August 29, 2005

When Will Wal-Mart Demand An Investigation of Wal-Mart?

Washington, DC – Lee Scott, CEO of Wal-Mart and ASDA, its British subsidiary, achieved a new level of global irony this weekend calling for a government investigation into the market dominance of one of its foreign competitors, TESCO. As reported by The Sunday Times, Scott demanded that the British Government investigate its chief grocery rival TESCO because of what Scott sees as the company’s growing market dominance in Britain. Scott stated that “”as you get to over 30 percent and higher, I am sure there is a point where government is compelled to intervene….at some point the Government has to look at it.””

“”Scott criticizing TESCO for its market dominance is like Enron criticizing Arthur Anderson for its accounting practices.  Wal-Mart is using its immoral business practices as a competitive advantage over responsible corporations.  The question for Wal-Mart should be when will Wal-Mart demand an investigation of itself?”” said, Paul Blank, campaign director for WakeUpWalMart.com

Lee Scott’s statement is especially ironic in light of the facts about Wal-Mart’s market share here in the United States.

Here are the facts:

1. Wal-Mart accounts for 60% of the sales for the $379 billion market called Discount Department and General Merchandise stores.
2. Wal-Mart’s general merchandise dominance means it has sales nearly 5 times more than their next closest competitor and double the sales of their next 3 closest competitors (Costco, Target and Kmart) combined.
3. Wal-Mart controls approximately 24% of grocery sales in the United States (more than double its next closest competitor), very similar to TESCO’s position in the United Kingdom.
4. Wal-Mart sells more groceries than their top 3 competitors combined.
5. Wal-Mart sells 30% of household staples bought in the United States, including items such as toothpaste, shampoo, and paper towels, according to Business Week.
6. A report prepared by Retail Forward in 2003 forecasted that Wal-Mart’s domestic supermarket-type sales could go from an estimated $82 billion to $162 billion by 2007. In the process, Wal-Mart will consume almost a third of the expected growth in US spending on grocery and drug products during 2003-2007. Growth of this magnitude would give Wal-Mart control of 35% of food store industry sales and 25% of the drug store industry – and put many entrenched players in jeopardy.
7. Grocery Industry statistics Ranked by Percentage:24% Wal-Mart and Sam’s Club
   10% Kroger
   7% Albertson’s
   6% Safeway

   Discount department & General Merchandise stores ($379 billion) Ranked by sales:

   Wal-Mart & Sam’s Club $229 bill
   Costco $47 bill
   Target $47 bill
   Kmart $20 bill