Tuesday, May 26, 2015

Does Walmart help poor people?

Reuters pokes holes in a $50 billion claim

Does Walmart help poor people?

(Sharon Gekoski-Kimmel / Staff Photographer)
(Sharon Gekoski-Kimmel / Staff Photographer)

Obama adviser Jason Furman has famously claimed that Walmart, the largest U.S. retailer and the largest private employer in Pennsylvania and many other states, saves poor Americans $50 billion a year by selling groceries more cheaply than other chains.

How? Walmart buys in enormous bulk; and it doesn't have to pay union pensions and healthcare, among other old-line grocery expenses.

The claim that Walmart helps the poor has been used to socially justify Walmart's low wages.

But, writing for Reuters, bond-watcher Cate Long pokes holes in Furman's widely-quoted number by pointing out, among other things, that total Walmart grocery sales are less than $75 billion/year.

Read her item here: http://blogs.reuters.com/muniland/2012/11/28/a-truth-bomb-for-walmart-supporters/

As lead grocery shopper for my family of 8, I can testify that Walmart sometimes has excellent prices for canned herring and other packaged goods, but its meat and produce prices are not competitive with my local Shop-Rite. Long says Walmart's former pricing advantage has eroded. 

About this blog

PhillyDeals posts drafts, transcripts and updates of Joseph N. DiStefano's columns and stories about Philly-area business, which he's been writing since 1989.

DiStefano studied economics, history and a little engineering at Penn and taught writing at St. Joseph's. He has written thousands of columns and articles for the Inquirer, Bloomberg and other media, wrote the book Comcasted, and raised six children with his wife, who is a saint.

Reach Joseph N. at JoeD@phillynews.com, distefano251@gmail.com, 215.854.5194 or 302.652.2004.

Reach Joseph N. at JoeD@phillynews.com or 215 854 5194.

Joseph N. DiStefano