Wednesday, August 30, 2006

Why Wal-Mart is bad

An interesting article on, essentially, why Wal-Mart's domination of the marketplace is a bad, bad thing:

Breaking the Chain

A brief excerpt:
Examples of monopsony can be difficult to pin down, but we are in luck in that today we have one of the best illustrations of monopsony pricing power in economic history: Wal-Mart. There is little need to recount at any length the retailer's power over America's marketplace. For our purposes, a few facts will suffice—that one in every five retail sales in America is recorded at Wal-Mart's cash registers; that the firm's revenue nearly equals that of the next six retailers combined; that for many goods, Wal-Mart accounts for upward of 30 percent of U.S. sales, and plans to more than double its sales within the next five years.
The scary part is that, given the power Wal-Mart has accumulated, it most likely will be able to achieve that goal of doubling its sales, simply because it can easily steamroller anyone or any company that gets in its way. The article as a whole takes a rather theoretical approach, which I find interesting. Well worth reading, and taking to heart.

(Props to Wilyone on DWS forums for locating the article.)


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