Replies

While the article had certain aspects of the typical "big bad Walmart" screed, it was actually pretty even-handed in its assesment of Walmart's short term economic benefits.

But what the article pointed out rather effectively, I thought, was the liklihood that Walmart is engaged in what is, in the long run, an unsustainable process of product price devaluation. Walmart deals in mass necessity consumables (food, clothing, etc.) and mass appeal consumables (tv's, sporting goods, etc.) as opposed to specialty or niche consumables. Walmart's strategy of perpetual price devaluation on these consumables has garnered unprecedented market share (the A&P analogy is kind of misleading given the current dramatic differences in the consumables marketplace).

However, at a certain point, the basic price/cost ratio takes over. US producers and suppliers are increasingly unable to drive the Walmart engine, and it is only a matter of time before foreign suppliers will also find themselves in the position of saying why bother?

Brutal competition yes, but maybe too brutal to sustain.