...why do they have to steal pricing data from their competitors? From the AP:
Wal-Mart Stores Inc. has repeatedly sent workers to steal price information from a local grocery store prior to the opening of a Wal-Mart Supercenter, a grocer alleges in a lawsuit.
Super H claims in its lawsuit in Osage County District Court that Wal-Mart sent workers to illegally scan bar codes on goods on Super H shelves. In a June 1 police report, Super H manager Greg McNeil called Wal-Mart's behavior "corporate espionage stealing sensitive information from a competitor."
The bar codes contain information about retailers' costs, inventory and other details considered highly private by Super H, which shares a parking lot with a nongrocery Wal-Mart store. A Wal-Mart Supercenter is scheduled to open in August.
The article points out that this is not the first time Wal-Mart has been caught doing this:
In 2000, Crest Foods in Edmond accused five Wal-Mart employees of the same practice. Crest ejected five employees - including David Glass, who had spent more than a decade as Wal-Mart's chief executive - and filed a federal lawsuit accusing Wal-Mart of predatory pricing.
Lest you think this is just in Oklahoma, here's a New Hampshire Wal-Mart manager interviewed by author David Shipler for his 2004 book, The Working Poor (who I've quoted before):
"[T]he way we do things, we go out and we check our competition every single week. Every department manager in this store goes out once a week and checks competition, and that's what determines our prices."
Let me take a detour here for just a moment. Wal-Mart has the best distribution system in the world. Tom Freidman even cites it as one of "the ten forces that flattened the world," writing:
"As consumers we love supply chains, because they deliver us all sorts of goods-from tennis shoes to laptop computers-at lower and lower prices. That is how Wal-Mart became the world's largest retailer."
Wal-Mart also shakes down suppliers better than anybody else. This is from a now-famous article that appeared in the December 2003 issue of Fast Company:
The retailer has a clear policy for suppliers: On basic products that don't change, the price Wal-Mart will pay, and will charge shoppers, must drop year after year. But what almost no one outside the world of Wal-Mart and its 21,000 suppliers knows is the high cost of those low prices. Wal-Mart has the power to squeeze profit-killing concessions from vendors. To survive in the face of its pricing demands, makers of everything from bras to bicycles to blue jeans have had to lay off employees and close U.S. plants in favor of outsourcing products from overseas.
If Wal-Mart is so great at moving products, acquiring them at ever-decreasing prices, and, of course, holding their own labor costs down by paying poverty-level wages, why do they need to know what they're competitors are charging? Shouldn't they be able to beat their competitors automatically?
The answer is that Wal-Mart doesn't do these things for its customers, they do these things for Wal-Mart. They charge what the market will bear and they pocket the difference. Once the competition in a town is gone, the sky is the limit on what Wal-Mart can make off of rural communities or any other place where they have run every other retailer into the ground. In fact, these profits would allow the company to afford predatory prices in the cities they're moving into now.
Wal-Mart is not a charity. If you save now, you will pay later.
JR