Zara

In October 2003 employees at more than 800 chain supermarkets in California walked out of their jobs after management demanded pay cuts and a reduction in health insurance benefits. The ensuing strike and lockout were notable for the number of workers involved (59,000), the duration of the conflict (more than four months) and the defeat eventually suffered by the United Food and Commercial Workers Union, which represented the workers. Just as notable was what had ostensibly provoked the showdown.

In 2002, the discount chain Wal-Mart announced that it would place at least forty new Supercenters, the largest of its big-box stores, in California. A nonunion company famous for expanding its market share by undercutting its competitors' prices, Wal-Mart had proven hard to beat in the past. And in addition to offering a massive selection of housewares, toys and clothes, its Supercenters were outfitted with a full-service grocery. The mere prospect of losing customers to these new stores convinced Safeway, Albertsons and other large grocery chains that they could seek concessions from their workers on the pretext that wage cuts were a necessary measure for remaining competitive. Wal-Mart, it appeared, had changed the way the grocery business operated in California before it even entered the market.

Forty years ago Wal-Mart was a small chain of stores concentrated in a sparsely populated patch of the American South. Today it employs 2.1 million people, more than twenty times as many as ExxonMobil, the largest oil company in the United States. Its total revenue exceeds that of Target, Home Depot, Sears, Safeway and Kroger combined. It has prospered by mastering the art of moving household products from manufacturer to consumer in the most efficient way possible, and by using economies of scale and low labor costs to undersell other stores. Its size and its just-in-time business model are now imitated by numerous companies looking to hold down costs while manufacturing...