Book Review: The Wal-Mart Effect, by Charles Fishman

Courtney has refused to shop at Wal-Mart ever since hearing a presentation about fair trade practices. I go along with it, but I occasionally get food and basic necessities from Wal-Mart Neighborhood Market. My main objection to boycotting Wal-Mart is that there does not seem to be a ton of evidence that Wal-Mart is any worse than other big stores. This book didn't necessarily help me with out, but it's a real gem for understanding the effect of Wal-Mart.

This is the first business book I've read. the writing style is just perfect. It is written in a style that explains business concepts, but also doesn't treat the reader like a dufus. It's the perfect pace for me. Also, I like the author's "high road" approach. What I mean is that he is open to whether Wal-Mart is good or bad. I would hate to waste my time on a biased book. The author both criticizes and praises Wal-Mart. The basic idea is that Wal-Mart is great for consumers and prices, but these low prices come at a cost to suppliers.

I was amazed how Wal-Mart took over the grocery business in a short time. In the early 90s no consumers were begging for another grocery store. The grocery business was well established. But Wal-Mart now is the number one grocer in the world, and it has put others out of business. Just in my neighborhood (Shawnee, KS) there are two empty spaces that used to be grocery stores, and there is a new Wal-Mart Neighborhood Market that is doing well. So...now I know what happened.

Overall this book has opened my eyes to what is behind a low price, and who may be suffering because it's low. The shopper also suffers in ways such as standing in long lines, or having to assemble your own purchase. Wal-Mart affects everyone, even those who refuse to shop there. It has even affected other industries, who have modeled after Wal-Marts efficiencies. I recently applied for life insurance and it is cheaper now than many years ago, but I suffered in the area of customer service - I wasn't provided a number to call or provided any instructions on my application - that's where they saved the cost.

I love the story of the $2.97 gallon jar of pickles. Try to imagine a gallon jar of pickles if you haven't seen one -I sure haven't. And I think it would be ridiculous. But to make a statement, Wal-Mart sold this and basically made a penny off each one, if that. It was so people could look at that prominent display, and truly believe that Wal-Mart had amazing prices. The thing is that Vlasic was help hostage by this, because Wal-Mart threatened to pull all Vlasic products if they didn't keep the gallon jar. And for Vlasic it would have been a tremendous risk to stop partnering with the number one grocer in the world. So they kept going. Not sure if I can tell this story perfectly, this story just shows the power that Wal-Mart has over suppliers.

And then there is the story about the foreign factories. Workers in certain countries get paid 13 cents per hour and make about $12,000 in one career. And they work in conditions that would likely be illegal if the factory were in the U.S. So when we shop at Wal-Mart as the author says it's satisfying and frightening at the same time. The author implies that although Wal-Mart could have tremendous power to improve working conditions around the world, it doesn't as far as he can tell. And this is why Courtney has refused to shop at Wal-Mart for about 2 years now. Honestly I haven't missed it. It hasn't been a pleasant shopping experience on recent trips I've taken there - my main complaints being the inability to find items quickly and the long lines.

This book is the front runner to win my book of the year award, so check it out!