A new piece from BusinessWeek showcases Wal-Mart's (NYSE: WMT) victory over nearly all of its competitors in the TV pricing war. Wal-Mart's decision to offer a 42-inch flat panel television for the unheard-of price of $988 wreaked havoc for stores like Circuit City, Tweeter, Best Buy, and Rex Stores.
This is a great example of why all the negative press that Wal-Mart receives probably won't effect it nearly as much as its critics would like. People might complain about the company's employment practices, complain when a local mom and pop goes under, or subscribe to anti-Wal Mart newsletters. But who is going to pay $500 more for a television as a matter of principle? For all the criticism of Wal-Mart's customer service, it isn't bad enough to go next door to pay more.
The triumph of Wal-Mart is the triumph of price. Given a choice between quality and service and price, most people will choose price on items like televisions. However, I think Wal-Mart will encounter greater resistance in its foray into areas like organic foods. That demographic is likely to be less easily swayed by the promise of a better deal.