The winner of Fortune 500’s annual ranking of America’s largest companies in 2011, was really no surprise. Walmart Stores ranked number one on the list for the second year running, and for that matter, eight of the past ten years. Add to this, Walmart’s standing as the largest retail organization in the world and you have an exceptionally large company. Coming in second on the list, Exxon Mobil, and third, Chevron.
The numbers are the interesting part on the Fortune 500 list. Walmart’s revenues were approx. $420 billion, with profits of roughly $16 billion. Exxon, by contrast had approx. $354 billion in revenues. Chevron, the third on the list reported revenues of approx. $196 billion.
Although standing firm in its position as the largest American company, Walmart has reported a drop in sales for the past seven quarters straight in U.S. stores. To combat this, the company is looking to fill its shelves with even lower priced items then they currently carry. Such items were previously done away with by former Walmart CEO Lee Scott.
Walmart has faced strong criticism in cities across the country and from tax payers. A report, based on 50 studies of Walmart openings, published last year from City University of New York’s Hunter College Center for Community Planning shows that Walmart places a burden the neighborhoods it enters. Reuters, detailing the findings of the report, finds that as the biggest U.S. employer, employing over 1.4 million people in the United States comprising 1% of the countries working population, Walmart actually kills jobs rather than creates them.
Furthermore, the study concluded that in areas with a Walmart, wages are driven down, local retailers are pushed out of business, and the tax payer is forced to cover the slack left by Walmart’s lack of health and other benefits denied its part time employees who have to turn to Medicaid and other public programs.
Concerns like these are what prompted the City of New York, last year, to hold a hearing on the impact a Walmart would have if allowed to open in the city. Walmart has targeted the city’s poorest areas for locations to open future stores, areas plagued by crime, drugs and unemployment. Walmart claims that its stores bring jobs and quality shopping to locals. Despite their claims, many cities, including Chicago, have also long opposed new openings of the retail giant.
Residents of the neighborhoods in New York targeted by Walmart are opposed to the company setting up stores there. Interviewed by Reuters, City Councilman Charles Barron from East New York, states, “”We don’t need Walmart (which) has a history of destroying the local economy and hurting it, not helping it.”
Walmart, on a website it runs promoting locations in New York City, WalmartNYC.com, highlights a quote stating,
“…More than 70 percent of residents want a Walmart here. They know it’s one thing to limit, for example, the size and location of stores. It’s another thing altogether to try to keep a particular company out. That’s the kind of thing you expect in authoritarian countries like Russia, or the old Soviet Union.”
America’s largest company will most likely gain admittance into New York City whether residents like it or not. The future of American retail obviously rests the grasp of giant companies like Walmart, but what will be its long term effects on local economies across the country?