What economic principles are affecting Walmart, and what are their positives and negatives?

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Despite having several qualities of a monopoly, Wal-Mart has actually been struggling since the great recession. As of the beginning of the fiscal year 2017, Wal-Mart's operating expenses as a percentage of net sales increased 21.8%, meaning that its net operating revenue fell 10.4% (to 5.11 billion). Things like the...

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Despite having several qualities of a monopoly, Wal-Mart has actually been struggling since the great recession. As of the beginning of the fiscal year 2017, Wal-Mart's operating expenses as a percentage of net sales increased 21.8%, meaning that its net operating revenue fell 10.4% (to 5.11 billion). Things like the great recession in 2008, labor lawsuits, as well as government legislature such as cutting funding for food stamps, all effect Wal-Mart's profitability.

The great recession (in which there was a consistent decrease in GDP from 2007-2009) impacted Wal-Mart's profits. This effect is not unique to Wal-Mart, as recessions historically have a negative effect on consumer spending, and Wal-Mart is one victim among many.

Another major factor effecting Wal-Mart are labor lawsuits. As a major producer and employer, Wal-Mart receives a high degree of public scrutiny. In 2016, Wal-Mart lost a $224 million lawsuits for depriving workers of lunch breaks. Settling on this and other lawsuits will effect Wal-Mart's overall revenue.

Lastly, government labor laws have been brought on Wal-Mart in recent years. One such labor law is the law that protects workers' abilities to engage in legally sanctioned protests. Allegedly, Wal-Mart threatened workers who did this. While this is not a wage-related complaint specifically, Wal-Mart will have to pay legal fees and invest in public relations expenses to combat lawsuits like this one.

Still, Wal-Mart has raised wages to $11 effective in 2018, and expanded its maternity benefits. It stands to remain a behemoth in the retail world.

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