Friday, July 15, 2005

Wal-Mart Picks Off Share
from Christian Retailers

Independent retailers who attended the recent Christian Booksellers Association meeting were lamenting the loss of market share to Wal-Mart. Share dropped from 57% to 53% as Wal-Mart cherry picks the high volume SKUs for Bibles, faith-based DVDs and videos, books, crucifixes and choir robes. It’s a battle reminiscent of Meg Ryan’s Little Shop Around the Corner doing battle with Tom Hanks’ Fox Books in “You’ve Got Mail.” It is also personally reminiscent of how the supermarket grocery chains wiped small independent grocers (like my father’s store) off the streets.

Wal-Mart, in its quest to offer us the lowest prices, uses its buying power to force producers to drop prices more and more and more. He who owns the customer owns the producer. So P&G merges with Gillette to regain power in the bargaining wars. And smaller producers move their factories from the US to China, and they offshore their IT departments to India.

I can sympathize with the independent Christian retailers. They feel like their producers owed them more loyalty. But this is one of the harsh realities of free enterprise. Even Mel Gibson’s marketing juggernaut behind The Passion of the Christ, is subject to the lure of opportunity when WalMart purchasing agents come knocking. This DVD was released at a $26.99 retail price last year, he sold it for $19.99 through the Christian retailers. But Wal-Mart cut the price for the same DVD to $17.97.

Christian retailers, like every other business owner, operates in a dog eat dog world. And we as consumers often eat our own feet off by single-mindedly buying cheap. But we just can’t help ourselves from chasing the bargains. Unless smaller retailers can become more relevant to their faithful customer base than the big guys, we will continue ripping up the value chain that supports jobs and families and our way of life.


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