Why Is Walmart the Devil But Amazon is an Angel?
Richard is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
$12 million per year for every second it can remove during the checkout process. That's what Charles Holley, CFO of Walmart (NYSE: WMT) says the company can save each day in cashier expenses. Imagine any company having to deal with such a burden – as necessary as it might be. Ask yourself, honestly: If you were the owner of a franchise, and an overhead of $12 million was staring you dead in the face at every turn and on every balance sheet, what would you do? I will tell you what I would not do, and that is sleep - until I get it fixed. Walmart seems to agree.
Recently, the retail giant has started looking at ways to make the checkout process more efficient. To that end, it has started testing an app using Apple’s (NASDAQ: AAPL) iPhone as an alternative to help customers shop, search inventory, scan their products, and then be able to produce a list of items within their cart to a checkout attendant who would then not be required to rescan every item.
What’s more, as has been the case with the recent proliferation of the self-pay kiosks at most retail stores, Walmart thinks that one day, customers will be able to take this a step further and complete the entire transaction by being able to pay for their items with their iPhone. No more long lines, “price-checks,” or having to deal with the customer in front of you who still insists on pulling out a checkbook to pay for groceries – nothing irks me more. It seems like a win-win for everyone right? But critics and ethicists see it another way.
As often is the case, the company is considered “evil” for exploring ways to run its business more effectively. Why is it always considered anti-American when businesses look for ways to save money? While I do understand that sometimes there will be labor casualties. “Cutting costs” often involves eliminating jobs. But should that preclude any company from wanting to be more efficient? If you decided to eliminate your monthly lawn service due to household budgetary concerns and in turn offered to pay your 16 year old neighbor to do the job, does that make you evil?
The misguided righteousness is one thing, but the double-standard that exists when Walmart is compared to Amazon.com (NASDAQ: AMZN) is beyond absurd. It seems Walmart is often considered the devil while Amazon is viewed as an angelic entity. But they’re the same.
Look at what Amazon has done to traditional book stores such as Borders and Barnes & Noble (NYSE: BKS). How about the unbalanced climate it has created in the retail segment, where its tax advantage has been slowly chipping away at Best Buy (NYSE: BBY) and Radio Shack (NYSE: RSH). Not to mention it has killed off CompUSA, Circuit City and Media Play and several others. Amazon’s body count is too many to list. It has become the mobster and everyone roots for during the movies – despite its lengthy body count.
Nonetheless, it is Walmart, not Amazon, that is considered “bad for American business” -- despite being one of largest employers in the world. As in the example above where it is now considering ways to eliminate wait time during the checkout process, it is the duty of every public company to explore ways to be more profitable and increase shareholder value. Sometimes, in the name of saving money, it has had to make some difficult decisions. All of which has helped it earn the reputation of being offering consumers the lowest prices of all of the retailers.
It is hard to imagine a company that was more American than Walmart at the height of the recession, as it was instrumental in helping households across America manage their budgets. Shoppers want the best items at the lowest possible prices. That is what Walmart offers. Yet, critics rush to proclaim Walmart of being under-handed and killing off mom & pop stores while outsourcing manufacturing to foreign markets. But many do not appreciate that there is a cost for offering the best prices in town. In this case, the mantra “The devil is in the detail” proves true.
Though Amazon employs similar competitive tactics to increase its market share, it gets to go about its business without having to defend its ethics or its anti-American persona. On the other hand, protests and revolutions against the business practice of Walmart is said to help the sun rise daily and makes the world go round. Remarkably, as in this example, if writers say one nice thing about Walmart, the hate mail pours in.
The company does a lot of good for which it gets very little credit. Unlike Amazon, it is one of the largest taxpayers to not only the U.S., but also to many states as well as local governments. Say what you want about its perceived low wages to employees, but in a country that has been hit with high unemployment, some perspective is more than warranted. These jobs have helped the American worker with opportunities they otherwise might not have had. Not the least of which is contributing to the America economy by paying personal income taxes. Perhaps, that’s where the comparison to Amazon should begin.
Compare and contrast
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rsaintvilus has no positions in the stocks mentioned above. The Motley Fool owns shares of Apple, Amazon.com, Best Buy, and RadioShack. Motley Fool newsletter services recommend Amazon.com and Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.If you have questions about this post or the Fool’s blog network, click here for information.