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The Walmart Effect: How the World's Most Powerful COmpany Really Works-AndHow it's Transforming the American Economy
Publishing House Pub. Date :2007-07-01. Pages 259 CITIC Publishing House Pub. Date :2007-07-01. Every hour . Americans spend $ 35.000.000 in the Wal-Mart; 90% of Americans will be able to go out less than 15 miles to find a Wal-Mart; the United States 70% of t
Hardcover
First published January 1, 2006
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About the author
Charles Fishman
23 books78 followersAs a reporter, Charles Fishman has tried to get inside organizations, both familiar and secret, and explain how they work.
In the course of reporting about water to write The Big Thirst, Fishman has stood at the bottom of a half-million-gallon sewage tank, sampled water directly from the springs in San Pellegrino, Italy, and Poland Spring, Maine, and carried water on his head for 3 km with a group of Indian villagers.
Fishman’s previous book, the New York Times bestseller The Wal-Mart Effect, was the first to crack open Wal-Mart’s wall of secrecy, and has become the standard for understanding Wal-Mart’s impact on our economy and on how we live. The Economist named it a “book of the year.”
Fishman is a former metro and national reporter for the Washington Post, and was a reporter and editor at the Orlando Sentinel and the News & Observer in Raleigh, NC. Since 1996, he has worked for the innovative business magazine Fast Company. Fishman has won numerous awards, including three times receiving UCLA’s Gerald Loeb Award, the most prestigious award in business journalism.
Fishman grew up in Miami, Florida, and went to Harvard. He lives outside Philadelphia with his wife, also a journalist, their two children, their two Labradors, and their two parakeets. He likes his water from the refrigerator spigot, with ice, or splashing across the bow of a Sunfish.
In the course of reporting about water to write The Big Thirst, Fishman has stood at the bottom of a half-million-gallon sewage tank, sampled water directly from the springs in San Pellegrino, Italy, and Poland Spring, Maine, and carried water on his head for 3 km with a group of Indian villagers.
Fishman’s previous book, the New York Times bestseller The Wal-Mart Effect, was the first to crack open Wal-Mart’s wall of secrecy, and has become the standard for understanding Wal-Mart’s impact on our economy and on how we live. The Economist named it a “book of the year.”
Fishman is a former metro and national reporter for the Washington Post, and was a reporter and editor at the Orlando Sentinel and the News & Observer in Raleigh, NC. Since 1996, he has worked for the innovative business magazine Fast Company. Fishman has won numerous awards, including three times receiving UCLA’s Gerald Loeb Award, the most prestigious award in business journalism.
Fishman grew up in Miami, Florida, and went to Harvard. He lives outside Philadelphia with his wife, also a journalist, their two children, their two Labradors, and their two parakeets. He likes his water from the refrigerator spigot, with ice, or splashing across the bow of a Sunfish.
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Displaying 1 - 30 of 471 reviews
March 15, 2008
Having a family in the grocery business (and being a product of one of the most economically distraught states in the country-Michigan) of course likely aroused my interest in this book more than most. But, as the book so thoughtfully and throughly puts forward, Wal-Mart truly affects us all, whether we shop there or not. Now don't think that this book was simply one big stoning fest at Wal-Mart, it's not. The author covers the positive and the negative of this the largest company in the country. I was pleased to hear how Wal-Mart has actually stream lined the methods of product distribution and prompted the cut down in unnecessary product packaging. Beyond the more publicized stories of how Wal-Mart has facilitated the exportation of jobs and closing of mom and pop stores, I found it really interesting to read about the more hidden and at times subtle influences of Wal-Mart. Most of all how they have really changed our expectations of products; how products are more cheaply made, and that is what we expect. So we aren't surprised when our toasters last only one or two years and we have to get a new one. We don't complain because it was inexpensive to begin with, what's so big about buying another one? (except that adds volume to our landfills). But you know a better toaster can be made, shoot I think my mom is still using the one she got in the early '60s.
It's overwhelming to try and summarize how the volume and dominance of Wal-Mart as a retailer and it's low pricing philosophy affects the environment, Wal-Mart employees, medicare, manufacturers, harvesters, factory workers, fisherman, farmers, everyone all the way down the production food/product chain. And with that the ultimate potential that Wal-Mart has to change and improve how we produce goods.
The book was written in 2006. There was an afterward that addressed Wal-Mart's response to the book. It did seem to prompt some ideas of change in their policies, ok, we'll see.
It's overwhelming to try and summarize how the volume and dominance of Wal-Mart as a retailer and it's low pricing philosophy affects the environment, Wal-Mart employees, medicare, manufacturers, harvesters, factory workers, fisherman, farmers, everyone all the way down the production food/product chain. And with that the ultimate potential that Wal-Mart has to change and improve how we produce goods.
The book was written in 2006. There was an afterward that addressed Wal-Mart's response to the book. It did seem to prompt some ideas of change in their policies, ok, we'll see.
January 30, 2016
The Wal-Mart Effect: How the World's Most Powerful Company Really Works, and How It's Transforming the American Economy
© 2006 Charles Fishman
352 pages
In only a little over fifty years, Wal-Mart has grown from a small five-and-dime store in rural Arkansas to an outright goliath, dominating the American, and increasingly, the global economy to an unprecedented degree. In The Wal-Mart Effect, Charles Fishman examines the secret of the corporation’s success, and explores how that success has altered the global marketplace.
Fishman does to Wal-Mart specifically what Eric Schlosser did for the fast food companies in general: probe into the details of their business, as far as the corporate obsession with secrecy will allow, and air out the laundry. But if Sclosser is a journalist looking for the ‘dark side’ of his subject, Fishman takes more of a neutral stance; however, a sense of awe pervades the text. He’s no less critical of Wal-Mart, but more honestly curious. It is the same attitude one might find in a history of Napoleon’s Grand Armee or the German Wehrmacht. The difference is that those legendary armies of old are now long gone: Wal-Mart is still very much alive: the changes it brings about are seen in the newspapers, not the history books.
The secret to Wal-Mart’s success lays in its near-maniacal obsession with finding the cheapest products and offering them as cheaply as possible. This seems an obvious proposition: doesn’t every business use that as its model? Wal-Mart’s distinction is a matter of degree: cutting expenses is an obsession in this corporation, at all levels. Fishman’s investigations find workaholic executives who meet in boardrooms filled with discarded lawn furniture, because Wal-Mart sees no reason in buying furnishing that hopeful clients provide for free. He finds managers who lock their employees in overnight and encourage people to work off the clock – and employees who exist in a perpetual limbo between partial and full employment, working too few hours to qualify for the meager benefits, but too many to look for a second job. But one expects a chain store like Wal-Mart to prosper by keeping wages low; the war it wages on its suppliers is more novel.
Wal-Mart is a supermarket: it sells vast quantities of goods, and its original successes allowed it to expand to the point that 90% of Americans live within a fifteen-mile radius of one of its stores. A company that does business with Wal-Mart can expect to sell more volume than they ever anticipated producing through the stores, but Wal-Mart is no passive player in the marketplace. That obsession with finding the lowest prices means obtaining the lowest price from their suppliers – and Wal-Mart conducts its commanding volume into power, in effect dictating prices to its suppliers. This doesn’t happen at the outset; instead, prospective clients are lured into business, then hit with demands that they lower their price 5% every year. Companies which can’t afford this go out of business, and those who linger can only make the cut by producing ever-more shoddy merchandise, or finding a cheaper source of production…like China. Wal-Mart not only prospers from outsourcing; it engineers it.
That Wal-Mart can dictate prices like this indicates that it has outgrown the restrictions normally present in the free market: indeed, Wal-mart is now so large that when it enters a market, that market becomes its own. It not only sets the prices in its own stores: other companies have to resort to the same tactics just to keep even. When Wal-Mart moves into a town, small businesses competing with it go out of business (creating a net job loss, for those ‘growth’-minded politicians who think the answer to a stagnant economy is big box stores). Those who try to compete with the giant of Bentonville face angry customers, because the Wal-Mart price has become the expected price – and it is, in fact, the lowest price that can possibly be offered. Wal-Mart's enormous income derives from volume sales, not a generous profit margin: Fishman elaborates that if Wal-Mart attempted to raise its standard wage from $10 to $12, the company would be operating at a net loss.
Although its effect on local economies and wages is deleterious, Fishman's chief concern with Wal-Mart is that its size makes it unmanageable: it's too big to be reined in by the market, because it is the market. His account doesn't address how exactly what concerned people should do with Wal-Mart, although after finishing it I think people who can might give it a miss and shop elsewhere, even if the prices aren't rock bottom. Fishman believes people are starting to tire of the store, missing quality goods and service. Wal-Mart's obsession with providing cheap goods has made shopping there an experience bereft of value.
Definitely a book to consider for Americans.
Related:
WalMart Watch
Fast Food Nation, Eric Schlosser
© 2006 Charles Fishman
352 pages
In only a little over fifty years, Wal-Mart has grown from a small five-and-dime store in rural Arkansas to an outright goliath, dominating the American, and increasingly, the global economy to an unprecedented degree. In The Wal-Mart Effect, Charles Fishman examines the secret of the corporation’s success, and explores how that success has altered the global marketplace.
Fishman does to Wal-Mart specifically what Eric Schlosser did for the fast food companies in general: probe into the details of their business, as far as the corporate obsession with secrecy will allow, and air out the laundry. But if Sclosser is a journalist looking for the ‘dark side’ of his subject, Fishman takes more of a neutral stance; however, a sense of awe pervades the text. He’s no less critical of Wal-Mart, but more honestly curious. It is the same attitude one might find in a history of Napoleon’s Grand Armee or the German Wehrmacht. The difference is that those legendary armies of old are now long gone: Wal-Mart is still very much alive: the changes it brings about are seen in the newspapers, not the history books.
The secret to Wal-Mart’s success lays in its near-maniacal obsession with finding the cheapest products and offering them as cheaply as possible. This seems an obvious proposition: doesn’t every business use that as its model? Wal-Mart’s distinction is a matter of degree: cutting expenses is an obsession in this corporation, at all levels. Fishman’s investigations find workaholic executives who meet in boardrooms filled with discarded lawn furniture, because Wal-Mart sees no reason in buying furnishing that hopeful clients provide for free. He finds managers who lock their employees in overnight and encourage people to work off the clock – and employees who exist in a perpetual limbo between partial and full employment, working too few hours to qualify for the meager benefits, but too many to look for a second job. But one expects a chain store like Wal-Mart to prosper by keeping wages low; the war it wages on its suppliers is more novel.
Wal-Mart is a supermarket: it sells vast quantities of goods, and its original successes allowed it to expand to the point that 90% of Americans live within a fifteen-mile radius of one of its stores. A company that does business with Wal-Mart can expect to sell more volume than they ever anticipated producing through the stores, but Wal-Mart is no passive player in the marketplace. That obsession with finding the lowest prices means obtaining the lowest price from their suppliers – and Wal-Mart conducts its commanding volume into power, in effect dictating prices to its suppliers. This doesn’t happen at the outset; instead, prospective clients are lured into business, then hit with demands that they lower their price 5% every year. Companies which can’t afford this go out of business, and those who linger can only make the cut by producing ever-more shoddy merchandise, or finding a cheaper source of production…like China. Wal-Mart not only prospers from outsourcing; it engineers it.
That Wal-Mart can dictate prices like this indicates that it has outgrown the restrictions normally present in the free market: indeed, Wal-mart is now so large that when it enters a market, that market becomes its own. It not only sets the prices in its own stores: other companies have to resort to the same tactics just to keep even. When Wal-Mart moves into a town, small businesses competing with it go out of business (creating a net job loss, for those ‘growth’-minded politicians who think the answer to a stagnant economy is big box stores). Those who try to compete with the giant of Bentonville face angry customers, because the Wal-Mart price has become the expected price – and it is, in fact, the lowest price that can possibly be offered. Wal-Mart's enormous income derives from volume sales, not a generous profit margin: Fishman elaborates that if Wal-Mart attempted to raise its standard wage from $10 to $12, the company would be operating at a net loss.
Although its effect on local economies and wages is deleterious, Fishman's chief concern with Wal-Mart is that its size makes it unmanageable: it's too big to be reined in by the market, because it is the market. His account doesn't address how exactly what concerned people should do with Wal-Mart, although after finishing it I think people who can might give it a miss and shop elsewhere, even if the prices aren't rock bottom. Fishman believes people are starting to tire of the store, missing quality goods and service. Wal-Mart's obsession with providing cheap goods has made shopping there an experience bereft of value.
Definitely a book to consider for Americans.
Related:
WalMart Watch
Fast Food Nation, Eric Schlosser
February 16, 2008
So I only got to disc 3 (of 6) before I gave up. There's just only so much hating of Wal*Mart that I can do in one week.
Actually, this book did help me see that Wal*Mart is not entirely evil. Suppliers don't necessarily like them b/c Sam Walton effectively stole the pants in the relationship. However, Wal*Mart's history is riddled with several examples of what happens to ethics when low prices become the ultimate goal: breaking the law. From sexual discrimination to large-scale employment of illegal aliens to locking employees inside stores to forcing employees to work off-the-clock, many Wal*Mart managers & executives have tried to cut corners only to get caught and settle huge lawsuits.
But none of that is actually the reason I hate and therefore do not shop at Wally World: when I go there I feel my soul slowly getting sucked out of me by the fluorescent lighting. That's something this book can't change.
Actually, this book did help me see that Wal*Mart is not entirely evil. Suppliers don't necessarily like them b/c Sam Walton effectively stole the pants in the relationship. However, Wal*Mart's history is riddled with several examples of what happens to ethics when low prices become the ultimate goal: breaking the law. From sexual discrimination to large-scale employment of illegal aliens to locking employees inside stores to forcing employees to work off-the-clock, many Wal*Mart managers & executives have tried to cut corners only to get caught and settle huge lawsuits.
But none of that is actually the reason I hate and therefore do not shop at Wally World: when I go there I feel my soul slowly getting sucked out of me by the fluorescent lighting. That's something this book can't change.
June 11, 2012
Everyone should read this book: Wal-Mart lovers, enthusiasts, conflicted shoppers and haters. I picked up this book because I hate Wal-Mart; I despise their business practices, the way they destroy small businesses and confuse the economy by creating a screen of bargains for the people, when it's the people who are ultimately getting robbed, that profits earned at my local supercenter Wal-Mart do not, after sales tax, stay in my community but go back to Bentonville, Arkansas and into the pockets of the 6 Walton family heirs (with a combined worth of $93 Billion). We do not save money at Wal-Mart. Statistics prove the average American family saving somewhere around $900 a year by shopping at Wal-Mart actually has less than $500 in savings. In other words, we just buy more stuff.
I've heard personal war stories of Wal-Mart edging out a sales rep in order to get a lower price. We've all heard about the low wages, the difficulty in getting a full-time position, hard-to-get health insurance, sweat shops, locking workers in stores overnight, hiring hundreds of illegals to clean their stores (because they're contracts are, of course, the cheapest) and overall cheapening of America by selling poor quality items made overseas. And yet we Americans still shop there, still vote with our money by supporting what Fortune Magazine has declared for 7 years running as #1 in America's top 500 businesses - that's gross sales.
From a gut instinct I do not shop at Wal-Mart. It's simply too big. No for-profit entity should be so large and have so much power that they literally by-pass their suppliers, reach into their suppliers [overseas] factories and dictate how a product is made, how fast, with what materials and at what cost, especially when that cost is the inhumane treatment of workers.
I hear people complain all the time about Wal-Mart, but admit to shopping there anyway. "There's no other options!" they say. Or "no one else carries the product I like." We've been trained to think we have no other option, that we are getting robbed by paying the other guy a dollar or two more for an item. Or that we can not live without what that certain product. In The Wal-Mart Effect Fishman suggests we consider those everyday super low prices and ask how they got so low. Who's working 16 hour days for .40/hour? Who's not allowed to use the bathroom during their 16 hour shift? How long does that product even last? If you have to buy another next year, haven't you already spent more than if you'd just paid a little more for the product that lasts? What pollution is being committed as a side effect of that everyday low price? How safe is the factory where the products are made?
Keep in mind, that not one of those overseas factories would be legal in this country. We would never stand for it.
If the tables were turned and we were the ones working in factories that supplied Wal-Mart, with only a day off a month, a barely livable wage, in filth and unsafe circumstances all to provide cheap goods to a country fat and greedy for more, how would we feel about ourselves?
We've allowed our desire to collect more things, our buyer's impulse and false sense that we deserve more to replace our traditional sense of pride as Americans, Americans who believed a durable, dependable well-made product was more important than price. Americans who believed in 'American Made'. Most big box retailers practice very similar buying standards now, sourcing from overseas, but Wal-Mart is by far, by a huge margin, the largest offender. Wal-Mart has set that pace and dictated the practices for everyone. And we buy it up.
So I'm coming off a little hard-ass on the matter. But I fear our complacency is our worst enemy. Complacency is what allows politicians to to conduct shady business, to allow government to make bad decisions for us, to send young men and women to fight money wars, to pollute the environment, to grow obese, to watch our homes slip away when mortgage lending gets out of control, to spend too much money on higher education that can't deliver what it promises because markets are over-saturated.
Fishman does not argue that Wal-Mart is bad or good. He simply states we do not yet fully understand Wal-Mart, or how it's values that worked when they were 300 stores becomes grossly distorted and ugly when they are 3,000 stores. Fishman argues we are not asking the right questions. And that legislation has not yet been created to handle mega corporations like Wal-Mart, like Fanny Mae, like Proctor & Gamble, or Chevron or ExonMobil. Wal-Mart, by the way, is bigger than both ExonMobil and Chevron.
Our dollar is our strongest vote. It's a lot to ask to consider where our dollar is really going, into who's pocket, or how things work behind the scene. It's a lot to ask to consider what goes into our food, which ingredients and how it's made, where it's sourced. It's a lot to ask to consider the ethics of a politician, their background, their true character before voting on an impulse, or emotional pull. Life should be easier. We should be able to afford not just the things we need but the things we want and we should feel good about spending that dollar, regardless of extenuating circumstances. But life is no longer so simple. We are a complicated people in a complicated world.
The least we can do is look hard at what has been revealed (however legal it may be, one has to question the ethics of the world's largest company when it refuses to contribute ANY sales information, ultimately skewing the numbers on the state of the U.S. economy) and make a decision based on a larger picture, a moment longer and deeper than the one we are immediately standing in, the one where that unbelievably low price is truly unbelievable. Ask, why?
Please, read this book, congratulate yourself for having been born American, for having been born into a country that allows choice, then exercise choice with an informed vote.
I've heard personal war stories of Wal-Mart edging out a sales rep in order to get a lower price. We've all heard about the low wages, the difficulty in getting a full-time position, hard-to-get health insurance, sweat shops, locking workers in stores overnight, hiring hundreds of illegals to clean their stores (because they're contracts are, of course, the cheapest) and overall cheapening of America by selling poor quality items made overseas. And yet we Americans still shop there, still vote with our money by supporting what Fortune Magazine has declared for 7 years running as #1 in America's top 500 businesses - that's gross sales.
From a gut instinct I do not shop at Wal-Mart. It's simply too big. No for-profit entity should be so large and have so much power that they literally by-pass their suppliers, reach into their suppliers [overseas] factories and dictate how a product is made, how fast, with what materials and at what cost, especially when that cost is the inhumane treatment of workers.
I hear people complain all the time about Wal-Mart, but admit to shopping there anyway. "There's no other options!" they say. Or "no one else carries the product I like." We've been trained to think we have no other option, that we are getting robbed by paying the other guy a dollar or two more for an item. Or that we can not live without what that certain product. In The Wal-Mart Effect Fishman suggests we consider those everyday super low prices and ask how they got so low. Who's working 16 hour days for .40/hour? Who's not allowed to use the bathroom during their 16 hour shift? How long does that product even last? If you have to buy another next year, haven't you already spent more than if you'd just paid a little more for the product that lasts? What pollution is being committed as a side effect of that everyday low price? How safe is the factory where the products are made?
Keep in mind, that not one of those overseas factories would be legal in this country. We would never stand for it.
If the tables were turned and we were the ones working in factories that supplied Wal-Mart, with only a day off a month, a barely livable wage, in filth and unsafe circumstances all to provide cheap goods to a country fat and greedy for more, how would we feel about ourselves?
We've allowed our desire to collect more things, our buyer's impulse and false sense that we deserve more to replace our traditional sense of pride as Americans, Americans who believed a durable, dependable well-made product was more important than price. Americans who believed in 'American Made'. Most big box retailers practice very similar buying standards now, sourcing from overseas, but Wal-Mart is by far, by a huge margin, the largest offender. Wal-Mart has set that pace and dictated the practices for everyone. And we buy it up.
So I'm coming off a little hard-ass on the matter. But I fear our complacency is our worst enemy. Complacency is what allows politicians to to conduct shady business, to allow government to make bad decisions for us, to send young men and women to fight money wars, to pollute the environment, to grow obese, to watch our homes slip away when mortgage lending gets out of control, to spend too much money on higher education that can't deliver what it promises because markets are over-saturated.
Fishman does not argue that Wal-Mart is bad or good. He simply states we do not yet fully understand Wal-Mart, or how it's values that worked when they were 300 stores becomes grossly distorted and ugly when they are 3,000 stores. Fishman argues we are not asking the right questions. And that legislation has not yet been created to handle mega corporations like Wal-Mart, like Fanny Mae, like Proctor & Gamble, or Chevron or ExonMobil. Wal-Mart, by the way, is bigger than both ExonMobil and Chevron.
Our dollar is our strongest vote. It's a lot to ask to consider where our dollar is really going, into who's pocket, or how things work behind the scene. It's a lot to ask to consider what goes into our food, which ingredients and how it's made, where it's sourced. It's a lot to ask to consider the ethics of a politician, their background, their true character before voting on an impulse, or emotional pull. Life should be easier. We should be able to afford not just the things we need but the things we want and we should feel good about spending that dollar, regardless of extenuating circumstances. But life is no longer so simple. We are a complicated people in a complicated world.
The least we can do is look hard at what has been revealed (however legal it may be, one has to question the ethics of the world's largest company when it refuses to contribute ANY sales information, ultimately skewing the numbers on the state of the U.S. economy) and make a decision based on a larger picture, a moment longer and deeper than the one we are immediately standing in, the one where that unbelievably low price is truly unbelievable. Ask, why?
Please, read this book, congratulate yourself for having been born American, for having been born into a country that allows choice, then exercise choice with an informed vote.
October 15, 2013
I feel like I know so much more about Wal-Mart now. This book goes out of its way to show both sides of the Wal-Mart story. But those sides tend to be Pro Wal-Mart city people and Anti Wal-Mart city people. The author describes Wal-Mart as a terrible shopping experience and the kind of place you only go to when you need to buy a product. This is very true if you live in a city with a lot to do. Not true in a small town.
I had the experience of living in a small town when a Super Wal-Mart moved in. It was huge town wide celebration. There were no parking spots free in the lot all weekend. In a small town, going to Wal-Mart is a social activity and the only thing to do after 9pm. Wal-Mart connect small towns with a universe of goods they would have no access to otherwise.
I had the experience of living in a small town when a Super Wal-Mart moved in. It was huge town wide celebration. There were no parking spots free in the lot all weekend. In a small town, going to Wal-Mart is a social activity and the only thing to do after 9pm. Wal-Mart connect small towns with a universe of goods they would have no access to otherwise.
June 26, 2017
If you haven't read this and think you know what it says already, read it. The situation is a whole lot bigger and more to ponder than I realized. He does a wonderful job. He doesn't just slam Walmart. He really looks respectfully at the company in terms of its founder and its work ethic and its philosophy and business practices. And then he looks thoroughly and in detail at the real effects those business practices have when the company's reach changes from small Arkansas store to global mega-corporation. It is also very thought-provoking (and extremely worrisome) and clarifying about the future.
August 29, 2019
Very interesting read. The methods that Walmart uses to control markets are extremely interesting. I was fascinated to find out how they go about manipulating small manufacturers, and even large ones, for that matter, into giving them just what they want. From their advertising to how they stock their workforce, everything is calculated to the penny. While I wasn't blown away by the fact that Walmart would do these things, some of the methods used were fascinating to me.
May 6, 2018
I read this a couple of years and remember it was really interesting.
dnf
January 18, 2019Stopped listening to the audiobook for a time and could never find the motivation to restart.
September 20, 2022
While I was aware of the problems Walmart causes to its own employees- underpaying them so much that even people who work full-time for Walmart need government assistance- I was not as aware of the ways in which Walmart has caused problems to manufacturers who must lower wholesale prices to meet Walmart contracts, and the detriment to the quality of goods sold even by higher-end manufacturers who can't compete with low-quality Walmart products. Walmart is growing to a point where there aren't alternatives in parts of the country to shopping there either which is something our antitrust (anti-monopoly) laws should be protecting against but are not.
October 25, 2007
Overall the book does a good job laying down the issues. It asks a lot of questions and tries to answer them. The writing is well organized, written in a way anyone can understand, and is very easy to read. All the sources are cited. Wal-Mart itself was of no help witing this book, and it is clear a lot of effort went into getting the interviews.
You're going to learn a lot about Wal-Mart reading this book. If you're in a hurry, much of the writing is anecdotal and you can skip over quite a bit. Important studies that actually give you concrete information are discussed in Chapters 6 and 7.
The author shops at wal-mart, the very first paragraph starts on a positive note for the corporation. However, it will become evident that the book is written in a bias against wal-mart. Unfortunately, much of this bias ends up in sentimental writing and omissions of scholarly knowledge. For example, the general consensus in the greater world of Economics is that trading overseas is generally more beneficial than closing doors to international trade. Regardless whether this is true, Fishman neglects to even mention (and then counter) such arguments. So I am left without further insight in this area, and then suspicious of what other omissions there are that are giving me only a partial view of the issues.
Statistics are often explained to us rather than given to us - at times he compares categories, but you can't understand the comparison unless you look at the original source because he doesn't explain what each category means. He cites, so I guess I can't complain too much.
Toward the end of the book Fishman asks a question I was wondering since page 1 - how much better is to to shop at other stores (ie. best buy, target, sears,etc.) He does absolutely nothing to answer this question - he only mentions it because it is indeed an important question. Despite his inability to answer many such questions he raises, he does encourage and call for others to research these. Fishman has definitely convinced me that Wal-Mart is a phenomenon that ought to be studied before it's too late (i would say kinda like global warming.)
There is a chapter titled "The Power of Pennies." Yes, consumers have some control with how they spend their dollars. This chapter does nothing to enlighten the reader on what would be a wiser purchase (or even non-purchase) with one's money. While that isn't the intent of this book, he insists repeatedly that Wal-Mart is an unstoppable force, showing that even people who have been screwed over by Wal-Mart still shop there. He repeatedly states that there is nothing to do but shop there. How is it that I've been in a Wal-Mart maybe five times in my ENTIRE LIFE, yet have always lived in the states? Clearly it is not a necessary practice to shop at Wal-Mart - if people can afford X-Boxes and iPods, they can afford the extra pennies. While Fishman does mention Starbucks - who makes a business doing the exact opposite of Wal-Mart (raising prices versus lowering), yet omits any tools or ideas we can draw from this (rather brief) comparison.
All in all, quite enlightening, but like most books I read such as this one, I am highly skeptical when the reasoning is not all that logical and there are clear omissions that the reader either will be unaware of or, if aware of them, be irritated by.
You're going to learn a lot about Wal-Mart reading this book. If you're in a hurry, much of the writing is anecdotal and you can skip over quite a bit. Important studies that actually give you concrete information are discussed in Chapters 6 and 7.
The author shops at wal-mart, the very first paragraph starts on a positive note for the corporation. However, it will become evident that the book is written in a bias against wal-mart. Unfortunately, much of this bias ends up in sentimental writing and omissions of scholarly knowledge. For example, the general consensus in the greater world of Economics is that trading overseas is generally more beneficial than closing doors to international trade. Regardless whether this is true, Fishman neglects to even mention (and then counter) such arguments. So I am left without further insight in this area, and then suspicious of what other omissions there are that are giving me only a partial view of the issues.
Statistics are often explained to us rather than given to us - at times he compares categories, but you can't understand the comparison unless you look at the original source because he doesn't explain what each category means. He cites, so I guess I can't complain too much.
Toward the end of the book Fishman asks a question I was wondering since page 1 - how much better is to to shop at other stores (ie. best buy, target, sears,etc.) He does absolutely nothing to answer this question - he only mentions it because it is indeed an important question. Despite his inability to answer many such questions he raises, he does encourage and call for others to research these. Fishman has definitely convinced me that Wal-Mart is a phenomenon that ought to be studied before it's too late (i would say kinda like global warming.)
There is a chapter titled "The Power of Pennies." Yes, consumers have some control with how they spend their dollars. This chapter does nothing to enlighten the reader on what would be a wiser purchase (or even non-purchase) with one's money. While that isn't the intent of this book, he insists repeatedly that Wal-Mart is an unstoppable force, showing that even people who have been screwed over by Wal-Mart still shop there. He repeatedly states that there is nothing to do but shop there. How is it that I've been in a Wal-Mart maybe five times in my ENTIRE LIFE, yet have always lived in the states? Clearly it is not a necessary practice to shop at Wal-Mart - if people can afford X-Boxes and iPods, they can afford the extra pennies. While Fishman does mention Starbucks - who makes a business doing the exact opposite of Wal-Mart (raising prices versus lowering), yet omits any tools or ideas we can draw from this (rather brief) comparison.
All in all, quite enlightening, but like most books I read such as this one, I am highly skeptical when the reasoning is not all that logical and there are clear omissions that the reader either will be unaware of or, if aware of them, be irritated by.
March 3, 2015
I must admit up front that I have never been in a Wal-Mart store and there is no Wal-Mart store anywhere near where I live. My second disclaimer is I absolutely hate to shop; I rush in and obtain the items I need and rush out of the store. Since the 1960 I have made it a mission of mine to buy products made in the United States even if I have to pay more or do without if I cannot find products made in the United State or Canada.
Fishman has done extensive research for this book. He has drawn on unprecedented interviews with former Wal-Mart executives; pursued a wealth of business and economic data and has created an interesting look at the corporation.
Fishman states the story of Wal-Mart is really the story of the transformation of the American economy over the past twenty years. Fishman presents a case for Wal-Mart (mostly consumer benefit) and against Wal-Mart. Fishman puts the reader inside the company’s penny-pinching mindset and shows how Wal-Mart’s mania to reduce prices has driven suppliers into bankruptcy and sent factory jobs overseas.
The “Wal-Mart effect” has become a common phase in the vocabulary of economists, and includes a broad range of effects, such as forcing local competitors out of business, driving down wages, and keeping inflation low and productivity high. Fishman discusses the replacement of quality with cheapness. The author sees Wal-Mart as neither good nor evil, but simply a fact of modern life. I enjoyed the fact he told stories and named the product and or company he spoke of to demonstrate the good or bad effect. I found the afterword the most important part of the book.
The book is well written and well organized. Fishman has made the book understandable and easy to read. I read this as an audiobook downloaded from Audible. Alan Sklar narrated the book.
Fishman has done extensive research for this book. He has drawn on unprecedented interviews with former Wal-Mart executives; pursued a wealth of business and economic data and has created an interesting look at the corporation.
Fishman states the story of Wal-Mart is really the story of the transformation of the American economy over the past twenty years. Fishman presents a case for Wal-Mart (mostly consumer benefit) and against Wal-Mart. Fishman puts the reader inside the company’s penny-pinching mindset and shows how Wal-Mart’s mania to reduce prices has driven suppliers into bankruptcy and sent factory jobs overseas.
The “Wal-Mart effect” has become a common phase in the vocabulary of economists, and includes a broad range of effects, such as forcing local competitors out of business, driving down wages, and keeping inflation low and productivity high. Fishman discusses the replacement of quality with cheapness. The author sees Wal-Mart as neither good nor evil, but simply a fact of modern life. I enjoyed the fact he told stories and named the product and or company he spoke of to demonstrate the good or bad effect. I found the afterword the most important part of the book.
The book is well written and well organized. Fishman has made the book understandable and easy to read. I read this as an audiobook downloaded from Audible. Alan Sklar narrated the book.
April 13, 2015
A fair take on Wal-Mart, and by extension the practices of many big businesses. What is Wal-Mart's responsibility outside of Everyday Low Prices? Where has it made a huge difference and where has it fallen short? Can Sam Walton's company clean up its image AND be the company that conquered rural America a couple of decades ago?
October 1, 2018
The content in this book was super interesting and there was obviously a ton of research done to put this book together. I'd say the writing was a little dry and matter-of-fact and was tough to keep going at times. I also felt like I got the point 75% of the way through. Still learned a lot though!
January 11, 2009
I found this throughly engaging. Loved reading it and I'm not much for non-fiction. It definitely is something to think about and I highly recommend it. Very accessible style of writing.
January 8, 2019
Objective Summary
Fishman’s 2006 book takes an objective look at Wal-Mart, the world’s largest company by revenue. He provides basic information about the company, discusses the good and bad of the “Wal-Mart effect,” and finally calls for one significant change. Fishman defines the “Wal-Mart effect” as “the ways both small and profound that Wal-Mart has changed business, work, the shape and well-being of communities, and everyday life in the United States and around the world.” Like most significant forces in economics, the Wal-Mart effect is neither uniformly good nor uniformly bad. There are positive and negative aspects to the Wal-Mart effect, which Fishman explores.
First, the tidbits of interesting information. Samuel Moore Walton was born in 1919 in Kingfisher, Oklahoma and was raised in Missouri. He was a competitive, charismatic workaholic who institutionalized his concept of everyday low pricing in Wal-Mart. From 1962 until his death in 1992, Walton personally oversaw Wal-Mart’s remarkable growth. That growth continued through 2006, the publication date of this book, and continues today. Wal-Mart has been the largest company by revenue since around 2001, with the occasional year captured by ExxonMobil when oil prices spike. Wal-Mart is the largest private employer in the United States and in the world. The company operates four types of stores domestically: Wal-Mart discount stores, Neighborhood Markets, Supercenters, and Sam’s Clubs. With much of the United States saturated—97% of Americans live within 25 miles of a Wal-Mart—the company’s growth in the medium term will likely come from overseas. It began expanding overseas through a series of acquisitions. Wal-Mart has been successful in Canada, Mexico, and the United Kingdom, but it has struggled in Germany and Japan. Wal-Mart operates a website with information it provides about itself: https://corporate.walmart.com/ (formerly: www.walmartfacts.com). Some truthful information emerges from the website, but some lacks significant context.
Second, the good. Fishman acknowledges through observation and empirical research that Wal-Mart lowers prices. Emek Basker was an academic who demonstrated that Wal-Mart lowered prices by 1.5-3% in the short term, and by 15% in the longer term. Wal-Mart saves American consumers tens of billions of dollars annually, which amounts to hundreds or thousands of dollars per family. Much of these savings comes from elimination of inefficiencies in supply chains and retail operations. For example, Wal-Mart insisted that manufacturers of deodorant stop packaging their plastic sticks in paper containers. The packaging wasted paper, time for both the packer and the consumer to deal with it, fuel costs, shipping space, and display space—all while failing to provide any benefit since the plastic deodorant sticks were more durable than the paper boxes. By requiring its producers to eliminate these paper boxes, Wal-Mart saved trees, fuel, hassle, time, and costs for all parties involved. The savings inured to the benefit of Wal-Mart’s competitors too since the industry now omits paper boxes with deodorant. There are countless other examples of tweaks to the packaging materials and sizes of the 120,000 items Wal-Marts stocks in its Supercenters. As another example, Wal-Mart reduced the plastic content in its disposable water bottles, thereby saving tons of plastic annually. Wal-Mart has every incentive to make its fleet of trucks, the largest in the world, as fuel efficient as possible, and it pledged to double its efficiency from 2006 through 2015. Wal-Mart reduced its electric bill in stores 20-30% by installing skylights. Wal-Mart began selling merchandise straight off of pallets in the main center aisles of its stores, known as “action alley.” This reduced the labor required to display merchandise and get it into the hands of end users. Wal-Mart’s large and steady purchasing smooths demand for suppliers, especially when compared to the sales and promotions that retailers used to run before Walton’s everyday low price revolution. With smoother demand, suppliers can anticipate demand and reduce waste. Wal-Mart works closely with many suppliers to understand their processes and eliminate inefficiencies between the manufacturer, wholesaler, and retailer. Wal-Mart’s online technology, known as “Retail Link,” gives suppliers access to valuable information about their products’ sales. Wal-Mart uses computer technology to reduce inefficiencies in its trucking fleets, such as empty trailer hauls. In addition to lowering prices and eliminating inefficiencies, thereby saving environmental resources and human effort, Emek Basker also demonstrated that Wal-Mart has an average net employment impact of an additional 30 jobs over five years when it opens a store.
Third, the bad. Economic change, even progress, comes with winners and losers. Every positive development listed above can be viewed as (or twisted into) a negative. Fishman identifies some of the negative consequences of Wal-Mart’s relentless drive for lower prices. The elimination of the paper packaging for deodorant yielded large net benefit for most constituents, but suppliers of the paper packaging lost revenue and jobs as a consequence of reduced demand for their product. Perhaps Wal-Mart’s claims of environmental concerns are just marketing ploys aimed at reversing its negative brand image. Though prices fall because of things like pallets in action alley, this really just means customers experience more stressful shopping in sorting through disorganized merchandise, navigating crammed aisles, and foregoing employees to help them find items they need. Wal-Mart shoppers spend less on furniture because they have to assemble it themselves. This is cost shifting, not cost saving. Similarly, suppliers fall captive to Wal-Mart and must meet its demands, no matter how absurd. At some point, all inefficiencies have been wrung out of the supply chain, and the only savings come from cutting quality, shifting manufacturing overseas, or both. And overseas manufacturing is cheaper because the lives of the workers are wretched. Adults, and frequently children, work in horrific conditions for 12 hours, 14 hours, or more each day for pennies per hour. They cannot use the restroom, and they must meet quotas. Many suffer physical abuse by factory managers. Wal-Mart claims to do factory inspections, but it almost always notifies the factories of inspections beforehand, yet there are still 10,000 violations per year. Low prices come at the cost of environmental damage in places like southern Chile, where salmon grow in farms. Wal-Mart and its customers enjoy low prices because they externalize costs. Environmental damage and poor labor conditions support low prices. Americans lose jobs, and the quality of products diminishes to the point that they become disposable, which further degrades the environment. Even the net growth of 30 workers in a county after 5 years of a new Wal-Mart opening means that higher paying jobs were replaced by lower paying ones at retail. A significant percentage of Wal-Mart’s employees receive state assistance for their healthcare. One study Fishman cites concludes that Wal-Mart contributes to poverty, though he does not explore the precise mechanism by which it does so. Wal-Mart squeezes suppliers to the breaking point. For example, Wal-Mart sold a one-gallon jar of Vlasic pickles for $2.97. The low price led to losses for Vlasic both on the one-gallon jar and also its other products to the extent that it declared bankruptcy. And consumers ended up throwing out lots of pickles since they could not eat them all before spoilage set in. Other suppliers who list Wal-Mart as a top customer suffer financially as their profit margins shrink in the perpetual quest for lower prices.
Fourth, Fishman’s suggestion. Fishman’s main complaint comes from Wal-Mart’s secrecy and lack of transparency in its operations. The company does not speak to the press, and basic information about its activities is hard to find. For example, Emek Basker, one academic Fishman cites, could not even get a list of stores and their opening dates from the company. Instead, she had to painstakingly reproduce it and factor in a margin of error for estimated opening dates. As a competitive strategy, Wal-Mart does not disclose information about its operations unless legally required. Suppliers fear losing the account, almost always their largest, so they refuse to speak publicly or report information about their dealings with Wal-Mart. The result of Wal-Mart and supplier secrecy is a dearth of tangible information upon which academics can conduct research and policymakers can act. Fishman’s only call to action is that Wal-Mart—and other “megacorporations” like it—should release more information about their operations. Fishman does not get specific as to what information or how much he would require Wal-Mart to disclose. He says, “The full answer to which companies should provide more information, and what they should provide, requires careful study, analysis, and public debate. What is clear is that companies should not be allowed to decide what information they should release—any more than they should be allowed to determine the safety regulations of their factories, or the pollution rules under which their cars operate.” Fishman argues that Wal-Mart’s size and power arguably make it a monopsony, meaning it can exert price controls in the same way as a monopoly. The Wal-Mart effect impacts the American economy, the world economy, the environment, and the lives of many people. Accordingly, per Fishman, Wal-Mart must be forced by government regulations to disclose information it would rather not. With that information in hand, consumers can finally make informed decisions about whether to shop at Wal-Mart, and policymakers can finally make informed decisions about what laws and regulations they wish to pass.
Subjective Thoughts
Fishman’s book is well written and entertaining. It moves along briskly and provides a valuable look at the impact of the world’s largest company. It seemed fairly evenhanded in exploring both the positive and negative sides of the Wal-Mart effect until the end, when it moved in a decidedly critical direction. As a libertarian and Wal-Mart devotee, I would not argue that Wal-Mart is perfect. But I would argue that it is overwhelmingly good. Perhaps there is room for environmental protections in Wal-Mart’s supply chain. And of course we’d all like to see desperately poor people’s suffering reduced, which is exactly what is happening with the spread of capitalism and global trade. I would not, however, support increased government regulations or control of business since the costs nearly always outweigh the benefits. Look at what already happens with consumer warnings every time you install iTunes or other software. Do you ever read the disclosures for medical procedures? Adding additional disclosure requirements inevitably leads to more bureaucratic red tape without benefiting consumers. So, Fishman, as moderate as your proposal is, I can’t get on board with it. If you don’t like Wal-Mart, don’t shop there. The prices of the goods you buy at Target, Kroger, or wherever else will still be lower because of the Wal-Mart effect. That’s amazing.
Revealing Quotes
“The bedrock values instilled by Sam Walton and his early lieutenants were all-American values: hard work, frugality, discipline, loyalty, a restless effort at constant self-improvement.”
“In 2004, a union was certified at a Wal-Mart store in Quebec, and it was authorized to negotiate a labor contract with Wal-Mart on behalf of the store’s 190 employees. Ten months later Wal-Mart closed the 130,000-square-foot store in Jonquiere, laying off all the associates. In eleven years of doing business in Canada, where Wal-Mart is the largest retailer, the company had never permanently closed a store. A Wal-Mart spokesperson said simply that the union’s contract demands would have required the store to add thirty new jobs—a 15 percent increase in payroll for a company that operates on a 3 percent profit margin.”
“We want everybody to be selling the same stuff, and we want to compete on a price basis, and they will go broke 5 percent before we will.” – David Glass, former CEO of Wal-Mart
“There is a parallel economic concept for a company that is such a large buyer . . . that it holds an equivalent kind of price-control power [as a monopoly]. The term is monopsony.”
“Wal-Mart wields its power for just one purpose: to bring the lowest possible prices to its customers. At Wal-Mart, that’s a goal that is never met. For basic consumer products that don’t change year after year, Wal-Mart is well known for insisting that the price drop 5 percent a year.”
“Eventually, there are no more efficiencies to be wrung out of the supply chain; there are no more pennies to be saved with smarter distribution or reduced packaging or cheaper plastic. Eventually, the only way to lower costs is to manufacture products outside the United States, in countries with lower labor costs, fewer regulations, less overhead.”
“The first real self-service store of any kind is credited to Clarence Saunders, who opened a fully self-service grocery in 1916 in Memphis called Piggly Wiggly.”
“In [Emek Basker’s] first study, ‘Selling a Cheaper Mousetrap: Wal-Mart’s Effect on Retail Prices,’ Basker proved—proved!—that Wal-Mart lowers prices. ‘I find price declines of 1.5 percent to 3 percent for many products in the short run,’ she writes. ‘Long run price declines tend to be much larger, and in some specifications range from 7 percent to 13 percent.’”
“So in jobs across retail, five years after the opening of a new Wal-Mart, employing hundreds, a county had gained thirty jobs.”
“Wal-Mart can’t seem to grasp an essential fact: in 2006, the company has exactly the reputation it has earned. No, we don’t give the company adequate credit for low prices. But the broken covenant Sam Walton had with how to treat store employees; the relentless pressure that hollows out companies and dilutes the quality of their products; the bullying of suppliers and communities; the corrosive secrecy; the way Wal-Mart has changed our own perception of price and quality, of value and durability—none of these is imaginary, or trivial, or easily changed with a fresh set of bullet points, an impassioned speech, and a Web site heavy with Wal-Mart ‘facts.’”
Fishman’s 2006 book takes an objective look at Wal-Mart, the world’s largest company by revenue. He provides basic information about the company, discusses the good and bad of the “Wal-Mart effect,” and finally calls for one significant change. Fishman defines the “Wal-Mart effect” as “the ways both small and profound that Wal-Mart has changed business, work, the shape and well-being of communities, and everyday life in the United States and around the world.” Like most significant forces in economics, the Wal-Mart effect is neither uniformly good nor uniformly bad. There are positive and negative aspects to the Wal-Mart effect, which Fishman explores.
First, the tidbits of interesting information. Samuel Moore Walton was born in 1919 in Kingfisher, Oklahoma and was raised in Missouri. He was a competitive, charismatic workaholic who institutionalized his concept of everyday low pricing in Wal-Mart. From 1962 until his death in 1992, Walton personally oversaw Wal-Mart’s remarkable growth. That growth continued through 2006, the publication date of this book, and continues today. Wal-Mart has been the largest company by revenue since around 2001, with the occasional year captured by ExxonMobil when oil prices spike. Wal-Mart is the largest private employer in the United States and in the world. The company operates four types of stores domestically: Wal-Mart discount stores, Neighborhood Markets, Supercenters, and Sam’s Clubs. With much of the United States saturated—97% of Americans live within 25 miles of a Wal-Mart—the company’s growth in the medium term will likely come from overseas. It began expanding overseas through a series of acquisitions. Wal-Mart has been successful in Canada, Mexico, and the United Kingdom, but it has struggled in Germany and Japan. Wal-Mart operates a website with information it provides about itself: https://corporate.walmart.com/ (formerly: www.walmartfacts.com). Some truthful information emerges from the website, but some lacks significant context.
Second, the good. Fishman acknowledges through observation and empirical research that Wal-Mart lowers prices. Emek Basker was an academic who demonstrated that Wal-Mart lowered prices by 1.5-3% in the short term, and by 15% in the longer term. Wal-Mart saves American consumers tens of billions of dollars annually, which amounts to hundreds or thousands of dollars per family. Much of these savings comes from elimination of inefficiencies in supply chains and retail operations. For example, Wal-Mart insisted that manufacturers of deodorant stop packaging their plastic sticks in paper containers. The packaging wasted paper, time for both the packer and the consumer to deal with it, fuel costs, shipping space, and display space—all while failing to provide any benefit since the plastic deodorant sticks were more durable than the paper boxes. By requiring its producers to eliminate these paper boxes, Wal-Mart saved trees, fuel, hassle, time, and costs for all parties involved. The savings inured to the benefit of Wal-Mart’s competitors too since the industry now omits paper boxes with deodorant. There are countless other examples of tweaks to the packaging materials and sizes of the 120,000 items Wal-Marts stocks in its Supercenters. As another example, Wal-Mart reduced the plastic content in its disposable water bottles, thereby saving tons of plastic annually. Wal-Mart has every incentive to make its fleet of trucks, the largest in the world, as fuel efficient as possible, and it pledged to double its efficiency from 2006 through 2015. Wal-Mart reduced its electric bill in stores 20-30% by installing skylights. Wal-Mart began selling merchandise straight off of pallets in the main center aisles of its stores, known as “action alley.” This reduced the labor required to display merchandise and get it into the hands of end users. Wal-Mart’s large and steady purchasing smooths demand for suppliers, especially when compared to the sales and promotions that retailers used to run before Walton’s everyday low price revolution. With smoother demand, suppliers can anticipate demand and reduce waste. Wal-Mart works closely with many suppliers to understand their processes and eliminate inefficiencies between the manufacturer, wholesaler, and retailer. Wal-Mart’s online technology, known as “Retail Link,” gives suppliers access to valuable information about their products’ sales. Wal-Mart uses computer technology to reduce inefficiencies in its trucking fleets, such as empty trailer hauls. In addition to lowering prices and eliminating inefficiencies, thereby saving environmental resources and human effort, Emek Basker also demonstrated that Wal-Mart has an average net employment impact of an additional 30 jobs over five years when it opens a store.
Third, the bad. Economic change, even progress, comes with winners and losers. Every positive development listed above can be viewed as (or twisted into) a negative. Fishman identifies some of the negative consequences of Wal-Mart’s relentless drive for lower prices. The elimination of the paper packaging for deodorant yielded large net benefit for most constituents, but suppliers of the paper packaging lost revenue and jobs as a consequence of reduced demand for their product. Perhaps Wal-Mart’s claims of environmental concerns are just marketing ploys aimed at reversing its negative brand image. Though prices fall because of things like pallets in action alley, this really just means customers experience more stressful shopping in sorting through disorganized merchandise, navigating crammed aisles, and foregoing employees to help them find items they need. Wal-Mart shoppers spend less on furniture because they have to assemble it themselves. This is cost shifting, not cost saving. Similarly, suppliers fall captive to Wal-Mart and must meet its demands, no matter how absurd. At some point, all inefficiencies have been wrung out of the supply chain, and the only savings come from cutting quality, shifting manufacturing overseas, or both. And overseas manufacturing is cheaper because the lives of the workers are wretched. Adults, and frequently children, work in horrific conditions for 12 hours, 14 hours, or more each day for pennies per hour. They cannot use the restroom, and they must meet quotas. Many suffer physical abuse by factory managers. Wal-Mart claims to do factory inspections, but it almost always notifies the factories of inspections beforehand, yet there are still 10,000 violations per year. Low prices come at the cost of environmental damage in places like southern Chile, where salmon grow in farms. Wal-Mart and its customers enjoy low prices because they externalize costs. Environmental damage and poor labor conditions support low prices. Americans lose jobs, and the quality of products diminishes to the point that they become disposable, which further degrades the environment. Even the net growth of 30 workers in a county after 5 years of a new Wal-Mart opening means that higher paying jobs were replaced by lower paying ones at retail. A significant percentage of Wal-Mart’s employees receive state assistance for their healthcare. One study Fishman cites concludes that Wal-Mart contributes to poverty, though he does not explore the precise mechanism by which it does so. Wal-Mart squeezes suppliers to the breaking point. For example, Wal-Mart sold a one-gallon jar of Vlasic pickles for $2.97. The low price led to losses for Vlasic both on the one-gallon jar and also its other products to the extent that it declared bankruptcy. And consumers ended up throwing out lots of pickles since they could not eat them all before spoilage set in. Other suppliers who list Wal-Mart as a top customer suffer financially as their profit margins shrink in the perpetual quest for lower prices.
Fourth, Fishman’s suggestion. Fishman’s main complaint comes from Wal-Mart’s secrecy and lack of transparency in its operations. The company does not speak to the press, and basic information about its activities is hard to find. For example, Emek Basker, one academic Fishman cites, could not even get a list of stores and their opening dates from the company. Instead, she had to painstakingly reproduce it and factor in a margin of error for estimated opening dates. As a competitive strategy, Wal-Mart does not disclose information about its operations unless legally required. Suppliers fear losing the account, almost always their largest, so they refuse to speak publicly or report information about their dealings with Wal-Mart. The result of Wal-Mart and supplier secrecy is a dearth of tangible information upon which academics can conduct research and policymakers can act. Fishman’s only call to action is that Wal-Mart—and other “megacorporations” like it—should release more information about their operations. Fishman does not get specific as to what information or how much he would require Wal-Mart to disclose. He says, “The full answer to which companies should provide more information, and what they should provide, requires careful study, analysis, and public debate. What is clear is that companies should not be allowed to decide what information they should release—any more than they should be allowed to determine the safety regulations of their factories, or the pollution rules under which their cars operate.” Fishman argues that Wal-Mart’s size and power arguably make it a monopsony, meaning it can exert price controls in the same way as a monopoly. The Wal-Mart effect impacts the American economy, the world economy, the environment, and the lives of many people. Accordingly, per Fishman, Wal-Mart must be forced by government regulations to disclose information it would rather not. With that information in hand, consumers can finally make informed decisions about whether to shop at Wal-Mart, and policymakers can finally make informed decisions about what laws and regulations they wish to pass.
Subjective Thoughts
Fishman’s book is well written and entertaining. It moves along briskly and provides a valuable look at the impact of the world’s largest company. It seemed fairly evenhanded in exploring both the positive and negative sides of the Wal-Mart effect until the end, when it moved in a decidedly critical direction. As a libertarian and Wal-Mart devotee, I would not argue that Wal-Mart is perfect. But I would argue that it is overwhelmingly good. Perhaps there is room for environmental protections in Wal-Mart’s supply chain. And of course we’d all like to see desperately poor people’s suffering reduced, which is exactly what is happening with the spread of capitalism and global trade. I would not, however, support increased government regulations or control of business since the costs nearly always outweigh the benefits. Look at what already happens with consumer warnings every time you install iTunes or other software. Do you ever read the disclosures for medical procedures? Adding additional disclosure requirements inevitably leads to more bureaucratic red tape without benefiting consumers. So, Fishman, as moderate as your proposal is, I can’t get on board with it. If you don’t like Wal-Mart, don’t shop there. The prices of the goods you buy at Target, Kroger, or wherever else will still be lower because of the Wal-Mart effect. That’s amazing.
Revealing Quotes
“The bedrock values instilled by Sam Walton and his early lieutenants were all-American values: hard work, frugality, discipline, loyalty, a restless effort at constant self-improvement.”
“In 2004, a union was certified at a Wal-Mart store in Quebec, and it was authorized to negotiate a labor contract with Wal-Mart on behalf of the store’s 190 employees. Ten months later Wal-Mart closed the 130,000-square-foot store in Jonquiere, laying off all the associates. In eleven years of doing business in Canada, where Wal-Mart is the largest retailer, the company had never permanently closed a store. A Wal-Mart spokesperson said simply that the union’s contract demands would have required the store to add thirty new jobs—a 15 percent increase in payroll for a company that operates on a 3 percent profit margin.”
“We want everybody to be selling the same stuff, and we want to compete on a price basis, and they will go broke 5 percent before we will.” – David Glass, former CEO of Wal-Mart
“There is a parallel economic concept for a company that is such a large buyer . . . that it holds an equivalent kind of price-control power [as a monopoly]. The term is monopsony.”
“Wal-Mart wields its power for just one purpose: to bring the lowest possible prices to its customers. At Wal-Mart, that’s a goal that is never met. For basic consumer products that don’t change year after year, Wal-Mart is well known for insisting that the price drop 5 percent a year.”
“Eventually, there are no more efficiencies to be wrung out of the supply chain; there are no more pennies to be saved with smarter distribution or reduced packaging or cheaper plastic. Eventually, the only way to lower costs is to manufacture products outside the United States, in countries with lower labor costs, fewer regulations, less overhead.”
“The first real self-service store of any kind is credited to Clarence Saunders, who opened a fully self-service grocery in 1916 in Memphis called Piggly Wiggly.”
“In [Emek Basker’s] first study, ‘Selling a Cheaper Mousetrap: Wal-Mart’s Effect on Retail Prices,’ Basker proved—proved!—that Wal-Mart lowers prices. ‘I find price declines of 1.5 percent to 3 percent for many products in the short run,’ she writes. ‘Long run price declines tend to be much larger, and in some specifications range from 7 percent to 13 percent.’”
“So in jobs across retail, five years after the opening of a new Wal-Mart, employing hundreds, a county had gained thirty jobs.”
“Wal-Mart can’t seem to grasp an essential fact: in 2006, the company has exactly the reputation it has earned. No, we don’t give the company adequate credit for low prices. But the broken covenant Sam Walton had with how to treat store employees; the relentless pressure that hollows out companies and dilutes the quality of their products; the bullying of suppliers and communities; the corrosive secrecy; the way Wal-Mart has changed our own perception of price and quality, of value and durability—none of these is imaginary, or trivial, or easily changed with a fresh set of bullet points, an impassioned speech, and a Web site heavy with Wal-Mart ‘facts.’”
May 5, 2025
This book was written in 2006 and is now (almost 20 years later!) almost comically out of date. The fact that it refers to Walmart as Wal-Mart reflects that pretty well. There’s also a line in the book that literally says that something (can’t remember what) is “slower than Amazon.com”, which is hilarious. Reading a book about American megacorporations from the pre-Amazon era is wild.
Despite all that jazz, it’s a pretty interesting book. A bit repetitive at times, but well written and fairly engaging for a book about Walmart. I think a lot of the things discussed about Walmart in this book are still true today and can be applied to Amazon as well. One thing I learned that I didn’t know before was all the secrecy surrounding Walmart. The author talks a lot about how Walmart keeps its data private and doesn’t let its suppliers discuss their relationship with Walmart to journalists. Also there’s a chapter about farmed salmon that I found pretty interesting. Crazy how much power these corporations have over our economy, living/working conditions for overseas factory workers and American employees, and the environment. Pretty wack if you ask me. This is basically the authors thesis.
TLDR; this book is old and perhaps not as relevant now, so I’m not sure I would recommend unless you’re a non fiction nerd with an interest in the American economy and the gritty details of megacorporations (which I guess is me). Felt pretty nerdy to be reading a book about Walmart but whatever.
Despite all that jazz, it’s a pretty interesting book. A bit repetitive at times, but well written and fairly engaging for a book about Walmart. I think a lot of the things discussed about Walmart in this book are still true today and can be applied to Amazon as well. One thing I learned that I didn’t know before was all the secrecy surrounding Walmart. The author talks a lot about how Walmart keeps its data private and doesn’t let its suppliers discuss their relationship with Walmart to journalists. Also there’s a chapter about farmed salmon that I found pretty interesting. Crazy how much power these corporations have over our economy, living/working conditions for overseas factory workers and American employees, and the environment. Pretty wack if you ask me. This is basically the authors thesis.
TLDR; this book is old and perhaps not as relevant now, so I’m not sure I would recommend unless you’re a non fiction nerd with an interest in the American economy and the gritty details of megacorporations (which I guess is me). Felt pretty nerdy to be reading a book about Walmart but whatever.
October 29, 2018
Overall, this book was okay. I could definitely tell that the author, Charles Fishman, put a tremendous amount of effort and time into his intensive research. From statistics to interviews to just simple facts about the stores he visited, Fishman had it all to make his writing the least-biased as possible. This book is very well-written from a journalistic perspective, and Fishman even made the book readable and easy to understand, even if the information was boring. However, I think he could have balanced out the positives and negatives in the book in a more appealing way. The first chapter of the book seems as if the entire book is going to be about the positive things about Walmart, and how the store is changing the world. When you get to the later chapters, the book goes on and on with the negative aspects of the store. After reading this book, I will not go to Walmart again, so it has definitely changed my perspective, but not in a positive way.
I recommend this book if you are looking for an interesting approach on the American economy, however, if you are not interested in those types of things, I do not recommend this book.
I recommend this book if you are looking for an interesting approach on the American economy, however, if you are not interested in those types of things, I do not recommend this book.
October 22, 2019
Everybody in America is affected by Walmart. Most Americans have shopped in one of its stores. The vast majority of Americans live within a tight radius around one of its stores. And anyone who has participated in the consumer economy in the last 25 years has been directly or indirectly impacted by its heft in setting prices, supply chain norms, and expectations for what quality looks like at what price.
And yet there had been little scholarship on the organization and its effects on workers, citizens, companies, and towns, before Fishman's pivotal work (the core of which is now somewhat dated, having been published in the mid-2000s).
Fishman takes on some of the biggest questions related to Walmart: what impact has it had on its workers? On its supply chain and employees of suppliers? On workers across the world? On the environment? On the economy overall?
The punchline is that it's complicated. On the one hand, Walmart has lowered prices for all Americans, dramatically lowering grocery bills and others, providing for more disposable income for people. On the other hand, its obsession with low prices over all else has decimated competitors and destroyed jobs and sometimes culture in places it operates. But all of this is a direct result of consumers' choices.
Fishman gives Walmart credit for addressing some of the biggest criticisms of Walmart, especially related to its impact on the environment.
The reality is that good or bad, Walmart is a major force in our capitalist system, and it's important to understand the impacts, trade-offs, and considerations as we make individual buying decisions and as we advocate for public policy that frames the business environment in which it operates.
Good book! (I read it on Kindle.)
And yet there had been little scholarship on the organization and its effects on workers, citizens, companies, and towns, before Fishman's pivotal work (the core of which is now somewhat dated, having been published in the mid-2000s).
Fishman takes on some of the biggest questions related to Walmart: what impact has it had on its workers? On its supply chain and employees of suppliers? On workers across the world? On the environment? On the economy overall?
The punchline is that it's complicated. On the one hand, Walmart has lowered prices for all Americans, dramatically lowering grocery bills and others, providing for more disposable income for people. On the other hand, its obsession with low prices over all else has decimated competitors and destroyed jobs and sometimes culture in places it operates. But all of this is a direct result of consumers' choices.
Fishman gives Walmart credit for addressing some of the biggest criticisms of Walmart, especially related to its impact on the environment.
The reality is that good or bad, Walmart is a major force in our capitalist system, and it's important to understand the impacts, trade-offs, and considerations as we make individual buying decisions and as we advocate for public policy that frames the business environment in which it operates.
Good book! (I read it on Kindle.)
April 6, 2018
The book was really well written, being that it was more of a news article. This in depth look into the “The Walmart Effect” really allowed me as a reader to learn more about a company that I see and hear so much about. The way the journalist, Charles Fishman gave voice to the voiceless really helped solidify my perspective. It gave accounts of people negatively affected by this huge enterprise. The author did a really good job in creating a fine line between news and advertisement. If you’re pursuing a novel like news article on a huge company like Wal-Mart, you’re bound to give free publicity to them. The overall book was a good choice, because I was particularly interested in knowing more about Wal-Mart and it’s affects on the economy and public.
April 6, 2018
I recommend to anyone interested in the global economy. Although Fishman details many negative impacts of Walmart, he does cover the push for efficiencies in transportation and packaging of the Walmart effect, giving the book an unbiased feel. He sticks to the point of the impact Walmart has. In the end we all need to ask ourselves if we really want one company to have some so much influence on the market place, and are the low prices worth the trade offs.
The book is somewhat dated since it was written on n 2005. Would love to see a follow up and the Amazon effect on brick and mortar stores.
The book is somewhat dated since it was written on n 2005. Would love to see a follow up and the Amazon effect on brick and mortar stores.
October 7, 2017
This was a very interesting and thought-provoking read. I shop at Wal-Mart; I admit I like the low prices. As well, I worked at Wal-Mart as a cashier when I was teenager and they do not treat their employees well. However, so do a lot of companies that we all frequent but we don't seem to have such controversial feelings about them. This book won't change my buying habits. It did give me a lot of food for thought about Wal-Mart and the economy it controls. I would love to read an updated edition which would include how the 2008 Recession affected them and other programs they've ceased (i.e. price matching).
June 22, 2018
On 9th May 2018, $16 billion dollar merger of Walmart and Flipkart was finally announced officially, after being in rumours for a long time. During my stay in the USA, I visited and shopped from all possible sized Walmart; supercenter, warehouse in Phoenix, medium-sized on Southern and Rural, small sized on campus etc. I had made several observations during my visits and hence when the merger was announced, I was curious to know the actual power of Walmart and how it will/ can impact Indian Retail Market.
My book review, in nutshell, if you have the similar curiosity, then just read the BOOK. That's it !!
My book review, in nutshell, if you have the similar curiosity, then just read the BOOK. That's it !!
November 10, 2021
I was oddly surprised at how interesting I found this book. I was expecting dry stats and information but that wasn't the case at all. This book was well rounded I feel when addressing Walmart practices to lower prices but was also straight up. Called out Walmart inaccuracies and secrecy. I really felt anger towards a company I already dislike but is literally the. Only department store left and not shopping There isn't always possible although not frequently. I enjoyed the Afterward of Walmart attempting to sway the author for the views expressed in the book. And insisting change is happening. I recommend reading this book and really putting thought into the bully Walmart is and the lengths they go to let is save a bit on products.
September 24, 2019
This book provides insights into how the world has been and will continue to transform through the efforts of Walmart. Interestingly, it shares who shops there and it is not who you would expect. The world will never be the same, some things better and some things possibly worse - mostly changed. It was fascinating from an economic perspective.
June 14, 2023
Overall, I enjoyed this book. I knocked it one star because the beginning chapters dragged on a bit. I appreciated how Charles Fishman brought up, in great detail, concepts such as shopping yourself out of a job, wage depression across industries due to Walmart, and how free markets aren't as free as they may seem.
March 27, 2017
The problem with this book is that there isn't enough information to make a clear picture of Wal-mart. It doesn't really clarify a position on Wal-Mart or make any forceful arguments, being careful not to offend or go outside the evidence.
April 5, 2020
Every consumer is obligated to know the reality of Wal-Mart's impact and act accordingly. Wal-Mart may be powerful but it's driven by how we shop. After reading this, I will hold even more staunchly to avoid Wal-Mart at all costs and continue to support American made businesses.
April 8, 2025
Interesting but repetitive and tedious by the end. Obviously not as timely as it was 20 years ago but many aspects I'm sure are still true and is still an interesting look into how the company got to where it is.
November 1, 2025
A deep dive into the practices of this bemouth. Unintended consequences of their buying decisions. Few of those good with respect to packaging, etc; and those that change entire communities and the labor market within.
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