In Praise of Wal-Mart

For millions of people, Wal-Mart is a lifesaver that provides what they want at prices they can afford.

Wal-Mart is certainly a company that merits superlatives. It is the world's largest retailer, with more than 4,000 stores in the U.S. and nearly 2,300 abroad. Annual sales exceed $330 billion, a figure larger than the gross domestic product of all but 20 nations. Wal-Mart is the largest private employer in the U.S. and the second-largest employer overall, behind only the federal government. Its 1.3 million domestic workers would more than fill all of the ballparks in the major leagues, and the number of shoppers over a two-week period exceeds the population of the U.S.

But few companies arouse as much passion as Wal-Mart. Critics contend that the company treats its workers badly, denies them benefits and buys its products from sweatshops in developing countries. Criticism of the company mounted after author Barbara Ehrenreich went underground to "expose" Wal-Mart in her 2001 bestseller, Nickel and Dimed. On top of this, some urban scholars blame big-box retailers in general, and Wal-Mart in particular, for putting mom-and-pop stores out of business, hastening the decline of downtowns and depersonalizing the shopping experience. Attacks on Wal-Mart almost surely contribute to its share price being lower than it ought to be. (Read Kiplinger's recent coverage of Wal-Mart and an outlook from Plus, see Kiplinger's stock picks for 2007.)

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Jeremy J. Siegel
Contributing Columnist, Kiplinger's Personal Finance
Siegel is a professor at the University of Pennsylvania's Wharton School and the author of "Stocks For The Long Run" and "The Future For Investors."