Report: Wal-Mart Saves Families $2,500 a Year
July 7, 2008 - 8:23 PM
(CNSNews.com) - A study released by Wal-Mart on Wednesday indicates the world's largest retailer now saves American families an average of $2,500 a year, up 7.3 percent from 2004. In addition, the corporation announced it is changing its tagline for the first time in 19 years, from "Always Low Prices" to "Save Money. Live Better."
"From the family vacation to a daughter's wedding, the savings American families realize at Wal-Mart bring the good things in life a good deal closer," said Stephen Quinn, Wal-Mart's chief marketing officer, in a news release on Wednesday.
'Save Money. Live Better' is more than a new advertising line - it speaks directly to Wal-Mart's efforts since the very beginning," Quinn stated. "Sam Walton said many years ago that 'if we work together, we'll lower the cost of living for everyone ... we'll give the world an opportunity to see what it's like to have a better life.'"
The retailer will literally track the amount of savings so far this year by installing a "savings ticker" outside Wal-Mart's home office in Bentonville, Ark., allowing employees and customers to see how much money American families save as a result of Wal-Mart's effect on communities.
The statistics unveiled by the corporation came from new research conducted by Global Insight, a firm that specializes in economic and financial analysis, examining Wal-Mart's national and local impacts on jobs, wages, prices, consumer buying power and the nation's gross domestic product.
According to the report, consumers saved a total of $287 billion during 2006, which translates into an average of $957 per person or $2,500 per household.
"These savings illustrate the everyday benefits of the retailer's presence, allowing consumers to keep more of their money in their own pockets," Quinn said.
The report was an update of a similar project conducted by Global Insight two years ago, when the research company found that during 2004, consumer savings totaled $263 billion, an average of $895 per person and $2,330 per household.
Quinn based the improvement on a number of factors:
Price leadership. By continuously rolling back prices on thousands of products, Wal-Mart is helping millions of Americans manage high gas prices and rising interest rates, with 20 percent more rollbacks than last year;
$4 prescription drugs. Wal-Mart has lowered the price of more than 100 generic prescriptions to $4. By providing access to drugs for 90 percent of all therapeutic categories, the company has saved customers $350 million since it launched the program; and
Money centers. With Wal-Mart's everyday low pricing on money services - including check cashing, money orders, bill payment and money transfers - customers can save 25 to 50 percent over what other leading money service providers charge and save $450 each year.
As Cybercast News Service previously reported, the world's largest retail chain has had its share of troubles over the past few years.
While Wal-Mart has about 4,000 stores in the United States and 2,200 more in 12 other countries, the retail giant is the target of a class action gender bias suit, has agreed to pay almost 87,000 employees over $33 million in back wages and had to withdraw its application for a bank charter.
Also, the corporation has been under fire from union-sponsored critics, who in June claimed the company is "just not American anymore."
Nu Wexler, communications director for the group Wal-Mart Watch, told Cybercast News Service on Wednesday that "Wal-Mart's 'research' glosses over a whole host of problems the company creates."
"Legitimate, independent studies not commissioned by Wal-Mart show that when the company comes to town, poverty levels go up, wages go down, and small businesses go away," she added.
Wexler also pointed to a paper from the pro-labor Economic Policy Institute that states the methodology used by Global Insight to calculate Wal-Mart's savings is "flawed" and presents "a false choice between wages and prices."
"With sagging growth and drooping sales, Wal-Mart is hoping the new tagline (and a new ad campaign) will give it back its lost luster, but we're thinking the new efforts are probably going to be as convincing as a combover," said Nicole Berckes, the group's online editor.
However, Stephen Moore, an economist in Washington, D.C., who has conducted his own research on Wal-Mart, told Cybercast News Service that the retail chain "has been one of the most effective anti-poverty programs in American history because it does lower prices, and the people who are the most frequent shoppers tend to be lower- to middle-income workers."
"When you are able to buy things at lower cost, that raises your real income, which is how much you can afford to buy with the dollars you receive for working," Moore said. "Wal-Mart comes in and allows you to buy 10, 15, or 20 percent more than you could before the company existed."
Referring to the retail chain's regular critics, Moore asked: "Is Wal-Mart bad for unions? It's horrible for unions. But is it good for most Americans? Unquestionably, yes."
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