New Orleans Wal-Mart recently settled a suit brought by Fendi, the fancy couture and fashionable handbag outfit, because Fendi caught Wal-Mart selling counterfeit, bogus bags at Sam’s. Of course there was a huge discount involved, Sam’s being Sam’s, and counterfeit not being real. The settlement seems to have been fairly minimal, all things considered, partially because Fendi may want to discount its bags someday, I guess.
But now that Wal-Mart is embracing the “grey market” and is no longer committed to even seeing if it is selling authentic rip-offs, rather than real rip-offs, I have no doubt that their marketing mavens read with interest the recent story in the Atlantic magazine about the falling street price of cocaine. Wal-Mart is having huge difficulties these days on “same store sales” comparisons, and I’m sure as they read the article about the increased efficiency of the distribution chain, the role of globalization, the reduced risk of prosecution (since just as in Tony Soprano found, the feds are all about the terrorists now), they started cranking out the memos about how much coke they could move through the stores. In fact they could have “Coke” and “coke” display aisles and get the foot traffic moving.
The street price of a gram of cocaine has fallen in less than 30 years from $600 per gram in the 1980’s (according to The Atlantic to $20-25 per gram in New York and only slightly higher in Los Angeles and other major markets). This kind of low-balling is obviously a carbon copy of the Wal-Mart business model and handling of suppliers anyway, so some of the boys in Bentonville are probably a little red-assed about the fact that they haven’t already corned the market and started plowing up fields in China and packing the stuff in storage containers filled with t-shirts and other valuable gear.
Nobody seems in charge at Wal-Mart these days so who knows how far up the chain this idea will get, but once you start selling illegal goods make by slave labor and children and Fendi bags that, well, aren’t Fendi bags, then how hard could this transition really be for them?