When looking at the retail landscape, Wal-Mart (NYSE: WMT) is the largest company in the industry, but there are a number of huge retailers selling everything from cloths to consumer electronics to appliances. So, Wal-Mart is big but there are hundreds of thousand of other stores around the country to give it competition

The size of Wal-Mart's influence, its tremendous influence, became evident again today. According to The Wall Street Journal, "Retailers are expected to report sales at stores open at least a year fell an average of 1.1% in December. The reports will likely confirm that the 2008 holiday season was the worst for retailers in decades. Excluding Wal-Mart Stores, the picture is even grimmer, with December sales falling an average of 6.3%."

Well, so what? So what is that with a weight of that magnitude, Wal-Mart could actually arrest the comeback of the retail industry and undermine its ability to raise prices which would almost certainly drive up store closings at other companies.

Wal-Mart almost certainly charges less than competitors for most of the inventory in its stores. And, since it sells almost every imaginable retail item, its reach across a number of segments of the industry is huge

The two critical elements for a retail industry recovery are store traffic and the ability to end the discount that are being offered to clear inventory and bring in customers. With is share of the total shopping population and "everyday low prices", Wal-Mart has the rest of the industry by the short hairs.