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Unit 100 The Wal-Mart You Dont Know Wal-Mart is not just the worlds largest retailer. Its worlds largest company -- bigger than ExxonMobil, General Motors, and General Electric. The scale is hard to absorb. Wal-Mart sells in three months what number-two retailer Home Depot sells in a year. Wal-Mart wields its power for just one purpose: to bring the lowest possible prices to its customers. At Wal-Mart, that goal is never reached. The retailer has a clear policy for suppliers: On basic products that dont change, the price Wal-Mart will pay, and will charge shoppers, must drop year after year. But what almost no one outside the world of Wal-Mart and none of its 21,000 suppliers know is the high cost of those low prices. Wal-Mart has the power to squeeze profit-killing concessions from vendors. To survive in the face of its pricing demands, makers of everything from bras to bicycles to blue jeans have had to lay off employees and close US plants in favor of outsourcing products from overseas. Indeed, 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. Its the story of what that pressure does to the companies Wal-Mart does business with, to US manufacturing, and to the economy as a whole. The giant retailers low prices often come with a high cost. Wal-Marts 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? Of course, US companies have been moving jobs offshore for decades, long before Wal-Mart was a retailing power. But there is no question that the chain is helping accelerate the loss of American jobs to low-wage countries such as China. One way to think of Wal-Mart is as a vast pipeline that gives non-US companies direct access to the American market. People ask, How can it be bad for things to come in
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