53 pages • 1 hour read
Charles FishmanThe Wal-Mart Effect: How the World's Most Powerful Company Really Works - and How It's Transforming the American Economy
Nonfiction | Book | Adult | Published in 2006A modern alternative to SparkNotes and CliffsNotes, SuperSummary offers high-quality Study Guides with detailed chapter summaries and analysis of major themes, characters, and more.
Chapters 8-9Chapter Summaries & Analyses
Chapter 8 Summary: “The Power of Pennies”
Fishman examines the atmosphere and operation of Wal-Mart’s store in Wyncote, Pennsylvania. At Wal-Mart, items cost roughly $0.03 less than they do elsewhere. These same prices exist at Wal-Mart #5229, although it’s not a supercenter (199). The atmosphere also isn’t as welcoming as at other stores, but shopping there still offers Wal-Mart customers the typical sense of “satisfaction, wonder, puzzlement, and guilt” (200).
Fishman considers how much money Wal-Mart saves their customers each year. In 2004, Wal-Mart shoppers saved roughly $22 billion on groceries alone. Fishman guesses that these savings inspire shoppers to ignore the annoyance of shopping at Wal-Mart in order to keep their cost of living down.
Fishman considers the American attitude towards money in general, referencing Ben Franklin’s adage about saving and earning pennies (204). Wal-Mart has built an empire around this antiquated philosophy. Fishman goes on to compare and contrast Wal-Mart’s model to a company like Southwest Airlines. According to Fishman, while Southwest similarly offers low prices for a less luxury experience,, unlike Wal-Mart, Southwest is aware of their offerings and has a sense of humor about their business model (207). Wal-Mart is comparatively austere and withholding.
In 2005, Wal-Mart advertised in Vogue for the first time. The advertisements revealed the ways in which Wal-Mart was competing with more fashionable companies like Target and Whole Foods. Because they couldn’t lower prices anymore, Wal-Mart was trying to market themselves as more stylish and trendy by running the ads in Vogue (212). This advertising scheme was also important, because Wal-Mart couldn’t open any more stores in the States, as America has enough already, and new Wal-Mart storefronts aren’t in demand overseas. Furthermore, Wal-Mart couldn’t raise their prices to increase sales, as they’d already taught consumers to expect and value low prices.
Fishman interviewed a frequent Wal-Mart shopper and former Wal-Mart supplier named Nancy Ridlen. She and her husband once owned Ridlen Adhesives and relied on their Wal-Mart account. They lost their business shortly after Wal-Mart ended their contract. Ridlen still resents the company, but shops there anyway because of the affordable prices. Former Master Lock CEO Randall Larrimore also has a complicated relationship with Wal-Mart. Sometimes he feels guilty for spending more on gas at smaller stations instead of at Wal-Mart, but also wants to support local businesses. Other times, he chooses to let other people pay more money to support these businesses and chooses to spend less at Wal-Mart because it makes him feel better about himself. Fishman considers these customer stories in order to understand the emotional and psychological experiences of Wal-Mart shoppers.
Chapter 9 Summary: “Wal-Mart and the Decent Society”
Fishman states that, in 2003, Foote Cone & Belding researchers visited Oklahoma City, Oklahoma, to study and understand the consumers that Wal-Mart typical attracts. They chose Oklahoma City because the town has “all four kinds of Wal-Mart stores” (219). Their findings uncovered four kinds of shoppers, who they categorized as the champions, the enthusiasts, the conflicted shoppers, and the rejecters (220). The shoppers in these groups spent various amounts of money each month, with the conflicted shoppers spending the most of all. According to Fishman, the study suggests that Wal-Mart has reshaped the way consumers shop. Fishman wonders if a single corporate entity should have this reach and power and who can hold them accountable (223). He goes on to question the implications of Wal-Mart’s influence over America’s economic and democratic ideals.
Sam Walton founded Wal-Mart in an isolated region. Wal-Mart headquarters have remained insular ever since although the company has outgrown its originating location. Therefore, Fishman argues, Wal-Mart doesn’t see or understand its national and global identity. Wal-Mart had humble beginnings, but it hasn’t adapted its behavior to its growth. Fishman insists that Wal-Mart must amend its operations and policies, as such changes could have positive and far-reaching effects.
Fishman writes that, after Hurricane Katrina, Wal-Mart promoted itself as a benevolent social do-gooder. However, before Lee Scott implemented sustainability measures, the company hadn’t altered its corporate policies or labor standards. Fishman doesn’t believe that Wal-Mart is inherently greedy or nefarious. However, Wal-Mart does have control over the economic system, which it could both acknowledge and wield differently. In particular, Wal-Mart’s continued opacity manipulates national economic data. Fishman references a 2005 report on snack cake sales from the Philadelphia Inquirer by way of example. The study was inaccurate because it excluded Wal-Mart snack-cake sales numbers. Wal-Mart continues to embrace secrecy, which has socioeconomic implications for the future.
Fishman argues that it’s time for public policies to acknowledge terms that govern million and billion dollar corporations like Wal-Mart (243). Wal-Mart also needs to respond differently to criticisms, instead of skirting responsibility.
Chapters 8-9 Analysis
Chapters 8 and 9 pose questions regarding Wal-Mart’s history and future, as well as the company’s long-term impact on its consumers, suppliers, competitors, and employees’ well-being. In Chapter 8, Fishman locates these thematic considerations within Wal-Mart shoppers’ experiences. The chapter assumes a more narrative tone and descriptive style in order to humanize Fishman’s subjects and to render their stories relatable. The chapter opens with detailed depictions of specific Wal-Mart stores and later incorporates Fishman’s conversations with specific shoppers including Nancy Ridlen and Randall Larrimore. These formal choices temper Fishman’s analytical, assertive tone and reinforce Fishman’s investigative inspiration: to determine how Wal-Mart has historically impacted the people they serve and employ. In Chapter 9, Fishman’s authorial voice assumes a more assertive and declarative tone. He devotes this final numerical chapter to restating much of the data he presented in the preceding chapters and to issuing a subsequent call to action. This chapter is thus both reflective and forward-looking. Its structure, style, and tone encapsulate Fishman’s overarching investigations and conjectures, while posing possible resolutions to his questions. In these ways, Chapters 8 and 9 work together to lead the text towards Fishman’s final conclusions.
Chapter 8 considers the dichotomous effects that Wal-Mart has on its community of shoppers. In Chapter 1, Fishman shared his own fraught relationship with the box store and the emotional challenges he faces while shopping there. In Chapter 8, he develops these personal anecdotes and observations further by moving beyond his first-person experience. Incorporating other customers’ perceptions of and relationships with Wal-Mart fortifies Fishman’s overarching argument that Wal-Mart has taught its shoppers “what things should cost, which way prices should go, and why cheaper is better” (215). According to Fishman, because American shoppers now operate under these guiding principles, even those customers who dislike Wal-Mart continue to give the corporation business as they are rewarded with affordable goods, highlighting again the Trade-Offs of Low-Cost Consumer Goods. Fishman argues that this phenomenon occurs because American consumers have learned from Wal-Mart that “low prices are a virtue, and they confer virtue on us” (218). According to antiquated American economic ideals, Fishman holds, spending less money is tied to morality and goodness. Therefore, Fishman avers, shopping at Wal-Mart makes consumers feel better about themselves, in spite of the annoyance the experience entails. These competing notions reinforce Fishman’s overarching argument that Wal-Mart is both a positive and a negative cultural force.
In Chapter 9, Fishman further develops the text’s exploration of Ethical Concerns in Global Supply Chains by considering how Wal-Mart might use its power for good instead of simply for selfish gain. “Wal-Mart is a problem,” Fishman asserts, “but it’s also an opportunity” (242). Because of the reach, influence, and control that Wal-Mart has established on consumer expectations and shopping habits and on national and global economies, Wal-Mart might use its platform to promote healthier and more ethical corporate standards. Throughout Chapter 9, Fishman employs both anaphora and repetition in order to reinforce his call to action. These formal techniques bolster Fishman’s tone and fortify his claims. Fishman’s stylistic and tonal shifts therefore grant the text a powerful, closing note. At the same time, because Fishman incorporates the pros and cons of Wal-Mart throughout the chapter, too, he also leaves room for readers to draw their own conclusions about the corporation’s influence and future.
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