Walmart get lower prices because they BRIBE to get lower prices. The only reason it's not called "bribery" is because it's legitimate. It's legitimate because the govt says so. That doesn't make it MORAL.
It also has a LOT to do with the govt.
The issue here is "would Walmart be able to do what they do, if they were working on a level playing field?"
The answer is clearly "no".
That much should be perfectly clear.
Walmart benefits from billions in government subsidies: Study
"The report estimates that Walmart.....collectively profit from nearly $7.8 billion per year in federal subsidies and tax breaks."
Okay, that's $7.8 billion of govt money that's going to this one company.
Okay, so Walmart can pay their employees less than they should be earning. Why? Why do you support the govt giving handouts to people who are actually working?
Walmart pays its employees less, because they're getting govt help, this means they can charge less for their products. Meaning companies who pay their employees the correct wage are going to have to charge higher prices for their products.
All because of what the GOVERNMENT has done.
Subsidies the same, they can charge less and less.
Okay, in 2016 Walmart had an income of around $482 billion. Profit of $121 billion. So, you're looking at a profit of 1/4.
Walmart Income Statement, Annual, 2017, 2016 - Amigobulls
Let's do a little role play here.
There's a grocery store called "Ray's Groceries". It has a yearly revenue of $482,000 and profits of $121,000. It pays its staff the correct wage, it doesn't get any govt subsidies. Let's make up another number. The company pays 25% in Federal and State taxes. That means it paid $120,500 in taxes last year. That also means $24 million is being spent in the city on groceries.
Now, in this city there are 50 grocery stores, and they all earn exactly the same as "Ray's Groceries", they all pay the same tax, they all do the same thing, because it's an easier example than trying to find real stuff out and you wouldn't appreciate it anyway. That means the govts are making $6 million. Local people are making 6 million too. This money will go back into the local economy.
Now, Walmart moves in to the city. Walmart moves in because instead of paying 25% in federal and local taxes, Walmart gets to pay 5% in federal and local taxes (am I being generous?).
So this Walmart store is there. It's products are cheaper. It pays workers less. More people got to shop at the local Walmart store than in the other stores.
So, the amount "Ray's Groceries" earns is halved. They earn $241,000 in the first year Walmart is operating. Walmart takes in $12 million that year. Each of the other Grocery Stores loses money.
The Grocery stores are suddenly paying the governments $3 million a year. Walmart is paying the the governments $602,500. This means the governments have LOST $2.4 million a year, and Walmart has gained $2.4 million a year it's not paying in taxes.
It's also paying workers less. So the governments have to pick up the tab there too.
The Walmart profits are $3 million for what it took from the local stores, and $2.4 million from the govt not making it pay taxes. That's $5.4 million.
But the govts need money. So they charge the local people more in taxes to make up the $2.4 million they're losing. The $3 million they make in profits is NOT going back into the local economy.
This means the next year, instead of the 50 groceries stories making a combined $24 million, they're making $21 million. Walmart is taking 50% of this $21 million.
So, the 50 stories are making $10.5 million a year, that's $210,000 a year for the 50 stories, instead of $241,000 they made the year before. Profits are going down. Each year profits go down as less and less money goes back into the local economy. Suddenly Ray's Groceries former competitor shuts down. The people who shopped there go off to Walmart, who suck more money out of the economy, the govt puts up taxes again. The people who worked for the competitor then go work at Walmart, as they're busier than ever, they need more staff, who earn less, and go collect from the govt every so often.
Then Ray's closes down, and then there are only three left, trying to function in the shadow of Walmart.
Are you telling me this is because Walmart was "better"?
No, Walmart was not operating on a level playing field, it could sell its products CHEAPER because the GOVT gave them a sweet deal. Had it been a level playing field, Walmart would have opened into a competitive market, it might have gained a small share of the market, but as it was it sucked the blood dry.
So you know ALL about Walmart? Well that's not really the point. Walmart might have been able to increase its position in the economy being being efficient in the past, and it might very well be efficient now. But what we're talking about here Ray, isn't whether they're more efficient or not, it's whether the govt is giving them an unfair advantage over other competitors, and is destroying local businesses, so that everyone goes to work at Walmart, and then goes on the govt payroll too.