Monday, November 26, 2012

Hatin' on Walmart

I saw this posted a few times recently on facebook:

Spend enough time on facebook and you will find that this is a common attack against the giant retail chain.  One thing which I have always found curious though is that these sort of criticisms are regularly made against Walmart, but you never see them made against Target.

So why is it that Walmart is seen as the evil empire to be rejected by communities while Target is warmly embraced?  Well it isn't due to the difference in what they pay their employees.  According to this AOL article based on data, the two companies pay their hourly employees the same amount.  There is some difference between the two when it comes to salaried (management) employees but this also is greatly equalized when you take into consideration annual bonuses.

So if it isn't due to a difference in employee pay then what is it?  I suspect it is largely due to the difference between their clientele.  According to this 2005 Scarborough market research study, those shoppers that would shop at Target but not Walmart (Target exclusive) are more likely to come from upscale households that also shop at stores such as Nordstrom, Macy's, Costco, Mervin's, ect.  On the other hand, Walmart exclusive shoppers tend to have less income and shop at other stores such as Dollar General, Family Dollar, Big Lots, Kmart, etc.  So this is the question; do the people who criticize Walmart but not Target do so because they see Target as fitting into what is acceptable within their social/economic class and thus hypocritically give it a free pass?


  1. Blaming activists for pointing out a problem and re-directing attention to ad hominem "questions" about the messengers' backgrounds is no way to approach a serious problem. The real reason I "hate on" Walmart is because of the mountain of market power that they have is setting labor payscales, commodity prices, and benefits practices that become the retail standard. To compare the size and power of WalMart and Target as if they had the same influence is to betray naivety about economies of scale. WalMart and Target may have the same wage scales and benefit packages but there is no doubt that WalMart's practices force the rest of the industry to follow suit if they want to keep up. The activist strategy is the change the largest, most egregious offender and the rest will either willingly comply or face the wrath of their own demanding employees. Instead of straining to view the silence on Target as a hypocrisy, why not address the actual business practices of the primary offender?

  2. Matt, you may want to re-read my post as I did not give an opinion either way regarding the criticisms made against Walmart, only that those criticisms are almost solely made against Walmart and not Target. An example of this is found in the link above (attached to the words "warmly embraced") where a Target and Walmart were both to open in downtown L.A.. The Target was welcomed and the Walmart was protested. As Target is the second largest discount retail chain in the country and shares many similarities with Walmart, I don't think it is an unfair question as to why they are treated so differently. You may be right (or partially right) in your view that activist have a particular strategy in mind. I also think that my observation as to the difference between their customer base goes a long way in explaining the difference.

  3. The answer is quite simple, Walmart has a much larger market share than Target. Although I agree that it is a bit hypocritical/unwise to blindly accept any retailer other than Walmart. However, unconsciously, by doing so, they're at least chipping away at Walmart's status as a monopoly and forcing them to compete.

    That being said, the difference in shoppers (as you pointed out) also plays an important role I'm sure...