Competition Is Bad For Competition

Frontline interviews Jon Lehman, a Wal-Mart manager turned Wal-Mart union organizer. While the interviewer's questions are unexpectedly level-headed for a PBS program, the answers, expectedly, are not. Lehman apparently believes that competition is great, except when one company successfully outcompetes another company. Then competition is bad. Or something.

Well, what's happening across America is Wal-Mart is eliminating competition. ... Wal-Mart is extremely fine-tuned on their ... pricing policies. ...

... As a store manager, I'll give you an example. Memorial Day, I'd go out to the local competition and look at the price of, say, for example, ketchup, mustard, relish, mayonnaise. And if my competitor lowballed me on a price, if they undercut me on, say, Heinz ketchup, then what I would do is I'd come back and say, "OK, you're going to play with me on Heinz ketchup?" The company's policy that I followed was that "OK, I'll take it, and I'll match the price." OK? I'll match the price.

Then I would go back and check it the next day or the following day at the same competitor. And if they'd lowered their price again, then I'd come back, and I would lower my price 5 percent under their price, plus I'd hit five more items in that category. So I would not only take the ketchup; I'd take mayonnaise, mustard, relish, whatever was there, five other items in that same category, as if to say: "Don't mess with me. I'll come after you."...

...And also, by doing this ... they're really hurting the competition. Competition is supposed to be good for you, like you said. Competition is supposed to be good for consumers. But what ends up happening, I think, is if you don't have a level playing field ... then you eliminate competition. ...

I know the perfect solution for these way-too-competitive business practices. Antitrust law! We must limit competition in order to promote it. Or something.

When asked if Wal-Mart is "any different from Target or Kmart or Home Depot or any other retailer," Lehman responded,

Well, yes, they are. Wal-Mart has a predatory pricing policy. They are always talking about bringing the prices down for the American consumer when it's all about, really, raising profits in Bentonville, Ark., and raising profits for the shareholders and continuing the growth, continuing the accountability to the quarterly earnings report that comes out every quarter. It's all about growth. It's all about profit.

Of course, Target, Kmart, Home Depot and every other retailer besides Wal-Mart is not interested in raising profits and growth. Only Wal-Mart is in it for the cash, those bastards.

So what really makes Wal-Mart different than its competitors?

Why is Wal-Mart hated so much? What differentiates Wal-Mart from similar retail chains like Kmart, Target, and Sears? I doubt that Wal-Mart disproportionately takes advantage of eminent domain, corporate subsidies or federally-funded highways compared to these other stores. Further, I’ve seen little evidence that Wal-Mart pays significantly worse wages or benefits to its workers relative to similar jobs in other retail chain stores.

On the contrary, the only thing that meaningfully separates Wal-Mart from its competitors is its incredible success. Wal-Mart got to where it is today by doing what successful businesses do best: developing more efficient practices for delivering value to their customers, cutting costs, inventing new business processes (in Wal-Mart’s case, they revolutionized supply-chain management and database management), and most importantly, satisfying the subjective preferences of consumers.

[Frontline interview via Bob Ewing of Analysis, a brand-spankin' new "blog for individualists]

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You didn't once mention that

You didn't once mention that Chinese workers are paid 50 cents an hour. That's more than you guys make on Cata-malarky! Maybe, you cheap whores should unionize yourselfs and fight for better wages and working conditions. That's the American way! Better yet, let's reinstitute the draft and will send your arrogant asses overseas to fight for "freedom" in Iraq and elsewhere. Make yourselfs useful boys; sign up for basic training now! Off to Iraq! Bon voyage and happy Thanksgiving to you half-baked turkeys!!

Micha- You might have seen


You might have seen this but Bruce Bartlett, who was interviewed for the Frontline special, wrote on the Wal-Mart series as well. I didn't see the special, just heard the 10 preview on NPR. It seemed extremely biased, a point that Bartlett confirms.

Here's the link:


[...] @ 12:39 am

Micha Ghertner from Catallarchy has more on Wal-Mart. A must read for anybody who thinks Wal-Ma [...]

I wonder how all of the

I wonder how all of the leftist Wal-Mart haters (ostensibly - those who claim to care the most about America's "working families" who obviously benefit from lower prices) would react to WM's pricing strategy if Wal-Mart declared that 5% of all profits would be donated to various environmental and 'social justice' organizations? Would they be singing the same incoherent song?