For more than a decade, authors have tried to write a superb book about corporate behemoth Wal-Mart. The topic is unquestionably worthy. Measured by revenue and employment, Wal-Mart is the largest corporation ever. The evidence is indisputable that since its founding in 1962, Wal-Mart has affected the life of every American, directly or indirectly, as well as tens of millions of other individuals around the globe.
Based on my reading, no Wal-Mart book author has come close to achieving “superb,” until now. Charles Fishman’s just-published book, “The Wal-Mart Effect,” is almost certainly the best yet, as measured by depth and breadth of research, writing style and evenhanded treatment. (More Wal-Mart exposés are on the way, with a highly publicized book, “The Bully of Bentonville,” from Business Week reporter Anthony Bianco due in mid-February.)
As an investigative journalist for nearly 40 years, I feel I am able to evaluate the evidence gathered by other investigators. One of my own books tackled a huge corporation and its legendary founder – Occidental Petroleum and Armand Hammer. I am completing a biography of Ida Tarbell, who 100 years ago exposed the machinations of the nation’s largest company, Standard Oil, and its founder John D. Rockefeller.
Furthermore, I live in a city that almost certainly is home to more Wal-Marts per capita than any other. No, not Bentonville, Ark., the now famous corporate headquarters of Wal-Mart. Rather, I live in Columbia, Mo., where Wal-Mart founder Sam Walton graduated from high school, attended the state university, and where several of his conspicuously wealthy heirs still live. On some days, the headlines in Columbia – the smallest city left in America with competing daily newspapers – seem like all Wal-Mart, all the time.
Consumers in other locales must feel that way sometimes, too. Wal-Mart operates about 4,000 stores in the United States, an average of more than one per county. Ninety percent of Americans live within 15 miles of a Wal-Mart. Those who do not tend to shop there anyway. My low-income in-laws, before dying last year, often drove from their isolated northwest Iowa town of 1,200 people to a Wal-Mart about 30 miles away, 60 miles round-trip. They enjoyed the journey, bought lots of stuff, including groceries, and worried little, if at all, about the impact on the grocer and the additional few merchants remaining in downtown Holstein.
What makes Fishman’s book so worthy, whether the potential reader is a Wal-Mart partisan, a Wal-Mart opponent or someone on the fence?
Foremost: his fascinating interviews with former Wal-Mart executives, hourly workers, suppliers and competitors. Current Wal-Mart employees, numbering 1.6 million, are pretty much off-limits to journalists, according to corporate policy. So Fishman persuaded knowledgeable sources retired from Wal-Mart or employed elsewhere to speak.
For example, Larry English, now age 57, who at age 14 began working at Wal-Mart store No. 2 in Harrison, Ark. By age 20, English managed Wal-Mart No. 18, in Newport, Ark. He rose within the hierarchy, eventually opening Wal-Mart No. 512 in El Paso, Texas, the first site to sell $1 million of merchandise in one week.
English does not slam Wal-Mart, but he does provide fascinating insights from the inside. English is especially good at explaining founder Walton’s monomania about offering the lowest price in town every day on almost every item, and how that monomania could lead to commercial ruthlessness behind the smiley-face façade greeting customers.
Another fascinating chapter is built around Fishman’s interviews with Jonathan Fleck, who, along with his preteen daughter Abigail, invented a bacon cooker adopted by Wal-Mart during 1995. Before Wal-Mart agreed to market the gadget called Makin Bacon, Fleck received orders directly, thanks to a feature in Good Housekeeping magazine and a promotional offer on Armour bacon packages. He received payment for each order up front, then filled the orders from home, finding it difficult to keep up with the modest but steady demand.
Wal-Mart’s initial order: 200,000 of the gadgets. Like so many other suppliers to the behemoth, Fleck said yes then began to wonder why. He had to find financing, alter his lifestyle completely, locate a manufacturing plant and hope to resist the traditional Wal-Mart squeeze of selling the product for less money each year.
Fleck’s saga is relatively happy so far. But if Wal-Mart decides to end its relationship with Makin Bacon or insist on a lower sales price (known as “the squeeze”), bankruptcy might result for the Fleck family.
Fishman’s book is filled with examples of Wal-Mart suppliers who could not escape the squeeze. The result is sometimes closure of their U.S. production lines, throwing loyal employees into government unemployment lines. If production resumes, it might be in Mexico or China or whatever other nation can produce at a cost low enough to meet Wal-Mart’s demands.
Throughout the book, Fishman wrestles with the question of whether it is a positive or a negative that the majority of American consumers buy at Wal-Mart. He wrestles with the question in his own life, each time he enters the Philadelphia area Wal-Mart where he appreciates the low prices but often bridles at the atmosphere.
“Should I shop at Wal-Mart” is an “amazing question,” Fishman says. “It’s hard to know even what kind of question it is: A political question? An economic question? A moral question? A values question?
The question is really shorthand for the whole set of larger questions, the mystery at the heart of Wal-Mart: What is the Wal-Mart effect? Is Wal-Mart good for America, or is it bad for the country? Is Wal-Mart itself good or bad? When we spend our money at Wal-Mart, are we helping companies and the economy and factory workers along with ourselves? Or are we just adding drops of acid to the corrosion of the very system we value?”
Steve Weinberg is a freelance writer in Colombia, Mo.
“The Wal-Mart Effect”
By Charles Fishman
Penguin, 294 pages, $25.95
