Wal-Mart Expecting Big Shopping Season, Small Businesses Cringe

While most of the nation’s retailers are preparing for what is sure to be an anemic holiday shopping season, Wal-Mart is expecting epic sales. The retail giant’s success will only further its stranglehold on the marketplace, driving others out of business.

"In my mind, there is no doubt that this is Wal-Mart time," H. Lee Scott Jr., the president and chief executive of Wal-Mart, said recently at a meeting of analysts and investors in Wal-Mart's hometown of Bentonville, Arkansas. Referring to the retail chain's founder, he added, "This is the kind of environment that Sam Walton built this company for."

With consumer confidence at disturbingly low levels and discretionary spending down as well, Wal-Mart is banking on consumers flocking to its store to buy cheaper goods. The retail giant, whose sales continue to climb despite the dismal state of the economy, is looking to increase its already enormous market-share.

Not that there is much competition left for Wal-Mart, but the current demand for cheaper goods could be the final deathblow for many smaller businesses and mom-and-pop shops. The company already has a notorious reputation for its perceived complicity in ending the era of small, locally owned retail businesses.

After starting out as a regional chain in the South, Wal-Mart soon expanded across the nation and often left a raft of empty retail spaces on Main Streets across America in its wake. Wal-Mart’s expansion and demand for ever-cheaper goods has also done serious damage to America’s manufacturing base. Nearly all of those cheap goods on Wal-Mart’s shelves are made outside of the U.S. As the nation’s largest retailer, manufacturers have no choice but to look outside the U.S. for sources of cheap labor in order to remain a Wal-Mart vendor. Without that market-share they would have very few other places to sell their goods. Other stores that refuse to sell cheap foreign-made goods are at a competitive disadvantage and will most likely see their sales plummet and watch their doors close for good.

The expansion of Wal-Mart has also severely hurt the tax bases of the towns it has expanded into. As more and more smaller businesses closed because they could not compete, municipal tax bases began to dwindle as corporate taxes and sales taxes declined. Often times, to encourage Wal-Mart to enter a market, municipalities would offer subsidies and tax breaks, a luxury not afforded to small businesses. Furthermore, as those small businesses - that most likely paid higher wages than Wal-Mart - closed their doors it also had a major impact on payroll taxes.

It should be noted that during the 1980s Wal-Mart’s founder, Sam Walton, organized and helped finance a campaign that encouraged consumers to buy American made goods. Shortly after his death in 1992 the company abandoned the philosophy of stocking shelves with American made goods, abandoning the practice for a higher profit margin. It is ironic that the same company that staunchly advocated for consumption of American products now almost exclusively stocks imports.

Wal-Mart should begin to place more value on the American worker and reclaim Sam Walton’s views instead of selling American workers down the river in exchange for inexpensive, poorly made products from third-world countries with no environmental or labor standards.

Source International Herald Tribune:

Front Page Photo by oswaldo - Flickr © Some rights reserved

Click Here For Solutions To America's Economic Problems:

Click here to contact your Representative in Congress.

Spread this message with Digg, Del.icio.us, Reddit, or Stumbleupon, and subscribe to the RSS Feed to track articles