business news in context, analysis with attitude

• The New York Times reports on how Wal-Mart's Sam's Club division is aligning itself with small businesses as a way of generating new sales. "For thousands of independently owned convenience stores, restaurants and hair salons, the nation's largest — and most feared — retailer also happens to be a business partner," the NYT writes. "Through its Sam's Club division, a chain of 570 club stores, Wal-Mart helps them process credit-card transactions, build Web sites, pay employees and take out loans, all at bargain prices.

"In that sense, Sam's Club is an oasis within the harsh climate of Wal-Mart. At Sam's, the very qualities that make Wal-Mart such a formidable competitor — its size and hard nosed negotiating tactics with suppliers — have been unleashed on behalf of small businesses."
KC's View:
We thought a long time ago that Wal-Mart would do itself a lot of good by helping the companies nominally believed to be its competitors. We even thought at one point that when Fleming was in trouble that it might make sense for Wal-Mart to buy the wholesaler and become a major supplier to the nation's independent supermarkets.

There were probably dozens of good reasons not to do such a thing, but it certainly would have made for an interesting dynamic…especially if Wal-Mart were able to pass on to those independents lower prices on goods and services.