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 The leading web portal for pharmacy resources, news, education and careers January 22, 2019
Pharmacy Choice - Pharmaceutical News - With its low-price advantage, Wal-Mart dominates the retail - January 22, 2019

Pharmacy News Article

 1/6/19 - With its low-price advantage, Wal-Mart dominates the retail

With its low-price advantage, Wal-Mart dominates the retail market in the United States. While several of its competitors survive in competition, Wal-Mart often drives small retail grocery stores out of the market ? those stores that cannot afford to drop their prices to such low levels. A June 2009 study by Dartmouth College found that median sales at high-volume retailers, supermarkets, and drug stores decreased by 40%, 17%, and 6% respectively when a Wal-Mart entered the market. Another study found that retail sales in Iowa, excluding Wal-Mart's share, decreased by 47% within one decade of Wal-Mart entering the state's market. In general, Wal-Mart's entrance into a local market signifies that the overall prices of goods and services at other similarly-sized retailers will also decrease. As a consequence, retailers like Target, Sears, and K-Mart are most harmed by Wal-Mart's entrance into the market.

To compete with the largest retailer in the United States, other stores like Target, Best Buy, CVS, and Home Depot have created their own price-matching policies. Arguably Wal-Mart's biggest competition, Amazon Co. offers promotional and marketing services. Large chains, including Walmart, Target, Best Buy, Nordstrom and Staples, often are judged on their success by "who finishes second to Amazon." Amazon's main concerns involve pricing and quality; however, its main advantage is seen in that it is a technology company. While Wal-Mart may dominate the retail market in-stores, Amazon undoubtedly dominates the internet market. A majority of software developers would much rather work for a technology company that is entering into retail, rather than a retail company that is attempting to utilize technology. Smaller retailers often find it difficult to gain market share, since they operate with generally less financial flexibility.

Wal-Mart has attempted to reach the same online market power by allocating enormous resources into their website and online sales. Though the company has gained ground on its largest competitor, Amazon, it has not yet caught up.

This columnist is an Intermediate Microeconomics student of Log Cabin columnist Joe McGarrity. Each guest column is vetted by McGarrity before publication in the newspaper. For more information or to contact the writer, email joem@uca.edu.



© Copyright, 2019, Log Cabin Democrat, All Rights Reserved.

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