Criticism of Walmart
The American multinational retail chain Walmart has received criticism from parties such as labor unions and small town advocates for its policies and business practices.
Criticisms include charges of racial and gender discrimination, foreign product sourcing, anticompetitive practices, treatment of product suppliers, environmental practices, the use of public subsidies, and its surveillance of its employees. The company has denied any wrongdoing and said that low prices are the result of efficiency.
In 2005, labor unions created new organizations and websites to criticize the company, including Wake Up Walmart and Walmart Watch. By the end of 2005, Walmart had launched Working Families for Walmart to counter those groups. Efforts to counter criticism include a public relations campaign in this same year, which included several television commercials. The company retained the public relations firm Edelman to interact with the press and respond to negative media reports, and has started working with bloggers by sending them news, suggesting topics for postings, and inviting them to visit Walmart's corporate headquarters. In November 2005, a documentary film critical of Walmart was released on DVD.
Critics say that Walmart's lower prices draw customers away from smaller Main Street businesses, hurting local small town communities, and that the company hurts the United States economy by relying excessively on Chinese-produced products – Walmart is the largest importer in the United States in many categories, such as electronics and fast-moving consumer goods. The 2006 book The Walmart Effect by business journalist Charles Fishman contains much of the criticism, though it also enumerates Walmart's positive impacts within society.
Local communities
When Walmart plans a new store location, as often as not the company has to fight its way into town in the municipal equivalent of civil war between pro- and anti-Walmart factions. Opponents cite concerns such as traffic congestion, environmental problems, public safety, absentee landlordism, bad public relations, low wages and benefits, and predatory pricing. Opposition by activists, competitors, local citizens, labor unions, and religious groups may include protest marches, property damage to store buildings, or by creating bomb scares. Some city councils have denied permits to developers planning to include a Walmart in their project. Those who defend Walmart cite consumer choice and overall benefits to the economy, and object to bringing the issue into the political arena.In 1998, Walmart proposed construction of a store west of the intersection of Charlotte Pike and Interstate 40 outside Nashville, Tennessee. The building site was home to both Native American burial grounds and a Civil War battlefield. Protests were mounted by Native Americans and Civil War interest groups, but the Walmart store was eventually constructed after moving graves and some modifications of the site so as not to interfere with the battlefield. Civil War relics were discovered at the site. The project developers donated land to permit access to the Civil War historic site. The Native sites were removed and re-buried elsewhere.
A Walmart superstore opened in 2004 in Mexico, from the historic Teotihuacan archaeological site and Pyramid of the Moon. Although the location was supported by Mexico's National Anthropology Institute, the United Nations, and the Paris-based International Council on Monuments and Sites, there had been protests organized by local merchants, as well as environmental groups and anti-globalization groups who opposed the construction. Poet Homero Aridjis called the opening as "supremely symbolic" and "like planting the staff of globalization in the heart of ancient Mexico". Archaeologists oversaw construction and discovered a small clay and stone altar along with some other artifacts where the store's parking lot is now located.
In 2005, developers demolished the long-closed Dixmont State Hospital in Kilbuck Township, Pennsylvania, near Pittsburgh, with plans to build a shopping complex anchored by a Walmart. While there were initially no general objections to the Walmart store itself, many residents did not want to see Dixmont demolished, despite the fact that the Dixmont complex, having been abandoned in 1984, was beyond maintainable condition and teenagers were dangerously trespassing onto the property on a regular basis. However, while the land was being excavated in order to create a plateau for the store to be built upon, a landslide occurred covering Pennsylvania Route 65 and the Fort Wayne Line railroad tracks between PA 65 and the Ohio River. Both routes were shut down for weeks. While Walmart did "stabilize" the landslide, many residents said that Walmart merely stabilized the hillside so that it could continue with work to build the store. Ultimately, in 2007 Walmart decided against developing the site, allowing the land to return to nature, with a Walmart location to be constructed in nearby Economy, Pennsylvania, instead behind the Northern Lights Shopping Center. After some opposition from the local Giant Eagle location at the plaza, the Walmart location opened in 2014.
In the 2010s, a proposal to build the Midtown Walmart supercenter in Midtown Miami was met with litigation and opposition from local businesses, delaying construction of the project. A Florida Third District Court of Appeal panel of judges denied the opposition's challenge of the city's approvals and Walmart broke ground on the development in January 2016.
In 2014, researchers at the University of South Carolina and Sam Houston State University published a study on whether Walmart affected local crime rates. In the 1990s, crime rates were in fact decreasing throughout most of the United States. The study found that this decrease was "nowhere near" as impressive in most communities that had a Walmart store, as if the presence of the large retailer was somehow stunting the decrease. The authors acknowledged the cause-and-effect arrow may go in the opposite direction. For example, one co-author stated, "Counties with more social capital – citizens able and willing to speak up about the best interests of the community – tend to have lower crime rates. Counties with more crime may have less social capital and, therefore, less ability to prevent Wal-Mart from building."
Allegations of predatory pricing and supplier issues
Walmart has been accused of selling merchandise at such low costs that competitors have tried to sue for predatory pricing. In 1995, in the case of Walmart Stores, Inc. v. American Drugs, Inc., pharmacy retailer American Drugs accused Walmart of selling items at too low a cost for the purpose of injuring competitors and destroying competition. The Supreme Court of Arkansas ruled in favor of Walmart saying that its pricing, including the use of loss leaders, was not predatory pricing. In 2000, the Wisconsin Department of Agriculture, Trade, and Consumer Protection accused Walmart of selling butter, milk, laundry detergent, and other staple goods at low cost, with the intention of forcing competitors out of business and gaining a monopoly in local markets. The case was settled out of court. Crest Foods filed a similar lawsuit in Oklahoma, accusing Walmart of predatory pricing on several of its products, in an effort to drive Crest Foods's own company-owned store in Edmond, Oklahoma, out of business.In 2003, Mexico's antitrust agency, the Federal Competition Commission, investigated Walmart for "monopolistic practices" prompted by charges that the retailer pressured suppliers to sell goods below cost or at prices significantly less than those available to other stores. Mexican authorities found no wrongdoing on the part of Walmart. However, in 2003, Germany's High Court ruled that Walmart's low cost pricing strategy "undermined competition" and ordered Walmart and two other supermarkets to raise their prices. Walmart won appeal of the ruling, then the German Supreme Court overturned the appeal. Walmart has since sold its stores in Germany.
Walmart has been accused of using monopoly power to force its suppliers into self-defeating practices. In 2006, Barry C. Lynn, a senior fellow at the New America Foundation, said that Walmart's constant demand for lower prices caused Kraft Foods to "shut down thirty-nine plants, to let go 13,500 workers, and to eliminate a quarter of its products." Kraft was unable to compete with other suppliers and said the cost of production had gone up due to higher energy and raw material costs. Lynn said that in a free market, Kraft could have passed those costs on to its distributors and ultimately consumers. As another example in 2006, most Walmart store pharmacies filled many generic prescriptions for $4 for a month's supply. However, in California and ten other states, complaints from other pharmacies resulted in Walmart being required to charge at least $9 for a month's supply of certain drugs.
In May 2010, Walmart's United States stores pulled the Chinese-made Miley Cyrus line of necklaces and bracelets after an Associated Press release that the jewelry contained harmful amounts of the toxic metal cadmium. Cadmium in jewelry is not known to be dangerous if the items are simply worn, but concerns come when a child bites or sucks on the jewelry, as children are apt to do. Walmart said that while the jewelry is not intended for children, "it is possible that a few younger consumers may seek it out in stores. We are removing all of the jewelry from sale while we investigate its compliance with our children's jewelry standard", Walmart said.