Thanks to Peter St. Onge for pointing out this little gem from Mark Perry:
Evil Walmart makes a lot of money, right? We hear that all the time even though the retail giant’s profit margin was only3.12% in the most recent quarter. Interestingly, we never seem to hear as much about the much higher profit margin of Apple, the “darling of the progressives.” In the most recent quarter, the computer behemoth with a market capitalization ($725 billion) that exceeds the value of the entire stock markets of Mexico, Thailand and Russia, had a whopping profit margin of 24.2%. No wonder its market cap is so astronomical.
So why is Walmart so reviled by progressives when its profits (and prices) are so low that it might earn a “profit day” every 31 days, and its main corporate objective is to provide low-cost merchandise to America’s low- and middle-income households? Every day that a Walmart opens its doors for business, it gives everybody in that local community a raise and makes them better off. On the other hand, why do progressives worship Apple so religiously when its extremely pricey products generate such huge profit margins (more than 7 “profit days” every month) that the company’s stock is worth almost as much as the entire Brazilian stock market? Every day that an Apple store opens for business, it stands ready to extract $24.20 in profits for every $100 spent that day, which seems like a huge transfer of wealth from Apple’s loyal customers to Apple’s wealthy shareholders. And yet the progressives worship Apple and revile Walmart – go figure?!
In a 2008 column for Mises Daily, I answered this very question. The answer is that Apple is stylish and Wal-Mart is not. In my column I made the comparison between Wal-Mart and Target, both of whom have very similarly-priced goods (they’re both monopsonists!) and both have a lot of “low-paid” workers (they’re exploiters!). But the crucial difference is that Target appeals to a higher income, younger, and hipper group than Wal-Mart. Thus, the rules are different for Target:
This loathing of Wal-Mart as unique among big-box retailers is perennially on display as Home Depots and Targets are opened with little to no opposition while Wal-Marts are rewarded with a bevy of anti-Wal-Mart yard signs and protests across the countryside.
While the sheer volume of anti-Wal-Mart articles, books, and documentaries are no doubt a factor, Wal-Mart’s woes can also be traced to another phenomenon: its catering to low-income customers.
Alone among major retailers, Wal-Mart is primarily identified with small towns and low-income shoppers. One often hears jokes about unwed mothers shopping at Wal-Mart and about the long lines endured while some customer at the front of the line fumbles with her WIC vouchers. The fact that Wal-Mart recently began selling fine wines was a source of much bemusement among pundits and late-night talk show hosts.
Home Depot and Target certainly don’t suffer from the same image, and the fact that those with means avoid Wal-Mart while the penurious take advantage of the low prices offered there, means that Wal-Mart has become irrelevant and contemptible to those who write columns or sit on planning commissions or pontificate on matters of labor and economics. Essentially, Wal-Mart is associated with tacky poor people, while the middle and upper classes can reserve for themselves the more respectable environs of other retailers.
The same general critique applies to Apple, although Apple is not a Wal-Mart competitor. In this case, we need only look to the critique of Wal-Mat is an extractor of resources from every community it inhabits. As Perry shows, however, Apple “extracts” far more in resources than Wal-Mart does, month after month. But rich, powerful people like iPhones, so, no there’s nothing to see here.
