I grew up in New York City in a family of very modest means. When I left NYC to go to graduate school in 1971, one thing was immediately apparent – if you were of modest means NYC was a much better place to visit then it was to live in. My standard of living rose dramatically as soon as I left NYC.
There are many reasons for this, but one that should not be overlooked is that the cost of doing business is so high in NYC that shopping opportunities commonly available in other places are not available in NYC. One such shopping opportunity is Wal-Mart.
Now if you are hedge fund manger making a seven figure salary, Wal-Mart may not seem like much of a shopping opportunity; but if you are family of four struggling to get buy on a household income of $40,000 annually, the low prices at Wal-Mart are a necessity to a decent quality of life.
It is thus with sadness for these struggling families that I read this Reuters’ dispatch today: ” Frustrated by a bruising, and so far unsuccessful battle to open its first discount store in New York City, Wal-Mart Stores Inc.’s chief executive said, ‘I don’t care if we are ever here.’ H. Lee Scott Jr., the chief executive of the nation’s largest retailer, said at a meeting with editors and reporters of The New York Times that trying to conduct business in the U.S.’s largest city was so expensive — and exasperating — that ‘I don’t think it’s worth the effort.'”
It is fashionable to bash Wal-Mart, but before we do let us consider the impact of doing so on the less fortunate segments of society. Sam Walton the founder of Wal-Mart was a frugal man who saw a larger purpose for his business. Wal-Mart buyers are notorious for driving a hard bargain with suppliers but they are simply carrying out Walton’s mandate to serve the consumer: “You’re not negotiating for Wal-Mart, you are negotiating for the customer. And your customer deserves the best price you can get.”
Competition fueled by entrepreneurial activity has been a tool of growth and prosperity in the United States for centuries. The attack on Wal-Mart in recent years is a symbol of the lack of understanding of this source of prosperity. All of us, even those who don’t shop at Wal-Mart, will bear the future consequences of this lack of understanding.