Every week, I go onto Walmart’s website and order a bunch of groceries to be delivered to my house and then feel a little bit guilty.
Walmart is a multi-billion dollar corporation with headquarters more than 1,000 miles from my home; the money I spend there goes to shareholders and executives who live far away, instead of to my local grocery store, Key Food, an 86-year-old co-op of independently owned stores based near my home in New York. By shopping at Walmart, I am likely contributing to the demise of the independently-owned grocery store, which is disappearing across the country.
But the prices make the choice easy. On a recent day, the 42-oz tub of Quaker Oats I get each week was $9.99 at Key Foods and $5.68 at Walmart; a 500 ml bottle of California Olive Ranch olive oil was $14.49 at Key Foods and $8.37 at Walmart; Rao’s homemade tomato sauce was $9.99, while I could have gotten the exact same item on Walmart for $6.88. On these three items alone, I saved $14 by shopping at Walmart.
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These prices are one reason that Walmart captures one in four grocery dollars in America, but there’s an argument to be made that Walmart and other big chains including Dollar General, which is expanding at a rapid clip across the country, come by those prices unfairly because of their market power.
There’s a law on the books—1936’s Robinson-Patman Act—that essentially says suppliers in any industry can’t give lower prices and special deals to big chain stores if it costs the same to serve them as other stores. The law also says retailers can’t try and bully suppliers into giving those discounts.
But because Walmart and dollar stores are so huge, representing a big part of a supplier’s business, they’re able to extract deals and low prices from suppliers,…
