Wednesday, August 31, 2005

Wal-Mart Wants to Monopolize Monopolization

Wal-Mart CEO Lee Scott is not too fond when other companies steal Wal-Mart’s business model of attempted monopolization. In fact, he recently complained that Tesco, Wal-Mart’s British supermarket rival, has too high a market share at 30.5% and that the British government should investigate. The irony is that, in the United States, Wal-Mart’s share of the grocery market may reach that percentage or higher, according to certain analysts. As Rich Smith, of the Motley Fool points out:

Dueling surveys aside, there's a bigger issue to consider here: corporate hypocrisy. Wal-Mart is, after all, the world's biggest retailer, with all the pricing power and market-dominating potential that such a title implies. The company's annual turnover exceeds most nations' GDPs. In the grocery segment, Merrill Lynch(NYSE: MER) put Wal-Mart's U.S. market share at 15% in 2003, and at least one research report argues that the company is on track to control a 35% share of the U.S. grocery market by 2007. Yet here it is, whining that it's a helpless, hapless victim of big, bad Tesco?
It seems that even when it comes to monopolization, Wal-Mart isn't too fond of competition.