The giant retailer's low prices often come with a high cost. Wal-Mart's relentless pressure can crush the companies it does business with and force them to send jobs overseas. Are we shopping our way straight to the unemployment line? [...]The second article, The Man Who Said No to Wal-Mart, is about Jim Wier, CEO of Simplicity, the company that bought out Snapper lawnmowers in 2002, and his decision to stop selling Snapper mowers through Wal-Mart stores.
Indeed, as Vlasic discovered, the real story of Wal-Mart, the story that never gets told, is the story of the pressure the biggest retailer relentlessly applies to its suppliers in the name of bringing us "every day low prices." It's the story of what that pressure does to the companies Wal-Mart does business with, to U.S. manufacturing, and to the economy as a whole. That story can be found floating in a gallon jar of pickles at Wal-Mart.
Selling Snapper lawn mowers at Wal-Mart wasn't just incompatible with Snapper's future--Wier thought it was hazardous to Snapper's health. Snapper is known in the outdoor-equipment business not for huge volume but for quality, reliability, durability. A well-maintained Snapper lawn mower will last decades; many customers buy the mowers as adults because their fathers used them when they were kids. But Snapper lawn mowers are not cheap, any more than a Viking range is cheap. The value isn't in the price, it's in the performance and the longevity. [...]Read the article yourself. It's a fascinating look into the behind the scenes world of Wal-Mart. When Wier went to Bentonville to end his relationship with the retailer, he had to sit on a lawn chair in the vice-president's office. Wal-Mart apparently maximizes profits by cutting out frivolous office furniture too!
Wier is too judicious to describe it this way, but he looked into a future of supplying lawn mowers and snow blowers to Wal-Mart and saw a whirlpool of lower prices, collapsing profitability, offshore manufacturing, and the gradual but irresistible corrosion of the very qualities for which Snapper was known. Jim Wier looked into the future and saw a death spiral.
Also, surprisingly, Wier says, "I believe Wal-Mart has done a great service to the country in many ways. They offer reasonably good products at very good prices, and they've streamlined the entire distribution system. And it may be that along the way, they've driven some people out of business who shouldn't have been driven out of business."
Does he have any regrets? "I could go to my grave, and my tombstone could say, 'Here lies the dumbest CEO ever to live. He chose not to sell to Wal-Mart.'"