The Wal-Mart Effect: How the World's Most Powerful Company Really Works - and How It's Transforming the American Economy

Action Alley is the term given to the large aisles that divide Wal-Mart stores and supercenters. These wide central pathways are “considered prime selling space” (67), and they are lined with pallets of products that feature “deals, often on seasonal merchandise” (67). Instead of stocking the products on shelves, Wal-Mart leaves them on their shipping pallets and tacks signage to the product itself. This model began in the early 1990s and emerged from Wal-Mart’s relationship with Sara Lee, an underwear company. Fishman observes that Action Alley is a way for Wal-Mart to feature statement products and to stack them high and sell them cheap without accruing labor costs.

Wal-Mart is an example of a monopsony. The term refers to a retail market in which there is only one primary buyer. Fishman argues that Wal-Mart is “such a large buyer” that it holds price-control power (83). Wal-Mart internally values low prices and is committed to offering consistently low-cost consumer goods. However, their internal devotion to low prices impacts the rest of the retail market, as competitors cannot rival Wal-Mart’s unprecedented price points. According to Fishman, a monopsony is equivalent to a monopoly and an example of “a parallel economic concept” (83).

Makin Bacon is one of the countless products that Wal-Mart supplies. Makin Bacon was invented by Jonathan Fleck and his daughter Abbey in 1992. The item is a special dish designed to cook bacon efficiently and without mess in a microwave oven. Fishman uses the Makin Bacon product and Fleck’s work to supply the product to Wal-Mart as an example of a positive supplier experience. Fleck initially put off working with Wal-Mart so as not to compromise his concurrent relationship with Armour, the meat company who was offering Makin Bacon coupons on its bacon packaging. In 1994, he signed a contract with Wal-Mart after the Armour program closed out. Wal-Mart offered to sell the product for $6.97, a price it has maintained throughout Fleck’s relationship with the corporation. Wal-Mart’s decision not to lower the price of Makin Bacon dishes remains a mystery to Fleck, and is thus an anomalous example of Wal-Mart’s relationships with its suppliers. According to Fleck, the Makin Bacon and Wal-Mart dynamic is both “a perfect miniature of the Wal-Mart effect” and “a fairy tale” (55, 56).