Walmart Wasn't First Big Retailer to Be Condemend for Offering Its Customers Everyday Low Prices
Does this sound familiar? 1. At its peak, the retail chain had nearly 16,000 stores nationwide, with a retail presence in almost every state. Critics charged it with competing unfairly by offering too-low prices. 2. The major retailer's business philosophy is simple: If the company keeps its costs down and prices low, more shoppers will come through its doors, producing more profits than if it kept prices high. The more stores it could open, the greater the take.3. But the company had a public-relations problem. For generations, small "mom and pop" family stores have served as community anchors. There were thousands across the country. If low-priced chain retailers drive out such stores, what will happen to small-town America?4. Chain retailing has become a political issue, one that continues to nag the big-box retailer. The critics' persistent charge is that the chain retailer's prices are too low. Because the chains are so big, they could offer special deals to wholesalers. They can also build their own bakeries and canneries, options unavailable to the independent "mom and pops."5. "We, the American people, want no part of monopolistic dictatorship in American business," remarked a popular Congressman from Texas commenting about the chain retailer. "Think of Hitler. Think of Stalin. Think of Mussolini."6. The chain retailer defended its aggressive efforts to cut purchasing costs, narrow its own margins, and reduce consumer prices in order to build business by saying that is exactly what a company is supposed to do in a competitive market economy. Of course the chain retailer being discussed above would appear to be "evil" Walmart, but it's actually a discussion about a low-price, chain retailer that was founded almost a century before Walmart opened its first store in 1962. What the two retailers had in common was a relentless focus on controlling costs with supply chain efficiencies and economies of scale, with the ultimate goal of providing "everyday low prices" to their consumers. And despite their joint success in serving their consumers with service, quality and prices unmatched by their competitors, both chain retailers received a fair amount of public condemnation for providing alternatives to higher-priced small, "mom and pop" merchants. Find out more about Walmart's retail predecessor in today's WSJ (text above was modified slightly). Note: Walmart currently operates about 4,400 stores in the U.S. (including Sam's Clubs), far fewer than the 16,000 stores the other giant retailer was operating in the U.S. at one time.