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Wal-Mart, Murphy Oil Prices Are Predatory

I was totally amazed that you would editorialize about poor Wal-Mart and Murphy Oil without consulting someone in the petroleum marketing business to get their side. You. only gave, your uneducated opinion and failed to check out what is really occurring in the gasoline marketplace today.

For the past two weeks, Wal-Mart and Murphy Oil have retailed gasoline in my market from 9 to 11 cents per gallon below my wholesale cost as a distributor. How in your uneducated mind can you call this a free-market issue? You said in your editorial, "Wal-Mart should be applauded for bringing in lower prices rather than castigated as a predator." If this is not predatory pricing then I am a newspaper editor.

Wal-Mart and Murphy Oil are using their financial power to absorb losses and sell gasoline below cost. They know full well that the locally owned small business retailer will run out of money long before they do. They also know that when the competition is gone, they can raise prices and recover earlier losses. For example, Wal-Mart is the only game in my town with no competition from the likes of Target, Kmart, etc. My wife has shopped in the Wal-Mart in Sherwood frequently and is amazed at how much cheaper things are there compared to the Wal-Mart at home. Does this mean Wal-Mart is more efficient in Sherwood than my hometown, or is it because they have no competition?

It makes me wonder how you would feel if Wal-Mart decided to publish a weekly business paper, sell ads below your minimum break-even rates and cut subscription prices?

Think about it!

Bobby Reynolds

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Title Annotation:Bobby Reynolds of Searcy
Publication:Arkansas Business
Article Type:Letter to the Editor
Geographic Code:1USA
Date:Sep 10, 2001
Previous Article:Ups and Downs.
Next Article:Another Shell Game?

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