Wal-Mart Critics Reading from an Old Script

Contact: Richard Morrison , 202.331.2273

Washington , D.C. , November 18, 2005—The success of retail giant Wal-Mart has generated criticism of its business practices from across the political spectrum—criticism that, according to a new study published today by the Competitive Enterprise Institute, has been heard frequently before. Contemporary attacks on Wal-Mart are echoes of the same unjustified charges leveled at retail innovators for over a century.

Because of Wal-Mart's uniquely successful history and influential place in the U.S. retail sector, the company has become the focus of many individuals' wider anxieties about shifting economic realities and the future of American prosperity. Despite being a strong force both for fueling economic growth and restraining inflation, the demise of some of Wal-Mart's less-efficient rivals have linked the company's reputation to worries about unemployment and economic stagnation.

“Despite the tremendous benefits in value, efficiency, and service that have accrued to the consumer through the passing of each era of retailing, Americans do not react well to such change,” writes author Zachary C. Courser. “Judging from history, capitalism's creative destruction is felt unusually strongly in retail.”

The historic disruptions caused by previous retail innovators like Sears & Roebuck, Woolworth's and the A&P chain, all led to populist backlashes and a demand that state and federal governments enact policies to halt the evolving changes in the business landscape.

“The same story has repeated itself through each major change to retailing: Groups mobilize against a vanguard of a new retail paradigm, public campaigns begin to rock the foundations of that enterprise, and eventually legislatures react to restore ‘normalcy' by regulating that business' practices, allegedly in the public interest,” writes Courser. “The tragedy in each instance is that the American consumer loses most in this drive for control over the forces of retail innovation.”

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