perks, and bribing politicians with campaign donations. Heaven forbid they would use those hundreds of millions of dollars to help fund heath care plans for their members. Buying politicians is better.
Another major complaint against Walmart is they crush small and medium sized retail businesses in communities where they build. Business is about competition. You either compete or die. Businesses can compete successfully with Walmart. They can offer merchandise Walmart does not or provide services that cannot be found at Walmart. Part of competition is adapting to changes. Too many small business, and even larger retailers, will not adapt.
American business is about growth. You start out small, like Sam Walton or Steve Jobs, and you grow. If you do things right your growth is exponential. If you do things wrong, refuse to compete, or adapt you stagnate or go out of business. At the end of the day, business is giving people what they want at a price they are willing to pay, and earning a profit. Nothing more. Nothing less.
If Walmart were some evil moral stain upon the nation hundreds of millions of people would not shop there every month. Millions of people would not work or seek jobs there. Walmart is an American success story. Give the people what they want or think they want and they will beat a path to your door. Walmart gives them what they want.
What have the moralists, whiners, complainers, and greedy unions ever accomplished, provided, or contributed to people except hot air?
Peter V. Bella is a retired Chicago Police Officer, freelance journalist and photojournalist, cook, and raconteur. He likes to be the irreverent sharp stick that pokes, prods, and annoys. His opinions are his and his alone. Mr. Bella is a member of the National Press Photographers Association, Online News Association, Chicago Headline Club, and the Society for Professional Journalists.
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