BOOKCASE : The Wal-Mart Effect: How an Out-of-Town Superstore Became a Superpower

• Charles Fishman • Penguin UK • $35

It is the world’s largest, most powerful, most influential company and any or all the statistics regarding Wal-Mart are staggering (consumers who shopped at Wal-Mart in 2005, for example, saved US$30 billion) but of recent times we have seen increasing evidence that Sam Walton’s baby might just have grown too big for its diapers. Does it really hire illegal immigrants? Is staff remuneration really so bad? Have staff been locked in the store at night in order to finish their work and not been paid for being there? Is it true that Wal-Mart, the champion of small town America, seeks to use such low-wage countries as China, Indonesia, Swaziland, Nicaragua and Bangladesh?
Charles Fishman’s The Wal-Mart Effect takes us on supermarket trolley ride of the aisles of Wal-Mart in order to address these and many other questions about the behemoth that bestrides not only the United States, but also neighbours Canada and Mexico, and is now penetrating the United Kingdom.
Somewhat hamstrung by the company’s refusal to provide interviews or information, Fishman takes hard look at both the pluses and minuses of Wal-Mart. Not only is the company uncooperative; current suppliers are equally reticent to speak of their relationship with Wal-Mart.
But Fishman has done great job in investigating range of suppliers in order to give us close-up view of what dealing with Bentonville, Arkansas (Wal-Mart’s headquarters) is like. Through these suppliers, we get crash course in supply chain management, not only from the suppliers but also as it is perceived at Wal-Mart.
This supply chain management comes with sting in the tail. Wal-Mart’s promise is to always offer low prices. As consequence, if supplier can’t match Wal-Mart’s requested price, it either walks away from the business or moves its manufacturing to low-wage country. Usually, by the time that squeeze really bites the supplier is in so deep with Wal-Mart that it is forced to respond to the company’s requests or go out of business.
Even those who are not suppliers to the company run the risk of being caught. Typically, when Wal-Mart comes to town it hires hundreds of staff, but after five years the average net employment growth in the town only amounts to 50 jobs, and four existing businesses will have closed. In the past decade, 29 supermarkets have sought bankruptcy protection and Wal-Mart has been the catalyst in 25 of those.
The Wal-Mart Effect is fast and fascinating read, demonstrating the extent to which consumers have benefited from its low prices promise, but also what it is like to be supplier to such giant.

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