There has only ever been one serious problem with Walmart: it historically hasn't paid very well.
It's just starting to kinda-sorta catch up with Target and Costco in pay and benefits.
There's a pay trade-off that the Walmart critics go dramatically out of their way to avoid however. Costco can pay what they do, because their employee to sales ratio is extremely different from Walmart. Walmart employs a lot more people per dollar of sales, and operates a very different style of retail business. To match Costco's employee count to sales ratio, Walmart would have to fire a million people. If you ask the critics if they would like to see Walmart fire a million people so they can raise the wages for the other million, you'll get an immediate evasion in response.
Walmart's net income margin for 2016 was 2.8%, and that's typical for them. They get by on a razors edge. They do $485 billion in sales, and only have a $7 billion cash buffer (Twitter has $4.3 billion), while operating on that comically tiny margin. One bad slip, the entire thing collapses in a giant heap of red ink, and a million people lose their jobs instantly. Walmart's ability to survive long-term at such thin margins, is one of the great business stories of the last century.
The notion that Walmart destroys small towns is a crock. I believe only someone that has never actually lived in a poor small town, could claim that. This is what it's like working for a small town retailer: minimum wage, zero benefits, high likelihood of losing the job because the business goes under (pre-Walmart), zero upside potential at all for the employees. That's what small town retailers overwhelmingly looked like in the US from the 1950s through the 1990s, when Walmart reached saturation.
Oh, and Walmart raises the standard of living by drastically improving product selection and access in small towns. Small town retailers have horrible selection and pricing. Critics will claim Walmart's pricing power is a negative, when in fact it's a massive positive for the actual humans that live in small towns (versus the people on the outside that have never lived in a poor small town, that like to write articles from a million miles away and talk about small town retail poverty culture as though it's glorious and should be preserved).
So let's recap: Walmart raised wages, it improved selection, it lowered prices, it absorbed labor slack, it provided benefits, it provided a consistent and large base of employment.
Growing up I watched Walmart move into every corner of Appalachia. It was a vast improvement everywhere it went and it absorbed immense labor slack among low skilled workers. The notion that there was a paradise beforehand, is blatantly false.
Uh..i live in a relatively small town, and a lot of the local stores were better than walmart at wages and service, and had good selection. They just couldn't beat price due to being regional instead of nationwide chains. Stores like Benny's for example:
Wal-mart killed toy stores, I think too; better selection, but you can't beat them on price.
You can't compete with someone who can price things maybe even half of what you can because of scale. That means they replace the two or three retail department stores and many small specialist shops or niche stores in your region with one or two walmarts
It easier to survive on a 2.8% margin in that business, because it works by rapidly getting that 2.8% return on capital - and reusing that money to buy new product. They actually do that 8 times per year.
So than their real yearly returns on capital are close to 11.5%.
Local stores can't compete on price in areas where it moves it (usually rural areas where consumers are super price sensitive). So most of the local retailers go out of business, taking away a towns retail base and often hollowing out its downtown areas. Wal-Mart siphons all the profits to its corporate HQ, furthering weakening monetary flows in areas where inflows are already weak due to stagnating industry.
This leaves the small town dependent on Wal-Mart, and when Wal-Mart decides to close a town, the whole town is screwed because they don't have any retail left and no one has the means to rebuild it. The cherry on top is that Wal-Mart's square footage is almost always too big for anyone to take over, so the buildings generally sit there rotting until they're demolished
tl;dr walmart hollows out the retail base of small towns, leaving them super dependent and screwed if they ever leave
It's just starting to kinda-sorta catch up with Target and Costco in pay and benefits.
There's a pay trade-off that the Walmart critics go dramatically out of their way to avoid however. Costco can pay what they do, because their employee to sales ratio is extremely different from Walmart. Walmart employs a lot more people per dollar of sales, and operates a very different style of retail business. To match Costco's employee count to sales ratio, Walmart would have to fire a million people. If you ask the critics if they would like to see Walmart fire a million people so they can raise the wages for the other million, you'll get an immediate evasion in response.
Walmart's net income margin for 2016 was 2.8%, and that's typical for them. They get by on a razors edge. They do $485 billion in sales, and only have a $7 billion cash buffer (Twitter has $4.3 billion), while operating on that comically tiny margin. One bad slip, the entire thing collapses in a giant heap of red ink, and a million people lose their jobs instantly. Walmart's ability to survive long-term at such thin margins, is one of the great business stories of the last century.
The notion that Walmart destroys small towns is a crock. I believe only someone that has never actually lived in a poor small town, could claim that. This is what it's like working for a small town retailer: minimum wage, zero benefits, high likelihood of losing the job because the business goes under (pre-Walmart), zero upside potential at all for the employees. That's what small town retailers overwhelmingly looked like in the US from the 1950s through the 1990s, when Walmart reached saturation.
Oh, and Walmart raises the standard of living by drastically improving product selection and access in small towns. Small town retailers have horrible selection and pricing. Critics will claim Walmart's pricing power is a negative, when in fact it's a massive positive for the actual humans that live in small towns (versus the people on the outside that have never lived in a poor small town, that like to write articles from a million miles away and talk about small town retail poverty culture as though it's glorious and should be preserved).
So let's recap: Walmart raised wages, it improved selection, it lowered prices, it absorbed labor slack, it provided benefits, it provided a consistent and large base of employment.
Growing up I watched Walmart move into every corner of Appalachia. It was a vast improvement everywhere it went and it absorbed immense labor slack among low skilled workers. The notion that there was a paradise beforehand, is blatantly false.