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The Business Page

Welcome to the business page, a blog where I'll take you behind the scenes of greater Rochester's fast-changing economy. My name is Ben Rand, and I intend to introduce you to some of the personalities, concepts and events that make news in business here. I've been a business reporter for eight years in Rochester and a journalist for 18, working in four states. I grew up in Pittsford, but moved away after college for about a decade. My wife and I live in Irondequoit with our two children.

Wednesday, November 23, 2005

The Wal-Mart Blowout

As I write this, the day before the "Black Friday" shopping day, the area's buying frenzy is reaching a crescendo. Much of that excitement will undoubtedly find release in Wal-Mart stores across the country. But this holiday season, the nation's largest retailer is facing some never-ending controversy. Type in "Wal-Mart" on Google News and the first page contains stories about a lawsuit that accuses the chain of purposely hiring illegal immigrants; about a pricing investigation in Connecticut; and about zoning troubles in Indiana. The biggest headache for the chain, however, may be a new documentary that's critical of the company on many levels. "Wal-Mart: The High Cost of Low Price," by Robert Greenwald, is in the same vein as "Roger and Me," a controversial Michael Moore documentary from a few years back. Then there's Wal-Mart Watch, which aims to shine a spotlight on what it sees as harmful Wal-Mart business practices, such as dampening competition. I'll leave others to fight this debate, but one observation: The sheer size of Wal-Mart is astounding. Wal-Mart last year recorded almost $300 billion in revenue -- roughly $1,000 for every man, woman and child in the United States. (Profits were $10 billion.) I venture a guess that the company's size will always draw some degree of intense criticism.

3 Comments:

Blogger ccryder1 said...

Ben,

When you are the largest retailer in the world there is a target on you back.

Some good points should be mentioned:

1. Wal-Mart employ’s more people than any other business in the world, over 1 mil.

2. They provide consistently lower prices than you will find elsewhere, helping people with a tight budget.

3. At least three times a year for the past two years their stock has slipped below $47.00 per share. Selling at $50.00 per share you will realize at least 6.3% return per transaction, or 18.9% per year.

9:44 AM, November 24, 2005  
Blogger Behind The Business Page said...

CCryder -

Fair points, but I know very well what critics will say - that the ends do not necessarily justify the means. If the net impact of Wal-Mart is negative...well, it's a fair question to ask: Why do it? The problem is that net impact is probably impossible to measure in a scientifically appropriate, agreed-upon way. And what means is, the debate is fought with anecdotal evidence.

4:01 PM, November 28, 2005  
Blogger ccryder1 said...

Ben,

“The debate is fought with anecdotal evidence.” True…however, I would much prefer the Wal-Mart line employees are working in the stores rather than standing in an unemployment line. Another alternative, they could be working for minimum wage with no health benefits. The latter would be a double hit on the economy assuming they or a member of their family fall ill.

Our country is faced with declining prime employment for the so-called middle class. Such employment is generally in the retail sector and frequently with no benefits. As the population without a degree or without a high school diploma is growing, good luck to any company willing to employ such people.

1:13 PM, December 11, 2005  

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