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Europe feels the Wal-Mart
effect: Price wars will cost thousands of jobs Europe's thirty million commercial workers are beginning to feel the Wal-Mart effect. In Germany, an escalating price war is thought to cost thousands of commerce jobs before the end of this year. In the United Kingdom, unionised retailers are looking at their labour costs when seeking answers to the Wal-Mart Asda challenges. Small and large commerce enterprises warn that a continued price war will mean that the quality of goods and services will go down. Although its market shares are lower than those of many German and British competitors such as Metro, Aldi and Tesco, Wal-Mart has not been late in taking them on through constantly escalating price wars. Already now, the price wars are costing jobs both in commerce and industry. In Germany, both enterprise associations and trade unions predict that the job losses this year will run in the thousands. There is also an increasing pressure on collective agreement provisions. In Britain, unionised employers have stepped up their efforts to find savings in personnel costs as the Wal-Mart price war takes its toll. The Wal-Mart ignited price wars in the United Kingdom and Germany can have many negative long term effects on the whole commerce sector. Commerce enterprises who have to participate in this competition themselves warn that if all emphasis is on price, the quality of both products and services will suffer. Lower wages and less attractive employment conditions will of course affect the labour force. Already now, Wal-Mart is said to have difficulties in finding qualified staff to ensure that its German distribution centres would be up to standards. The German authorities have found it difficult to enforce the ban against predatory pricing as Wal-Mart ruthlessly uses its global weight to carry on this predatory fight. Questions should be asked whether the company starts to be so excessively dominant on the global level that measures should be taken to ensure free competition. This is equally important for its commerce competitors, be they large or small, as for its suppliers. Uni Commerce will follow the German and British developments very closely. This is not a real competition, but an offensive by an overwhelmingly powerful multinational, where it makes ruthless use of its huge global size. At the end, consumers, companies and commercial workers will pay the price. Before too long, an intervention by competition authorities is needed, to secure a balanced development of the commerce industry in Europe and world-wide.
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