"Like Robin Hood, Only With Parking"
In his Sunday NYT column, Daniel Akst nails what's really going on with Wal-Mart:
The recent bankruptcy filing of Winn-Dixie Stores, the supermarket chain, would seem to be the latest evidence that Wal-Mart, dreaded by competitors as retailing's 24-hour-a-day death star, has lost none of its price-cutting potency. The company's apparent invincibility is part of what galls its critics, whose opposition led to the cancellation of a proposed Wal-Mart in Queens.
The conventional criticism of Wal-Mart is that it's an insatiable capitalist juggernaut, reaping private benefit at the expense of the public good. The view retains some currency, I suspect, because many of Wal-Mart's critics haven't really shopped there.
The funny thing is that, for quite a while, this view has had the situation almost exactly backward. Instead of producing private benefit at public expense, Wal-Mart has been producing public benefit at private expense. And the equation is likely to become ever more lopsided.
Like the airlines, whose investors generously provide low fares and convenient service while forgoing gains for themselves, Wal-Mart has kindly mustered considerable capital from investors with the goal of providing all kinds of basic goods under one roof at convenient locations and amazingly low prices. These investors must be charitably minded because they aren't the main beneficiaries of Wal-Mart's business.
For several years now, the shareholders, who have more than $200 billion tied up in the company, have not done especially well. Since the end of 1999, Wal-Mart stock is off 23 percent, while Target is up 43 percent and Lowe's is up 95 percent.
The big winners during this period were the juggernaut's customers, who gained by having Wal-Mart drive down the price of consumer goods. Assuming that Wal-Mart investors are more affluent than its shoppers, the system offers a progressive transfer from rich to poor--from capital owners to less prosperous American consumers and hard-working Chinese factory hands. It's like Robin Hood, only with parking.
If that sounds like unalloyed praise, you should really read the whole thing. This piece is, after all, by someone who actually shops at Wal-Mart from time to time.