Squeezing community after community, farmer after farmer, and attempting to camouflage and clean up its heavily packaged inventory with so-called green initiatives, the behemoth Walmart appears more tenacious than bed bugs as it keeps creeping in expected and unexpected places around the globe.
The discount retail giant, which operates in 14 countries, has now set its blights on Africa, namely the Johannesburg-based Massmart with an offer of $4.2 billion to buy out the business. Massmart is a combo of Walmart and Home Depot and the biggest peddler of basic foods in the region, selling in 14 sub-Saharan countries with sales of about $6.8 billion this year. No wonder Walmart is considered a global superpower. It is more than a force to reckon with; it is a planet with a life force of its own.
It’s hard to believe this is what Sam Walton had in mind in 1962 when he set up shop. Yet in the nearly five decades since the enterprising son of an Oklahoma farmer founded the discount chain, it has morphed into one of the 100 most powerful economies in the world, ranking #19. Meanwhile, it has emerged as the anti-green in putting mom and pop stores out of business, planting its own cheap farm sources and peddling affordable bulk to a growing base of consumers buying the concept that quantity over quality is the way to get ahead.
The post-war aspiration of a car in every garage has been reinvented as the goal of a flat screen in every den, as Walmart makes it possible for low-income families to afford the luxuries that define the viral American dream. In fact, the company operates like bankrupt attorneys, growing fatter during a recession, benefiting from hard times. And as the economy recovers, sales at Walmart suffer. That tells you something about perception.
In efforts to recover, the company is doing what it has trained serotonin seeking consumers to do: Go shopping. After using up its credit allowance in small towns and suburbs, it is trying to locate urban hoods that have rejected the retailer in years past, along with new international ventures like Africa. It figures it can disguise its box stores and still offer cheap goods that will appeal to cash-poor shoppers in cities like New York and Chicago.
But we wonder if Walmart’s journey will end when its influence peddling no longer charms decision makers or when consumers can no longer fill their trucks with gas to drive to the stores to load up their reusable bags.
“I don’t believe Walmart will ever be a sustainable business in the classic definition of being able to operate indefinitely in the way they current do,” he tells me. “Eventually, they’ll run out of resources of permission to operate or something else. But I also believe that they are extremely resourceful and clever and powerful, so like so many other companies, they may find a pathway through this. Time will tell.”
Meantime, Makower points out that box stores aren’t the enemy of the green good movement, arguing that they might work to introduce local and organic ideology to the masses.
“Farmers markets are flourishing in record numbers, and more big stores – including Walmart and Whole Foods – are learning how to source locally when possible and affordable,” he suggests. “And these big players have scale, which we need to make these products mainstream and affordable. If we relegate green products to a few small niche players, we simply won’t make the different we need to make.”
Still, its a mixed grocery bag, according to food writer Vanessa Barrington, who says Walmart’s touted Heritage Agriculture Program is just another scam to undercut farmers, citing the profit margin in 2006 when farmers received a mere 19 cents for every $1 consumers spent on food. She says the company could end up displacing the very farmers it set out to support with this initiative. In other words, there’s no business like show business.
“The problem is that Walmart doesn’t do anything without a compelling business reason,” Barrington wrote in a recent EcoSalon article. And often when a whale as large as Walmart moves an inch, it displaces everything around it.
Is there cause for concern? Makower believes Walmart may look unbeatable on the outside but is a long way off from from truly transforming into the good, green, sustainable brand the marketing geniuses are spinning.
“What makes Walmart interesting is its influence, both upstream with its 60,000-plus suppliers, and downstream to its 300 million or so consumers,” he observes. “They can make a big different. If they can succeed as a business along the way, that’s terrific, but they’re a long way from that.”