In 1823, U.S. President James Monroe issued the “Monroe Doctrine”, in effect warning European nations that the American continents were no longer open to European colonization, and that any effort to extend European political influence into the New World would be considered by the United States “as dangerous to our peace and safety.” Now, 182 years later, we have the Walton Doctrine, which states that the American retailing empire will be extended throughout Central and South America, ironically as European companies sell off their shares in the region. This week Wal-Mart announced that a Dutch company, Royal Ahold, which is one of the largest grocery chains in the world, owning four U.S. grocery chains (Stop & Shop, Tops, Giant-Landover, Giant-Carlisle) had sold a one-third ownership in a company called Central American Retail Holding Co (CARHCO). Wal-Mart indicated that the Ahold deal allows Wal-Mart to eventually gain “majority ownership” in the company. This is Wal-Mart’s first flag in Central America. The company already controls as much as 50% of the grocery market in Mexico. Central America gives Wal-Mart an instant share in 363 supermarkets in Guatemala, El Salvador, Honduras, Nicaragua and Costa Rica. CARHCO has 23,000 workers and sales of $2 billion in 2004. That’s pocket change to Wal-Mart, which has $288 billion in sales last year, but the acquisition is an important strategic toehold.
Wal-Mart has big plans for the globe. As space gets tighter in the United States, and as community opposition to its stores explodes, foreign expansion is looking greener and greener all the time. In Central America, land use laws are loose, a much easier mark than the increasingly restrictive American laws. Citizen opposition is also much weaker, as centralized governments can quash citizen opposition with a much freer hand than in the U.S. There are plenty of poor people to live off of. So the demographics, the governments, the land use laws — all conspire to make Central America a great place for rapid sales expansion — exactly what Wal-Mart can no longer expect in America. The international share of sales has become more and more important to the future of Wal-Mart on Wall Street — which must weigh heavily on Wal-Mart executives’ minds, as their stock hit a six year low this week. What the American colonialist government could never do, the Wal-Mart economic colonialists will accomplish: the economic subjugation of the Americas. Call it the Walton Doctrine.
