GANDHI LOVES 

WALMART!

(onionlive.com)

SUNNY THOMAS

Of late, Gandhi has changed so much! You may not even recognize him if by chance you met him on the street. The other day, I saw a true Gandhian, with a true Gandhi cap and in true khadi getting out of a Mercedes Benz car. He was coming after a televised fasting in the capital, which even President Obama and the First Lady Michelle Obama watched from the White House. Our Gandhian owns no Mercedes Benz, but simply got a lift from a friend who runs a foundation that gets funds from well-wishers abroad. The crowd was taken aback when this foundation man was shouting, ‘Bharat Mata ki jai’ instead of ‘American Mata ki jai’!! 

Welcome to Walmart (Wal-Mart till 2008) to the land of Gandhi, which is being Americanized by the hour ever since the IT Revolution. It is often said in South Bloc in whispers of course that if Obama catches cold, Dr Manmohan Singh will sneeze.When Sam Walton opened a retail store in 1962 at Bentonville, Arkansas, he had no idea that it would one day do business in 15 countries, opening 8,500 stores, and be the largest grocery retailer in the US.

But what worries India’s sensible people is the impact it would have on the ‘mom and pop’ stores of the small towns. An Iowa State University study by Prof Kenneth Stone has warned that small towns could lose almost half of their retail trade within ten years. However, shopkeepers who can adapt will thrive on new opportunities thrown open by Walmart.  

Another study by Global Insight found that food-at-home prices were 9.1% lower between 1985 and 2004 in the US because of the impact of Walmart. Washington Post reported (2005) that Walmart’s discounting of food alone boosts the welfare of American shoppers by at least $50 billion per year. An MIT study (2005) said the poorest segment benefited most from the existence of discount retailers.

To balance good news with bad ones, two professors from Pennsylvania observed that poverty increased in counties with Walmarts rather than in counties without Walmarts. This could be due to displacement of workers from higher paid jobs in retail business, which disappears as Walmart opens stores. Dr Raj Patel, the author of Stuffed and Starved, brings forth the tale of two Walmart stores in Nebraska, one just launched and the other well established. The first cut prices to the bone to drive out competitors whereas the second was charging 17% higher. 

Each week, about 100 million customers, nearly one-third of the U.S. population, visit Walmart stores because of low prices. Walmart Express is a smaller discount store with a range of services from grocery to gasoline service. The concept is focused on small towns.

Walmart had to bite the dust in Germany and South Korea, known for fierce competitive spirit. In Germany it captured just 2% of the food market in 1997 and remained a second  behind Aldi with a 19% share till 2006 when it finally withdrew. But it is doing well in the UK, and its Asda subsidiary is the second largest chain after Tesco.Entering the South Korean market in 1998, it withdrew in 2006.

In China, Wal-Mart hopes to succeed by adapting the Chinese way. The Chinese consumers prefer to select their own live fish and seafood; stores began displaying the meat uncovered and installed fish tanks, leading to higher sales.

Wal-Mart is governed by a fifteen-member Board of Directors, notable among them were Hillary Clinton (1985–1992) and Tom Coughlin (2003–2004), who was later caught in a

fraud and tax evasion case and sentenced to 27 months of confinement and damages worth $411,000.

There have been charges that Walmart is anti-woman, anti-labour, anti-environment, none of which has been proved in a court of law.