The Wal-Mart You Don't Know

In the December issue of Fast Company, we lead with a little-known look at Wal-Mart: how the big-box retailer affects the suppliers it works with — and how partnering with the company can make or break a business.

Preservation magazine, published by the National Trust for Historic Preservation, offers a good parallel read in its November/December issue. Focusing more on the big box vs. small town narrative that most stories about Wal-Mart provide, the feature takes a look at Chestertown, Maryland, a historic burg that struggled against Wal-Mart's attempts to open a location bigger than the city's entire downtown — and won.

Both pieces bookend to give a solid perspective on the outer — and inner — workings of the world's largest retailer.

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  • Melissa Lewis

    I heard interview with man who wrote this article on NPR, it was very eye opening. There really needs to be more awareness made about what Wal-Mart has done and is doing to this country. It is only going to get worse. Imagine going in for a raise and they tell you well you get 5% less this year. Basically that is what Wal-Mart is doing. Companies forced to compete will have to mimic Wal-Mart policies

  • Lisa Wyatt Knowlton

    Arm twisting and intimidation with employees and vendors are bully tactics which reflect poorly on the culture Mr. Scott perpetuates...Regretfully, Walmart may win the pyrrhic victory...but it is a victory so costly that it can be ruinous to communities because it extracts employment options by sending work to the cheapest labor. Walmart wins the prize for MOST socially irresponsible company of the century. Their house of cards isn't sustainable -over the long haul.

  • Rob

    I think WalMart has the right to do business however they want. But, I think we are starting to see a backlash against them. I know my wife hates to go there, not because of their business practices but because it is crowded, messy, and the sales people are usually little help. The nature of the US economy will expose any large company to problems (employee turnover, lawsuits, etc.) that will limit their ability to "take over the world," as people like to say WalMart is doing.

  • Jeff Trucks

    Being one of the few remaining independent office products dealers left in the country we have experienced and survived the onslaught of the office product superstores. With the help of buying groups we can now compete effectively with that competition but I shudder to think what would happen if WalMart decided to go after this market the way they are going after the grocery business.

    What would I do? I would become better at what I do. I would demand more from my suppliers. I would increase the service level I offer my customers. I would look for products and services that would differentiate myself from Walmart. I would increase my employee training. I would hope that a large enough percentage of our market area would find what I offer to be of value. In other words I would do what I had to do when the Superstores arrived.

    It was good for my customer then and would be good for the customer now if I could find enough ways to tighten the belt or come up with innovative products and services.

    That said.

    I don't like how Walmart does business. I don't shop Walmart. I think they accelerate the destruction of value in products and services. They encourage over consumption. They have no regard for the social and environmental costs their business model promotes. They need to be held accountable and have to deal with the true social costs and damages of the Walmart way

    But haven't small businesses always fought this same fight against the big boys. We fill the gaps they can't and innovate to survive.

  • I don't want to live in the Un

    Excellent article, my family has several small businesses that are in direct competition with Wal-mart. All of the statements in the article are true. If it is not scary enough what they have been doing you didn't even cover what they are planning on doing. In addition to the standard Wal-mart, the SuperCenter they have started a chain of neigborhood markets that they are currently building. This chain is designed to put the small grocer out of business. So think about it, in about 10 years the only place you will be able to buy groceries is a store that is controlled completely by Wal-mart. What do you think is going to happen to the price of milk?? The best defense to this company is to educate the consumer as to what their shopping at Wal-mart really costs. You have spelled it out with your article, I would like to see you follow-up with Wal-mart's response. Hopefully you don't count on any sales from Wal-mart.

  • Rick Presley

    So, if Wal-Mart is so bad, why is it so successful? And if Wal-Mart is forcing the loss of so many low-wage jobs overseas, then why are we not seeing a corresponding rise in unemployement? And if Wal-Mart had not forced, low-wage jobs overseas, then what would these people have done for jobs? I guess I remeber the inflation of the 1970's and stagnating manufacturing with bloated costs and waste and am having a hard time seeing how "bad" things are now by comparison.

  • cm

    Thank you for this excellent article and for your oustanding publication. I discovered your magazine in my doctor's office and was so impressed that I am getting a subscription for me and for a friend.
    I appreciate the way that FC opened our eyes to Walmart and other retail giants and how they are killing the working class by exporting jobs and then luring us into their stores with rock bottom prices. It's like putting a contract out on yourself.
    This really gives you something to think about. Thank you and please keep it up.
    C.M. Miller, a writer in Atlanta

  • Anonymous

    This doesn't suprise me about Walmart. I think Walmart is due for a huge wakeup call like Microsoft and the telephone companies. Unfortunately, they have grown so big that the government may even be afraid of them. They supply a great deal of US jobs.

  • Anonymous

    This is a fantastic article about Wal-mart and a wake-up call for me. Considering how well vendors and suppliers are treated, I will definitely be doing less spending with them. Unfortunately Wal-mart is not the only company that treats their suppliers and vendors this way. If you take a good look at Dell Inc., you should the same situations as Wal-mart. Yes, I want to keep my real name private, because I work for Dell Inc. and right now I need my paycheck.

  • chris_fl

    What a fantastic article! I had already been boycotting Wal-Mart, and now I have a handy article that I can carry around with me to show others!

  • Jason Bidish

    Oh yeah, one other thing. Following everyone else's thought on how little Walmart has actually helped...
    I've also been told that WM goes to towns in the south, usually those hanging on a string. Put up a shopping mecca (in the eyes of the townspeople). Then the few businesses that were there obviously go out of business. Later WM thinks "hmmmm business isn't good here and we got people from shopping elsewhere. TIME TO LEAVE!" Then the "helpful" WM leaves the town that was already struggling in an even worse situation by leaving them with nothing.
    Isn't this a little unethical as well? I do realize that companies make mistakes with market research and have to leave towns. But come on I know that has probably been done more than three or four times. Also with all of their logistics technology wouldn't they have some marketing technology that says "don't go there, it's not a good idea!" Their's probably says, "stuggling town, there are other places to shop than WM...destroy everything in sight"
    Since FC talked about manufacturers having to leave the states...what about the towns that those manufacturers were in?
    Yeah, I got issues with WM I guess!

  • Jason Bidish

    GREAT ARTICLE! I was curious, being a business major and finding out about monopolies, wouldn't WallyWorld be pretty much on it's way to becoming a monopoly? The reason I ask this is, well it is obvious that they are, but with it's power over it's suppliers to be able to send them out of the country (going away from "Buy American", from the artical) and also with the new RFID tags which is talked about in Fortune magazine, wouldn't some of these technologies that they are getting themselves in make it difficult for a new company to join in, or heck a old company to stay in? And thanks to our Econ class we learn that "difficulty to enter the market/industry" is a major characteristic of a monopoly. I guess since I am concentrating in small business I am a little partial (I'm still a business major though and I am all about profit maximization) but what they to do small business and small towns is a little ridiculous.
    I have also heard from people (small business owners) that the only way that Walmart helps out non-profits is with putting "the handing-over of the check" in the paper for publicity purposes, if no publicity, no check. Though it is a good way to get publicity, but the small businesses in my area give 10 times more than the retail king and no one knows about that publicly. The reason I bring this point up is because when you walk into Walmart there are signs everywhere highlighting the work that their employees do, and the company does for it's communities following the "because it's good." (or however it says that). I guess it should be more along the lines of "Walmart helps, as long as it's in the paper!"
    A question I have is what other suppliers are being affected by Walmart's demands, etc..."? Again, great article!

  • Seamus

    Not only a great article, but an OUTSTANDING cover illustration and layout. Perhaps the best use of turning a "positive" brand around on itself. That smiley face is one of the most disgusting insignias out there.

  • w. cash jr

    This the second story on WalMart in one month.
    The business practices of Wal Mart are totally
    against not only workers but suppliers. The company pays below the federal wage needed to support a family of four. It practices censorship
    against magazines it does not like, but will allow the raunch of magazines it does. It is already being investigated for having illegal aliens. These illegals are contracted by other
    companies but Wal Mart is aware they are illegal.
    This is company that is for the Wal Mart and only
    for the Wal Mart way. A&P used to be the Wal Mart of its day it is now in decline the same fate will happen to them. Let us also not forget the
    45 percent turnover in staff but guess that beats the 70 percent they used to have. For everyone's information that comes to about 655,000 people. Do you want that kind of company in your community?

  • Lee

    Did we forget that our tax dollars are paying for Wal Mart's health insurance. The State Medical card! Medicaid! Since most employee's are part time, they are free insurance. Paid by the citizens. I wish I could not pay insurance for my employees. But you know, people will not quit shipping Wal Mart.

  • paulo

    The difference between Walmart and Microsot is this: Microsoft pays employees (far over) a working wage and they prefer to work there. Walmart pays people below poverty wages and they have little choice but to work there.

    And Bill Gates gives far more to charity than the Waltons, whose fortune, according to Forbes, is $102 billion.

  • john beck

    I agree with Todd Swift. Wal-Mart is a mess. It's cluttered with junk and hard as hell to get around in. Our local Wal Mart doesn't even clean the parking lot. One day I saw a pair of old tennis shoes hanging from the top of the cart return! I asked the manager why they couldn't at least keep the parking lot clean and she said there was nothing she could do! Nice!

    How do other retailers feel about WM's power to squeeze prices? Do stores like Target, KMart, etc. ask for a sub $3.00 jar of pickles from Vlassic? Jeez, doing business with Wal Mart could kill you just from the backlash of your other customers.

  • sanj arora

    There are hundreds of suppliers to Walmart and there are less than 10 profiled.

  • Todd Swift

    Great article! I've disliked shopping at Wal-Mart because they are sloppy and dingy. I've know they squeezed manufactures to meet their demands, but not to this extent. Hurray for uncovering a little of the darkside. We've heard how they treat emoplyees, now we know the other side. When will America wake up?