Problem:
Large discount stores and superstores can wield enormous power and impact on a local community. When a megaretailer like Wal-Mart enters a town, especially a smaller one, it often drives nearby small retailers out of business and sends downtown business districts into a nosedive. Wal-Mart has been the target of much criticism for this. When Wal-Mart founder Sam Walton was alive, he responded as follows: "Quite a few smaller stores have gone out of business during the time of Wal-Mart's growth. Some people have tried to turn it into this big controversy, sort if a "Save the Small Town Merchants" deal, like they were whales or whooping cranes or something that has the right to be protected. Of all the notions I've heard about Wal-Mart, none has ever baffled me more than this idea that we are somehow the enemy of small-town America. Nothing could be further from the truth. Wal-Mart has actually kept quite a number of small towns from becoming extinct by saving literally billions of dollars for the people who live in them, as well as by creating hundreds of thousands of jobs in our stores. I believe millions of people are better off today than they would have been if Wal-Mart had never existed. I do not want to be too critical of small-town merchants, but the truth is that a lot of these folks just were not doing a very good job of taking care of their customers. Whenever we put a Wal-Mart store into a town, customers would just flock to us from the variety stores. With our low prices, we ended an era of 45 percent markups and limited selection. We shut the door on variety-store thinking."
Question 1. What is your assessment of Sam Walton's remarks?
Question 2. Does Wal-Mart have a responsibility to the small retailers It puts out of business? Why?
Question 3. What does the future look like for small retailers in America? How can they compete with retailing giants like Wal-Mart?