PRNewswire-FirstCall

BusinessWeek

By Ronald Grover
AUGUST 31, 2006                       [back to top] 

The retail behemoth isn't happy about the iPod maker's plans to offer movie downloads through iTunes. Has Wal-Mart met its match?

The guy from Bentonville, Ark., surely isn't on any of Hollywood's leading man lists. A 23-year Wal-Mart Stores (WMT ) veteran, David Porter is the person at the retail giant who orders DVDs and slashes prices to move them. But this summer, Porter has been one of Hollywood's hottest acts, taking meetings with top studio brass like a producer with a hot script. His pitch: Wal-Mart isn't happy.

That prospect tends to send shivers through Hollywood's Gucci-toed corner offices. As the largest seller of DVDs, Wal-Mart accounts for roughly 40% of the $17 billion in DVDs that will be sold this year, a financial lifeline to big-spending studios. But now Wal-Mart's video business faces a potential threat by Steve Jobs and Apple Computer (AAPL ), which in mid-September, sources tell BusinessWeek, plans to announce it will start offering movie downloads from its iTunes store.

The notion of kids running around with full-length movies on new, wider-screen iPods that Apple is expected to unveil as well is causing grief in Bentonville, according to Hollywood executives. The $312 billion a year retailer, they say, wants concessions that could include lower DVD wholesale prices.

PLAYING THE HEAVY. With Wal-Mart CEO H. Lee Scott assigning his point man Porter to roam the halls of major studios, skittish executives have for months delayed giving Jobs the rights to distribute their movies through his new service. The price Apple hopes to charge, now set at $14.99 for new releases and $9.99 for older movies, has risen from Jobs's initial plan to offer new flicks for $9.99, say industry insiders.

So far, Apple only has one studio signed on: Walt Disney (DIS ), where Jobs is the largest shareholder following the entertainment giant's purchase of his Pixar Animation Studios. News Corp.'s (NWS ) Fox Entertainment Group may join in later, as might independent Lions Gate Entertainment (LGF ), say Hollywood sources, but only if other studios come along, too. So far, other large studios have taken a pass, especially after Wal-Mart earlier this year threatened not to sell Disney's High School Musical for a time after Disney released it initially only on iTunes.

What does Wal-Mart want this time to play nice? Executives who have met with Porter say it wants marketing help when it launches its own planned download site. And it wants Hollywood to trim the current $17 wholesale price for DVDs. That would let Wal-Mart slash its own prices to the same $15 or so that Apple would charge. (The plan is for Apple to pay a $14 wholesale price for new releases, say sources, although negotiations continue.) A large wholesale cut for Wal-Mart, of course, would amount to hundreds of millions in lost studio revenues each year at a time when DVD sales are slowing.

LOSING PATIENCE. Wal-Mart isn't the only issue that's giving some studios pause. Several are concerned about Apple's rules for using iTunes, which let users watch a film on up to five different devices. And others worry about letting Jobs set a download price they can't change, as he has done in music. Still, studios have embraced the digital concept and accept some "burning" of movies to DVDs. In addition to Apple, the studios are negotiating potential download deals with Amazon.com (AMZN ), AT&T (T ), and cable giant Comcast (CMCSA ).

No doubt Steve Jobs knows how to turn tiny digital media niches into a mainstream phenomenon. That's what he did in the music biz. But his patience for all this tiptoeing is wearing thin. Jobs recently hopped aboard his corporate jet for a little politicking of his own in Hollywood, and insiders say he called Scott to express the concern of a vendor who sells tons of iPods and Macs through Wal-Mart stores.

Jobs would not comment for this story nor would any studios. Wal-Mart acknowledged that it's talking with studios about starting its own download service but disputed that it is "dissuading studios from conducting business with other providers," according to Wal-Mart spokeswoman Jolanda Stewart.

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Wal-Mart looks beyond the aisle

By Jonathan Birchall
Financial Times
Aug 31, 2006                        [back to top] 

At Wal-Mart's new supercentre in Plano, Texas, shoppers can buy upmarket wines and sushi and surf the web in a Wi-Fi-connected café as part of an experiment by the mass discount retailer to test its ability to extend its appeal to higher income customers.

Plano shoppers might notice that the staff are wearing smart dark blue T-shirts, instead of the usual Wal-Mart nylon smocks. But they might not be conscious of the fact that the store's most popular departments – the grocery and health and beauty sections – have been repositioned next to each other rather than on opposite sides of the 200,000sq ft store, more than 100 yards apart.

The move, at odds with retail industry's traditional "get 'em in and keep 'em in" approach, reflects research done not just by Wal-Mart itself, but by Saatchi & Saatchi X, its "in-store" marketing agency.

"The core thing we're trying to do is for the customer to spend less time searching and more time shopping," says Andy Murray, chief executive of Saatchi X, based in Springdale, Arkansas, a few miles from Wal-Mart's Bentonville headquarters.

"In Plano, we really tried to understand the total store experience, and to look at things such as adjacencies, how intuitive is the navigation, can it communicate more quickly, and can it make areas of the store feel different – if you're in the baby department, and it feels like the laundry detergent section, that's not good."

Wal-Mart has worked before with Saatchi X and its predecessor, Thompson­Murray, which the advertising agency Saatchi & Saatchi bought in 2004 in a move that illustrated the growing interest of the marketing industry and its clients in in-store, or "at retail", ­marketing.

The retailer has now reinforced its relationship with Saatchi X by declaring it to be its "agency of record" for "shopper, in-store and associate [employee] communications" – the first time a retailer has awarded an in-store agency this status, which gives it involvement in higher-level strategic marketing decisions.

Saatchi X focuses on everything from store layout to product packaging, shelving and the creation of in-store promotions – an area of increasing importance for consumer goods marketing as the ­traditional mass media channels of television and ­newspapers decline.

"It's a recognition from Wal-Mart's point of view that the store is a focal point for the shopping experience," says Mr Murray. "Most other retailers don't have the in-store shopping environment brought together at a strategic level. So it's a recognition for Wal-Mart that this space is important."

Under John Fleming, who took over as marketing officer last year, the retailer has stepped up its efforts to improve the look and feel of its stores.

"The new paradigm for retail is that the store is a brand," Stephen Quinn, Wal-Mart's senior vice-president of marketing told investors this year, laying out the focus on reducing store clutter and making shopping at the retailer easier.

Laura Davis-Taylor, founder and principal of Atlanta-based Retail Media Consulting, says the elevation of Saatchi X reflects one of the biggest challenges facing retailers as they strive to manage the proliferating opportunities created by the expansion of interest in in-store media.

"The biggest challenge is that no one owns the store; someone in marketing owns the internet, and someone else owns the external marketing. But no one owns the store, so it's very difficult to act upon this whole idea of customer-centricity."

But Ms Davis-Taylor also points out the challenges facing Wal-Mart as it seeks to co-ordinate the competing demands of its store department managers, who have traditionally arranged in-store promotions directly with the brand suppliers – often without input from the marketing department.

Mr Murray argues that being nominated as agency of record gives the Saatchi X more influence in the decision-making process – the appointment of his agency also reflects the influence of Mr Fleming's marketing team.

The rise of Saatchi X is also emblematic of the impact of in-store marketing on the relationship between the two giants of the consumer universe – Wal-Mart and Procter & Gamble.

Mr Murray himself worked for nine years at P&G, including three years at its Wal-Mart liaison office in Springdale, Arkansas, before he went off on his own and eventually set up ThompsonMurray.

Saatchi & Saatchi itself numbers several P&G brands among its most important clients, including its Pampers childcare line. Mr Murray's team has worked with other companies, too – including Novartis, the pharmaceutical company, and American Express.

The agency's stress on the importance of winning the attention of a customer in the store, and creating an overall store experience that helps shape customer decisions, synchronises with P&G's focus on what it calls the "first moment of truth" – winning a consumer's attention in store within an ­estimated three to seven ­seconds.

Saatchi X argues that there might be even less time than that. Using proprietary eye-tracking technology, it estimates that shoppers only notice 50 per cent of what they look at, even standing in front of a shelf, and that the retailer has a mere two-and-a-half seconds to make an impact.

P&G's current focus on the in-store experience also reflects its collaborative relationship with Wal-Mart. The two companies have been sharing shopping data since the late 1980s, and Dina Howell, the head of P&G's global "first moment of truth" team, headed the company's Wal-Mart research and marketing office in Springdale from 1996 to 2004. She was also one of Mr Murray's first major clients after he set up on his own in 1997.

Much of the agency's work at Wal-Mart, however, has concentrated on trying to make shopping more convenient – helping the retailer to pursue its goal of focusing on offering "solutions" and "value", in place of its previous focus on selling the cheapest items.

"A shopper might spend 21 minutes in a store on average, but of that only six minutes involves shopping, and the rest of the time she's trying to find stuff, and that is really not driving the value of the shopping basket," he says. "Most in-store experiences have ignored the factor of time."

That has led to in-store "multibrand" efforts co-ordinated by Saatchi X, in which the objective is to provide single-location groupings of disparate products – such as a promotion last year presenting a range of products linked to the annual ritual of the US high school senior year prom dance.

"Typical retailers concentrate on product placement – such as putting the bananas near the cereal, rather than trying to inspire, through multibrand campaigns that are really connected to consumers," says Mr Murray.

He also argues that retailers need to change their approach to in-store marketing – away from the traditional focus on design, point-of-sale promotions or navigating around the store, towards a more holistic approach that looks at the store from the point of view of the customer.

"Our centre of gravity is the shopper, and not the retail space. We need to understand the shopping cycle that starts at home and then goes on through to the store."

Intimacy, mystery and sensuality

Andy Murray, head of Saatchi & Saatchi X, believes successful retailers should try to address three aspects of customers' experience in stores. In The Lovemarks Effect , a book to be published in November, he describes three "attention zones": one associated with the need to create an air of "mystery", another "intimacy" and a third "sensuality".

The first attention zone operates at a distance of 30ft from the shopper, and requires the retailer to use "a combination of sound, colour, scent and motion" to attract potential buyers – ideally by creating a sense of mystery and delight.

At 10ft the retailer's task changes, as "placement on the shelf and the ability of the brand to stand out from its competitors is at stake".

At 3ft the consumer is either holding their potential choice or reaching out for it. "It is the look, feel, and design of the object that will turn her from shopper to buyer."

The agency also identifies three layers of shopping communication within a store – navigation, inspiration and education – and notes that most retailers spend most of their time on navigation, guiding customers around their stores.

In spite of the current enthusiasm for in-store television and digital signage, Mr Murray argues that the biggest technological revolution in stores will come through mobile phones: customers will use mobiles to compare prices or download recipes, film clips or product ingredients.

"The screens are going to be on the shoppers as much as on the shelves . . . that's the place where things are going to move really fast," he says.

© 2006 MSNBC.com

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Marubeni eyeing linkup with Aeon or Wal-Mart

By Business Desk
The Daily Yomiuri
31-08-2006                            [back to top] 

Marubeni Corp, the largest shareholder in Daiei Inc, will soon enter into separate negotiations with Aeon Co and Wal-Mart Stores Inc, the U.S. retail chain operator that has Seiyu Co under its umbrella, to choose a partner to assist in the rehabilitation of Daiei, industry sources said on Wednesday (August 30).

Marubeni plans to make a final decision following negotiations with other major retail chain operators, but Aeon is seen as a prime candidate because of its expertise in developing goods and outlets, the sources said.

If Daiei and Aeon join hands it would create the nation's largest retail business alliance, with more than 6 trillion yen (US$51.1 billion) in sales.

Marubeni, currently holding a 44.6 per cent stake in Daiei, will sell up to 20 percentage points of its ownership to the rehabilitation partner, forming a partnership in October.

The partner will become Daiei's third-largest shareholder after Marubeni and Advantage Partners LLP, an investment fund holding a 23.5 percent stake.

Aeon President Motoya Okada told reporters: "We're interested in Daiei. We'll talk with them after collecting information for two or three days."

On August 4, Marubeni gained an additional 33.6 per cent stake in Daiei for 69.8 billion yen (US$595 billion) from the Industrial Revitalisation Corporation of Japan, and thus became the largest shareholder in Daiei.

Copyright @ 2002 ASIA NEWS NETWORK All rights reserved.

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Tell Wal-Mart to Stick to Low Prices, Not Homosexual Activism

Family Research Council
August 30, 2006                           [back to top] 

It is certainly not news that Wal-Mart has a history of providing American consumers with good products for reasonable prices. But what you may not know is that for some time Wal-Mart has come under assault from the far left questioning how they provide such an affordable service to the American public. Even Hillary Clinton - former Wal-Mart board member and 2008 presidential hopeful - has turned against the company by returning $5,000 in political contributions.

In an apparent concession to the heat from the radical left, Wal-Mart has entered into a new partnership with the National Gay and Lesbian Chamber of Commerce (NGLCC). While the NGLCC professes to promote the "interests of the LGBT business community," this is not all they have done. Recently, they described efforts to defend traditional marriage as an attempt to "write discrimination into the Constitution..." The NGLCC also advocated attaching a pro-homosexual "hate crimes" amendment to legislation intended to protect children from violent sex offenders. Their advocacy delayed the legislation for several months.

It is unfortunate that Wal-Mart has joined forces with an organization whose mission opposes many of the values shared by rural and small-town America. It is precisely the interests of average Americans that Wal-Mart has prided itself in promoting. Now, by surrendering to the radical homosexual lobby, Wal-Mart has entered the political arena with no economic benefit to their company or their customers.

While it appears to be a done deal, it's never too late to express your disappointment with this recent decision by Wal-Mart executives. Please download the flier and deliver it to your local Wal-Mart Customer Service Desk. Doing so will allow you, a patron of their stores, to convey your desire that Wal-Mart stick to business, not politics.

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Wal-Mart's 'Gay' Partnership Risks Conservative 'Rollback'

By Randy Hall
CNSNews.com 
August 29, 2006                                     [back to top] 

(CNSNews.com) - After months of criticism from union-backed groups over its employee pay and health care practices, Wal-Mart now faces a potential "rollback" of support from conservatives because of the retail giant's partnership with a homosexual business coalition.

"I don't think this is something that will sell on Main Street America, where most Wal-Mart stores are located," said Tony Perkins, president of the conservative Family Research Council (FRC). "I don't think cheap prices on goods from China will be enough to stop a rollback in their customer base if they choose to go down this aisle."

Joining the FRC in criticizing Wal-Mart's new alliance with the National Gay and Lesbian Chamber of Commerce (NGLCC) is Americans for Truth, which describes itself as "the only national organization devoted exclusively to exposing and countering the homosexual activist agenda."

"Wal-Mart has always been a favorite of God-fearing Middle American customers who hold traditional family values," said Peter LaBarbera, the group's founder and president. "I'm very surprised that Wal-Mart would now bite the hand that feeds it and thumb its nose at those very customers.

"It seems to me that Wal-Mart should reconsider its unsavory alliance with these extremist homosexual activists in today's heated and polarizing culture war," LaBarbera added.

However, Bob McAdam, vice president of corporate affairs with Wal-Mart, told Cybercast News Service that the world's largest retail company joined the NGLCC "just like we have joined a number of other groups representing all parts of the spectrum of our customers" - including women's organizations and minority groups.

The conflict began on Aug. 21, when the NGLCC issued a news release announcing "a partnership with Wal-Mart Stores, Inc., as part of the company's ongoing commitment to advancing diversity among all of its associate, supplier and customer bases."

As part of that agreement, Wal-Mart will pay $25,000 to NGLCC - "the largest LGBT [Lesbian, Gay, Bisexual and Transgender] business development and economic advocacy organization in the world" - and has agreed to sponsor two of NGLCC's annual conferences.

"We are honored to have Wal-Mart's support of the NGLCC," said the group's co-founder and president, Justin Nelson. "Our partnership will not only provide more opportunities for the Chamber, but the business community as a whole."

When asked by reporters why Wal-Mart had not issued a statement on the new partnership, Nelson said that it's "normal procedure" for the NGLCC to handle such announcements.

Since then, conservative organizations have become increasingly vocal in their criticism of the new partnership.

Robert Knight, director of the Culture and Family Institute at Concerned Women for America, said that by joining forces with the NGLCC, Wal-Mart is "validating the idea that homosexual activists have the right to shake down corporations out of fear of being called bigots."

Perkins called the alliance "an odd new domestic partnership." He's asking FRC's supporters to download a flyer from the group's website that asks why the retail chain is supporting homosexual activism and place a copy of it at the customer service desk of the nearest Wal-Mart.

As Cybercast News Service previously reported, the retail giant has been no stranger to controversy over the past year when union-sponsored groups such as WakeUpWal-Mart.com and Wal-Mart Watch have charged the corporation with needing to meet "higher expectations" and being unsafe for shoppers.

McAdam said he expects the popularity of the company - which has about 3,900 outlets in the United States alone - will trump any criticism from either side of the political aisle, just as when Wal-Mart added homosexuals to its non-discrimination policy two years ago.

"I think our attraction to Americans in general speaks for itself, and that's why comments from either side of the political spectrum or whatever philosophical debate are less important than the daily approval we see from our customers," McAdam said.

"Wal-Mart continues to serve the vast majority of Americans regardless of their political persuasion or their personal beliefs," McAdam noted. "Last year, about 85 percent of Americans bought something at Wal-Mart. We have more than 138 million customers a week at Wal-Mart.

"With numbers of that size, we're dealing with just about everybody, and to that extent, we want to be as welcoming as we can to every part of the spectrum, and we will continue to be broad in our outreach," he added. "We welcome people of all persuasions and all philosophies."

Not all homosexual activists are pleased with the new arrangement, though.

"Our community is a smart community, and we can see a shameless marketing opportunity when it comes," Jeremy Bishop, program director of the "Pride at Work" subsidiary of the AFL-CIO, told Cox Newspapers.

"For us, it's a matter of social and economic justice," Bishop added, "and Wal-Mart has a long record of not treating its employees - gay or straight - with equity and dignity."

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New Wal-Mart TV Ads Promote Company Transformation

30 and 60 Second Spots Highlight Values, Health Care, Savings, and Philanthropy

PRNewswire-FirstCall                  [back to top] 

BENTONVILLE, Ark., Aug. 29  -- Wal-Mart today announced that it is airing two television advertisements as part of a continued effort to inform the public about the transformation underway at the company.

The spots highlight the company's positive impact on communities, including its core values, affordable health care, customer savings, and charitable contributions. The ads will initially be launched in two markets - - Tucson, Ariz. and Omaha, Neb.

"This is part of Wal-Mart's ongoing effort to talk about our commitment to the men and women who work for us, to the customers who shop at our stores, and to the communities we serve," said Bob McAdam, vice president of Corporate Affairs. "The more people learn about who we are and how we strive to do better every day, the more they know that we are good for America's working families."

Wal-Mart associates featured in the advertisements speak to the company's values and facts about its transformation:

* Wal-Mart's low prices save the average working family more than $2,300 a year; * Wal-Mart creates tens of thousands of jobs per year; * Wal-Mart offers eligible associates health insurance for less than a dollar a day ($23 per month); * Wal-Mart moved more than 150,000 uninsured Americans into a company- sponsored insurance plan; * Wal-Mart is one of the largest corporate contributors to local charities in America.

At the June shareholder's meeting, Wal-Mart CEO Lee Scott called the company's transformation, "Wal-Mart Out In Front." It is an effort to remain true to the values that built Wal-Mart over the last 44 years, while also changing to be an even stronger business and an even better company.

The new ads can be viewed online at http://www.walmartfacts.com .

About Wal-Mart Stores, Inc.

Wal-Mart Stores, Inc. operates Wal-Mart discount stores, Supercenters, Neighborhood Markets and SAM'S CLUB locations in the United States. The company has operations in Argentina, Brazil, Canada, China, Costa Rica, El Salvador, Germany, Guatemala, Honduras, Japan, Mexico, Nicaragua, Puerto Rico, South Korea and the United Kingdom. The company's securities are listed on the New York Stock Exchange and NYSE Arca, formerly the Pacific Stock Exchange, under the symbol WMT.

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Judge dismisses racketeering counts in Wal-Mart lawsuit

By JEFFREY GOLD
AP Business 
August 29, 2006                      [back to top] 

NEWARK, N.J. -- A federal judge has dismissed two racketeering charges in a lawsuit brought by illegal immigrants who worked as Wal-Mart janitors, finding that they failed to explain how any violations of U.S. immigration law by the retailer caused them economic harm.

The lawsuit's other charges, including failure to pay overtime and minimum wages, still stand, but no trial has been scheduled.

"Obviously, the plaintiffs are disappointed in the ruling. We feel it's at odds with the law in the area and we are exploring options," a lawyer for the janitors, James L. Linsey, said Tuesday.

John Simley, a spokesman for Wal-Mart Stores Inc. at its headquarters in Bentonville, Ark., said the company was pleased with the decision.

The lawsuit, filed in Newark nearly three years ago, seeks class-action status for the janitors. It claimed that Wal-Mart conspired with contractors to violate the Racketeering Influenced Corrupt Organizations Act, known as RICO, by systematically depriving the workers of legal protections.

U.S. District Judge Joseph A. Greenaway Jr., however, found that the janitors failed to link any immigration violations by the company to their claimed injuries.

"As to the RICO claims for immigration violations and money laundering, the path from wrongdoing to injury is too indirect to meet the proximate cause requirement," Greenaway wrote in a 17-page opinion issued Monday.

As part of the litigation, the janitors obtained a 2003 affidavit by U.S. Immigration and Customs Enforcement. In the affidavit, investigators said testimony and taped conversations from 2003 showed two executives at Wal-Mart headquarters knew that contractors and subcontractors cleaning its stores in several states employed illegal immigrants from Eastern Europe and elsewhere.

The lawsuit charged that Wal-Mart executives conspired with several contractors to hire the illegal immigrants, who were paid $1,500 a month or less to clean stores seven days a week, with no overtime or benefits.

Wal-Mart agreed last year to pay $11 million to end a federal probe into the use of illegal immigrants at stores in 21 states, including New Jersey.

Shares in Wal-Mart rose 6 cents to close at $44.49 in trading Tuesday on the New York Stock Exchange. It has traded from $42.31 to $50.87 over the past year.

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New Wal-Mart opens Wednesday

By JOHN MORGAN
Star-Tribune 
Tuesday, August 29, 2006            [back to top] 

The new, west-side Wal-Mart store opens Wednesday morning, after a year and a half of planning, construction and debate.

"In every community, there are people who are anti-Wal-Mart," Mayor Renee Burgess said Monday. "I think it will balance Casper's growth and help to remind people that life is about choices. People can choose not to shop there.

"Not everybody has to support Wal-Mart," she said. "We don't all go to every new bar or every new restaurant in any community. This is the same thing, just on a much larger magnitude. For the most part, all the controversy has been greatly blown out of proportion."

Last fall, a citizens group tried to block the new store, but failed to get enough signatures in time to submit a referendum petition. Wal-Mart currently has a store on Casper's east side. The east side also has the mall and a bustling business community, while the west side has seen little growth until recently.

"Wal-Mart will provide a tremendous anchor on the west side and revitalize the business area," Burgess said. "It's been a real painful growth experience, but I think the community as a whole will support it."

The new store will open at 8 a.m. Wednesday. There will be a special ceremony at 7:30 a.m. to give $36,000 in donations to several area organizations.

The store is Wal-Mart's latest design, a supercenter that includes clothing, household products, lawn and garden supplies, jewelry, crafts, and expanded electronics and toy departments. The store will also feature a Tire & Lube Express station, a Subway restaurant, a family fun center, one-hour photo lab, a vision center, pharmacy, SmartStyle hair salon, Regal Nails salon, wireless phone center and a full-service liquor store.

The supercenter will include a grocery area with a bakery, deli, dry and frozen goods, and an organic food section.

"Our associates are very excited and looking forward to getting down to the day-to-day business," said store manager Ken Braun. "Having a new supercenter in this still underdeveloped area of town will help Casper to really flourish. I think the public is excited and will take advantage of not having to drive across town."

Despite having to halt construction briefly in March and again in May due to undocumented workers and struggling to find enough workers in Casper's tight job market, Braun said the store has been able to overcome difficulties and open on schedule.

"We have a large enough staff to make the store open," he said, adding that while not yet fully staffed, the store currently has more than 260 workers ready to start Wednesday. "We are still looking for good employees and are still interviewing people."

The Wyoming Department of Transportation will activate the new traffic signal on the highway in front of the store this afternoon, according to WyDOT public involvement specialist Jim Nations.

The 206,640-square-foot supercenter is located at 4255 CY Avenue and will be open 24 hours a day, seven days a week.

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After German Failure, Wal-Mart Is All Smiles In China

homeworldbusiness.com
Monday, August 28, 2006                   [back to top] 

NEW YORK— If you were surprised by Wal-Mart throwing in the towel and selling off its German stores, stranger still was its more recent decision to cooperate with China’s state-sanctioned labor group to create unions at its 60 stores in that country.

Actually, none of it is strange if you look inside these developments.

American pundits from the outside are performing flips trying to figure it out. I’ve read so many analyses of Wal-Mart’s German failure— some cite the company’s alleged human resources policies disallowing employee fraternization; others argue that German consumers didn’t like Wal-Mart clerks packaging their groceries.

But the most uninformed one yet was from a know-it-all who compared Wal-Mart’s failure to “invaders” in WWII and Germany proving to be a bridge too far.

Where do I start with that one? For starters, this analysis had the wrong country (operation Market Garden was in 1944 in Holland, not Germany). It compared a retailer’s multi-national expansion to invaders, when it was the Allies trying to liberate an occupied country from the Nazis. And, finally, I took this editor’s comparison as an insult to the brave allied soldiers in this daring raid who gave their lives for freedom.

Wal-Mart failed in Germany for a host of reasons, but insiders say a key element was out-of-stocks. This company’s strength always has been its efficient distribution system. Wal-Mart’s German competitor, Aldi, does a much better job of being in stock for advertised and off-the-shelf items.

Several insiders told me that the intolerance of German consumers to out-of-stocks was an important issue. If Wal-Mart advertised a product and it wasn’t on the shelf, German consumers were turned off. Some didn’t come back.

One anecdote I heard was that German logic and American retailing simply didn’t dovetail. For example, if one multi-pack of a product being promoted was out of stock, Germans simply couldn’t understand why they were not allowed to buy two lower-count packs instead as a substitute? Logically, two smaller count packs that added up to the larger one not available should be offered instead, right? Not according to a rigid Wal-Mart. And Germans couldn’t understand it.

Issues like this one seem small, but took their toll. How ironic that Wal-Mart strengths— distribution and

in-stock positioning— were part of its Achilles heel in Germany.

And, most intriguing, several vendors now report that just weeks after the announcement of the sell-off of the German stores, Wal-Mart in the U.S. notified suppliers that it was invoking sharp new penalties for companies that do not maintain 99% in stock positions of their goods at store level.

The vendors complained that maintaining this almost-perfect in-stock position level was difficult, considering the complexities of getting goods through the distribution network to the sales floor. And most shipments are precision-timed to distribution centers, not allowed too early or late.

What happens to these goods once they reach that far is really out of the vendor’s hands. But, evidently, 99% at store level it is. A lesson learned by Wal-Mart from failures in Germany? Or a closely timed coincidence?

In China, where Wal-Mart is betting much of its international expansion, it seems there is nothing this retailer wouldn’t do to keep it friendly and growing. Joe Hatfield, who’s been heading Wal-Mart’s operations there since the retailer landed there (invaded?) in 1996, said Wal-Mart is hoping its relationship with the All-China Federation of Trade Unions is “prosperous for our associates and for the growth of our business.” The ACFTU is seeking to organize some 28,000 Chinese employees of Wal-Mart.

Can you imagine what Sam Walton himself would have thought of all this? He was adamant in his stand against unionization of Wal-Mart stores. And his organization has carried that standard to this day, battling to break into New York City and Chicago, but against activists who seek unionization of stores in these urban centers.

So, while Wal-Mart resists union activity at home, it’s all smiles in Shenzhen and Beijing, where Wal-Mart says it now will be helpful with the ACFTU in helping to create worker unions at its already-open 60 stores and, presumably, for Wal-Mart stores to be opened in the future in China.

Wal-Mart really doesn’t have a choice in China. Either it cooperates, or China could become unfriendly very quickly to its expansion plans.

I once met with Hatfield in China in the company’s Shenzhen store, one of its first in China, and he took pains to explain to me floor-by-floor in this multilevel unit how Wal-Mart had adapted its product assortment to the Chinese culture.

A reason for its success in China was its elasticity in merchandising, its willingness to be a fast learner— and also to cooperate with local community groups.

Many of you have walked Wal-Mart stores in China and have seen firsthand just how unique they are in product selection and presentation. Now, if unions are going to be required, Wal-Mart is in no position to act like this is Chicago or New York City.

In China, Wal-Mart has to cooperate. With 60 units open and the promise of hundreds more to come in the future, Wal-Mart is in a preferred position in China retailing. It can’t close its doors or say no to growth.

But watch to see how far Wal-Mart will go in cooperating with union formations of its workers. I say, you’ll be surprised at how much more cooperative they’ll be in Shanghai than in a large American city.

Chinese officials know that Wal-Mart is in no position to be difficult or close stores when workers prefer the protection of organizations such as the ACFTU.

The upside for Wal-Mart in China is exciting. But as time progresses, and it opens more stores and generates a larger portion of its revenues from China, Wal-Mart will find itself in a weaker and not stronger bargaining position with Chinese authorities and labor groups.

In a flash moment, China could put up hurdles to Wal-Mart’s growth there or impose new fees to its profits there. So, Wal-Mart has every reason to keep it friendly in China.

Watch and see.

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Wal-Mart's next battlefield

MARINA STRAUSS
The Globe and Mail
Monday, August 28, 2006               [back to top] 

For more than a year, Wal-Mart has been trying to get into Port Elgin, a burgeoning Ontario town on the shores of Lake Huron.

The world's biggest retailer likes the spot and the wider community of Saugeen Shores, with its population of about 12,500 -- 7,000 in Port Elgin alone and up to 40,000 in summer when cottagers settle in. The local market is well-heeled, and its numbers are forecast to jump by about 55 per cent over the next two decades. The nearby Bruce Power nuclear station is being revived, attracting hundreds of workers and boosting demand for housing and retailing in the area.

Best of all, fast-growing Port Elgin is home to only one supermarket, a Your Independent Grocer owned by Loblaw Cos. Ltd.

But for Wal-Mart and its Canadian real estate partner, SmartCentres, that's just where the challenge begins: Loblaw is opposing SmartCentres' rezoning application, joining a number of local groups to run its rival out of town.

The company may not be able to keep Wal-Mart out of Port Elgin forever, but it seems to know that in the competitive retail market, a battle delayed is a battle not lost.

"The longer the delay, the more the benefits," says Dennis Wood, a lawyer for SmartCentres. Welcome to the front lines of Canada's testiest retail war, where Wal-Mart, Loblaw and Zellers are duking it out over small communities and growing suburbs. But instead of using price cuts and two-for-one coupons, they're attacking each other with phalanxes of lawyers, planners and consultants.

In a handful of towns across Canada, Wal-Mart's latest ambitious expansion plans -- especially to add grocery aisles -- have met opposition from the entrenched players who say there isn't room for more.

"Everyone is trying to protect their turf, which is a natural thing to do," says John Gray, Mayor of Oshawa, Ont. where a proposed Wal-Mart expansion is under attack. "If you're in a good competitive position, why undermine it by letting somebody else come in?"

For Loblaw, the stakes are especially high. It is racing to recover from its faltering expansion into non-food offerings in its bid to take on Wal-Mart.

But Loblaw spokesman Geoffrey Wilson says the grocer doesn't object just for the sake of objecting. Rather, it objects to a rezoning application in markets where it operates if it believes there aren't enough sales opportunities for "supermarket-type merchandise," he says. Or it objects if there is no food retailing study accompanying an application.

"We will do that as a matter of course to protect our business," he says.

Andrew Pelletier, a Wal-Mart Canada Corp. spokesman, disagrees: "We find it very unfortunate that they would resort to these tactics to try to maintain what amounts to monopolies in these markets. They're ultimately trying to limit competition."

In small-town Port Elgin, local politicians can't get enough of this sort of attention. They're keen to attract more retailers, and new tax revenues. Townspeople already drive 45 minutes to shop at Wal-Mart stores in nearby towns, says Mayor Mark Kraemer of Saugeen Shores. While away, the residents are patronizing other businesses too. "We need the dollars retained in our community," he says.

Such logic helped catch the eye of SmartCentres, which was formerly named First Pro and has been a close ally of Wal-Mart's since the U.S. giant arrived in Canada 12 years ago. Sobeys Inc. also sees the opportunities, with plans for its own supermarket in Port Elgin.

Joshua Kaufman, director of land development at SmartCentres, spent months in early 2005 studying the Port Elgin market. He drove around town, browsed its stores and chatted with local townspeople. He spoke with municipal engineers, planning officials and the local Chamber of Commerce representative. He observed people's driving and shopping habits.

He made the inquiries using his own name, not that of SmartCentres, because he didn't want to attract attention. SmartCentres is so closely identified with Wal-Mart that just using the corporate name could raise the bidding price of a property. "We didn't know who Mr. Kaufman was and who he was representing," says Ron Brown, Saugeen Shores's chief administrative officer. "That's quite common. He said he was interested in a big retail development . . . But we did the research. We assumed it was Wal-Mart."

By April of that year, Mr. Kaufman sealed a deal for a parcel of land on Highway 21 at the south end of Port Elgin, at one of its entry points. Then he focused on getting closer to the community. He contacted town councillors and the mayor. He joined the Chamber of Commerce.

On Dec. 5, the developer submitted its formal application for a zoning change to allow for a larger retail space than was permitted on the site. The application was supported by five SmartCentres-commissioned studies on the retail market, traffic patterns, planning issues, public services and an archaeological assessment.

The developer spends an estimated $1-million a month just on outside advisers for these types of applications, observers say. The more opposition it anticipates, the more consultant reports it orders. Along with that, SmartCentres employs an in-house team of about 80 specialists who work on applications -- engineers, architects, financial analysts, lawyers, leasing and project managers.

In Port Elgin, town staff reviewed the developer's application, asked for some revisions, but were not concerned about the Wal-Mart store and its food section. Staff recommended that the project get a green light, and a public meeting was called for April 6.

Loblaw got into the action weeks before the meeting. Its lawyer called town officials, gathering information about the application. On April 3, the lawyer submitted a letter expressing Loblaw's concerns, and advised that it had hired its own consultant to review Wal-Mart's market analysis. The consultant, Hermann Kircher, warned that the town may be setting itself up for an overabundance of grocery-store uses in the area.

Mr. Kircher argued that Wal-Mart's consultant had underestimated the potential grocery sales at the discounter's proposed Port Elgin outlet. Moreover, he said existing Wal-Mart outlets in three nearby towns could soon be carrying more food. And he said that Loblaw's own supermarket in town may expand.

Because of the uncertainties, the municipality should commission an independent study or -- at the very least -- limit the amount of food that the proposed Wal-Mart could sell, Eileen Costello, Loblaw's lawyer, said in the letter.

Council members may have anticipated objections to Wal-Mart from some local residents, but several were taken aback by Loblaw's stance. "It's unrealistic to presume that you can retain a monopoly in a community forever," Mayor Kraemer says. "It's nothing but a delay tactic to keep them [Wal-Mart] out as long as they can."

Only Councillor Judy Ashbee voted against the Wal-Mart project, feeling the process had been too rushed. Loblaw had every right to challenge the proposal, she says, although "competition is not a reason for developments to be denied." The community itself is split on the prospect of Wal-Mart coming to town. But even many anti-Wal-Mart stalwarts would welcome more grocery stores. "It is true that we need more shopping," says Margaret Grottenthaler, a Port Elgin cottager who is among those fighting the new development.

Despite the mixed feelings, the town council approved the zoning changes for the development on April 10 and, soon after, they were endorsed by the local county. But the final go-ahead could be months, if not years, away. That's because Loblaw, along with nine special interest and residents' groups, have appealed the zoning amendment to the Ontario Municipal Board. No hearing has been set.

Loblaw isn't alone among competitors to raise objections. In Oshawa, where SmartCentres has proposed a mall with a Wal-Mart super centre, two other opponents emerged: Zellers and a nearby shopping centre, which is owned by landlord heavyweight Ivanhoe Cambridge. (Loblaw recently withdrew from the fight.) The City of Oshawa commissioned its own consultant's report on the proposal. It found that the combined sales of the four Zellers stores in the city fall short of total sales at the single Wal-Mart at the other end of Oshawa.

David Baffa, director of development at Ivanhoe Cambridge, says he has to protect his tenants against a potentially overzealous competitive onslaught. His tenants include Zellers and the Bay.

"I don't think anyone expects us to just sit idly and say, 'Great, just keep stretching the amount of retail space as far as possible,' " Mr. Baffa says. "What we're saying is: 'Control the growth.' "

Retailers square off in Port Elgin

The proposal

Wal-Mart's developer wants to build a shopping centre anchored by a 120,000-square-foot Wal-Mart on a parcel of land it recently purchased at the south end of Port Elgin, pictured above. The store would carry a wide range of groceries, part of the global discounter's bigger push into food in Canada.

The opposition

Loblaw, the country's largest grocer, owns the only supermarket in Port Elgin today. It opposes the proposed Wal-Mart development and has appealed the town's rezoning approval. Its advisers argue that the town is setting itself up for big headaches -- namely, an excess of food retailing. The community

Port Elgin is on the shores of Lake Huron, about a 2 1/2-hours drive northwest of Toronto. With a population of 7,000, it swells to as much as 40,000 in summer when cottagers arrive. It's a growing town, part of the larger Saugeen Shores, attracting generally well-off retirees, families and tourists. Some even call the area the next Muskoka.

The economic engine

Close to Port Elgin, the nuclear plant is the area's largest employer. It's being revived, hiring hundreds of workers, many of whom are expected to settle in the area. The new jobs will create a heightened demand for housing, retailing and other services, town officials predict.

© The Globe and Mail

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Wal-Mart Critics Defend Campaign

By MARCUS KABEL
AP Business
Monday, Aug. 28, 2006

(AP) - Union-backed Wal-Mart critics defended their drive to change the world's largest retailer in a letter Monday to Arkansas Gov. Mike Huckabee after he called them a "traveling circus" and refused to sign a communique criticizing the Bentonville company.

Wal-Mart Watch, a Washington D.C.-based group formed to pressure Wal-Mart Stores Inc. on issues including employee pay and benefits, urged Huckabee to reconsider his support for Wal-Mart and suggested further talks.

"I was surprised that you took issue with such an open and honest call for a debate on these questions, and I was disappointed that you offered no answers of your own," the group's executive director, Andrew Grossman, wrote in a letter to Huckabee which the group made public.

Grossman cited figures from an Arkansas Democrat-Gazette report in March that found 3,971 of Wal-Mart's 45,106 employees in Arkansas were on public health care assistance. Grossman said the average annual cost to Arkansas for each Medicaid recipient is $4,083 for a maximum cost of $39.6 million.

Huckabee criticized Wal-Mart Watch for sending its response to The Associated Press, rather than his office.

"It was interesting that you claimed a desire for 'dialogue,' but I'm not sure you meant a dialogue on the actual issues, since you were more interested in getting your latest misled missive to the media than to me," Huckabee wrote to Grossman.

Huckabee, in a response letter on Monday, questioned why the group is singling out Wal-Mart, when other employers pay less than the retailer.

"Of course, there may be Wal-Mart employees who qualify for various levels of our Medicaid program," Huckabee wrote. "So do employees of numerous companies. One difference is that Wal-Mart employees aren't stuck at the bottom. They have real opportunities to be promoted and grow in responsibility and income."

The back-and-forth between Huckabee and Wal-Mart Watch began after Huckabee sent a letter to the group on Aug. 18 criticizing the advocacy group for asking him to take part in a national campaign against Wal-Mart.

"Your traveling circus of appearances to single out Wal-Mart will perhaps attract some politicians and even some maybe in my own state, but please don't hold a seat for me," Huckabee wrote.

At the time, Grossman had sent a draft copy of a letter addressed to Wal-Mart CEO H. Lee Scott and asked Huckabee to sign onto it. Among other requests, the letter urged Wal-Mart to enter a voluntary deal to ensure affordable health insurance and to pay a "family-sustaining wage."

Huckabee told Grossman that he viewed the letter as an attempt to bash Wal-Mart. Huckabee said Wal-Mart employs about 46,000 people in Arkansas and pays its hourly workers an average of $9.64 an hour.

Wal-Mart created more than 240,000 new U.S. jobs in the past three years and has helped move people off Medicaid rolls with an expanded range of lower-premium health plans, Wal-Mart spokeswoman Sarah Clark said. About 7 percent of its workers were on Medicaid before they were hired, dropping to 5 percent after joining Wal-Mart and 3 percent after two years at the company.

Huckabee, a Republican who is term-limited, leaves office in January and is considering a 2008 presidential campaign.

Wake Up Wal-Mart, another union-based group that formed last year to pressure the company to improve wages and benefits, is holding a monthlong national bus tour that has enlisted support from several prominent Democrats including the party's Senate leader, Harry Reid.

Several potential presidential candidates have also participated, including Iowa Gov. Tom Vilsack; Sen. Evan Bayh, D-Ind.; Sen. Joe Biden, D-Del.; Democratic New Mexico Gov. Bill Richardson; and former North Carolina Democratic Sen. John Edwards.

Copyright 2006 The Associated Press. All rights reserved.

Copyright © 1994-2006 FindLaw

New Environmental Defense office to coordinate work with Wal-Mart

FACILITIES MANAGEMENT NEWS
August 28, 2006                                         [back to top] 

The national environmental advocacy group Environmental Defense is adding a new position in Bentonville, Arkansas, to coordinate the group's work with Wal-Mart. At Wal-Mart's invitation, Environmental Defense has been advising the company on environmental issues for about one year.

"Wal-Mart's impact on the national economy is almost beyond calculation. Every week, 175 million Americans shop at Wal-Mart. If Environmental Defense can nudge Wal-Mart in the right direction on the environment, we can have a huge impact," said David Yarnold, Executive Vice President of Environmental Defense.

Yarnold noted that Wal-Mart has pledged to dramatically improve its environmental performance and that "in working with the company over the past year, we've concluded that Wal-Mart is making a sincere effort to do a better job of protecting the environment."

Yarnold also noted that "Wal-Mart can have a ripple effect through the whole economy by demanding better environmental performance from its suppliers. By challenging itself and its supply chain, we really believe that Wal-Mart can create a race to the top for environmental benefits."

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Wal-Mart: We save blacks from Jews, Koreans, and Arabs

Cynthia Tucker
Universal Press Syndicate
08.28.06                                           [back to top] 

Unlikely though it may seem, Andrew Young, the embattled ambassador for social justice, is in a unique position to push forward a candid, searching conversation about race in America. Two weeks ago, when he inexplicably meandered into the territory of vile ethnic stereotypes, he revealed what we all know but rarely acknowledge publicly: Bigotry is not the exclusive domain of any race or religion or region. Most of us -- a few saints excluded -- harbor ugly prejudices, unfortunate biases and harsh preconceptions.

Black Americans, too. Civil rights leaders, too. Preachers, too. Good Christians, especially.

Understanding that -- knowing that about universal human foibles -- doesn't lessen my disappointment in Young. Still naive enough to have heroes, I wanted to believe that he would know better than to wallow in the cheapest of the old canards about urban shopkeepers. But in one incomprehensible moment, he managed to insult Jewish, Korean and Arab merchants, claiming they have greedily exploited poor black consumers.

A paid representative of Wal-Mart, Young was asked by a California newspaper about the huge retailer's tendency to force smaller shops out of business. His response was startling in its wrongheadedness:

"But you see, those are the people who have been overcharging us -- selling us stale bread and bad meat and wilted vegetables," he was quoted as saying. "... I think they've ripped off our communities. First it was Jews, then it was Koreans and now it's Arabs. Very few black people own these stores."

After the comments were published in the Los Angeles Sentinel, he resigned as chairman of a pro-Wal-Mart advocacy group, Working Families for Wal-Mart, and he has been apologizing ever since.

Young's long career in the civil rights movement is just one reason his crude bigotry is so surprising. His upbringing was an unlikely incubator for that sort of prejudice. Young didn't grow up poor; his parents were not limited to shops that served low-wage consumers.

The son of a New Orleans dentist, Young grew up in a racially integrated neighborhood. In his memoir, "An Easy Burden," he wrote of his boyhood:

"Despite the rigid segregation of New Orleans, our neighborhood was a real jambalaya. ... Delahay Dunn and Harry Hannan were Irish, Eddie Pontiff was Italian, Ralph Guelfo was German, Jimmy Ray was Cajun, and Israel Kitt was black."

And, as a lifelong member and, later, ordained minister of the United Church of Christ, he had opportunities to meet and mingle with whites that weren't afforded to most black Americans of his generation. Not only did he attend a predominantly white seminary, Hartford Seminary, but he also traveled to Europe as a young seminarian.

As a lieutenant in the civil rights movement, Young met many progressive whites -- college students, Catholic priests, Jewish rabbis -- who contributed money, planned strategy and marched alongside black activists, putting their lives on the line. He has no excuse for narrow-mindedness.

The worst thing about Young's offensive utterances was that they have given other black Americans, ordinary folk without his credibility or influence, an excuse to embrace bigotry as acceptable, even courageous. "I ask you, if you're over 30 years of age and lived in any urban area in this country and are Black, does this (Young's remarks) not have the ring of our reality?" wrote James Welcome, publisher of Newsmakers, a black-interest Web site.

(I'm black and over 30, and this is what I've noticed: The poor are not well-served by any merchants. In down-at-the-heels neighborhoods, I've walked into large chain-owned groceries with filthy floors and spoiled fruit.)

While black Americans are perfectly capable of a host of prejudices, there has long been an especially obnoxious strain of anti-Semitism among us. Martin Luther King Jr. was forceful in attacking it.

"The segregationists and racists make no fine distinction between the Negro and the Jew," he said. And in a letter to Jewish leaders, he denounced anti-Semitism "within the Negro community," saying, "I will continue to oppose it, because it is immoral and self-destructive."

But there are very few among the current generation of black activists who expose and criticize the prejudices that proliferate in black America -- from anti-Semitism to hostility toward Latino immigrants. We sometimes behave as if the frailties that plague every other group of human beings, including bigotry, have somehow passed over us.

Not so, as Young's transgressions have shown. So it's time to have a conversation in which we, too -- we who have benefited when others acknowledged their prejudices toward us -- acknowledge our own. When he's finished apologizing, maybe Young will start that conversation.

(c) 2006, The Atlanta Journal-Constitution

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Wal-Mart Helps Multi-Published Christian Author Spread the Word

Billie Yoder
Sunday, August 27, 2006                 [back to top]   

ALBUQUERQUE, NM (ANS) -- Wal-Mart is a big target. Therefore, they are like a bulls-eye for the media. Most recently the Democratic Party has declared that Wal-Mart is hurting the middle class. They have been in trouble for immigration violations. The list could go on.

But for one multi-published Christian author, Wal-Mart spells success!

Marita Littauer

Marita Littauer wrote her first book nearly 25 years ago and has 19 published books to date (several written with bestselling author, her mother, Florence Littauer). While writing runs in the family, the crowning “Littauer” writing achievement has come to Marita as a result of Wal-Mart!

The magnum opus of Marita’s career is a new project published by Regal Books (a division of Gospel Light). The Wired That Way project includes a trade book, a workbook, a ten lesson DVD teaching series and the Wired That Way Personality Profile. Wired That Way book cover

In June, Wal-Mart placed an order for 7500 copies of the Wired That Way tradebook — which Marita did not know about. One evening Marita was shopping in Wal-Mart and happened to stop in the book department. There on the top shelf was Wired That Way. Marita grabbed the book and showed to the only people nearby: a couple looking at magazines. She waved Wired That Way in front of them and exclaimed, “I wrote this!” They looked at her as if she had escaped from a lock-up facility. Marita then called her husband who was away visiting his mother. She woke him up with her good news.

Marita sent out e-mails encouraging everyone on her vast e-mail list to go to Wal-Mart to buy Wired That Way — even telling her public that they could buy if for less at Wal-Mart than they could from her.

Marita reports, “My own mother had breakfast by herself one day in the Cathedral City, CA Wal-Mart and there she found Wired That Way! She was so excited she called to report to me that not only had she found Wired That Way in Wal-Mart, but she also rearranged the book department so Wired That Way was the top shelf—and then she bought one to be sure they had a sale.”

This week (August 22) Regal Books notified Marita that they were temporarily “out of stock” of Wired That Way because Wal-Mart had placed a “substantial” second order that cleaned out the warehouse.

Marita’s books have traditionally been found in Christian bookstores—and, during the plethora of radio interviews she has done over the years, Marita always encourages people to shop at their local Christian bookstore first. Her books can frequently be found in the chains like Barnes and Noble. However, Wired That Way is the first of her books to be accessible to the masses though a discounter like Wal-Mart. This means that the message is reaching a whole new audience with 7500 books sold through the nationwide chain in two months.

With its emphasis on understanding one’s own personality, maximizing strengths and minimizing weaknesses, and improving relationships with others, Wired That Way is the perfect book for the Wal-Mart customer. Some of Marita’s other titles such as Your Spiritual Personality, The Praying Wives Club, and The Journey to Jesus have a strong Christian message. However, the content in Wired That Way is what Marita calls “Christian lite.” “Yes,” she says, “it has some Scripture and it has core Christian values.

But Wired That Way is written in such a way that a reader could take it to work in the bank and share the contents with his or her peers without offending anyone. Yet, it is like a beacon in a dark world as it attractive to those who would not darken the door of a church. The workbook has a much stronger Christian emphasis. It is my hope that Wal-Mart customers who may not be Christians and who may not be familiar with my work will buy Wired That Way, enjoy it and want more. Maybe they’ll discover The Praying Wives Club or The Journey to Jesus. You expect that the customers buying my books in a Christian bookstore probably already have a relationship with Christ, but Wal-Mart reaches a much wider cross section of people.”

This week Wal-Mart ordered 2500 more copies of Wired That Way bringing the total sale to Wal-Mart to 10,000. Total sales of Wired That Way since its release in June are 15,000 — with 10,000 of those copies as a direct result of the Wal-Mart sale. For this multi-published author, this constitutes record-breaking sales. Marita explains, “The second Wal-Mart sale is especially exciting to me as it means people are buying the book.

Wal-Mart has it in the self-help section, not the religion section. Readers will receive the subtle Christian message without realizing it. It is my hope that the message of Wired That Way: the Comprehensive Personality Plan will improve relationships and ultimately change lives. My greatest joy would be to meet someone in heaven who is there because they picked up a copy of Wired That Way in Wal-Mart and it led them on a journey of spiritual discovery.”

Note: Marita Littauer is a professional speaker with more than twenty-five years of experience. She is the author of 19 books, including Journey to Jesus, But Lord, I Was Happy Shallow, The Praying Wives Club, and Wired That Way. Marita is the President of CLASServices Inc., an organization that provides resources, training and promotion for speakers and authors. She is also the director of the Glorieta Christian Writers Conference.

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China Direct Trading Corp. to File June 30, 2006 Form 10-Q and Intrepid to Open Health Clinics in Wal-Mart Supercenters

FinancialNewsUSA.com
08/25/2006                                  [back to top]   

City of Industry, CA --Specialty Retail industry news provided by Financial News USA (OTC: FNWU). China Direct Trading Corp. (OTC BB:CHDTE): announced recently that it will be filing its Form 10-Q for the quarter ending June 30, 2006 recently with the U.S. Securities and Exchange Commission. The filing will eliminate the "e" designation on China Direct's trading symbol. China Direct has scheduled an investor teleconference at 10:00 a.m., local Miami time, tomorrow, Friday, August 25, 2006. An Indianapolis resident will receive a Canine Assistants service dog through a partnership with Milk-Bone and PetSmart (NASDAQ: PETM). Matthew Griffin, who suffers from a nervous system and muscle disorder and uses a wheelchair, will be partnered with a canine companion that will be trained to retrieve dropped objects, turn on and off lights and open doors.

Shoppers can add health care to the list of services provided by Wal-Mart (NYSE:WMT) thanks to a new lease agreement with Intrepid Holdings Inc. Houston-based Intrepid will open its Health Access medical clinics in Wal-Mart Supercenters in Texas starting in the third quarter. More clinics are planned in other markets following the initial rollout in Texas. The clinics will offer health care for non-threatening conditions, said Toney Means, president of Intrepid Healthcare Group. Intrepid Holdings (OTCBB: ITPD) provides pharmacy, clinic and related health care services to the urban marketplace. Shares of online auction site eBay Inc. (Nasdaq:EBAY) slipped Thursday afternoon on worries that buyer activity has slowed, in spite of the company's efforts to reinvigorate its core business. The San Jose, Calif.-based company's stock fell $1.20, or 4.4 percent, to $25.80 on the Nasdaq. Piper Jaffray analyst Safa Rashtchy downgraded the company to "Underperform" from "Market Perform" and lowered his price target for the stock to $25 from $30.

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Wal-Mart Licks Its Wounds

By Barbara Ehrenreich,
AlterNet
August 25, 2006                 [back to top]   

Poor Wal-Mart just can't seem to catch a break. There they are, the monks of Bentonville -- who, according to company legend, share hotel rooms on business trips rather than drive up the price of pantyhose -- toiling away to make the good life affordable to the impecunious masses. And what do they get? Nothing but grief. The Democrats are running against Wal-Mart in the fall congressional elections, and not just the wild-eyed progressive ones. Centrist Hillary Clinton returned a $5,000 donation from the company, citing its inadequate health benefits, and Joe Biden just attacked it because he doesn't see "any indication that they care about the fate of middle-class people."

Then Andrew Young, the former civil rights leader-turned-Wal-Mart-flack, pulled a Mel Gibson, lashing out at the company's small business, ethnic, competitors: "I think they've ripped off our communities enough. First it was Jews, then it was Koreans and now it's Arabs; very few black people own these stores." Wal-Mart quickly distanced itself from the remark, as did Young himself. He stepped down from his Wal-Mart job, though he has not yet followed Mel's example by seeking counseling from leading Korean fruit vendors.

The Young meltdown aside, Wal-Mart blames its troubles on the unions it has worked so hard to bar from its stores. They're so touchy, those unions! They take offense just because the Wal-Mart orientation for new hires includes a 12-minute video on the evils of unions, portraying them as little better than extortionists. They get all bent out of shape every time a union sympathizer is fired by Wal-Mart on some trumped-up charge like using profanity or being discourteous to customers. They jump up and down when Wal-Mart is caught making its associates work overtime for no pay, or locking them into the stores at night.

But the cruelest blow to Bentonville is a sudden decline in profits -- down 26 percent in the second quarter of '06 -- the first decline in 10 years. Wal-Mart blames, first, the failure of its attempted expansion into Germany, where apparently folks don't cotton to smiley faces and people greeters; and second, high gas prices in the USA. According to the New York Times, Wal-Mart CEO H. Lee Scott "hinted that those [gas] costs seemed to be prompting consumers to shop less frequently." There's one big advantage to the little Jewish-, Korean- or Arab-owned shop: Usually, you can walk to it.

The profit drop suggests a deep contradiction in Wal-Mart's seemingly altruistic goal of bringing abundance to the American working class. According to Wal-Mart defenders, those low prices hinge, not only on improvements in productivity, but on the low wages and benefits offered to Wal-Mart's workers. In other words, you've got to squeeze one part of the working class -- the 1.3 million Wal-Mart employees -- to fill the shopping carts of the others. How much the employees are squeezed is hard to determine: Wal-Mart claims to pay an average of $9.68 an hour, which doesn't sound all that bad. But Wal-Mart has a record of falsifying data on employee hours to conceal unpaid overtime work, so why should we believe them about anything?

There were signs, even before the recent profit drop, that Wal-Mart was beginning to be priced out of the reach of its own employees. I was surprised, in my brief stint as a Wal-Mart associate, that our ladies' wear was too costly for many of my co-workers. (In Nickel and Dimed, I told the story of a $7 an hour associate who could not afford a $7 polo shirt of the kind we were required to wear.) If you earn $7, $8, or even $9 an hour, you're not buying new clothes anyway; you're going to Goodwill or consignment stores. As for the offerings of Wal-Mart's Electronics and Lawn and Garden departments, for my co-workers, these weren't even on the distant horizon.

Then there are Wal-Mart's sagging Christmas sales. Christmas is of course a retailer's defining moment, and in the last two years, Wal-Mart desperately slashed its prices as the holiday approached. But both in '04 and '05, Wal-Mart's Christmas take was disappointingly low (Target and Costco did better, as did the luxury stores like Nordstrom.) Who buys their Christmas presents at Wal-Mart? It's the $7-$10 an hour crowd that dreams of Christmas shopping at Wal-Mart, and for the last two years, there hasn't been much under their trees.

Now of course Wal-Mart associates are not a special breed of celibates who have taken a vow of poverty. They are the spouses and live-in grown children of carpenters, home health aides, baggage-handlers and truck drivers. When Wal-Mart workers can't afford health insurance or new school clothes, the whole working class begins to flail. Furthermore, the Wal-Mart business model increasingly betrays what was once the operating principle of American capitalism, as explained by Henry Ford the First: You've got to pay your workers enough so that they can buy your product; that's what keeps the system going. When the American majority can't buy the very goods they manufacture or sell, that system is cruising for a bruising.

With their business model crashing down around them, the monks of Bentonville are already moving on to Plan B. Forget the working class, which was so ungrateful anyway, and move up-market. They're redesigning their stores to be more appealing to the J. Crew and Whole Foods crowd. They've added organic foods and $2,000 flat-screen TVs to their wares. The poor will have to fall back on those Jews, Koreans and Arabs.

Barbara Ehrenreich is the author of 13 books, most recently "Bait and Switch: The (Futile) Pursuit of the American Dream." This piece originally appeared on Barbara's blog.

© 2006 Independent Media Institute. All rights reserved.

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A Party branch for Wal-Mart in China

The Associated Press
August 25, 2006                         [back to top]   

SHANGHAI Wal-Mart Stores, capitalist retailer for the masses, now has its own Communist Party branch in China.

This month, Communist Party and Communist Youth League branches and a trade union were set up at a Wal- Mart outlet in the northeastern industrial city of Shenyang, an employee in the store's communications department said Thursday, confirming Chinese media reports. The worker, who gave only her surname, Liu, declined to discuss further details.

Wal-Mart has fought efforts to form unions elsewhere in its worldwide operations. But in recent weeks it said it had agreed to work with the state-sanctioned labor federation to allow unions in its outlets in China, where it has 30,000 employees.

It is not clear how the party branch will operate or whether it has an office in the Shenyang store.

At Wal-Mart headquarters in Bentonville, Arkansas, a spokeswoman for the international division, Beth Keck, said the opening of the party branch was a routine matter.

"It is our understanding that party members and the party have routinely organized branches in enterprises in China, and we respect their right to do so," Keck said. She declined to comment on whether the move was related to a recent spread of official trade unions at Wal-Mart stores in China, or on what the branch in Shenyang would actually be doing.

Repeated phone calls to the public relations department of Wal-Mart's China headquarters in the southern city of Shenzhen went unanswered.

The All-China Federation of Trade Unions, reportedly at the behest of President Hu Jintao, has been campaigning for several years to set up party-controlled unions in Wal-Mart branches as well as other foreign-invested companies.

Wal-Mart, which has 60 stores in 30 Chinese cities, resisted for two years before employees in the southeastern city of Quanzhou successfully voted to set up a union in late July.

The Shenyang Wal-Mart has only 2 party members and 16 Communist Youth League members out of 389 employees, according to the official news agency Xinhua. But the Xinhua report stressed that the branch's function would be to promote better business.

The party and youth league branches "will encourage members to play an exemplary role in doing a good job, and that will be helpful to business development," Xinhua quoted Chen Lie, a Communist Party district leader in Shenyang, as saying.

Chen said the groups would not interfere with management or operations of the retailer.

Since July, employees of at least 16 other Wal-Mart branches in China also have formed unions, according to the ACFTU, the umbrella group for unions permitted by the Chinese government.

Over all, China aims to unionize employees at 60 percent of its foreign companies by the end of this year.

In China, unions usually represent the work force of a single company or outlet, rather than an industry, and traditionally they have been allied with management.

The communist leadership has sought to preserve the party's influence in the business sector amid sweeping capitalist reforms and a huge influx of foreign capital and management.

Once a thriving industrial hub of China's planned economy, where factory workers enjoyed elite status and cradle-to-grave benefits, Shenyang has seen massive layoffs in recent years.

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Wal-Mart plan to shrink

Opposition spurs retailer to agree to trim the size of Crofton store

By Phillip McGowan
Baltimore Sun
August 25, 2006                         [back to top]   

Amid rising opposition to a proposed Wal-Mart in Crofton, the discounting retailer will trim the size of the store by as much as 20 percent, and the state has agreed to hold a public hearing on the project.

The Maryland Department of the Environment is not required to hold a forum as part of its consideration of a crucial license that would allow Wal-Mart to bury wetlands near the Little Patuxent River, said Julie Oberg, an agency spokeswoman.

"Public interest is driving this hearing," Oberg said. "We are trying to be very responsive to the community and elected officials."

Civic leaders said they want to summon enough opposition over environmental concerns at the forum to kill the project, a 143,000-square-foot store on 20 acres along Route 3. Challenging Wal-Mart on environmental grounds, they have said, would provide their strongest argument.

"This is our opportunity, our golden egg," said Torrey C. Jacobsen Jr., president of the Greater Crofton Council, an umbrella organization of western Anne Arundel community associations. "We want to pack the room, to say the community does not want this at any size. At all costs, we don't want this built."

Annapolis attorney David M. Plott, a representative for the retail giant, said this week that company engineers are working to shrink the size of the store. It wasn't clear yet exactly how much, he said. Project engineers are awaiting comments from county planners on the initial plans before any resubmission.

"Any project like this is an evolving process," he said.

County Council Chairman Edward R. Reilly, a Crofton Republican, said that Wal-Mart officials informed him that the store size would drop to 115,000 square feet - a 20 percent reduction. Reilly said he did not know how the smaller footprint for the store would affect parking or Wal-Mart's plans to fill in less than a quarter-acre of wetlands.

"I am encouraged that they are starting to listen to the citizens," Reilly said of Wal-Mart, although he remains opposed to the store.

Jacobsen, a Democratic candidate for state delegate, said Wal-Mart's revisions would help get the project through the county approval process, but that a smaller store won't mean fewer cars there.

"The same traffic will go through," he said.

Wal-Mart announced plans to build a Crofton store this spring, and the Greater Crofton Council responded with a petition to oppose the store. The council is supporting a limited building ban on the state highway until major improvements are made.

State highway officials told The Sun this month that they expect to receive approvals for a $700 million overhaul of the Route 3 corridor by the end of the year, and could begin construction of a boulevard-style highway by 2009.

Prodded by local lawmakers facing re-election this fall, MDE announced Wednesday its planned public hearing on Wal-Mart's application for a nontidal wetlands permit. It will likely be held late next month, although details have yet to be ironed out.

Oberg said that, as part of the hearing, Wal-Mart officials would present the project. MDE would hear public testimony and allow residents to send in written responses for up to an additional week.

MDE sent out public notice two years ago when the property owner at the time, William D. Berkshire, submitted a proposal for a generic big-box store, Oberg said. The agency received no requests for a hearing and no public comments, and therefore was not obligated to put out another notice when Wal-Mart took control of the land, she said.

Reilly said that he broached the topic of a public hearing last week with MDE Secretary Kendl P. Philbrick at the Maryland Association of Counties' convention in Ocean City.

"[Residents] want to be heard," Reilly said. "They don't want this ramrodded down their throat."

Copyright © 2006, The Baltimore Sun

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A Wal-Mart Bank? Yes—Sort Of

By Matthew Mogul
Aug. 24, 2006                   [back to top]   

In the end, Wal-Mart will get the OK to open a bank of its own, prevailing over the opposition. Approval is likely to come soon after a six-month moratorium on banks owned by firms—known as industrial loan companies (ILCs)—expires on Jan. 31. The hold was imposed by the new head of the Federal Deposit Insurance Corporation (FDIC) to allow time for a study of the issue.

To ease concerns, Wal-Mart vows to limit the bank's reach, and most consumers won't even know it exists. The bank won't take deposits, have branches, offer checking accounts or run its own ATMs. In fact, the Wal-Mart bank has only one purpose—to process electronic transactions, saving the company millions of dollars a year in fees. Still, the banking community is fighting the application, arguing that once Wal-Mart gets a foot in the door, it will seek to expand into other markets. As evidence, bank industry lobbyists note that the big retailer recently filed for a charter in Mexico to run a complete suite of retail banking services out of Wal-Mart stores there.

But that opposition probably won't stop the FDIC from giving Wal-Mart the go-ahead. Having given approval to Target and others, it will be hard to deny Wal-Mart. And the agency will find it tough to drag its feet by extending the moratorium. General Motors urgently needs a quick decision so it can go ahead with its $14-billion sale of its financing arm, GMAC, which is an ILC. Home Depot, DaimlerChrysler and Blue Cross Blue Shield also need decisions.

Nor will Congress stop it, although there will be plenty of complaints because many lawmakers, especially Democrats, see political gain in beating up on Wal-Mart for the low pay and minimal benefits it gives most workers. A bipartisan effort to stop the bank is under way, but as long as Republicans control the Senate, no Wal-Mart banking bill will get past Sen. Bob Bennett, who chairs a key banking subcommittee and whose home state of Utah has aggressively courted ILCs. More than half of all ILCs are now located in Utah.

Opponents will keep trying. A contingent of anti-Wal-Mart organizations, including trade unions, local banker groups and community activists, will sue to try and prevent it, arguing that industrial banks aren't supervised as strictly as most other banks and that they exploit a loophole that allows banking and commerce to mix unlawfully. They'll also contend that the mega-retailer and others have an inherent conflict of interest when it comes to making loans because they can strong-arm suppliers and charge unfavorable rates to rivals.

States that don't trust Wal-Mart not to expand would likely take preventive measures, passing legislation to stop the company from opening in-store branches in their states. Five have already done so, including Maryland and Missouri, and at least three other states are considering it.

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Wal-Mart supporters criticize downtown Simcoe at OMB

Core berated at Wal-Mart hearing for not trying hard enough

Monte Sonnenberg
SIMCOE REFORMER
Thursday August 24, 2006                    [back to top]   

The Simcoe Reformer — The Ontario Municipal Board was treated to a frank discussion last night about downtown Simcoe and how a 111,000-square-foot Wal-Mart on the Queensway East might affect it. Chair Joseph Sniezek presided over a meeting at the Simcoe Public Library designed to field input from the community about the proposed development. A surprising number of speakers took the opportunity to heap criticism on downtown Simcoe. Downtown businesses were taken to task for high prices, poor selection and poor customer service. The downtown itself was taken to task several times for being dirty and appearing run down. Speakers of this persuasion not only want the choice of shopping at Wal-Mart; they’re convinced the giant retailer will force downtown merchants to improve. They also believe Wal-Mart will increase the flow of consumer traffic in the core. “People wonder why Simcoe is failing,” said Doreen Danton, past owner of a pizzeria on Colborne Street South. “Well, open your eyes and give people what they want. I don’t think things are going to change until we get trendy little stores downtown that are hip and happening.” Under oath, former Simcoe resident John Weirmier said downtown businesses “have forgotten how to merchandise.” Weirmier added the downtown “is a dump. What have you guys done to it?” “Please bring this town back,” he said. “It’s a town I love.” Sniezek is on Week 2 of a six-week hearing into the proposed development. Last night’s gathering was considered an instalment of the quasi-judicial proceeding. Wal-Mart lawyer Mary Bull was in attendance, as was Toronto lawyer Stan Stein, who represents appellant Zellers Inc. Hamilton lawyer Peter Tice attended on behalf of Norfolk County, which approved the development. Mark and Cheryl Halmo, downtown jewelers who have challenged Wal-Mart’s arrival, also took part in the proceeding. Sniezek has heard competing testimony in recent days about the health of the local agricultural economy. Vanessa tobacco farmer Mark Bannister, 48, vice chair of Tobacco Farmers in Crisis, swore under oath that the outlook is bleak from one end of the farming spectrum to the other. Whether it is tobacco, ginseng, grains, oilseeds, fruits or vegetables, few farmers are making money, Bannister said. A collapse of the agricultural economy is entirely possible he added, which in turn would force hundreds of small- and medium-sized businesses to close. Bannister suspects tobacco farming in Norfolk will collapse sooner rather than later. His group worries that as many as 1,000 farmers in the tobacco belt could be forced out of business in the near future. Bannister reported that talks with Ottawa about a total buyout of remaining growers have stalled. No one knows where they stand and most farmers are losing ground financially. “We’ve got multinational corporations making billions,” Bannister said. “We’ve got governments that are making billions. And we have tobacco growers who are faced with losing everything.” Dennis Travale of Simcoe, one of two candidates to replace Rita Kalmbach as mayor of Norfolk, was the first at the podium last night. He told Sniezek of his door-to-door experiences as a councillor candidate in Ward 5 during the 2003 municipal election. “I’m not a cheerleader for Wal-Mart,” Travale said. “But I can tell you, there was overwhelming support for Wal-Mart becoming part of the retail mix.” Downtown jeweler Mark Haskett listened in the gallery as Simcoe residents heaped scorn on their town while speaking rapturously about the dollars they’ve saved shopping at Wal-Marts in other communities. “I just wanted to barf,” Haskett said as he left the meeting. “If you were even remotely accurate that these people downtown aren’t trying, I’d be on the Wal-Mart bandwagon. “I’m on the fence and I’m still on the fence. But I’m leaning in favour of Mark Halmo’s view. This is a planning issue. We haven’t had the population growth to support this kind of increase in retail space. I’m just glad I’m not selling towels and drugs.”

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No Wal-Mart on Sankey Tract, Limerick says

By: Lynn Jusinski
08/24/2006                       [back to top]   

It will be something commercial, but it won't be a Wal-Mart.

That was the word from Limerick Township Board of Supervisors at the Aug. 17 meeting, regarding the Swamp Pike property the retail giant was considering for a new location. "All those concerned about the Wal-Mart on the Sankey tract, I can tell you that there's not going to be a date issued for the hearing at this time. We have to wait for some developments that happened at staff [meeting] today, but I don't believe that there's any chance that a Wal-Mart will be on the Sankey Tract," said Supervisors' Chairman David Kane said. At the June 27 meeting, supervisors voted to approve a request for a public hearing to rezone the Sankey Tract, a 35-acre parcel on Swamp Pike, set back from Ridge Pike by 700 feet. The rezoning hearing was not yet set, and the land is currently zoned for up to three 65,000-square foot box stores. At the June 27 meeting, Attorney Robert Brant, representing the tract's owner, Mark Quigley, requested a hearing for a zoning amendment that would eliminate a 65,000-square foot limitation on retail locations. Since initial word that Wal-Mart has been eyeing up the site began, residents from the township have come out to meetings to voice their opposition. Most of the residents protesting a Wal-Mart on the site hail from Willow Run, an active adult community located adjacent to the Sankey tract. Kane thanked the residents for information that they provided the township with and for their participation in the process, but he cautioned that the tract would house a commercial development. "It's either three 65,000-square-foot box stores [or] we can still have a hearing on a zoning change. Commercial development will occur there. The type of development that will occur will be up again, in the end, to the applicant," Kane said. He added what the board hopes to see on the site, as well. "We're hoping possibly for a town center, something with aesthetics and streetscapes and appeal that would be more characteristic to the heart of downtown Limerick," Kane said. He later referred to the tract as "the centerpiece of our village district." In figuring out just what would happen on the site, Kane urged residents to continue to be vocal in the process. "What I want those people who certainly have connections in Willow Run and those neighboring developments to do, is I want you to begin to educate folks that it's not a field or a Wal-Mart. We're going to need your cooperation in processing information, being reasonable," Kane said. He said that many of the letters he received on the Wal-Mart were fruitful. Some, however, did not recognize the role of the former landowner in the process, he said. "I've received a lot of letters that talk about people's property values and how they bought property. Well so did this landowner. And Mr. Sankey, who owned this tract, held it and farmed it for years, and this is his retirement, this is his equity," Kane said. Kane added that the township has looked into purchasing and preserving the land, but he said it is not "economically feasible" at this time. "We'll try to come up with the best possible product," Kane said. Kane did not take a suggestion to rescind the public hearing that came from another board member, either. "I still think that there could be a hearing, it's just not going to be a hearing for a Wal-Mart. It's the applicant's choice-he's either going to come in as of right, and we talked with his attorney today, and we let him know that we would be agreeable to some incentives and changes. We still want road improvements," Kane said. Kane added that a commercial development on the site is actually within the best interests of the township, despite possible reservations residents may have. "That [Wal-Mart] is not something that will be there, but I want your help in working out the best possible product. It is going to be commercial. There's going to be traffic in this township regardless. But what's happening with our surrounding municipalities-it is this board's responsibility to make sure that we capture whatever revenue we can for that traffic that's going to be here, but we'll never eliminate it," Kane said.

©Montgomery Newspapers 2006

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BY MARILYN GEEWAX
Cox News Service
Thu, Aug. 24, 2006                  [back to top]   

Wal-Mart Stores Inc., the retail giant that grew up in the rural South, is moving to attract gay shoppers as it expands its presence in urban centers.

By entering into a partnership with the National Gay and Lesbian Chamber of Commerce this week, the company "is making a very sincere effort to reach out to people who are a significant part of our customer base," Wal-Mart spokesman Bob McAdam said Wednesday.

"I am proud of that effort," he said.

But Wal-Mart did not issue a news release about the alliance, leaving the chamber to announce it. And as news of the partnership trickles out, a backlash is taking shape among some conservatives.

"I don't think this is something that will sell on Main Street America, where most Wal-Mart stores are located," said Tony Perkins, president of the Family Research Council, a conservative public policy group in Washington. "I don't think cheap prices on goods from China will be enough to stop a rollback in their customer base if they choose to go down this aisle."

By partnering with a gay business group, Wal-Mart is "validating the idea that homosexual activists have the right to shake down corporations out of fear of being called bigots," said Robert Knight, director of the Culture and Family Institute at Concerned Women for America, a Washington-based public policy group.

The alliance with the business group is not expected to bring a visible influx of gay-oriented merchandise to Wal-Mart stores. McAdam said the specific purpose of the partnership is to help Wal-Mart attract and hire a diverse array of suppliers, including gays and lesbians.

Justin Nelson, co-founder and president of the 4-year-old gay business coalition, said he was certain that objections from conservatives would not cause Wal-Mart, headquartered in Bentonville, Ark., to back away from his organization.

But Nelson said that while Wal-Mart may start taking flak from the right, he expects it from the left.

Many liberal groups say the company fails to provide its 1.3 million U.S. workers with adequate wages and benefits.

Jeremy Bishop, program director of Pride at Work, a constituency group within the AFL-CIO labor confederation, said Wal-Mart should not expect the support of gay shoppers when it does not offer domestic partnership benefits for its gay workers.

"This community is really social justice-minded," Bishop said. "It won't be fooled by this."

McAdam said Wal-Mart has an anti-discrimination policy covering sexual orientation, and is considering offering domestic partnership benefits.

© 2006 St. Paul Pioneer Press and wire service sources. All Rights Reserved.

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Tell Wal-Mart: Apologize Now              [back to top]   

Dear Pat,

We must stop Wal-Mart’s outrageous behavior now.

As you may remember, late last year Wal-Mart formed its own right-wing front group to try and defend the company. Wal-Mart called the group, Working Families for Wal-Mart, even though it had no working families, was funded directly by Wal-Mart, and is being run out of the same office as their public relations war room.

Since then, this group has recruited a cadre of some of the dirtiest and most extreme right-wing operatives with ties to Karl Rove, the New Hampshire phone jamming scandal and the Swift Boat Veterans. And, following Karl Rove’s playbook, Wal-Mart’s operatives immediately launched attacks against leading Democrats and even launched a website personally attacking WakeUpWalMart.com staff.

But, yesterday, Herman Cain, one of the steering committee members of Wal-Mart’s front group and a well-known right-wing commentator, completely crossed the line in a column he wrote by describing Democrats who are standing up, on behalf of working families, and asking Wal-Mart to be a responsible corporation as “Hezbocrats.”

Mr. Cain’s attempts to associate great leaders like Senator John Edwards, Senator John Kerry, Senator Joe Biden, and others with Hezbollah is inflammatory, ridiculous and an insult to every American leader who has stood up and said America’s largest employer, Wal-Mart, should be responsible and pay a living wage and provide affordable health care to its employees.

Please join us in calling on Wal-Mart to immediately apologize to the American people, denounce Mr. Cain’s remarks as outrageous, and ask Mr. Cain to resign from Wal-Mart’s front group:

http://www.wakeupwalmart.com/feature/hezbocrats/

Unfortunately, Mr. Cain’s remarks come right on the heels of another embarrassing incident for Wal-Mart’s front group when Ambassador Andy Young, the former chairman of Working Families for Wal-Mart, was forced to resign for using derogatory statements to defend Wal-Mart’s business practices.

As some of you may recall, Ambassador Young insulted Asian-Americans, Jewish-Americans and Arab-Americans in trying to defend Wal-Mart’s business practice of putting small businesses out of business.

Both Andy Young’s remark and Herman Cain’s column are a disgusting display of how the politics of personal destruction now runs rampant through Wal-Mart's right wing war room. The tactics of Wal-Mart’s steering committee members are unbecoming of the corporation, leading Wal-Mart down a very dangerous path, and insulting to every American who believes in affordable health care for all, corporate responsibility and living wages.

Please join us in immediately calling on Wal-Mart to apologize to the American people, denounce Mr. Cain’s remarks as outrageous, and ask Mr. Cain to resign from Wal-Mart’s front group:

http://www.wakeupwalmart.com/feature/hezbocrats/

The good news is, while Wal-Mart suffers from these embarrassing incidents and their first profit decline in more than a decade, our campaign to change Wal-Mart is gaining tremendous momentum as we travel around the country on our 2006 Change Wal-Mart, Change America national bus tour. In just the last few weeks, the tour has been featured on the front page of the New York Times, ABC World News, the Washington Post and countless other media outlets.

With over 256,000 supporters all across America, we hope Wal-Mart will use these two incidents as an opportunity to shut down its pointless attack group, end its association with these right-wing operatives, stop its misguided attacks against so many Democratic leaders, and realize that only through real positive change will Wal-Mart become a better company.

Thank you for all that you do,

Paul Blank
WakeUpWalMart.com

P.S. Here is the New York Times article talking about how Democrats are unifying around our campaign for corporate responsibility, health care for all and living wages.

P.P.S. Here is Mr. Cain’s most outrageous remark, “The Hezbocrats, armed with nothing more than Katyusha-grade class warfare rhetoric, descended upon Iowa earlier this month determined to take down Wal-Mart, a company they consider the nation’s largest capitalistic oppressor of the proletariat.” You can read the whole insulting and inflammatory article here:

http://www.townhall.com/Columnists/HermanCain/2006/08/22/hezbocrats_attack_wal-mart

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Wal-Mart defender Cain lashes out Calls Democratic critics of retailer 'Hezbocrats'

By SHELIA M. POOLE
The Atlanta Journal-Constitution
Published on: 08/24/06                           [back to top]   

Working Families for Wal-Mart is feeling the heat again.

This time for a column posted on a conservative Web site by businessman Herman Cain, a member of the group's Georgia steering committee, in which he labels some Democrats "Hezbocrats" in an apparent reference to the Lebanese militant group Hezbollah.

"The Hezbocrats, a roaming band of militant guerrillas seeking their party's 2008 nomination for president, have most recently lobbed their rhetorical bombs at Wal-Mart, that cruel capitalist occupying corporation," Cain writes in the column that appeared Tuesday on townhall.com.

Among the "Hezbocrats" he targets are Sen. Joe Biden (D-Del.); Sen. Evan Bayh (D-Ind.); and New Mexico Gov. Bill Richardson. Cain blasts them for slamming Wal-Mart with "Katyusha-grade" rhetoric and rallies in Iowa earlier this month. Katyushas are the rockets Hezbollah has used.

He also lashed out at Sen. Hillary Clinton (D-N.Y.), who returned a $5,000 campaign contribution from Wal-Mart although she once served on the giant Arkansas-based retailer's board. Wal-Mart officials did not return a call for comment.

Kevin Sheridan, a spokesman for Working Families for Wal-Mart, said the organization includes Democrats, Republicans, independents and others who "believe working families benefit from the low prices and economic opportunity Wal-Mart provides. Herman Cain's long-standing weekly column is his own and we do not endorse his statements as they represent his personal views and opinions."

Cain, former chairman of Godfather's Pizza and a Republican candidate for U.S. Senate in 2004, could not be reached for comment. Ericka Pertierra, his chief of staff, said he was in Houston recovering from surgery for colon and liver cancer. Pertierra denied Cain was playing the terrorist card or likening those Democrats to the militant group.

Cain's chief of staff responds

"He was referring to the militant rhetoric that liberals use against capitalism and the economy," she said. "The column was basically saying liberals need to be reminded that we're not at war against American companies that contribute jobs, wages and fuels our economy."

But that didn't fly with Chris Kofinis, a spokesman for wakeupwalmart.com, which was launched last year in an effort to build a grassroots movement to push the giant retailer to be "a responsible employer."

Kofinis said Cain's statements were "some of the most outrageous and disgusting comments ever to be used to describe patriotic Democrats. Wal-Mart should apologize considering he made these comments on their behalf." Massachusetts Sen. John Kerry also weighed in on the column, even though he was not specifically mentioned.

In an e-mailed statement, Kerry accused Cain of "swiftboating" people who ask tough questions of big business. "Make no mistake, those who push and prod Wal-Mart to be a decent corporate citizen are standing up for the American worker," Kerry said. "Decent wages and affordable health care aren't too much to ask for from the largest employer in the United States."

Young quit after statements

This is the second time in less than a week that Working Families for Wal-Mart has felt the heat.

Another Wal-Mart supporter, former Atlanta Mayor Andrew Young, resigned last week as head of Working Families for Wal-Mart's national steering committee after controversial remarks he made about Jewish, Korean and Arab business owners were published in a Los Angeles newspaper.

In that incident, Young, who has since apologized for his comments, was asked if he were concerned that Wal-Mart caused mom- and pop- businesses to close.

"But you see, those are the people who have been overcharging us — selling us stale bread and bad meat and wilted vegetables," he was quoted as saying. "I think they've ripped off our communities enough. First it was Jews, then it was Koreans and now it's Arabs ..."

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China's unions emboldened by Wal-Mart success

By Candy Zeng               [back to top]   

SHENZHEN - Coming off its success in establishing unions in outlets of militantly non-union Wal-Mart, China's official All China Federation of Trade Unions (ACFTU) has been emboldened to push for unionization in other foreign-invested enterprises across the country.

At least 16 of Wal-Mart's 60 outlets across China have already been organized, while the chain retailer promises to help all others to establish local unions. And the US-based retail super-giant is planning to open 20 more mega-stores in China.

According to officials with the ACFTU, only about 26% of the 150,000-odd foreign-funded enterprises across the country have so far established trade unions, with a total membership of 4.3 million. The federation has now set an ambitious goal of boosting the ratio to 50% by the end of this year.

The ice was broken with the establishment of the first trade union in Wal-Mart's Jinjiang outlet in Quanzhou in the southeastern province of Fujian on July 29. The inauguration ceremony took place at 7:30am with none of the management attending. In contrast, the inauguration of a trade union in a state-owned enterprise would normally be a solemn affair, attended by company executives and even senior local party and government officials.

"Our success was no accident. We began sending union publications and newsletters to its staff since the Wal-Mart outlet was established in November 2005, after holding fruitless talks with its management," said Chen Xiongnan, vice director with the general office of the Quanzhou Federation of Trade Unions.

After repeated rebuffs, Chen and his fellow union officials approached the outlet's employees directly, sometimes in the middle of the night. "It was as if we are working underground," said Chen. So by July 21, some 30 Wal-Mart employees had handed in applications for unionization to the local authority. But only 25 managed to attend a midnight meeting on July 28 to elect a seven-member union committee, the minimum requirement for such an election under China's labor laws.

Wal-Mart is famously anti-union. Not one of its US stores has a union. It has been known to close stores rather than accept unions. So the Jinjiang unionists approached their mission with some trepidation. At first they were concerned that they would be reprimanded by the company. In addition, they were not sure how to finance the union's activities. Although China's labor law stipulates that an employer must set aside 2% of its total payroll to finance union activities, lack of contributions has been a major obstacle at many non-unionized private firms.

But soon Wal-Mart's Shenzhen and Nanjing outlets became unionized, with the inauguration of their trade unions also taking place at night, after business hours. To sort out the financial problem, the official Nanjing Federation of Trade Unions agreed to subsidize the union with 20,000 yuan (US$2,500), according to the China Youth Daily.

Soon after the debut of Wal-Mart's Jinjiang union, China's official media openly questioned whether the company would punish its unionist employees. Possibly under the pressure of such public sentiment, Wal-Mart held high-level talks with China's union authority on August 9 and agreed that it would help establish trade unions at all of its outlets across China.

"I hope to establish good relations with the ACFTU and its regional branches that would be conducive for our employees and business development," said Joe Hatfield, president of Wal-Mart Asia, adding - and quoting the latest Communist Party line - "it is in line with Chinese government's efforts to build a harmonious society."

Trade unions in China, it should be noted, are not the same as those in the West. They are all controlled by the Communist Party. "Trade unions are not simply about workers' economic interests, they also have to do with political, cultural and democratic rights," said Guo Wencai, an ACFTU official in charge of formation of grassroots unions.

Indeed, China's trade unions are known for their tameness and obedience to the party. The activities they organize for the workers are usually no more than social events or entertainment. They are often criticized as being more like showcases of corporate culture than organs to protect labor rights.

Be that as it may, the government has been encouraging unions to bring more foreign companies into the fold. President Hu Jintao himself has urged the ACFTU to strengthen its union network among multinational companies. He wrote a directive to the group in March to "do a better job of building [Communist] Party organizations and trade unions in foreign-invested enterprises".

The ACFTU now has more than 1.17 million grassroots trade unions across the country. An ACFTU official disclosed that in the first six months of this year, about 9 million workers had joined unions, and more than 80,000 new trade unions been set up.

The Chinese government intends to counter increasing labor disputes with the help of trade unions, according to analysts. For example, labor disputes often occur in the booming Pearl River Delta due to low pay and poor working conditions. As a result, the region has suffered a labor shortage in recent years.

However, it is still in doubt whether Chinese trade unions could serve that purpose. According to the survey by the China's Youth Daily, 71.6% of the respondents believed China's unions had not fully carried out their tasks as set forth by labor officials such as Guo.

An online survey by a popular Chinese Internet portal showed that more than 82% of respondents believed the unions failed to safeguard labor rights, while only 1.5% thought the opposite.

Candy Zeng is a freelance write based in Shenzhen.

Copyright 2006 Asia Times Online Ltd. All rights reserved.

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Wal-Mart marks progress in Japan market

By YURI KAGEYAMA
AP BUSINESS
Tuesday, August 22, 2006                 [back to top]   

TOKYO -- Wal-Mart's Japanese subsidiary said Tuesday its first-half losses grew fivefold, but the unit's chief executive reaffirmed his commitment to Japan even as the U.S. retailer abandons the German and South Korean markets.

Seiyu reported a 54 billion yen ($465 million) loss for the first six months of the year. The 400-store chain, which doesn't break down quarterly numbers, had racked up a 10.6 billion yen loss the same period the previous year. First half sales fell 2.9 percent to 468 billion yen ($4 billion).

But Seiyu Chief Executive Ed Kolodzieski, who took office in December, said there were clear signs of progress here in the first half of the year, with comparative store sales rising 1.4 percent, the first year-on-year gain in 14 years. Comparative store numbers measure sales after deleting effects from store openings and closures.

Although sales and profit results for the first half didn't meet company expectations, Seiyu has reduced costs and has been busy opening new stores while closing underperforming stores, Kolodzieski told reporters at a Tokyo hall.

"I am very proud of the accomplishments of our team," he said, adding that the company remains "on track" in its strategy to improve profitability, remodel stores, beef up its supply chain and other efforts.

While operating profitability was gradually improving, the bigger net loss was due to a one-time write-off for assets.

Japan, where consumers are notoriously finicky, has been a challenging market for many foreign retailers. Carrefour SA of France, the world's No. 2 retailer, abandoned the Japanese market last year after it failed to woo buyers.

During the first half, food sales were up 1.7 percent, apparel up 0.8 percent and general merchandise up 3.9 percent on a comparative store basis, he said.

Seiyu kept unchanged its full year forecast for a group net loss of 54.5 billion yen ($471 million) on 966 billion yen sales ($8.3 billion), but said it expects to swing into black ink next year.

Bentonville, Arkansas-based Wal-Mart Stores Inc., the world's biggest retailer, arrived in Japan in 2002 and increased its stake in Seiyu in December to 53 percent from 42 percent.

It has stuck with the Seiyu brand, familiar to Japanese, instead of using the Wal-Mart name.

Unlike its operations in South Korea and Germany, Wal-Mart has made significant investments in Japan, the world's second largest retail market, setting up a distribution facility, introducing its computerized systems, remodeling stores and opening large-scale supermarkets, which had been relatively rare here.

Wal-Mart runs more than 6,600 stores worldwide in 16 nations, including China and Mexico.

But the company announced in May it was selling its 16 stores in South Korea to that country's top discount chain Shinsegae Co. for 825 billion won ($882 million), pending approval by South Korean regulators. Wal-Mart Korea, established in 1998, had been losing money.

Two months later, Wal-Mart said it was ending its loss-generating business in Germany, selling its 85 stores there to rival Metro AG, ending a nearly decade-long effort to crack the market in Europe's biggest economy. Terms were not disclosed.

Kolodzieski said the move to ditch Germany and Korea would allow Wal-Mart to focus on markets with growth potential like Japan.

"There is no doubt in my mind Japan is a key market and a great growth opportunity," he said.

Seiyu is going in the right direction, such as opening 24-hour stores to draw shoppers who may have otherwise gone to convenience stores, but it needs to move quicker to achieve solid results, Kolodzieski said.

Once a total novelty in Japan, Wal-Mart-style gigantic stores are becoming gradually more accepted in this nation, long dominated by mom-and-pop stores. The problem for Wal-Mart is that Japanese retailers are starting to imitate Wal-Mart methods, setting up similar large stores.

Wal-Mart Stores, which posted its first quarterly profit decline in 10 years, has also been fighting some problems in the U.S., including soaring energy costs and public criticism that its pay and benefits are too low.

Seiyu shares, which doubled earlier this year but lost the gains in recent months, closed up 1.4 percent at 224 yen ($2.00) in Tokyo.

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Wal-Mart battles variety of woes

The Associated Press
August 22                           [back to top]   

BENTONVILLE, Ark. -- Wal-Mart Stores Inc. is fighting battles on multiple fronts after posting its first quarterly profit decline in 10 years, and analysts question whether the world's largest retailer can regain the feverish growth rates of its past.

Wal-Mart's woes include high energy prices, which hit its lower-income customer base and its own costs, setbacks in its international strategy, and public relations stumbles, such as last week's sudden resignation of civil-rights icon Andrew Young as its public ambassador.

Young quit as head of a pro-Wal-Mart advocacy group after he was quoted in the Los Angeles Sentinel newspaper as saying inner-city stores that overcharged black customers were run by "Jews, then it was Koreans and now it's Arabs." Wal-Mart, which has made repeated public commitments this year to diversity, said Young's comments did not reflect its views.

On the plus side, analysts say, Wal-Mart has ambitious programs to stock trendier products, remodel most of its more than 2,000 Supercenter stores and tighten its grip on the costs of inventory, labor and energy.

Combined with an ongoing public relations offensive to counter critics who claim its pay and benefits are skimpy, Wal-Mart is juggling a lot of balls at once, and analysts say the outcome is still up in the air.

"I think they're in so much transition right now that it's hard to measure whether or not they're making progress," said Patricia Edwards, portfolio manager and retail analyst at Wentworth, Hauser & Violich in Seattle. "It is a lot to handle."

George Whalin of Retail Management Consultants in San Marcos, Calif., said Wal-Mart has a track record of handling multiple tasks.

"When you get to be the biggest in the world, you fight battles on every front sometimes," he said.

Second-quarter results showed the first profit decline in a decade came at the cost of selling its loss-making business in Germany. It quit another loss producer, South Korea, in May, but still operates in 13 countries in Asia, Latin America and Britain and intends to keep expanding, especially in China.

But the quarter's sales and profit growth also slowed at Wal-Mart's U.S. stores, its biggest division, as high fuel prices kept customers away and drove up Wal-Mart's own costs for a fleet of 7,000 trucks.

Some analysts question whether Wal-Mart can regain growth rates that made it a darling of Wall Street in the 1990s.

Edwards said that with nearly 4,000 stores in the U.S., Wal-Mart can maintain past growth rates only by acquiring more companies overseas or "building a Wal-Mart on every other street corner in China."

Some analysts are more bullish. Sandra J. Skrovan, who heads a Wal-Mart research program at consultant Retail Forward Inc. in Columbus, Ohio, said Wal-Mart is well-positioned to weather the current gas crunch.

Its Supercenters, which combine a full grocery section with general merchandise, offer a one-stop shop where customers will continue to come in for food even if they postpone buying home electronics or clothes.

"The retailers that are positioned to provide value and convenience to consumers who are having to tighten their wallets and having to reduce the number of trips they make are really in a good position," she said.

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Wal-Mart cashiers want end to threats

By MARGARET CRONIN FISK
AND LAUREN COLEMAN-LOCHNER
BLOOMBERG NEWS
Tuesday, August 22, 2006                       [back to top]   

Cashiers at Wal-Mart Stores Inc., the world's largest retailer, asked a federal judge to order the company to stop threatening to fire Texas employees who join a lawsuit claiming unpaid wages.

Workers' lawyers sent out notices Aug. 4 to more than 100,000 current and former Wal-Mart and Sam's Club cashiers in Texas, inviting them to join the litigation. Wal-Mart managers asked employees to turn over the notices and sign statements that they never worked off the clock as the suit claims, according to court papers.

The cashiers asked U.S. District Judge Samuel Kent to order Wal-Mart to stop "improper communications" with workers. A hearing on the request is set for Wednesday.

Wal-Mart's conduct "borderlines on criminal witness intimidation," the cashiers said in an Aug. 15 request to Kent. It's illegal under the federal Fair Labor Standards Act "for Wal-Mart to threaten its current and former associates with adverse consequences for filing claims under this lawsuit," workers said in the suit.

The lawsuit is one of more than 70 filed against Wal-Mart in federal and state courts across the U.S. claiming the company failed to pay hourly wages for all time worked. California hourly employees won a $172 million verdict in December over unpaid meal breaks. The company faces similar trials in Philadelphia in September and Massachusetts in October.

Wal-Mart spokesman John Simley said the claims have "no merit and we plan to demonstrate that in court on Wednesday."

Wal-Mart's employees in Texas are vulnerable to threats, said attorney Russell Lloyd, who represents the cashiers.

"These people have a lot of power," he said of Wal-Mart. "In some places, Wal-Mart is the only job in town because they've run everyone else off."

The company may be legally responsible if store managers in Texas are attempting to intimidate workers, said Patricia Edwards of Seattle-based Wentworth, Hauser & Violich, which has $8 billion in assets, including Wal-Mart shares.

"It's bad if you've got store managers doing it," she said. "Store managers from Wal-Mart have better things to do than to thumb through legal filings."

The Wal-Mart workers were sent a packet including details about the lawsuit and an opt-in form, which they were told to sign and send in if they wanted to be included in the lawsuit.

About 1,500 cashiers have opted in so far, Lloyd said. The deadline for joining is Nov. 3.

Several employees called the attorneys after receiving the packets, saying they were afraid to participate in the lawsuit for fear that they would lose their jobs.

One former employee and one current cashier complained of intimidation, the workers said in the court filing.

These workers filed affidavits along with the request for a "temporary restraining order," barring the practice.

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Beyond Wal-Mart

The superstore has become a useful poster child for the problems of the modern American economy. But reforming it would only be a drop in the bucket.

By Robert Kuttner
08.21.06                      [back to top]   

Wal-Mart is usefully becoming the symbol of an America where tens of millions of hard-working families cannot make ends meet.

Its wages and health benefits are so dismal that in several states Wal-Mart displaces worker healthcare costs onto tax-supported Medicaid for the poor. Wal-Mart batters down wages not just in the United States, but in Third World countries, where it plays foreign suppliers against one another to demand the lowest possible wholesale price (and wage.

The New York Times reported recently that Democratic politicians from Senator Joseph Lieberman to his winning opponent in the Connecticut primary, Ned Lamont, are making Wal-Mart their nemesis. This focus is certainly helpful in spotlighting one mega-employer that is symbol and substance of an America where the middle-class dream is vanishing, but the problems go far beyond Wal-Mart.

The America of a generation ago had multiple institutions for enabling worker incomes to rise with their rising productivity. More industries were regulated. The federal minimum wage was equal to about half the average wage; today, it is below one - third. The federal government actually enforced workers' right to organize a union. Nearly half of U.S. workers were covered by decent, federally guaranteed pensions, instead of funny-money worker-savings plans. Wall Street was more tightly regulated, and corporate executives were not able to grab such an outlandish share of the total pie. Taxation was progressive, and ordinary workers paid much lower rates. We did not trade with countries that had something close to slave labor, like the Chinese factory system.

Since the mid-1970s, under three Republican presidents and too- often-feeble Democratic ones, this social compact was blown up. Since the early 1970s, real incomes for the top 1 percent have doubled, while earnings for most Americans have stagnated. Middle-class Americans have stayed even only thanks to a second wage-earner -- an average increase of more than 500 annual work hours per household. This is a disguised loss in living standards, cutting into leisure and parenting time, and incurring child-care and transportation costs.

Politicians may legislate special laws, requiring higher minimum wages for mega-stores (as Chicago has done) or requiring them to contribute to health coverage (as Maryland has attempted), but until our political system addresses the larger problems, even reforming Wal-Mart is a drop in the bucket.

The system is now essentially rigged so that workers' productivity can rise, but workers' incomes can't. A study prepared last month for Democrats on the House Financial Services Committee and released by Representative Barney Frank of Newton showed that since 2002 annual productivity growth has averaged more than 3 percent, while real wage increases have been under half of 1 percent. Corporate profits, meanwhile, have risen from 8.5 percent to 14.4 percent of national income.

Whenever wages show signs of rising with productivity, the Federal Reserve whacks them back down. It shows no such concern about corporate profits being excessive. Until this month, when the Federal Reserve announced a "pause" in rate hikes, our central bank had hiked interest rates 17 times since June 2004, citing fears of inflation, mainly in rising labor costs. But note the sleight of hand. If workers' wages are lagging well behind workers' increased productivity, then rising wages are not a source of inflation. The rising "total labor costs" include pensions and health insurance. Doesn't that benefit workers? In fact, the increase in recent employer contributions to pension plans is mainly to make up for the corporate looting of plans during the 1990s.

In the stock market euphoria of that decade, corporations used outlandish assumptions about future stock market returns to reduce annual contributions they were supposed to make to pension funds. The replenishing of fund shortfalls in recent years is not a source of true worker compensation -- and it can hardly be burdensome given the huge increase in net corporate profits.

The hike in employer health insurance costs, likewise, is not a true benefit for workers. It reflects a health system out of control, and excessive charges and profits by health maintenance organizations and drug companies. Actual health insurance benefits to workers are being cut back, and not just by Wal-Mart. Corporations generally are hiking the employee share of premiums, and plans are increasing deductibles and copayments.

I hope Wal-Mart does become a poster child for all that's out of whack with the U.S. economy. But we need to go after a great deal more than Wal-Mart if politicians are serious about restoring the dream of an America where people who work hard and play by the rules can aspire to be middle class.

Robert Kuttner is co-editor of The American Prospect. This column originally appeared in The Boston Globe.

© 2006 by The American Prospect, Inc.

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Democrats Criticize Wal-Mart Over Health Benefits, Wages At Rallies Nationwide

Nagourney/Barbaro,
New York Times
21 Aug 2006                               [back to top]   

A number of Democrats this week in Iowa and this month nationwide have criticized Wal-Mart Stores, the largest private employer in the U.S., "for what they say are substandard wages and health care benefits," the New York Times reports. According to the Times, the focus on Wal-Mart "is part of a broader strategy of addressing what Democrats say is general economic anxiety and a growing sense that economic gains of recent years have not benefited the middle class or the working poor," and their criticism of the company "dovetails with their emphasis in Washington on raising the minimum wage and doing more to make health insurance affordable." In recent weeks, Sens. Joe Biden (D-Del.), Evan Bayh (D-Ind.) and John Edwards (D-N.C.), New Mexico Gov. Bill Richardson (D) and other Democrats have appeared at rallies in opposition to Wal-Mart. In addition, Sen. Hillary Rodham Clinton (D-N.Y.), who previously served as a member of the Wal-Mart board, last year returned a $5,000 campaign contribution from the company to protest employee health benefits. Democrats have criticized Wal-Mart as a "potent symbol of corporate excess," the Times reports. Wal-Mart reported $11 billion in earnings last year, but fewer than half of employees in the U.S. receive health insurance through the company. However, Wal-Mart maintains that more than 150,000 U.S. residents who previously did not have health insurance currently receive coverage through the company. Mona Williams, a spokesperson for Wal-Mart, said of the criticism from Democrats, "There is far more evidence to show that this short-sighted political strategy will backfire than that it will actually work"

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Indian Food Trade Lures Reliance, Bars Wal-Mart

By Andy Mukherjee                            [back to top]   

Aug. 21 (Bloomberg) -- The demise of India's fragmented, wasteful and corruption-ridden agricultural market, and its replacement by a modern supply chain, may well be the most significant change in the Indian economy over the next decade.

Since the new arrangement will inevitably see local and multinational companies dealing with farmers directly in private markets, the change is also controversial.

``Without market regulation, agribusiness corporations will make profits selling costly seeds, buying cheap farm produce, and locking farmers in debt,'' says Indian environmentalist Vandana Shiva in New Delhi.

I would bet on exactly the opposite outcome: Farmers will earn higher profits, consumers will get food at cheaper prices, and the economy at large will gain from an increase in agricultural productivity, the biggest constraint on the purchasing power of three out of five Indians.

Needless to say, the companies that are currently at the forefront of building farm-to-store networks will probably make handsome returns. Investors should pay attention.

Indian agribusiness company ITC Ltd., which is almost one- third owned by British American Tobacco Plc, last month said it would spend $1 billion over the next seven to 10 years to link up one-sixth of rural India with its digital network.

The Internet-based system, called ``e-Choupal,'' already covers 3.5 million farmers and allows ITC to buy directly from them, bypassing the inefficient village marketplace.

Other companies, too, are realizing that investing in exclusive arrangements to obtain farm produce will pay in the long run. Reliance Industries Ltd., India's biggest non-state company, announced earlier this month that it has entered into an agreement with the government of the northern state of Punjab for setting up 50 of its ``rural business hubs.''

Reliance Retail

The petrochemicals company, controlled by billionaire Mukesh Ambani, plans to buy 900,000 tons of food grains and 200,000 tons of horticultural produce a year, apart from 700,000 liters of milk a day.

Reliance's motivation is plain to see. It is spending $5.4 billion to create a brand-new supermarket chain across the country. The first Reliance Retail store will open next month.

Owning the supply chain right down to the farmer will allow Reliance to establish a clear lead over international retailers such as Wal-Mart Stores Inc. and Carrefour SA, which are still awaiting government permission to set up shop in India.

The New Delhi-based Bharti Group, which runs India's biggest mobile-phone operator, has similar plans.

Bharti Chairman Sunil Mittal proposes to enter into contracts with farmers so that he has access to as much as 100,000 acres over the next five years for his foray into horticulture.

FieldFresh

In 2004, former investment banker Evelyn de Rothschild and his wife Lynn Forester teamed up with Mittal to set up FieldFresh Foods Pvt. The company, which aims to supply Indian fresh fruit and vegetables to Europe, Southeast Asia and the Middle East, is in talks with ``several global companies'' to set up a retail venture in India, Mittal said in March this year.

There are some 7,000 markets for agricultural produce in India. Although they collect 1 percent to 2 percent of the value of the crop as a fee, most of these markets don't even provide the most basic infrastructure, such as protection from rains.

After cursory visual inspection, buyers' agents bid for the crop, which is usually brought to the market by the farmer the previous night to beat long queues. Once the price is ascertained, the crop is put in bags -- the farmer pays for the packing -- and weighed manually. The agent pays only some of the money upfront and the grower has to come back for the rest.

Using Technology

There is immense scope to improve this inefficient, high- cost system. Technology has a big role to play.

In ITC's ``e-Choupal'' program, the Internet allows all farmers to access prevailing soybean prices in several nearby markets at a computer maintained by one of them -- a coordinator. The coordinator also quotes an indicative one-day price for the farmer's crop based on a sample. The farmer can then decide whether he wants to sell to ITC, in the open market, or wait.

Farmers, who distrust manual weighing in the open market, have more faith in the accuracy of ITC's electronic scale. Since the produce doesn't have to be packed in bags to be weighed, the spillage associated with it can also be avoided.

Even after reimbursing the transportation cost to the farmer, ITC saves 2.5 percent of what it would have paid to procure the crop in the open market. The farmer gains a similar amount, according to a University of Michigan case study.

An efficient supply chain can also have a salutary effect on agricultural productivity, which has been stagnant in India for the past several years, especially in wheat and rice.

A Model for Change

A template for transformation already exists. By building a network that connects more than 12 million farmers with consumers in 750 cities and towns, India's milk cooperatives have, over the past four decades, turned an importing nation into the world's biggest dairy producer.

Ultimately, the Indian government will have to reduce its controls on agricultural trade -- some 400 laws govern trading in commodities, according to research by economist Raghbendra Jha of the Australian National University in Canberra, Australia -- in order for a common, nationwide market to emerge.

Two years ago, the federal Indian government asked states to amend their laws to allow ITC-type private markets. Some states have already heeded the advice and relaxed their laws.

``This is a recipe for destroying local markets, and through market destruction, destroying local production,'' environmentalist Shiva writes on the ZNet Web site.

It's up to agribusiness to prove her wrong.

(Andy Mukherjee is a Bloomberg News columnist. The opinions expressed are his own.)

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Industry leader Whole Foods has a challenger in Wal-Mart

The Dallas Morning News
Sunday August/20/2006                  [back to top]   

PLANO -- Walter Robb studies weekly sales from every Whole Foods market nationwide, but he's been pulling Plano store numbers more often since an experimental Wal-Mart Supercenter opened two miles away. "I'm all over it, and so far I can tell you the impact is minimal," said Mr. Robb, co-president and chief operating officer at Austin-based Whole Foods Market Inc., the No. 1 U.S. organic grocer. "And, if you check the prices, we're competitive to Wal-Mart." The Plano Supercenter has one of Wal-Mart's biggest selections of organic foods and is where the world's largest retailer has been learning advanced organics since March. So far, the discount giant sells organics in 374 select stores nationwide Much attention has been focused in recent months on Wal-Mart's ambitious plans to bring organic food to the masses -- and that puts a new spotlight on Whole Foods. When Wal-Mart enters a category, it usually looks to capture about a 30 percent market share by both expanding the pie and taking share from others, said Sandra J. Skrovan, director of Retail Forward Inc.'s Wal-Mart program. "Wal-Mart is taking this seriously because mainstream grocery offers organics -- and we all know how well Whole Foods has been doing," Ms. Skrovan said. "It doesn't make sense for Wal-Mart to have it in all their stores, but Wal-Mart is indeed looking to broaden its customer base. They've done their homework and know which stores have shoppers who demand organics." Organics heavyweight Whole Foods' performance in recent years has led the grocery industry. The retailer has posted double-digit sales increases as it's added prepared foods and other products to its mix. Its new Austin flagship store even has an organic apparel department. With sales of $4.7 billion last year, Whole Foods is more than four times the size of the next-largest organic grocer, Colorado-based Wild Oats Markets. Lehman Brothers analyst Meredith Adler said she isn't worried for Whole Foods. The analyst wrote in a recent report that the organics leader has considerable expansion opportunity with its "large, perishables-oriented stores." And Wal-Mart will end up expanding the number of growers and processors, she said. Formidable newcomer Organics is a part of Wal-Mart's new corporate persona. The chain is promoting itself as environmentally friendly under a broad corporate sustainability program. It's testing ways to be energy efficient at another experimental store in McKinney. By some estimates, Wal-Mart is the largest seller of organic milk and has its own private-label organic soymilk. It already claims to be the largest buyer of organic cotton. The company bought out a large organic cotton producer in Turkey to make its private-label George Organic baby clothes, which arrived in stores earlier this summer. Some of that fiber went into an organic cotton yoga outfit for its Sam's Club chain, which sold out of 190,000 units in 10 weeks. Mr. Robb, the Whole Foods executive, acknowledged that Wal-Mart's entry proves organics is not a "fringe category or a fad" and it speaks to the niche's potential size. Still, he said, organics is just another product category for Wal-Mart. "For us, it's in our soul," Mr. Robb said. "The issue is: Who can do it better?"

©Copyright 2006 Copyright Financial Times Information 2006.

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Many challenges for Wal-Mart

By AP
August 20, 2006                          [back to top]   

BENTONVILLE, Arkansas -- Wal-Mart Stores Inc. (NYSE:WMT) is fighting battles on multiple fronts after posting its first quarterly profit decline in 10 years, and analysts question whether the world's largest retailer can regain the feverish growth rates of its past.

Wal-Mart's earnings per share rose more than 16% per year on average over the past 10 years and sales grew by annual rates between 12% and 20%. But all that has slowed, with earnings per share up about 11% last year and sales up just 9.5%.

Wal-Mart's woes range from high energy prices, which hit its lower-income customer base and its own costs, to setbacks in its international strategy, to public relations stumbles like this week's sudden resignation of civil rights icon Andrew Young as its public ambassador.

On the plus side, analysts say, Wal-Mart has ambitious programs to stock trendier products, remodel most of its more than 2,000 supercentre stores and tighten its grip on the costs of inventory, labour and energy.

Combined with an ongoing public relations offensive to counter critics who claim its pay and benefits are skimpy, Wal-Mart is juggling a lot of balls at once and analysts say the outcome is still up in the air.

"I think they're in so much transition right now that it's hard to measure whether or not they're making progress," said Patricia Edwards, portfolio manager and retail analyst at Wentworth, Hauser & Violich in Seattle, which manages $8.2 billion US in assets and holds 51,000 Wal-Mart shares. "It is a lot to handle."

George Whalen of Retail Management Consultants in San Marcos, California, said Wal-Mart has a track record of handling multiple tasks: "When you get to be the biggest in the world, you fight battles on every front sometimes."

Sandra Skrovan, who heads a Wal-Mart research program at consultant Retail Forward Inc. in Columbus, Ohio, said Wal-Mart is well-positioned to weather the current gas crunch, even if prices don't decline.

Its supercentres, which combine a full grocery section with general merchandise, offer a one-stop shop and customers will continue to come in for food even if they postpone buying home electronics or clothes.

"The retailers that are positioned to provide value and convenience to consumers who are having to tighten their wallets and having to reduce the number of trips they make are really in a good position," Skrovan said.

 [back to top] 

19 trade unions set up in China's Wal-Mart outlets

ChinaEconomic.net
August 19                                  [back to top] 

The world's retail giant Wal-Mart has established 19 trade unions in its Chinese outlets since late July, disclosed an official of the All-China Federation of Trade Unions (ACFTU) on Friday. "The negotiations between Wal-Mart and ACFTU have proved fruitful. The two sides have agreed to set up trade unions in Wal-Mart Chinese outlets on a cooperative and harmonious basis and in line with Chinese laws, " an ACFTU official said on Friday in a Xinhua interview.

The two sides agreed that the candidates for trade union posts in a Wal-Mart Chinese outlet should be approved by a higher-level trade union after work staff's nomination.

Then, the work staff will elect, by secret ballot, a chairman, vice chairpersons and posts in the trade union committee. The election outcome should be reported to the higher level trade union for approval, said the official.

The outlet's manager, vice managers, human resources managers and their family relatives are not entitled to be trade union chairpersons, vice chairpersons or trade union committee members, said the official.

Wal-Mart has made commitments to help China's union authority establish branches in all its stores in China and strictly perform the duties written in China's Law on Trade Unions.

Wal-Mart opened its first outlet in China in 1996. Until July 29 this year, no Wal-Mart Chinese outlets had set up trade unions.

On July 29, its outlet in Jinjiang City, east China's Fujian Province, set up a trade union. In the following 20 days, another 18 trade unions were established in Wal-Mart's outlets in the cities of Shenzhen, Nanjing, Fuzhou, Jinan, Shenyang, Dalian, Nanchang, Qingdao, Wuhan and Taiyuan.

@ China Economic Net All rights reserved

Running against Wal-Mart

Does the big-box retailer deserve to be a political target?

By Jeff Greenfield
CNN Senior Analyst             [back to top] 

NEW YORK (CNN) -- It may not be the most noble of notions, but one of the most useful assets for a politician is the right adversary: illegal immigrants, corporate polluters, street criminals, lazy bureaucrats, welfare cheats, rich tax cheats.

But what about a store?

Democrats seem to think one store in particular will make a fine political target. That's what Sen. Joe Biden was doing when he attended an anti-Wal-Mart rally in Des Moines, Iowa -- site of the first presidential caucuses, not so incidentally.

Biden declared: "Wal-Mart's formula is how they can survive a race to the bottom," as he decried their low wages and the size and nature of their health benefits.

The day before, Sen. Evan Bayh, another likely presidential candidate, denounced Wal-Mart's wage and benefit structure as "emblematic" of the middle-class squeeze.

Sens. John Kerry and John Edwards have also been critical, and Sen. Hillary Clinton, who was on the board of Wal-Mart back in her former Arkansas home, returned a $5,000 Wal-Mart campaign contribution.

The targeting of the nation's largest employer has gone beyond political sound bites.

State and local governments -- New York City; Maryland; Chicago, Illinois, among others -- have passed so-called "Big Box" laws requiring huge stores -- often affecting Wal-Mart and one or two others stores like Wal Mar t-- to provide higher wages and health benefits to their workers. A judge has struck down Maryland's law; Mayor Richard Daley has hinted he may veto Chicago's City Council bill.

Wal-Mart calls these efforts "a shortsighted political strategy that will backfire," and pointedly notes that "it is our responsibility to let [our employees] know when a politician speaks out for or against our company." The company argues its practices save shoppers an average $2,300 a year, and claim a high level of employee satisfaction.

So what's going on here? On the one hand, lower-income shoppers benefit from Wal-Mart's low prices. On the Friday after Thanksgiving last year, 10 million Americans shopped at Wal-Mart in just six hours.

On the other hand, Wal-Mart's wage and benefit structure, its troubles over hiring illegal immigrants, and charges some workers have been forced to work off the clock have made it and its 1.3 million workers Target Number One for organized labor. Unions have seen a sharp decline in their rolls, especially among private sector workers. And organized labor, in return, remains one of the key elements of the Democratic Party's financial and voter turnout base.

As for the Democrats, they've seen a steady erosion in their blue-collar, working-class support. Once upon a time, Democratic icons trumpeted their opposition to wealthy interests. Franklin Roosevelt proclaimed at his 1933 Inaugural "the money changers have fled from their high seats in the temple of our civilization..."

And after President Kennedy battled US Steel over price hikes in 1962, he was asked at a press conference if he was worried that big business "had him where they wanted."

With a huge grin, he replied: "I can't believe I'm where big business wants me."

But in recent years, national security and traditional values issues have changed voter patterns. In 2004, Bush beat Kerry among blue-collar low- and middle-income whites 54 percent to 46 percent.

This year, Democrats seem to believe that they can win back many of these voters by hitting basic bread-and-butter issues like low wages and health care.

And they appear to believe they can turn a symbol of low prices into a symbol of economic injustice.

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Wal-Mart Battling to Revive Growth

By MARCUS KABEL
Associated Press 
Aug 18                               [back to top] 

BENTONVILLE, Ark. (AP) -- Wal-Mart Stores Inc. is fighting battles on multiple fronts after posting its first quarterly profit decline in 10 years, and analysts question whether the world's largest retailer can regain the feverish growth rates of its past.

Wal-Mart's woes range from high energy prices, which hit its lower-income customer base and its own costs, to setbacks in its international strategy, to public relations stumbles like this week's sudden resignation of civil rights icon Andrew Young as its public ambassador.

Young quit as head of a pro-Wal-Mart advocacy group after he was quoted in the Los Angeles Sentinel newspaper as saying inner-city stores that overcharged black customers were run by "Jews, then it was Koreans and now it's Arabs." Wal-Mart, which has made repeated public commitments this year to diversity, said Young's comments did not reflect its views.

On the plus side, analysts say, Wal-Mart has ambitious programs to stock trendier products, remodel most of its more than 2,000 Supercenter stores and tighten its grip on the costs of inventory, labor and energy.

Combined with an ongoing public relations offensive to counter critics who claim its pay and benefits are skimpy, Wal-Mart is juggling a lot of balls at once and analysts say the outcome is still up in the air.

"I think they're in so much transition right now that it's hard to measure whether or not they're making progress," said Patricia Edwards, portfolio manager and retail analyst at Wentworth, Hauser & Violich in Seattle, which manages $8.2 billion in assets and holds 51,000 Wal-Mart shares. "It is a lot to handle."

George Whalen of Retail Management Consultants in San Marcos, Calif., said Wal-Mart has a track record of handling multiple tasks: "When you get to be the biggest in the world, you fight battles on every front sometimes."

Second-quarter results showed the first profit decline in a decade on the cost of selling its loss-making business in Germany. It quit another loss-maker, South Korea, in May but still operates in 13 countries in Asia, Latin America and Britain and intends to keep expanding, especially in China.

But the quarter's sales and profit growth also slowed at Wal-Mart's U.S. stores, its biggest division, as high fuel prices kept customers away, cut their spending power and drove up Wal-Mart's own costs for a fleet of 7,000 trucks.

Some analysts question whether Wal-Mart can regain growth rates that made it a darling of Wall Street in the 1990s.

After precipitous gains in the 1980s and 1990s, the stock peaked at around $70 in January 2000 before losing steam to linger mainly in the $50-$60 range. It has lost another 3 percent this year to current levels around $45.

Wal-Mart's earnings per share rose more than 16 percent per year on average over the past 10 years and sales grew by annual rates between 12 percent and 20 percent. But all that has slowed, with earnings per share up about 11 percent last year and sales up just 9.5 percent.

Robert Buchanan, head of retail analysis at A.G. Edwards & Sons, said a target of 10 percent growth in annual earnings per share is more realistic from now on, considering Wal-Mart's size. In a research note, he wrote that "the 'law of large numbers' has set in with regard to go-forward percentage growth in sales and EPS."

Edwards said that with nearly 4,000 stores in the U.S., Wal-Mart can only maintain past growth rates by acquiring more companies overseas or "building a Wal-Mart on every other street corner in China."

"They are the 900-pound gorilla. The 900-pound gorilla cannot grow as fast as the little company from the Ozarks," Edwards said.

Some analysts are more bullish, and Wal-Mart has said it plans to open more than 1,500 stores in the United States in the coming years. It is opening more than 300 this year alone.

Sandra J. Skrovan, who heads a Wal-Mart research program at consultant Retail Forward Inc. in Columbus, Ohio, said Wal-Mart is well-positioned to weather the current gas crunch, even if prices don't decline. Its Supercenters, which combine a full grocery section with general merchandise, offer a one-stop shop and customers will continue to come in for food even if they postpone buying home electronics or clothes.

"The retailers that are positioned to provide value and convenience to consumers who are having to tighten their wallets and having to reduce the number of trips they make are really in a good position," Skrovan said.

But Skrovan agreed it was too early to say when Wal-Mart will see an increase in sales from its new initiatives, which include more organic foods, trendier clothes for women including a new segment of its George line from designer Mark Eisen, and flashier home electronics in a remodeled display. Those changes are meant to compete with rivals like Target Corp. and Best Buy.

"I think it's going to take a while before we really start to see that bump up," Skrovan said.

©2006 The Associated Press. All rights reserved.

[back to top] 

Andrew Young Resigns From Wal-Mart Post

By BERNARD McGHEE,
Associated Press
08.18.2006                                      [back to top] 

Civil rights leader Andrew Young, who was hired to help Wal-Mart Stores Inc. improve its public image, said early Friday he was resigning from his position as head of an outside support group amid criticism for remarks seen as racially offensive.

Young, a former Atlanta mayor and U.N. ambassador, was hired by Working Families for Wal-Mart in February.

"I think I was on the verge of becoming part of the controversy and I didn't want to become a distraction from the main issues, so I thought I ought to step down," he told The Associated Press.

Young, once a close associate of the Rev. Martin Luther King Jr., said his decision followed a report in the Los Angeles Sentinel, which he said was misread and misinterpreted.

In an interview with the weekly newspaper, Young was asked whether he was concerned that Wal-Mart causes smaller, mom-and-pop stores to close.

"Well, I think they should; they ran the 'mom and pop' stores out of my neighborhood," the paper quoted Young as saying. "But you see, those are the people who have been overcharging us, selling us stale bread and bad meat and wilted vegetables. And they sold out and moved to Florida. I think they've ripped off our communities enough. First it was Jews, then it was Koreans and now it's Arabs; very few black people own these stores."

Young, who has since apologized for the remarks, said he decided to end his involvement with Working Families for Wal-Mart after he started getting calls about the story.

"Things that are matter-of-fact in Atlanta, in the New York and Los Angeles environment, tend to be a lot more volatile," he said.

He said working with the group also was "taking more of my time than I thought."

An after-hours call to Wal-Mart was not immediately returned. Company spokeswoman Mona Williams told The New York Times for Thursday's editions that Young's comments did not reflect Wal-Mart's views.

"Needless to say, we were appalled when the comments came to our attention," Williams said. "We were also dismayed that they would come from someone who has worked so hard for so many years for equal rights in this country."

The remarks also surprised Rabbi Marvin Hier, dean and founder of the Simon Wiesenthal Center in Los Angeles, who pointed to Young's reputation of civil rights work.

"If anyone should know that these are the words of bigotry, anti-Semitism and prejudice, it's him," Hier said. "I know he apologized, but I would say this ... during his years as a leader of the national civil rights movement, if anyone would utter remarks like this about African-Americans his voice would be the first to rise in indignation."

Young came under fire from the civil rights community after his company, GoodWorks International, was hired by the advocacy group to promote the world's largest retailer. Young's company, which he has headed since 1997, works with corporations and governments to foster economic development in Africa and the Caribbean.

In an April letter to the General Synod of the United Church of Christ, Young said it was wrong for the church and others to blame Wal-Mart for world ills.

"I think we may have erred in not paying enough attention to the potentially positive role of business and the corporate multinational community in seeking solutions to the problems of the poor," Young wrote at the time.

Associated Press Writer Jeremiah Marquez in Los Angeles contributed to this report.

Copyright 2006 Associated Press. All rights reserved.

 [back to top] 

China's president encouraged Wal-Mart union

Report: Hu Jintao wants more foreign-company workers to organize

The Associated Press
Aug 18, 2006                            [back to top] 

BEIJING - An order by President Hu Jintao prompted China's state-sanctioned labor group to launch a campaign that led to the creation of Wal-Mart's first Chinese union, according to a newspaper report.

Such personal involvement by Hu in dealing with foreign companies is rare, and could help to explain the All-China Federation of Trade Unions' surprise success in forming a Wal-Mart union in July after the American retailer resisted organizing efforts for two years.

In a written order to the ACFTU in March, Hu said, "Do a better job of building (Communist) Party organizations and trade unions in foreign-invested enterprises," the Beijing News reported, citing the group's records.

The ACFTU responded by setting up an office targeting a Wal-Mart in the southeastern city of Quanzhou, where employees voted July 29 to form the company's first Chinese union, according to the newspaper's report Tuesday.

Since then, employees at 16 other Wal-Marts in China also have formed unions, according to the ACFTU, the umbrella group for unions permitted by the communist government.

If accurate, the report could presage sharply increased efforts to organize unions at foreign companies. The ACFTU says only 26 percent of China's 150,000 foreign companies have unions.

An ACFTU spokesman, Li Jianhua, would not say Wednesday whether an order by Hu led to a special effort targeting Wal-Mart Stores Inc., which employs 30,000 people at its 60 stores in China.

"In recent years, the ACFTU has consistently put a large share of workers in trade union organizations. This is important work. The time has come to achieve Wal-Mart unions," Li said.

Unions in China usually represent the workforce of a single company or outlet, rather than a whole industry.

The ACFTU has described the creation of the Wal-Mart unions as a boost to its campaign to reach a target of unionizing employees at 60 percent of China's foreign companies this year.

Wal-Mart, based in Bentonville, Arkansas, has resisted efforts to form unions elsewhere in its worldwide operations. But it said this month it would cooperate with the ACFTU to organize its Chinese employees.

Copyright 2006 The Associated Press. All rights reserved.

© 2006 MSNBC.com

[back to top] 

Reliance announces start of India's answer to Wal-Mart

TurkishPress.com
08-18-2006                             [back to top] 

India's biggest private company Reliance Industries has said it aims to launch its first store next month as part of a plan to build an Indian version of Wal-Mart, the world's largest retail chain.

Reliance, whose main business is oil and petrochemicals, has said it plans to invest nearly six billion dollars in setting up the store subsidiary covering nearly 1,500 cities and towns in India.

"We will be opening our first store in Hyderabad in September and this will be a very large store with food, vegetables and staples," Reliance Retail president Raghu Pillai told reporters in the Indian capital Friday, according to the Press Trust of India.

The retail firm plans to sell a host of products from food and clothes to consumer durables and will roll out its business using a mix of neighbourhood convenience stores, supermarkets, specialty stores and hypermarkets.

Pillai said the company "plans to be across the country ... as soon as we can" and would quickly reach 100 stores but gave no specific timeframe.

He said Reliance Retail would offer competitive prices by removing "extra costs from the supply chain."

As part of its drive to cut costs, it is considering partnering consumer durable companies to procure goods directly and sourcing items from low-cost manufacturers such as China.

The company has been busy seeking to set up deals with state governments to establish rural hubs to buy fruits, vegetables, pulses and dairy goods from farmers.

Pillai also said Reliance was talking to different international brands to bring them into India but did not name them.

India has allowed 51 percent foreign direct investment in retailing by companies which sell only a single brand like Reebok and Nokia. Global retail chains which offer many brands such as Wal-Mart are still banned from making direct investments but can strike franchise deals.

Reliance is a corporate behemoth that has straddled India's economy for decades with activities in petrochemicals, oil and gas, refining, power, insurance and telecommunications.

Mukesh Ambani, chairman of Reliance Industries, has said he wants to make the retail chain "a Wal-Mart in India" and has set an annual sales target of 25 billion dollars by 2011.

US retailer Wal-Mart is the largest retailer in the world, having revolutionised the business through a super efficient management system overseeing thousands of suppliers.

Ambani says he expects the venture to create up to one million jobs.

Reliance is seeking to gain critical mass in the sector before an expected easing of a ban on the entry of foreign retailers, analysts say. Wal-Mart, France's Carrefour group and Britain's Tesco Plc. are among the retail giants which have expressed interest in coming to India.

The Congress government favours foreign direct investment in the sector and is seeking to develop a political consensus on the issue in the face of opposition from leftists who fear global chains would destroy local players.

India's retail market is still dominated by small mom-and-pop street corner stores but is in a process of transformation with traditional markets making way for department stores, hypermarkets and malls.

Organised retail or sales from chain stores still make up just two percent of the sector reckoned by analysts to be worth 200 billion dollars a year.

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Non-compliance of Bangladesh RMG: ILRF sues Wal-Mart

News_Monitor 
Thursday, August 17, 2006                  [back to top] 

The International Labour Rights Funds (ILRF) has filed a lawsuit in the US District Court of Central California against Wal-Mart Corporation, a major importer of Bangladeshi readymade garment, over non-compliance issue centring the garment factories of the country....

Non-compliance of Bangladesh RMG: ILRF sues Wal-Mart Syful Islam

The International Labour Rights Funds (ILRF) has filed a lawsuit in the US District Court of Central California against Wal-Mart Corporation, a major importer of Bangladeshi readymade garment, over non-compliance issue centring the garment factories of the country.

The global trade union working for the establishment of human rights filed the case on grounds of violation of labour rights and deprivation of workers from due benefits in the Wall-Mart sourcing factories in Bangladesh.

The plaintiff filed the case in California district court and stated that the judiciary system of Bangladesh was not trustworthy. They believe that the general workforces cannot get proper judgement under the Bangladesh’s legal system.

The ILRF referred the recent labour unrest in and outsides of the export processing zones during filing the lawsuit in June. According to the organisation Bangladesh’s RMG factories are non compliant and the working conditions there was very bad. It mentioned about the workplace environment, low wages, long over due of payments and deprivation from other benefits.

The month long biggest ever labour unrest in Bangladesh, the May tragedy, claimed lives of several workers and damaged a large number of factories which amounted to more than Tk 100 crore in damages.

In the lawsuit the organisation mentioned, “The supply contracts require that the foreign suppliers producing goods for Wal-Mart adhere to Wal-Mart’s Standards for Suppliers Agreement as a direct condition for supplying merchandise to Wal-Mart. In exchange, Wal-Mart was obligated to ensure supplier compliance with their Code of Conduct, and adequately monitor working conditions in the supplier factories.”

Indeed, Wal-Mart represents to the public at large that it is committed to and, in fact does, strictly undertake such obligations given the well-documented evidence by public reports and its own monitoring audits that serious worker rights violations were notoriously routine in Bangladesh.

However, the Ambassador of Bangladesh in Washington Shamsher M Chowdhury strongly protested filing of the case in the US court and some derogatory remarks against Bangladesh’s judiciary system in a recent letter to the US Assistant Secretary Richard Boucher.

“The US courts are not the appropriate forum for negotiating better workplace conditions in foreign countries,” he said adding, “As a sovereign country we do not feel it appropriate for a US court to pass a judgement based on one sided and exaggerated compliant.”

Country's ready-made garment owners, despite the major labour unrest and the tripartite agreement, still refuse to accept more than Tk 1,230 as minimum salary for their workers.

On the other hand the trade union leaders are demanding Tk 3,000 as minimum wages for the workers to cope with the rising living expenses.

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High Springs meets with water district to discuss Wal-Mart site issues

By Christa Jenkins-Desrets
High Springs Herald                               [back to top] 

HIGH SPRINGS – In their fight to protect the aquifer from possible contamination by a proposed Alachua Wal-Mart, High Springs officials must first learn more about the site before continuing with discussions, City Manager Jim Drumm said after a Tuesday meeting.

Drumm attended the first of many possible meetings about the Wal-Mart site with two officials from the Suwannee River Water Management District, the agency that approved Wal-Mart’s water permit.

Drumm spoke with Jon Dinges, director of recourse management with the water district and Steve Minnis, senior resource development coordinator, about the city’s concerns regarding the site, which some believe could potentially be harmful to the water supply.

“It was a very good discussion,” Drumm said. “There was a lot of information passed back and forth.”

Dinges also said he felt the discussions went well.

“It was an excellent meeting,” he said.

The city’s next step, Drumm said, is working with environmental experts to determine exactly what hazards the site and other development in the area may pose.

That study would also need to detail what sort of concessions Wal-Mart would need to make to alleviate concerns about these dangers, Drumm said.

“We’re looking to take it to a detailed, more technical level to see what the potential dangers are,” Drumm said. “We want to dig deeper into the data…On some of these issues there are different claims.”

No specific decisions were made, Drumm said, but once the dangers have been determined, the city will be able to make a better decision on how to handle the issue.

“We’re still hoping that perhaps we’ll get to the point that after we have some more information then we can eventually talk to Wal-Mart officials,” he said. “That’s the best thing to do – to sit down and talk about these issues with the parties at hand.”

In the meantime, Dinges said, the Wal-Mart permit remains in effect.

“The only thing that would affect the status of the permit would be if the Suwannee River Water Management District found new information that showed that something submitted by the applicant was incorrect or omitted,” Dinges said. “That’s true of any permit.”

In such a case, he said, the permit could be modified based on the new information but Wal-Mart or other affected parties would then have the option to challenge those modifications.

A date has not yet been set for the city’s next meeting with water district officials but could come within the next couple of weeks, Drumm said.

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Adam Werbach: Eco-Traitor or Wal-Mart Warrior?

by Kiera Butler
August 17, 2006                       [back to top] 

Back in July, it seemed as if Adam Werbach, former Sierra Club president and current Wal-Mart sustainability honcho, was the eco turncoat of the hour. John Sellers and Barbara Dudley denounced former Werbach’s move in Grist’s “Soapbox” section, accusing him of “abandoning his principles.”

But this week, in a sprawling piece called “An Unbelievable Truth,” Amanda Witherell of the San Francisco Bay Guardian casts Werbach’s move in a much warmer light. The piece has its problems, not least of which is a tone that sometimes veers toward the obnoxious:

“Wal-Mart CEO H. Lee Scott these days sounds like he just got smacked in the face with a copy of 50 Simple Things You Can Do to Save the Earth. His awe over some really tired statistics is almost endearing. Last November, in a speech broadcast to all Wal-Mart facilities he said, ‘Did you know that a large percent of the 5 billion pounds of pesticides used every year are used on cotton? Those toxins don't stop at the field but can leach into the waterways and may eventually find their way into animals, food, and children.’

Uh, yeah, ever heard of Silent Spring? Environmentalists have long decried the insidious nature of toxic chemicals.”

Well, actually, uh, no. Some people haven’t heard of Silent Spring. And we’re willing to bet that not everyone in all the Wal-Mart facilities where Scott broadcast his speech was familiar with that “really tired” cotton statistic. Uh, yeah, SFBG, ever heard of populism? (see, we can be obnoxious, too!)

The bright side of the piece is a paragraph in the middle devoted to Werbach’s strategy for working at the big box:

“Werbach's been tasked with changing the way Americans think. ‘How do you make sustainability something people in America want and care about?’ he said — that's the basic question Wal-Mart is asking. The test pool the company has given him is a field of associates at eight stores, because the people who work there are a lot like the 92 percent of Americans (according to company calculations) who walk through the front doors steering shopping carts. Through workshops and retreats, Werbach is sitting down with associates and asking them what their goals are. Losing weight? Quitting smoking? Spending more time with their families? Those are real-world challenges that Werbach helps them see in a broader context and tackle with a tool set that considers the basic tenets of sustainability. One associate he's worked with decided to quit eating fast food. That's great for the arteries, but the action also made him realize he was eating less frozen food, which meant less resources spent for processing, packaging, shipping, and refrigeration. He also spent less time idling in the drive-thru lane, which meant less fuel burned, which saved him money. That's more sophisticated thinking than even that of the average Trader Joe's shopper with Amy's Organic heat-and-serve enchiladas in the cart. ‘They're showing me things. I'm not trying to convince them of something,’ Werbach said of the associates who wield the tools he gives them in creative ways. He cites the problem of smoking. Yes, it's a health issue, but associates are telling him it's an environmental issue too. That's not something you hear from the typical save-the-trees organization. Smoking is not their problem; saving the redwoods is their problem.”

If Werbach is to be believed, it would seem that he’s listening to what people tell him. This is good. Let’s hope Wal-Mart, in turn, listens to him.

[back to top] 

Top Democrats line up to take aim at Wal-Mart

By Adam Nagourney
and Michael Barbaro
The New York Times
August 17, 2006                               [back to top] 

DES MOINES, Iowa Senator Joseph Biden Jr. of Delaware, a likely Democratic presidential candidate in 2008, delivered a 15-minute, blistering attack to warm applause from Democrats and union organizers here Wednesday.

But Biden's main target was not Republicans in Washington, or even his prospective presidential rivals.

It was Wal-Mart, the largest private employer in the United States.

Among Democrats, Biden is not alone. Across Iowa this week and across much of the country this month, Democratic leaders have found a new rallying cry that many of them say could prove powerful in the midterm elections and into 2008: denouncing Wal-Mart for what they say are substandard wages and health care benefits.

Six Democratic presidential contenders have appeared at rallies like the one Biden headlined, along with some Democratic candidates for Congress in some of the toughest-fought races in the country, including in Ohio.

"My problem with Wal-Mart is that I don't see any indication that they care about the fate of middle-class people," Biden said, standing on the sweltering rooftop of the State Historical Society Building here.

"They talk about paying them $10 an hour. That's true. How can you live a middle-class life on that?"

The focus on Wal-Mart is part of a broader strategy of addressing what Democrats say is economic anxiety and a growing sense that economic gains of recent years have not benefited the middle class or the working poor.

Their alliance with the anti-Wal- Mart campaign dovetails with their emphasis in Washington on raising the minimum wage and doing more to make health insurance affordable. It also suggests they will go into the midterm congressional elections in the fall and the 2008 presidential race striking a populist tone.

What has been striking about this campaign is the ideological breadth of the Democrats who have joined in, including moderates who in the past have warned the party against appearing hostile to business interests.

Senator Hillary Clinton of New York, who served on the Wal-Mart board when she lived in Arkansas, the corporation's home state, returned a $5,000 campaign contribution from the company at the end of last year in protest against its health care benefits.

"It's not anti-business," said Senator Evan Bayh of Indiana, a former head of the moderate Democratic Leadership Council, who appeared at a Wal-Mart rally Tuesday. "Wal-Mart has become emblematic of the anxiety around the country, and the middle-class squeeze."

Yet there are clear risks for Democrats, not least in alienating Wal-Mart employees and customers.

Wal-Mart itself is beginning a strong counterattack. In interviews Wednesday, company executives warned that they would alert their 1.3 million U.S. employees to the anti-Wal-Mart campaign.

"There is far more evidence to show that this shortsighted political strategy will backfire than that it will actually work," said Mona Williams, a company spokeswoman.

Democrats say the giant retailer has become a symbol of corporate excess: Wal-Mart earned $11 billion in profit last year; fewer than half of its 1.3 million U.S. employees are covered by the company's health care plan, and the average worker earns less than $20,000 a year.

Wal-Mart has been the target of political attacks before, but the ongoing cross-country bus tour organized by Wake Up Wal-Mart, which includes news conferences with elected leaders in 19 states, may be the most ambitious tactic to date.

Democratic candidates joining the group's rallies include candidates in Senate races in Ohio and Maryland, and the governor's race in Maryland, where Wal-Mart's employment practices have been the subject of a legislative battle.

Still, so far, the events have attracted the most interest from prospective presidential candidates.

Williams of Wal-Mart said the rallies were unlikely to resonate with voters. "There is not a swing vote in sight," she said. Democrats "are preaching to the choir."

DES MOINES, Iowa Senator Joseph Biden Jr. of Delaware, a likely Democratic presidential candidate in 2008, delivered a 15-minute, blistering attack to warm applause from Democrats and union organizers here Wednesday.

But Biden's main target was not Republicans in Washington, or even his prospective presidential rivals.

It was Wal-Mart, the largest private employer in the United States.

Among Democrats, Biden is not alone. Across Iowa this week and across much of the country this month, Democratic leaders have found a new rallying cry that many of them say could prove powerful in the midterm elections and into 2008: denouncing Wal-Mart for what they say are substandard wages and health care benefits.

Six Democratic presidential contenders have appeared at rallies like the one Biden headlined, along with some Democratic candidates for Congress in some of the toughest-fought races in the country, including in Ohio.

"My problem with Wal-Mart is that I don't see any indication that they care about the fate of middle-class people," Biden said, standing on the sweltering rooftop of the State Historical Society Building here.

"They talk about paying them $10 an hour. That's true. How can you live a middle-class life on that?"

The focus on Wal-Mart is part of a broader strategy of addressing what Democrats say is economic anxiety and a growing sense that economic gains of recent years have not benefited the middle class or the working poor.

Their alliance with the anti-Wal- Mart campaign dovetails with their emphasis in Washington on raising the minimum wage and doing more to make health insurance affordable. It also suggests they will go into the midterm congressional elections in the fall and the 2008 presidential race striking a populist tone.

What has been striking about this campaign is the ideological breadth of the Democrats who have joined in, including moderates who in the past have warned the party against appearing hostile to business interests.

Senator Hillary Clinton of New York, who served on the Wal-Mart board when she lived in Arkansas, the corporation's home state, returned a $5,000 campaign contribution from the company at the end of last year in protest against its health care benefits.

"It's not anti-business," said Senator Evan Bayh of Indiana, a former head of the moderate Democratic Leadership Council, who appeared at a Wal-Mart rally Tuesday. "Wal-Mart has become emblematic of the anxiety around the country, and the middle-class squeeze."

Yet there are clear risks for Democrats, not least in alienating Wal-Mart employees and customers.

Wal-Mart itself is beginning a strong counterattack. In interviews Wednesday, company executives warned that they would alert their 1.3 million U.S. employees to the anti-Wal-Mart campaign.

"There is far more evidence to show that this shortsighted political strategy will backfire than that it will actually work," said Mona Williams, a company spokeswoman.

Democrats say the giant retailer has become a symbol of corporate excess: Wal-Mart earned $11 billion in profit last year; fewer than half of its 1.3 million U.S. employees are covered by the company's health care plan, and the average worker earns less than $20,000 a year.

Wal-Mart has been the target of political attacks before, but the ongoing cross-country bus tour organized by Wake Up Wal-Mart, which includes news conferences with elected leaders in 19 states, may be the most ambitious tactic to date.

Democratic candidates joining the group's rallies include candidates in Senate races in Ohio and Maryland, and the governor's race in Maryland, where Wal-Mart's employment practices have been the subject of a legislative battle.

Still, so far, the events have attracted the most interest from prospective presidential candidates.

Williams of Wal-Mart said the rallies were unlikely to resonate with voters. "There is not a swing vote in sight," she said. Democrats "are preaching to the choir."

[back to top] 

Wal-Mart Begins Voter Education Program to Its 18,000 Iowa Associates

iowapolitics.com
8/16/2006                             [back to top] 

BENTONVILLE, Ark., Aug. 15 /PRNewswire-FirstCall/ -- Wal-Mart Stores, Inc. (NYSE: WMT) today released the attached letter to its roughly 18,000 Iowa associates regarding the decision of a few elected leaders and candidates for office to attack the company at union-funded publicity events this month in Iowa. This is the first step in an ongoing effort to educate the company's associates about candidates' remarks and the factual errors they may make in talking about Wal-Mart. In another attached letter, the company also invites candidates to tour stores and meet associates to learn the truth about Wal-Mart.

"The paid critics and the politicians who join them at these publicity stops are attacking the wrong company and should stop telling working families where to shop and work," said Wal-Mart vice president of corporate communications, Bob McAdam. "We're disappointed that these politicians are speaking out without paying attention to the facts and will be sure to inform our associates across Iowa and in other key states that these candidates are not telling the truth about Wal-Mart. We certainly hope these political leaders will accept our invitation to tour our stores, to talk with our associates, and to learn first-hand the truth about our company."

Wal-Mart creates tens of thousands of jobs every year, many in neighborhoods that desperately need jobs. In the last three years alone, Wal-Mart has created 240,000 jobs nationwide, with an average full-time, hourly wage of $10.11 -- and it's even higher in urban areas. Wal-Mart offers health coverage to both full and part-time associates, something uncommon among many retail employers. Wal-Mart's health plans start at just $11 per month in some areas and just 30 cents more per day for children. Today, more than 1 million people are covered under Wal-Mart plans.

"We plan to make all of our roughly 18,000 associates in Iowa aware of the misguided attacks aimed at scoring special-interest political points by playing politics with our company," McAdam continued. "We think elected officials should spend their time on real solutions to real challenges. That's why we hope they are open to learning the facts about our company and what we are doing to make the lives of working families even better."

More than 127 million customers visit Wal-Mart stores across America every week, more than the total number of votes cast in the 2004 presidential election. As a result of findings from a recent survey for Working Families for Wal-Mart, Democratic pollster Thomas Riehle explained how "Democrats Make Wal-Mart an Issue at Their Peril." According to Riehle's omnibus poll taken for the respected Cook Political Report, 62% of respondents disapproved, and only 21% approved of "Democratic candidates making Wal-Mart an issue in November's elections." Even a majority of union households opposed this strategy. Overall, 40% of registered voters would vote against an anti- Wal-Mart Democratic candidate, while just 18% would vote for such a candidate.

"It's surprising to see candidates take part in attacks that are rejected even by the base voters they need to win," McAdam said. "We believe that playing to a small, increasingly special-interest audience at the expense of working families will prove to be a failed strategy."

Wal-Mart said it will soon begin sending "fact check" letters to its associates in other key states, including more than 8,000 associates in New Hampshire, nearly 27,000 in South Carolina, and more than 12,000 associates in Nevada.

Wal-Mart also made the following materials available to the candidates: Fact Sheets on the company's economic benefits, sustainability efforts, health care benefits, and diversity. A copy of pollster Thomas Riehle's memo also was provided.

--------------------------------------------------------------------------------

August 15, 2006

The Honorable Evan Bayh

463 Russell Senate Office Bldg

Washington DC 20510

Delivered to fax: 202-228-1377

Dear Senator Bayh,

It is our understanding that you will be taking part in a bus tour being organized by the union-funded groups attacking our company. As a leader who advocates on behalf of working families, we hope that you will be open to learning more about Wal-Mart. We believe strongly that our company is a positive force for the working men and women of this country.

Every year, Wal-Mart creates tens of thousands of jobs in the United States. And those are good jobs. We pay competitive wages and offer opportunities to advance. In fact, more than three-quarters of our store managers started as hourly associates.

We also offer affordable and accessible health benefits to our associates. This isn't the norm in retail, but every Wal-Mart associate -- both full-time and part-time -- can become eligible for our health plans. They are available for as little as $11 in some areas and $23 anywhere in America. They also come with $3 co-pays on some prescription drugs that treat common illnesses.

At the same time, we are committed throughout the Wal-Mart family to being good stewards of the environment. We are taking environmentally-friendly actions to reduce waste and conserve energy. For example, by wrapping fresh food in corn-based packaging, we will save 800,000 gallons of gasoline and prevent more than 11 million pounds of greenhouse gases from polluting our environment. We are also offering working families organic products -- like fruits and vegetables -- at prices they can afford.

The stop on the bus tour that you will be joining is in Iowa. Let me share with you some facts about what Wal-Mart means to the working families of this state. This year, Wal-Mart will spend nearly $956 million on merchandise and services with 1,041 suppliers in Iowa. As a result of these relationships, we support 56,784 supplier jobs in the state. Our company also paid more than $26.1 million in state and local taxes. Clearly, Wal-Mart has a positive impact on Iowa.

On behalf of the 17,464 Wal-Mart associates in Iowa, I would like to extend to you a personal invitation to come meet us and tour one of our stores. We don't want this to be about politics -- the union-funded groups are already doing enough of that for the both of us.

We'd like to meet with you personally -- without the fanfare of media or staff or supporters.

You have dedicated your professional life to helping Americans, fighting for social and economic justice for all. You have made a difference, and that's commendable. We know we make a difference too -- whether it is by saving the average American household more than $2,300 per year or having donated more than $245 million to charities last year alone.

We hope that you will keep an open mind about our company and learn about the positive impact we have on the working families of America. If you would like to accept our offer, please contact me at (479) 273-4222 or through email at tjunder@wal-mart.com.

Sincerely,

Tom Underwood

--------------------------------------------------------------------------------

August 15, 2006

Dear Associate,

This month, union-funded groups who do not know Wal-Mart are funding a bus tour around the country attacking your company. Along the way, political candidates for a variety of elected offices are joining the protests and joining in the attacks. According to published schedules for the next few days, U.S. Senators Evan Bayh of Indiana and Joseph Biden of Delaware, and Governors Bill Richardson of New Mexico and Tom Vilsack of Iowa will be taking part in events throughout Iowa.

We believe it's wrong for these political candidates to attack Wal-Mart and the transformation underway at our company. We would never suggest to you how to vote, but we have an obligation to tell you when politicians are saying something about your company that isn't true. After all, you are Wal-Mart. We know you take pride in your company and the work you do every day to generate the economic opportunities that so many working families in this country need right now.

We want you to know that your voice matters when these political candidates attack your company. We urge you to talk with you friends, your family and your neighbors about the good Wal-Mart does. And we hope to be able to give you the same opportunity with some of these political candidates. We're inviting them to tour our stores and learn more about who we are, and what we stand for.

We will continue to keep you informed about who accepts our invitation to learn about your Wal-Mart. And we will also keep you informed about what these political candidates are saying about your company while on the campaign trail.

As you know, working families are who we are, who we serve, and who make us a success. Every year, we create tens of thousands of jobs, often in neighborhoods that desperately need them. Our stores save the average America household more than $2,300 per year. And our affordable health plans have helped move more than 150,000 uninsured Americans into company-sponsored insurance plans.

The fact is, the challenges facing America's working families won't be solved by publicity stunts or false attacks from political candidates. Those challenges will be solved by civil and honest conversation and working together toward common goals and aspirations.

Sincerely,

Tom Underwood

RGM, Region 7

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Wal-Mart's quarterly profit declines -- for the first time in 12 years

Roland Waite
Wed, 16 Aug 2006                     [back to top] 

NEW YORK: Wal-Mart Stores Inc., the world's largest retailer, reported a decline in its profits for the first time in more than a decade Tuesday with net income for the second quarter dropping 26 per cent to $2.08 billion, compared with $2.8 billion a year earlier. The company's revenue rose 11 per cent to $85.4 billion, less than market expectations.

The retailer had paid a huge price -- $863 million -- to exit its loss-making operations in Germany, while at home high energy prices affected its sales and added costs. And its Asda unit in the U.K. has been struggling against competition from market leader Tesco.

The firm said sales at stores open more than a year rose 1.7 per cent during the quarter, which is the slowest in six quarters. Sales at stores in the U.S., which were open at least a year, were up 1.5 per cent during the quarter, compared to 3.8 per cent in the first quarter and 3.6 per cent a year ago.

Chief executive Lee Scott admitted sales had been disappointing at the company's U.S. outlets, which is its largest division. This has been largely on account of customers' reluctance to move out because of the higher energy costs, he said.

Chief financial officer Tom Schoewe said the company's domestic profit margins have also been affected by factors like higher transportation costs and more sales of lower-margin products. Food sales grew faster than general merchandise, but this put pressure on margins as groceries are less profitable than items like apparel, home furnishings or electronics.

The company, however, reiterated its guidance for the year. It forecast third-quarter earnings between 59 cents and 63 cents per share, compared with the average analyst estimate of 63 cents. It also said its full year forecast stands at $2.88 to $2.95 per share, while analysts were predicting $2.92 per share.

The last time Wal-Mart's quarterly profits had fallen was in 1996.

The retailer had exited Germany in July and South Korea in May after making losses in these units. The company now intends to put its resources in more profitable overseas markets like China and Latin America.

The company has not come out with sales in the German and South Korean operations for the period under review. Excluding these, its income from continuing operations grew 5 per cent to $2.98 billion from $2.85 billion a year ago.

The firm said it is remodeling some 1,800 U.S. stores and this could affect its sales to some extent. The work on 1,200 of these stores should be over by the end of the third quarter and the company would take a break during the shopping

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Hu Order Led to Wal-Mart Unions

Order by President Hu Led to China's Wal-Mart Union Campaign

By JOE McDONALD
The Associated Press               [back to top] 

BEIJING - An order by President Hu Jintao prompted China's state-sanctioned labor group to launch a campaign that led to the creation of Wal-Mart's first Chinese union, according to a newspaper report.

Such personal involvement by Hu in dealing with foreign companies is rare, and could help to explain the All-China Federation of Trade Unions' surprise success in forming a Wal-Mart union in July after the world's largest retailer resisted organizing efforts for two years.

In a written order to the ACFTU in March, Hu said, "Do a better job of building (Communist) Party organizations and trade unions in foreign-invested enterprises," the Beijing News reported, citing the group's records.

The ACFTU responded by setting up an office targeting a Wal-Mart in the southeastern city of Quanzhou, where employees voted July 29 to form the company's first Chinese union, according to the newspaper's report Tuesday.

Since then, employees at 16 other Wal-Marts in China also have formed unions, according to the ACFTU, the umbrella group for unions permitted by the communist government.

If accurate, the report could presage sharply increased efforts to organize unions at foreign companies. The ACFTU says only 26 percent of China's 150,000 foreign companies have unions.

An ACFTU spokesman, Li Jianhua, would not say Wednesday whether an order by Hu led to a special effort targeting Wal-Mart Stores Inc., which employs 30,000 people at its 60 stores in China.

"In recent years, the ACFTU has consistently put a large share of workers in trade union organizations. This is important work. The time has come to achieve Wal-Mart unions," Li said.

Unions in China usually represent the workforce of a single company or outlet, rather than a whole industry.

The ACFTU has described the creation of the Wal-Mart unions as a boost to its campaign to reach a target of unionizing employees at 60 percent of China's foreign companies this year.

Wal-Mart, based in Bentonville, Ark., has resisted efforts to form unions elsewhere in its worldwide operations. But it said this month it would cooperate with the ACFTU to organize its Chinese employees.

Copyright 2006 The Associated Press. All rights reserved.

Copyright © 2006 ABC News Internet Ventures

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Wal-Mart's Policy Letter

NPR
August 16, 2006               [back to top]

Wal-Mart Stores released a letter that it sent to its 18,000 Iowa workers this week. The letter warns that some local politicians are wrongly criticizing Wal-Mart's health and wage policies, but the company insists it's not trying to influence voting. Alex talks with Marketplace's Amy Scott.

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Wal-Mart warns workers of attacks from White House hopefuls

Associated Press
Wed, Aug. 16, 2006                  [back to top] 

DES MOINES, Iowa - Wal-Mart Stores Inc. is accusing several potential presidential candidates of dealing "misguided attacks" against the retail giant in events across Iowa this week.

The company released a letter Tuesday to its 18,000 Iowa employees, claiming several politicians and elected leaders are wrong to criticize Wal-Mart's wages and health benefits.

"We would never suggest to you how to vote, but we have an obligation to tell you when politicians are saying something about your company that isn't true," the letter reads.

"We urge you to talk with you(r) friends, your family and your neighbors about the good Wal-Mart does."

Wake Up Wal-Mart, a union-based group that formed last year to pressure the company to improve wages and benefits, is holding a weeklong bus tour across the state this week. Several potential presidential candidates have said they will participate, including Iowa Gov. Tom Vilsack, Sen. Evan Bayh, D-Ind., Sen. Joe Biden, D-Del., and Democratic New Mexico Gov. Bill Richardson. Former North Carolina Sen. John Edwards has joined the tour in other states.

Wake Up Wal-Mart claims that by paying low wages and offering few benefits, Wal-Mart indirectly receives government subsidies since its workers are eligible for programs such as Medicaid and food stamps.

Bob McAdam, Wal-Mart's vice president of corporate communications, said he has invited the candidates to tour Wal-Mart's stores and meet employees to "learn the truth about our company."

"The paid critics and the politicians who join them at these publicity stops are attacking the wrong company and should stop telling working families where to shop and work," McAdam said. "We're disappointed that these politicians are speaking out without paying attention to the facts."

Wal-Mart, based in Bentonville, Ark., claims it has created 240,000 jobs nationwide in the last three years with an average full-time hourly wage of $10.11. Wal-Mart officials said they offer health coverage to all employees, with health plans starting at $11 per month in some areas.

"We plan to make all of our roughly 18,000 associates in Iowa aware of the misguided attacks aimed at scoring special-interest political points by playing politics with our company," McAdam said. "We think elected officials should spend their time on real solutions to real challenges."

Wal-Mart said it will begin sending "fact check" letters to its employees in other states, including more than 8,000 in New Hampshire, nearly 27,000 in South Carolina and more than 12,000 employees in Nevada.

© 2006 AP Wire and wire service sources. All Rights Reserved.

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Wal-Mart takes the fight to its critics

By Jonathan Birchall
and Holly Yeager
Financial Times
Aug 16, 2006                    [back to top] 

John Edwards, Democratic vice-presidential candidate in 2004, was in Pittsburgh this month doing his bit for the party ahead of November's midterm elections to the US Congress. His agenda included addressing a rally against the shortcomings not of the Bush administration but of Wal-Mart, the country's biggest retailer and largest private-sector employer.

"Wal-Mart needs to be a more responsible employer, by offering decent wages," Mr Edwards told a crowd who had turned out to support Wake Up Wal-Mart, a campaigning group funded by the UFCW grocery workers' union that, along with others, the company staunchly refuses to recognise. Mr Edwards also attacked the company's record on health benefits, arguing that the dependence of some Wal-Mart employees on state-funded Medicare programmes meant the chain was being unfairly subsidised.

"Every consumer should know when they walk into Wal-Mart their tax dollars are going to provide healthcare for Wal-Mart workers . . . while the people who own Wal-Mart are making billions of dollars," he proclaimed. The retailer struck back immediately. A Wal-Mart official denounced the Pittsburgh event as part of "a union-funded publicity stunt that's more about politics than anything else".

Then Working Families for Wal-Mart, officially a non-profit lobbying group, hit even harder, pointing out that the former senator's family had previously held Wal-Mart shares. "Now he and other political candidates are telling working men and women that they can't save money or take jobs at Wal-Mart? This is all about special-interest politics. And that's sad," said a spokeswoman for Working Families.

This is the world of Wal-Mart, the political retailer.

Under Lee Scott, chief executive, the company has in the past year expanded beyond the usual realm of corporate lobbying to wage a fully-fledged campaign in the mainstream of American politics. "When a company is as large as ours, we're certainly going to have a lot of interaction with both politics and government," says Bob McAdam, vice-president of corporate affairs.

On Tuesday it sent 18,000 "voter education" letters to its employees in Iowa, pointing out what it said were factual errors made by politicians who had attacked the company. The group is to despatch similar letters to its staff in other states.

But Wal-Mart's embrace of some of the darker arts of US politics – it has set up a campaign-style "war room" at its Bentonville, Arkansas headquarters – also attests to the success its critics have had in turning the "big-box" retailer into a political issue at local, state and, increasingly, national level.

In January, Maryland passed a law aimed at making Wal-Mart increase the amount it spends on its workers' health benefits – a move that has led to similar legislation being proposed elsewhere. In July, in an initiative aimed at large national retailers including Wal-Mart, Chicago's city council passed an ordinance intended to raise the minimum wage for retail workers.

John Kerry, to whom Mr Edwards was running-mate, cited Wal-Mart and the family of founder Sam Walton in a speech this month on the failings of the US healthcare system. "It's unconscionable and it is unacceptable that five of the 10 richest people in America are Wal-Mart stockholders from the same family – worth double-digit billions each – but they can't find the money to secure health coverage for their own workers and their families," he complained.

Senator Byron Dorgan in his new book, Take This Job and Ship It , uses the company to illustrate what he sees as bad consequences of globalisation. He devotes a chapter to Wal-Mart's business practices in China, which he calls "the most obvious example of what has gone terribly amiss on the way to a healthy and truly free market".

For Wal-Mart, all this raises an unwelcome possibility – that it will become a focus of debate during the 2008 presidential election campaign as well, something that its union critics are eager to bring about. "It's going to be so important in the presidential cycle," says Chris Kofinis, of the Wake Up Wal-Mart campaign. "Everyone is going to talk about this issue . . . about where you stand on corporations that make $11bn a year in profits and say they can't afford to pay for healthcare for their workers."

Wal-Mart's evolving political strategy, shaped with advice and support from Edelman, the public relations consultancy, has been twofold. First, it has attacked its critics – arguing that it is the victim of an unholy alliance between Democrat lawmakers and the unions they rely on to deliver votes and campaign financing. Second, it is seeking to make the argument that the company is good for America.

It is doing this by mobilising its own political constituency, seeking alliances with local community leaders and businesses – in particular, black and Hispanic groups – that accept Wal-Mart's argument that the company helps low-income Americans by offering low prices and jobs with the prospect of advancement.

Working Families for Wal-Mart, funded mainly by the retailer, is part of both strategies. Operating with more personal animosity than might be appropriate from the company itself, it is attacking the store chain's critics. For instance, it has just launched a website called PaidCritics.com, aimed at exposing what it says are special-interest links between the anti-Wal-Mart campaign, the unions and politicians in the Democratic party (Wake Up Wal-Mart struck back with its own site –
Abunch­ofgreedyrightwingliarswhoworkforwalmart.com).

Working Families has also set out to mobilise support. It is chaired by Andrew Young, the pro-business former mayor of Atlanta who served as the first black US ambassador to the United Nations. Its board includes Hispanic business figures, while its recently created state organising groups include leading black clergy.

"There's a large majority of people out there who support Wal-Mart and who have had no vehicle to voice their opinions on what they see as Wal-Mart's positive impact on their lives and on the economy," says Kevin Sheridan, Working Families campaign director and a former spokesman for the Republican National Committee.

At the same time, Wal-Mart has reorganised its own community relations operations and has announced plans for "Wal-Mart jobs and opportunity zones" in inner-city areas, aimed in part at encouraging businesses owned by people from ethnic minorities.

In an indication of the strategy's potential, the black caucus on Chicago's city council was evenly split on the move to set a minimum wage for workers in the city's big stores – with opponents saying depressed inner-city areas needed Wal-Mart's investment and tax revenues.

The vote in Chicago also highlights the risk to the Democrats of trying to use Wal-Mart's record to galvanise support in the run-up to 2008. While Mr Kerry and Mr Edwards might see Wal-Mart's low-paying jobs and healthcare record as a rallying point for voters who feel left out of the American dream, other elements of the party will take a different view – including New York's Senator Hillary Clinton, who in 1986-92 served on the board of the retailer based in Arkansas, her home state.

John Zogby, the pollster, argues that focusing too much on Wal-Mart "means no net gain", because union voters already favour the Democrats and the party must seek other support if it is to recapture the White House in 2008. "When are the Democrats going to talk to Wal-Mart shoppers?" he asks (see below left). Mr Zogby, who has done some polling work for Wake Up Wal-Mart, says Democrats still lack "a strategy that deals with Joe and Mary Middle America – and Joe and Mary Middle America are at Wal-Mart".

Polling shows that people who shop at Wal-Mart do care about human rights and worker healthcare, he adds. Democrats therefore need a more subtle message "about trouble in paradise, without carpet-bombing paradise. There are too many people who shop there".

Mr McAdam counters that the recent criticisms from the Democrats are instead tied to the party's own battles in the primaries. To win union support, candidates are prepared to deliver an anti-Wal-Mart message that will often not be carried through in the coming midterm campaign.

"There's abundant survey data that says that attacking Wal-Mart for the population as a whole is detrimental," he argues. "So if they persist in doing this as the general election approaches, they may find themselves doing more harm than good."

Wal-Mart is meanwhile taking no chances. It is pursuing a broad effort to enhance its public image, including its record on environmental sustainability. That might drive a wedge in an alliance between its union critics and environmental groups such as the Sierra Club, which have faulted the company on issues ranging from waste water management to its stores' impact on urban sprawl.

In a sign that political Wal-Mart is here to stay, Leslie Dach, a former political adviser to Al Gore's failed 2000 presidential campaign, this month becomes head of its government relations and corporate communications. Mr Dach, who will serve on the company's powerful executive committee, joins Wal-Mart from Edelman, where he became the retailer's top politics tutor.

His appointment shows just how far the chain has come, with its small army of consultants and political advisers, from the days when Sam Walton argued that if you gave the customers low prices and good service, everything else would look after itself.

Mr McAdam, who will work for Mr Dach, argues that the retailer had no choice. "I think any company that is faced by the kind of campaign-style attacks would be naive not to respond in kind. It became clear to us that, to maintain our ability to do our business, we needed to have a similar style of response."

Copyright The Financial Times Ltd. All rights reserved.

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Chamber maintains neutral stance as curiosity over potential WalMart grows

Angela Anderson
Cochrane Times
Wednesday August 16, 2006                   [back to top] 

In keeping with its neutral position on the issue of a big box store being allowed for in Cochrane, the Cochrane and District Chamber of Commerce is holding an information session for residents and businesses at the Cochrane RancheHouse theatre. At 10 a.m. Saturday, Aug. 26, the chamber will be host to both sides of the issue. "Our members are neutral, they are split right down the middle," said Chamber of Commerce president Adamo Cocuzzoli. He said the Chamber believes it's important to present both sides of the issue so the town can make a proper decision on the matter. "This is just to present information to educate the people who want to make a presentation to council at the public hearing," he added. Information that will be presented at the session will cover the Downtown Area Redevelopment by-law amendment process, under which a request by a developer has been made to allow for big box stores inside town limits. Also, people attending will hear presentations from speakers on the effects that a big box store has had on their communities. "The information that will be presented will be unbiased, as concerns for and against big box stores will be presented," said a release from the Chamber announcing the information session. Attendees to the meeting are being asked to hold their questions and concerns because they will not be addressed. "Forms will be handed out to the participants in which they can ask any questions they may have and the chamber will endeavor to answer them at a later time," said the release. The Chamber is asking people to register, in case the meeting prompts an overwhelming response, in which case a second session will be scheduled.  Springwood Development currently has an option on a large parcel of land on Railway Street, known as the old Domtar site. That land has been contaminated and not used since the 1980s. If Springwood develops on that land, it is believed that they will likely take responsibility for cleaning it up as well. While president of the company Bill Butler said in an earlier interview with the Times that they have some possible clients in mind to occupy the land, he said the company hopes to work with the community to determine what would work well for local businesses and residents. He said a big box store is likely what they would want to build, and to have that happen, amendments to the Downtown Area Redevelopment Plan are key, as the plan currently doesn't allow for big box stores. A public hearing on possible amendments to the Downtown Area Redevelopment Plan is going to be help Sept. 13 in council chambers.

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Wal-Mart charge hurts profit; forecast maintained

By Emily Kaiser
Tue Aug 15, 2006                             [back to top] 

CHICAGO, Aug 15 (Reuters) - Wal-Mart Stores Inc. <WMT.N> on Tuesday reported a 26 percent drop in quarterly profit -- its first earnings decline in more than 10 years -- because of a charge for selling its German stores to a rival, but it maintained its full-year profit forecast.

Excluding the $863 million loss on the sale of the German stores, second-quarter earnings per share met Wall Street expectations.

But analysts raised concerns about falling margins at Wal-Mart's key U.S. discount stores, by far its biggest division. Wal-Mart's shares slipped 1 percent in opening trading on the New York Stock Exchange.

"The quality of Wal-Mart's second-quarter earnings was low," J.P. Morgan analyst Charles Grom wrote in a note to clients, pointing out that margins declined 24 basis points at the U.S. discount stores because of rising utility expenses and maintenance costs from remodeling stores.

Net income fell to $2.08 billion, or 50 cents per share, in the second quarter that ended July 31, from $2.8 billion, or 67 cents per share, a year earlier.

Excluding the loss on the sale of the German stores to Metro AG <MEOG.DE>, earnings per share were 72 cents in the latest period, in line with the average forecast of analysts polled by Reuters Estimates.

Grom noted that Wal-Mart's earnings were boosted by 3 cents per share because the retailer classified the stores it is selling as "discontinued" operations. Earnings would have been a weaker-than-expected 69 cents per share had those operations been included in the core operations, he said.

SALES GROWTH SLOWS

Lee Scott, Wal-Mart's chief executive, said the company was disappointed with U.S. sales for the second quarter, which were up 6.9 percent at the Wal-Mart discount stores. A year earlier, the retailer posted a 10.4 percent sales increase at the U.S. Wal-Mart stores.

"Customers tell us that they're most concerned about gas prices," Scott said on a prerecorded call.

Wal-Mart, the world's biggest retailer, caters to lower-income shoppers, who have been hit especially hard by rising gasoline prices. The average price per gallon of gasoline was $3 last week, up 45 cents from a year earlier, according to a government report released on Monday.

Quarterly sales rose 11.3 percent to $84.52 billion.

Wal-Mart has been adding more upscale merchandise, such as trendy clothing and organic food, to try to get wealthier shoppers to buy more high-margin items.

The retailer is also in the process of remodeling hundreds of stores, and some analysts have questioned whether those efforts have caused disruption and hurt sales.

Wal-Mart's last decline in quarterly profit came in the fourth quarter that ended Jan. 31, 1996. That had been its first drop in profit since becoming a publicly traded company in 1970.

The retailer said it still expects full-year profit in the range of $2.88 to $2.95 per share, excluding the loss from selling the German stores. Analysts, on average, expected $2.92, according to Reuters Estimates, and some on Wall Street had worried that Wal-Mart would lower its forecast.

For the third quarter, Wal-Mart expects earnings of 59 cents to 63 cents per share. Analysts expected 63 cents.

The company's shares are down about 4.5 percent this year on lackluster sales growth at its stores. The stock trades at about 13.5 times analysts' profit forecasts for next year, compared with 13.6 times for rival Target Corp. <TGT.N>.

The shares fell 44 cents to $44.56 in early NYSE trading.

© Reuters 2006. All rights reserved.

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Wal-Mart may resume buybacks by fiscal year-end

By Emily Kaiser
Tue Aug 15, 2006                         [back to top] 

CHICAGO (Reuters) - Wal-Mart Stores Inc. <WMT.N> hopes to resume share repurchases by the end of the current fiscal year if the share price remains around current levels, Chief Financial Officer Tom Schoewe told Reuters on Tuesday.

The world's biggest retailer has not bought back any stock in the first half of the year, which ended on July 31, because its debt load is heavier than it would like.

Wal-Mart aims for a debt-to-capital ratio of about 40 percent. As of July 31, that figure stood at 41.8 percent, Schoewe said.

"Certainly between now and the end of the fiscal year we'll be back in line with our 40-percent target, and if the stock continues to be the value it is today, it wouldn't surprise me to see us in the market," he said in a telephone interview.

Wal-Mart's stock price is down about 4.5 percent in the year-to-date, hurt by disappointing sales growth and concerns about rising costs for utilities and transportation. The shares are off some 24 percent over the past five years.

Earlier on Tuesday, Wal-Mart posted a 26-percent drop in quarterly profit because of an $863 million loss on the sale of its German stores, marking its first quarterly earnings decline in more than 10 years and only the second since becoming a publicly traded company in 1970.

Analysts have raised concerns about sluggish growth and disappointing margins at its key U.S. discount stores, which account for about two-thirds of the company's total sales.

The world's biggest retailer is remodeling hundreds of stores as it tries to make them more attractive to shoppers. Schoewe acknowledged that those remodeling efforts have been disruptive, but said the retailer was taking steps to ease the transition.

"It's not like we haven't done this before," he said. "We plan ahead for these things, try to (increase staffing) to make sure we can handle it, but at the end of the day you are going to disrupt your customer," he said.

Wal-Mart hopes to complete the remodeling efforts by the middle of the next fiscal year, which would be around July 2007.

Wal-Mart's stock was off 53 cents, or 1.2 percent, at $44.47 in early New York Stock Exchange trading.

© Reuters 2006. All rights reserved.

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Wal-Mart deepens India focus

TIMES NEWS NETWORK
MONDAY, AUGUST 14, 2006                   [back to top] 

KOLKATA: Wal-Mart is becoming more serious about its India game plans. The retail behemoth, which has decided to pull out of German and South Korea markets to concentrate on core markets, has identified China and India as its future growth drivers.

As the Arkansas headquarters of Wal-Mart gears up to fine-tune its India entry plans, Amy Wyatt, international corporate affairs spokesperson, Wal-Mart Stores, confirmed the development to ET.

In an email interview, Ms Wyatt said: “The divestitures will allow us to focus on our core markets and to search for new opportunities in growing consumer markets such as India. It will enable us to improve the overall financial position of our international business and focus on our continued growth.”

This comes in the wake of Wal-Mart getting the Union government approval to set-up a liaison office in Bangalore. The company will undertake its Indian market research from here.

While India and China have been identified as the future growth drivers for the company, the core markets identified are the countries of Latin America, Central America, Mexico, Japan, Canada and the UK. “Certainly China is one of the markets where we will focus on continued growth. We have plans to open 20 new stores in China this year.

India is an emerging retail market, in which also we have a high interest,” Ms Wyatt said Incidentally, Wal-Mart had announced its plans to exit Germany about a fortnight back and South Korea in May this year. Retail industry analysts have acclaimed Wal-Mart’s move to quit these markets.

Love Goel, chairman & CEO, Growth Ventures Group, an US-based investment firm with interests in the retail sector, told ET from Minnesota in US: “Wal-Mart has made a brilliant move to withdraw from Germany and Korea to focus on India. The Indian market is much less competitive than Germany and Korea and its middle class is hungry for modern retailing practices and products sold by western retailers like Wal-Mart.”

However, Ms Wyatt refused to comment on several rumours in the market about Wal-Mart entering into partnership with an Indian company. “We are still in the research phase in India and monitoring the Indian government’s policy on FDI,” she said.

Recent reports in the Indian media have, however, suggested that Wal-Mart has initiated discussions with companies like DLF, Bharti, Mahindra & Mahindra and Reliance Industries for possible tie-ups. Ms Wyatt, however, did not confirm this.

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The Flip Side of Wal-Mart's Pay Hikes

The world's largest retailer has won kudos for raising starting pay. But some workers have seen their wages capped

By Pallavi Gogoi 
AUGUST 14, 2006                       [back to top] 

Wal-Mart (WMT ) made headlines with its Aug. 8 announcement of pay hikes for some employees. The company, one of the largest private employers in the country, said it is raising the starting pay for employees at 1,200 of its Wal-Mart and Sam's Club stores by 6% (see BusinessWeek.com, 8/9/06, "Wal-Mart's About-Face").

But the real story is more complex. Interviews with workers and officials at the company as well as outside experts reveal that many employees will see their pay capped because of the retailer's new compensation plan.

The company is instituting new pay ranges for each job category and limiting wages in each category. Once employees hit the top of their pay range, their hourly rate will be frozen, with no cost-of-living adjustments. "There's no talk here about any raises, and no one here has gotten a raise. All they've talked about are the caps," says Rosetta Brown, who works at Sam's Club, the warehouse club division of Wal-Mart Stores, in Cicero, Ill.

NOT MUCH ROOM. Wal-Mart acknowledges that more than 30,000 of its employees are already at or above the cap for their job category. The company says that associates who want to move beyond their pay maximum may apply for a new job within the company.

No associate's salary will be reduced as long as the associate remains in his or her current job. "The wage caps give current associates an incentive to move up to higher positions if they want to make more money," says John Simley, spokesman for Wal-Mart. The retailer is the largest in the country, ahead of rivals Target (TGT ) and Costco Wholesale (COST ).

Brown is not happy with the new compensation plan. She has worked at Sam's Club for eight years and is now a store clerk, checking shoppers' purchases at the door. She makes $12.24 an hour and says that she's probably has not hit the cap for her job description.

Still, she doesn't believe there's lots of room for advancement. The store she works at has fewer managers today, 8, than the 13 it had a few years ago, she says. "There are people who have worked here for 13 or 14 years and haven't been promoted," she says.

Wal-Mart is not releasing the details of what the new salary bands are. Brown doesn't know the specifics for her job category. She says her manager is at a gathering in Kansas City, and she expects to find out more on Aug. 19.

BUS TOUR. Chris Kofinis, spokesman for WakeUpWalMart.com, an activist group started last year by the United Food & Commercial Workers Union, points out that despite the positive headlines, Wal-Mart workers don't benefit from the pay hikes because they're only for new employees. "Not a single Wal-Mart employee has received a raise," he says. In fact, the number of new employees who benefit from the pay raise may very well be smaller than the number who see their pay capped under the company's new plan.

Wal-Mart's announcement of pay hikes comes as it faces pressure to improve wages and health benefits. The city of Chicago recently passed an ordinance to raise the minimum wage at big-box retailers such as Wal-Mart, Target, and Costco to $10 an hour. On Aug. 1, WakeUpWalMart.com kicked off a nationwide 35-city bus tour from New York to Seattle, aimed at pressuring Wal-Mart to increase wages and provide better health care to its employees (see BusinessWeek.com, 8/2/06, "Wal-Mart Foes Hop A Bandwagon").

Kofinis says Wal-Mart may end up lowering compensation overall because its new pay plan could frustrate more experienced employees, who tend to earn higher pay. "Wal-Mart is creating conditions that will push out loyal workers who have worked there full-time for many years," says Kofinis. "I say why doesn't [Wal-Mart Chief Executive] Lee Scott have a salary cap?"

Wal-Mart's Simley counters that executives at Wal-Mart do have a salary cap. "Two years ago, Wal-Mart established pay ranges for all management and salaried positions," he says. Simley didn't provide any details on what the salary caps for top executives are. Scott's compensation in Wal-Mart's fiscal year ended January, 2006, was $10.6 million, up 23% from the previous year. In the same period, Wal-Mart's stock fell 13%.

Simley also notes that there are many openings for assistant manger positions around the country and says that Wal-Mart has added middle-management positions. However, when pressed for the total number of managers that Wal-Mart has today, vs. three to five years ago, Simley declined to provide details.

Copyright 2000- 2006 by The McGraw-Hill Companies Inc. All rights reserved.

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Wal-Mart May Post First Profit Drop in 10 Years on German Exit

Lauren Coleman-Lochner
Bloomberg
Aug. 14                                          [back to top]   

Wal-Mart Stores Inc., the world's biggest retailer, tomorrow may report its first profit decline in 10 years on the cost of last month's decision to pull out of Germany.

Second-quarter net income probably fell 23 percent to $2.15 billion, or 51 cents a share, said Deborah Weinswig of Citigroup Inc., Institutional Investor's top-ranked retailing analyst for 2005. Sales for the fiscal quarter ended July 28 may have risen 14 percent to $87.8 billion as shoppers bought school supplies and uniforms, she said.

Wal-Mart's failure in Germany and its exit from South Korea in May show the difficulty the low-price retailer faces as it looks abroad to counter slower growth at home. Abandoning Germany, where it was thwarted by native discounters Aldi Group and Lidl, cost Wal-Mart $1 billion before taxes in the quarter.

``The concept did not translate well,'' said Patricia Edwards, a Seattle-based money manager at Wentworth Hauser & Violich, which has $8.2 billion in assets including Wal-Mart shares. ``Every market has got somebody who's already in there selling stuff cheap.''

Excluding the German charge, Bentonville, Arkansas-based Wal-Mart probably earned $3 billion, or 72 cents a share, in the quarter, Weinswig said. Wal-Mart said last month it is selling its 85 German stores to Metro AG.

Overseas Goals

Wal-Mart announced the German pullout two months after it said it would sell its 16 South Korean supercenters to Shinsegae Co., the country's largest discounter. Wal-Mart hasn't said if the South Korea decision would hurt profit for the quarter.

Leaving Germany and South Korea suggests Wal-Mart is further from its target of getting a third of its sales and profit growth overseas. In the fiscal year ended last January, its sales increase abroad accounted for 24 percent of the total gain. About 20 percent of Wal-Mart's $312.4 billion in sales came from outside the U.S.

Wal-Mart Chief Executive Officer H. Lee Scott wants to expand abroad because the retailer isn't growing as rapidly at home as it once did. Comparable-store sales growth in the U.S. from February through July averaged 2.9 percent, down from 3.4 percent in the year through January.

Wal-Mart shares fell 20 cents, or 0.5 percent, to $44.69 in New York Stock Exchange composite trading Aug. 11. The stock dropped 3.2 percent in the quarter, compared with a 1.1 percent decline by the Dow Jones Industrial Average.

Of the 24 Wal-Mart analysts tracked by Bloomberg, 16 rate Wal-Mart shares ``buy,'' and eight say ``hold.''

Pursuing Fashion

With U.S. sales growth trailing that of Target Corp., the second-largest U.S. discounter, Wal-Mart also is trying to persuade affluent U.S. shoppers to buy pricier and more- profitable items. During the quarter, Wal-Mart introduced a clothing line aimed at fashion-conscious young men called Exsto.

Wal-Mart is ``trying to introduce more fresh merchandise, getting some designer exclusives, taking a page out of Target's book,'' said Lori Wachs, a portfolio manager at Delaware Investments in Philadelphia, with $100 billion in assets including Wal-Mart shares.

At the same time, Wal-Mart lowered prices to entice shoppers coping with the rising cost of gasoline. A gallon of regular gasoline averaged $2.92 in the quarter, up 33 percent from a year earlier, according to the U.S. Department of Energy. The company cut prices on 500 items at cut rates in June, Chief Financial Officer Tom Schoewe said July 6.

Target's Gains

Wal-Mart customers, with average household incomes of about $35,000, are hurt more by higher fuel prices, said Rick Rubin, an analyst at Baltimore-based Mercantile Bankshares Corp., which has $22 billion in assets including Wal-Mart and Target shares. He estimates the average income for Target customers at $55,000.

Target has outpaced Wal-Mart in growth at stores open more than a year by offering clothing and housewares by designers such as Isaac Mizrahi and Cynthia Rowley. The Minneapolis-based company's comparable-store sales rose 5.6 percent last year. Target doesn't have stores outside the U.S.

Target on Aug. 10 said second-quarter profit increased 13 percent to $609 million, or 70 cents a share. Revenue climbed 11 percent to $13.3 billion. Same-store sales gained 4.6 percent.

Scott, 57, earned $15.7 million in salary, stock options and bonus last year. Wal-Mart's net income rose 9.4 percent for the year, the smallest increase since 2001. The company said Scott also was awarded restricted shares tied to revenue growth.

Margin Threats

Wal-Mart faces threats to its U.S. profit margins from attempts to regulate what the retailer pays workers. Chicago last month passed a bill that requires workers at stores larger than 90,000 square feet, like Wal-Mart's, to pay at least $9.25 an hour plus $1.50 in benefits. Other cities, including New York, have passed minimum levels for wages or benefits as Wal-Mart seeks to expand into urban areas.

In China last week, the company agreed to allow employees of its 60 stores there to unionize, which it hasn't allowed U.S. employees to do. That decision may increase pressure from unions and community groups that have been pushing the company to raise wages and benefits in the U.S.

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Past Wal-Mart executive gets home detention

China Economic Net
Aug 14 2006                      [back to top] 

Thomas M. Coughlin, the former vice chairman at Wal-Mart Stores Inc, was sentenced to 27 months' home detention, avoiding prison after admitting he falsified expense reports to buy liquor, care for his dogs and upgrade his truck, Bloomberg News reported.

US District Judge Robert T. Dawson in Fort Smith, Arkansas, took into consideration Coughlin's fragile health in sentencing him to home detention, five years probation and a US$50,000 fine. Coughlin, 57, will also pay US$411,218 in restitution to Wal-Mart and the US government. Prosecutors asked Dawson to sentence Coughlin to up to a year in prison.

"I think it's clear Mr Coughlin is an exemplary citizen who has risen to the top, but he has had a pretty spectacular fall," Dawson said before announcing the sentence in a hearing on Friday. "Considering the worldwide ridicule and embarrassment, the worst punishment may have already been administered."

Wal-Mart, the world's biggest retailer, has accused Coughlin in a civil suit of wrongly claiming reimbursement for hundreds of thousands of dollars worth of items including hunting gear, dog food, underwear, beef jerky and a stuffed wild boar. Coughlin, a friend of the late Wal-Mart founder Sam Walton, was head of theft prevention when he joined the company in 1978.

In January, Coughlin pleaded guilty to five counts of wire fraud and a single count of failing to report income from the fraud on his 2000 federal tax return. At the time of Coughlin's guilty plea, Wal-Mart called the case "embarrassing and painful."

Coughlin was the retailer's second-ranking executive before he retired in January 2005. Coughlin's salary and bonus amounted to US$3.9 million in 2005 and 2004, US$3.2 million in 2003 and US$1.8 million in 2002, according to data compiled by Bloomberg.

Prosecutors said Coughlin committed his thefts with the help of Robert E. Hey Jr, Wal-Mart's director of operations development. Hey pleaded guilty to three counts of wire fraud in November and was sentenced to six months probation and a US$3,300 fine.

Source:Shanghai Daily

@ China Economic Net All rights reserved

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Minn Human Rights Dept Backs Bias Claim Against
Wal-Mart

Dow Jones Newswires
08-13-06                                      [back to top] 

ST. PAUL (AP)--The Minnesota Department of Human Rights is backing an Eagan woman in her claim of racial discrimination by Wal-Mart Stores Inc. (WMT).

Employees of the Eagan Wal-Mart store had accused Gayle Bryant of using a bad check into buy about $93 worth of bottled water and household goods.

They called police, who waited for her to leave the store and then stopped her for questioning. The check was good, however.

The human rights department says it found probable cause to support Bryant's contention that she was singled out for being black.

Wal-Mart later offered Bryant $1,000 after blaming the incident on overalertness for fraud. The company has said the matter was not race-related.

Bryant's attorney said they and Wal-Mart have a settlement meeting planned for October.

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Wal-Mart fills in the gaps

Smaller towns, bedroom communities attract the giant retailer's attention

Sue Stock
The News & Observer Publishing Company
Aug 11, 2006                                                               [back to top] 

There are already 14 Wal-Mart stores in the Triangle, and the world's No. 1 retailer is making plans for as many as five more. Although that might seem like overkill to some, the expansion is part of Wal-Mart's new growth strategy. Nationwide, the retailer is moving away from markets it has saturated and toward "secondary markets" such as Holly Springs, where it has little or no presence, but there is lots of growth potential.

Many of these areas fall between cities where Wal-Mart already has stores, and the shift in development philosophy means booming areas such as Holly Springs, Morrisville and Knightdale are suddenly prime locations.

It also is moving away from the discount stores that made it famous and is opening supercenters almost exclusively, because they have full grocery sections and are able to help the retailer better penetrate a new market.

Wal-Mart is betting on growth when it chooses new store locations. Recent developments suggest that the Triangle's smaller markets, such as Holly Springs, are safe bets.

Drug maker Novartis recently selected Holly Springs for a $267 million manufacturing plant that will create an estimated 350 jobs over five years. That means more households -- and more demand for retail stores.

"Wal-Mart can certainly afford to have a store sit in an up-and-coming community for 10 years," said Marshal Cohen, chief analyst for research firm The NPD Group. "That's why they can afford to enter some of these communities that other retailers cannot."

Wal-Mart is pushing into areas early, typically getting in before there's significant competition and land values get too high.

It's doing so rapidly, despite critics who say Wal-Mart has grown too big already: In July alone, it opened 32 stores, including 25 supercenters.

Right now, Wal-Mart's development plan for the Triangle includes new stores in Knightdale, Holly Springs and Morrisville.

In addition, a 72-acre shopping center proposed near northeast Raleigh's Triangle Town Center could be anchored by a Wal-Mart, area developers said. A Southeast Raleigh store at the corner of Rock Quarry and Sunnybrook roads also is proposed.

Wal-Mart spokeswoman Tara Stewart could not confirm a store near the mall but said the company would love to build in Southeast Raleigh and is awaiting the city council's approval. That proposal has been referred to the city's comprehensive planning committee.

Stewart said the reason for Wal-Mart's rapid expansion in the Triangle is easy to explain.

"We follow the rooftops, of course," she said. "We are looking to serve a population right now that we feel is underserved."

Building several stores simultaneously helps Wal-Mart maximize its distribution centers and uphold its reputation for running efficient operations, said Fred Marx, a retail expert with Marx Layne, a marketing and public relations firm in Farmington Hills, Mich.

"It means very little to the customer, but it means everything in the way stores are built," he said. "They can put out the bids collectively, and it's far more efficient."

Fallout when Wal-Mart comes

The arrival of each new Wal-Mart Supercenter changes the landscape around it. The stores generate taxes -- property taxes on the nine Wal-Mart stores in Wake County totaled more than $1.1 million this year -- and their arrival tends to increase local land values and attract other retailers.

Look at the supercenter that opened in 2004 on New Bern Avenue in Raleigh: Where once there was just Wal-Mart, now there is a strip shopping center, complete with an auto repair shop, restaurants and a Starbucks. That kind of draw makes Wal-Mart a valuable tenant for city officials and real estate developers.

WRS, a real estate investment firm based in Aiken, S.C., builds Wal-Mart-anchored shopping centers in the Southeast.

"It's our livelihood," said Gary Anthony, WRS' director of leasing. "They're either relocating or building another store all the time."

WRS, which built a Wal-Mart shopping center in Wake Forest in 2004, is planning 50,000 square feet of shops around the planned Wal-Mart in Holly Springs. It's one of nine WRS is developing in the Southeast right now. In the past, it was more common for the company to build only five or six Wal-Mart shopping centers at a time, Anthony said. "We've probably done 25 or 30 in the past year," he said. "And we're doing more every year."

But just because Wal-Mart will be the first big retailer in some of these towns doesn't mean Wal-Mart has it easy.

The Triangle is among the most competitive grocery markets in the country, with several major chains, discount warehouse clubs and a growing number of upscale gourmet stores.

Some of the markets Wal-Mart has selected may have more competition by the time Wal-Mart opens its doors.

The Holly Springs store is planned near the site where Harris Teeter just announced it will build its second Holly Springs store.

And as Wal-Mart gets bigger, it also contends with more negative sentiment about its business practices, criticism that often surfaces at public meetings related to its new stores. This year, the state of Maryland tried unsuccessfully to force Wal-Mart to spend more on employee health insurance.

Wal-Mart has tried to counter complaints about its wages and health-care benefits with advertising that touts its commitment to diversity. Just this week, it announced a 6 percent pay raise for employees at 1,200 stores.

Still, the anti-Wal-Mart faction is another reason for the company to act early to enter markets, before they are fully developed, said Connell Radcliff, president of Cary's 1st Carolina Properties.

"It's going to be more difficult later than it is today to get into that market," he said. "Land costs will go up, No. 1. But then the people come out of the woodwork who are anti-Wal-Mart. So if you wait, along with paying more for the property, you're also having to fight the anti-Wal-Mart movement."

Some of that sentiment surfaced last year in Chatham County when residents balked at rumors that Wal-Mart was planning a store on U.S. 15-501. It came up again this summer at Morrisville's public hearings about its new Wal-Mart. But the town's board of commissioners granted Wal-Mart the special-use permit it needed after a three-month review.

Morrisville is trying to balance big national retailers with residents' desire for a hometown atmosphere, planning director Ben Hitchings said. Along with courting larger retailers, Morrisville is trying to develop a town square with smaller, specialty retail.

"With a rapidly growing community, retailers are taking notice," Hitchings said. "But we also want to make sure we offer a full range of retail experiences."

Even with four new stores in the works -- and a fifth one a possibility -- Wal-Mart isn't finished in the Triangle. Stewart said the retailer is also interested in more stores in Cary and in Apex, where it failed in recent years after coming up against staunch opposition from residents.

Any new store sites will be selected strategically, she said. "The grocery industry has a profit of only 1 or 2 percent," she said. "And that's 1 or 2 percent on a good day. ... It has to be very scientific and planned in advance."

(Staff writer Jack Hagel contributed to this report.)

© Copyright 2006, The News & Observer Publishing Company A subsidiary of The McClatchy Company

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Wal-Mart agrees to cooperate with unions in China

TaipeiTimes
Friday, Aug 11, 2006                                [back to top] 

Workers perform the warm-up dance during the opening ceremony for a new Wal-Mart store in Shanghai on July 28 last year. PHOTO: AP

Wal-Mart Stores Inc said yesterday it has agreed to cooperate with China's state-sanctioned labor group in creating unions at its 60 Chinese outlets.

The announcement follows the creation of unions at five of the company's Chinese stores and is a victory for the All-China Federation of Trade Unions (ACFTU), the umbrella group for unions permitted by the communist government. The ACFTU had accused Wal-Mart of obstructing efforts to organize its 28,000 Chinese employees.

"Our mutual aim is to establish grassroots unions within each Wal-Mart store throughout China," a statement issued by Wal-Mart said.

China doesn't allow independent unions, and activists are frequently jailed and harassed. The ACFTU often is regarded not as an advocate for better pay and working conditions for employees but as an intermediary that represents employers to workers.

Wal-Mart is preparing to hold talks with the ACFTU on how to carry out union organizing, said Dong Yuguo, a spokesman at the company's China headquarters in the southern city of Shenzhen.

"We will talk about how the Wal-Mart stores in China will organize unions," Dong said. "We will talk about how to work with the ACFTU in a more effective and cooperative way."

Dong didn't give any details of when additional union votes might take place, saying such work "will develop step-by-step."

Wal-Mart has few unions elsewhere in its worldwide operations.

The company's statement quoted Joe Hatfield, president and CEO of Wal-Mart Asia, as saying it hopes its relationship with the ACFTU is "prosperous for our associates and for the growth of our business."

In a possible effort to mollify Chinese officials, Hatfield invoked the phrase used by the government to describe its current campaign to ease tensions over China's growing gap between rich and poor.

"We believe this is conducive to China's effort to build a harmonious society," Hatfield said.

Wal-Mart, based in Bentonville, Arkansas, opened its first store in China in 1996.

Copyright © 1999-2006 The Taipei Times. All rights reserved.

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Wal-Mart to Help Create Chinese Unions

By JOE McDONALD
AP      
Aug 10                                       [back to top] 

BEIJING (AP) -- Wal-Mart Stores Inc. said Thursday it has agreed to cooperate with China's state-sanctioned labor group in creating unions at its 60 Chinese outlets.

The announcement follows the creation of unions at five of the company's Chinese stores and is a victory for the All-China Federation of Trade Unions, the umbrella group for unions permitted by the communist government. The ACFTU had accused Wal-Mart of obstructing efforts to organize its 28,000 Chinese employees.

"Our mutual aim is to establish grassroots unions within each Wal-Mart store throughout China," said a statement issued by Wal-Mart.

China doesn't allow independent unions, and activists are frequently jailed and harassed. The ACFTU often is regarded not as an advocate for better pay and working conditions for employees but as an intermediary that represents employers to workers.

Wal-Mart is preparing to hold talks with the ACFTU on how to carry out union organizing, said Dong Yuguo, a spokesman at the company's China headquarters in the southern city of Shenzhen.

"We will talk about how the Wal-Mart stores in China will organize unions," Dong said. "We will talk about how to work with the ACFTU in a more effective and cooperative way."

Dong didn't give any details of when additional union votes might take place, saying such work "will develop step-by-step."

Wal-Mart has few unions elsewhere in its worldwide operations.

The company's statement quoted Joe Hatfield, president and CEO of Wal-Mart Asia, as saying it hopes its relationship with the ACFTU is "prosperous for our associates and for the growth of our business."

In a possible effort to mollify Chinese officials, Hatfield invoked the phrase used by the government to describe its current campaign to ease tensions over China's growing gap between rich and poor.

"We believe this is conducive to China's effort to build a harmonious society," Hatfield said.

Wal-Mart, based in Bentonville, Arkansas, opened its first store in China in 1996.

The new Wal-Mart unions are relatively small, with about 25 to 30 members each. Unions in China represent the work force of individual companies or stores, rather than a whole industry. All unions must be affiliated with the ACFTU.

The first union was formed July 29 at a Wal-Mart in the southeastern city of Quanzhou. Since then, workers have formed three unions in Shenzhen and one in the eastern city of Nanjing.

The ACFTU says expanding its presence in private companies is one of its key goals, and it has expressed hope that its success with Wal-Mart will boost efforts to organize workers elsewhere.

About 26 percent of China's 150,000 foreign-financed companies have official labor unions, according to the ACFTU. The group says it hopes to raise that to 60 percent this year.

© 2006 The Associated Press. All rights reserved. 

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Report: Wal-Mart Agency Dropped From Review Chain Store Age

RetailNet
Thursday, August 10, 2006           [back to top] 

Wal-Mart Stores dismissed one of its two longtime creative agencies, Bernstein-Rein Advertising, Inc. in Kansas City, Mo., by eliminating it from an account review that began in May, according to a report by The New York Times. Wal-Mart spends more than $570 million a year on advertising. Bernstein-Rein, which has worked for Wal-Mart since 1974, has created campaigns that featured the familiar smiley-face character as well as others focused on Wal-Mart's low prices. Bernstein-Rein, which said it would continue working for Wal-Mart through Jan. 31, was among five agencies eliminated from the review. The others were JWT in New York, part of WPP; Kirshenbaum Bond & Partners in New York, part of MDC Partners; and two agencies owned by Publicis, Leo Burnett in Chicago and Publicis Worldwide in New York.

The Times said a final decision in the review from Wal-Mart executives, who are looking to shake up their advertising approaches in the face of intensified competition from retailers like Target, is expected next month.

Wal-Mart spends more than $570 million a year on advertising.

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Wal-Mart opens door to unions

By David Barboza
The New York Times
Published: August 9, 2006                  [back to top] 

SHANGHAI After years of fighting unionization efforts at its stores, Wal- Mart the world's largest retailer, said Wednesday that it would work closely with Chinese officials to establish labor unions at all of its outlets in the country.

Saying it wanted to create "an effective and harmonious way of facilitating the establishment of grassroots unions," Wal-Mart announced that it would form an alliance with the government-backed All China Federation of Trade Unions.

The announcement comes less than two weeks after Wal-Mart employees established their first union in China with the same government backing.

Four other Wal-Mart stores in China have also formed unions.

Wal-Mart's decision to allow unions also follows years of pressure from the All China Federation of Trade Unions. It is pushing more large foreign companies here to allow unionization, which is required under Chinese law.

While unions in China do not have the history of bargaining power that unions in Europe and the United States have, the Wal-Mart announcement is still an historic and surprising step here.

The AFL-CIO, the umbrella organization of the American labor movement, has been trying but has failed to set up unions at Wal-Mart stores in the United States.

But China has become an increasingly important market for Wal-Mart, which now has about 60 retail outlets and 30,000 employees in China.

Although Wal-Mart has strongly opposed unions at its stores around the world, it said under pressure in late 2004 that if workers in China moved to unionize, the company would not stop them.

With Wal-Mart aggressively expanding its operations in China's booming retail market, the company issued a brief statement Wednesday that seemed to echo the Chinese government's latest propaganda campaign, which promises to build a "harmonious society."

The company said in the statement, entitled "Wal-Mart Supports China's Effort to Build a Harmonious Society," that it would collaborate with the All China Federation because the two groups had the "mutual aim" to establish grass-roots unions.

Some experts, however, say that little is known about how the unions are being formed and who has control of them.

Liu Kaiming, director of the Institute of Contemporary Observation, a labor rights organization based in Shenzhen, applauded the Wal-Mart announcement but questioned whether it would lead to significant change.

"I don't see any bargaining power in the unions in China," Liu said. "The function of Chinese unions is to urge workers to participate in the work, to care about their welfare and to organize recreational activities for them."

In fact, independent unions are banned in China. But the All China Federation issued a statement earlier this week, suggesting that it would be able to contend with one of the world's biggest companies. "If Wal-Mart union members are subjected to unfair treatment at work, unions at the national, provincial, city and district level will strive all out to protect employees' legitimate rights," the announcement said.

SHANGHAI After years of fighting unionization efforts at its stores, Wal- Mart the world's largest retailer, said Wednesday that it would work closely with Chinese officials to establish labor unions at all of its outlets in the country.

Saying it wanted to create "an effective and harmonious way of facilitating the establishment of grassroots unions," Wal-Mart announced that it would form an alliance with the government-backed All China Federation of Trade Unions.

The announcement comes less than two weeks after Wal-Mart employees established their first union in China with the same government backing.

Four other Wal-Mart stores in China have also formed unions.

Wal-Mart's decision to allow unions also follows years of pressure from the All China Federation of Trade Unions. It is pushing more large foreign companies here to allow unionization, which is required under Chinese law.

While unions in China do not have the history of bargaining power that unions in Europe and the United States have, the Wal-Mart announcement is still an historic and surprising step here.

The AFL-CIO, the umbrella organization of the American labor movement, has been trying but has failed to set up unions at Wal-Mart stores in the United States.

But China has become an increasingly important market for Wal-Mart, which now has about 60 retail outlets and 30,000 employees in China.

Although Wal-Mart has strongly opposed unions at its stores around the world, it said under pressure in late 2004 that if workers in China moved to unionize, the company would not stop them.

With Wal-Mart aggressively expanding its operations in China's booming retail market, the company issued a brief statement Wednesday that seemed to echo the Chinese government's latest propaganda campaign, which promises to build a "harmonious society."

The company said in the statement, entitled "Wal-Mart Supports China's Effort to Build a Harmonious Society," that it would collaborate with the All China Federation because the two groups had the "mutual aim" to establish grass-roots unions.

Some experts, however, say that little is known about how the unions are being formed and who has control of them.

Liu Kaiming, director of the Institute of Contemporary Observation, a labor rights organization based in Shenzhen, applauded the Wal-Mart announcement but questioned whether it would lead to significant change.

"I don't see any bargaining power in the unions in China," Liu said. "The function of Chinese unions is to urge workers to participate in the work, to care about their welfare and to organize recreational activities for them."

In fact, independent unions are banned in China. But the All China Federation issued a statement earlier this week, suggesting that it would be able to contend with one of the world's biggest companies. "If Wal-Mart union members are subjected to unfair treatment at work, unions at the national, provincial, city and district level will strive all out to protect employees' legitimate rights," the announcement said.

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China's state-backed union warns Wal-Mart

No. 1 retailer told 'not to take revengeful measures' against union members; company reportedly calls for talks away from news media.

August 9 2006                                  [back to top] 

BEIJING (Reuters) -- Sparring between China's official trade union and Wal-Mart Stores Inc. intensified Wednesday, with the union warning the world's largest retailer not to act against members while the company called for talks.

Guo Wencai, an official from the All China Federation of Trade Unions, said earlier that the two sides would meet Wednesday to discuss the federation's campaign to spread official unions into Wal-Mart that began two weeks ago.

But a deputy president of Wal-Mart China, Li Chengjie, later told the official Xinhua news agency the company was waiting for a reply to its request for talks away from news media. Guo had said media would be present.

Guo warned Wal-Mart "not to take revengeful measures" against workers who join unions, Xinhua reported later in the day.

"The federation, led by the Communist Party of China and backed by the government, will take measures to protect these workers if Wal-Mart takes revenge against them," Xinhua cited Guo as saying.

The report made no mention of any such action by the company.

Wal-Mart resists unions in any of its operations, while China is determined to introduce trade unions in all local Wal-Mart stores, Guo said last week.

Two weeks ago, China's official labor organization established a union at a Wal-Mart store in eastern China's Fujian province.

Since then, four other unions have formed at other Chinese Wal-Mart stores, according to Xinhua, which did not specify their locations. One was established in Shenzhen in far southern China, and another in Nanjing, capital of eastern China's Jiangsu province, the federation said on its Web site.

The federation told Wal-Mart not to interfere in the 31-member-strong Nanjing union.

"If Wal-Mart union members are subjected to unfair treatment at work, unions at the national, provincial, city and district level will strive all out to protect employees' legitimate rights," the announcement said.

In the past, Wal-Mart has said it listens to the needs of its Chinese workers and does not need the official trade union to step in. In 2004, Wal-Mart China gave some ground, issuing a statement that:

"Should associates request the formation of a union, Wal-Mart China will respect their wishes and honor its obligations under China's trade union law," Xinhua reported Wednesday.

In a separate report on state television, Guo said unionization would not harm Wal-Mart's development in China. China aimed to establish unions in 60 percent of foreign companies operating in the country by year's end, he added.

Official Chinese unions are largely conduits for official policy and rarely encourage workers to strike. The government opposes labor groups outside its control.

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Why Wal-Mart wants to sell ethanol

E85 is available at only a tiny fraction of gas stations. But Fortune's Marc Gunther says the giant retailer is poised to change that.

By Marc Gunther
Fortune 
August 9 2006                           [back to top] 

NEW YORK (Fortune) -- More than 5 million vehicles on U.S. roads today can run on ethanol - a renewable fuel that comes from corn - as well as gasoline. General Motors (Charts), Ford (Charts) and DaimlerChrysler (Charts) recently announced plans to double their annual production of so-called flex fuel vehicles to two million cars and trucks by 2010.

It's the single largest commitment to renewable fuels in the history of the auto industry - a good move for the automakers, and for the planet, too.

Gas stations where you can purchase ethanol are few and far between today.

The retailing giant is placing bets on an environmentally friendly future. (more) How America's biggest company became the world's biggest purchaser of organic cotton Wal-Mart's unsentimental reasons for promoting sustainable fishing practices

That's because running cars and trucks on E85, a blend of 85 percent ethanol and 15 percent gasoline, could turn out to be a cost-effective way to reduce the carbon emissions that cause global warming and curb our dependence on imported oil.

There's just one big problem.

Only about 800 service stations in the United States, out of a total of 168,000, pump E85. There's not a single E85 pump, for example, in all of New England.

You won't be surprised to learn that the big oil companies are not, as a rule, interested in selling E85.

But Wal-Mart (Charts) is. The giant retailer is considering selling ethanol at the eight stations that it operates at Wal-Mart Stores and at about 380 more that it runs as part of its Sam's Clubs division.

It could also decide to sell ethanol in a partnership with Murphy Oil Corp. (Charts), which operates about 946 gas stations in Wal-Mart parking lots, and there's no reason why Wal-Mart couldn't sell E85 - which it calls "America's Fuel" - at the rest of its 3,000 U.S. stores.

"Our goal would be to make E-85 available across the U.S.," Rich Ezell, senior strategy manager of fuel at Wal-Mart, said recently.

Why does Wal-Mart want to get into the transportation fuel business?

Several reasons. First, selling ethanol could be a new profit center for Wal-Mart, since the retailing business is wide-open. It's also a way for the company to help its customers save money; the less money they pour into the tank, the more they have to spend at Wal-Mart.

Finally, Wal-Mart's interest in alternative fuels like ethanol comes as part of its sweeping efforts to adopt business practices that are better for the environment. To guide its efforts, Wal-Mart has organized more than a dozen "sustainable value networks" that are composed of suppliers, environmentalists, industry experts and government officials.

The company brought an impressive group of movers-and-shakers to the kickoff meeting of its alternative fuels network in Washington last May. Participants included representatives of GM, Ford and DaimlerChrysler, the National Corn Growers Association, ethanol-makers such as Cargill, Blue Fire Ethanol and Iogen, consulting firms Green Strategies, BluSkye and the Rocky Mountain Institute, and nonprofits Conservation International, Environmental Defense, the Natural Resources Defense Fund, the World Wildlife Fund and the Worldwatch Institute. For most of a day, they discussed how Wal-Mart could help promote alternative fuels.

Afterwards, one longtime ethanol advocate told me that Wal-Mart - if it agrees to distribute E85 - could be a catalyst to making ethanol a mainstream alternative to gasoline for millions of Americans.

"That would be a complete game-changer," said Reid Detchon, the executive director of the Energy Future Coalition. "Everybody knows where the local Wal-Mart is. You would immediately know where to buy E85."

But Wal-Mart isn't ready to commit to ethanol yet, insiders say.

Before doing so, the company needs to feel confident that it will have access to ample supplies of ethanol, at a price competitive with gasoline. That's a complicated matter - prices for ethanol spiked this summer, even as lots of new supply is coming into the market. Wal-Mart is also waiting for ethanol dispensers to get certified by the Underwriters Laboratory, which tests products for safety.

Some other key issues need to be resolved before millions of Americans regularly fill their tanks with ethanol. (For more, see How To Beat the High Cost of Gasoline. Forever!)

Many experts believe that so long as ethanol comes from corn kernels or sugar cane, using ethanol for fuel will create stresses on the world's food supply; they favor what's called cellulosic ethanol, which can be made from prairie switchgrass, corn husks or other waste products.

Mass production of cellulosic ethanol isn't expected for a couple of years. Transporting ethanol from farm country to population centers is another challenge. There's also debate over the future of a 51-cent a gallon government subsidy for ethanol.

Consumers also need to learn more about the fuel. The auto industry's working on that. You've probably seen GM's clever "Live Green, Go Yellow" ad campaign, which can be found online.

GM's also been trying to help build an ethanol infrastructure. In California, Texas, Pennsylvania and several Midwestern states, the automaker has helped bring together ethanol refiners, governments and independent service stations to sell E85. Those selling the fuel include Meijer supermarket chains and the Sheetz convenience store chain.

The National Ethanol Vehicle Coalition keeps a list of E85 stations online. Philip J. Lampert, the executive director, says the number of stations has doubled in the past two years. "It's still just a drop in the bucket, but we're making significant progress," he says.

All this leaves people like Reid Detchon - who has worked on ethanol issues since the 1980s, and served in the energy department in the first Bush administration - feeling like ethanol's moment may finally be here. Particularly if Wal-Mart gets on board, Detchon says: "If oil stays at anything like these prices, I think ethanol will grow as fast as the farmers can produce it. We are on the cusp of a fundamental change."

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Wal-Mart's About-Face

By Pallavi Gogoi
AUGUST 9, 2006                           [back to top] 

It's not only raising wages but also updating products and remodeling stores to attract more affluent shoppers

Wal-Mart is raising wages? The move came as something of a shocker. After all, the retailing giant is known for both its low prices and its low wages. So parsimonious is the company that politicians across the country are turning to legislation to compel Wal-Mart to pay employees an extra buck or two.

Yet this week, Wal-Mart (WMT ) said it would raise the starting pay at 1,200 of its Wal-Mart and Sam's Club stores by an average of 6%. "These start rate changes, combined with our competitive benefits like affordable health care, 401K and profit sharing, and annual incentives for our hourly associates, make us an even more attractive employer, which is why people stand in line to apply for Wal-Mart jobs," said Susan Chambers, executive vice-president of the People Division for Wal-Mart Stores, in a statement. A spokesman for the company said it had conducted a wage survey and found the increases made sense to "remain competitive as an employer."

FAUX WOOD. The decision is certainly a deft public relations move. It comes as the city of Chicago is on the verge of raising the minimum wage for big box retailers like Wal-Mart to $10 an hour. It also coincides with a month-long bus tour by activists and politicians to prod the company into raising wages and improving health-care benefits (see BusinessWeek.com, 8/2/06, "Wal-Mart Foes Hop a Bandwagon"). "It's really an image thing," says David J. Abella, portfolio manager at Rochdale Investment Management, which manages more than $2 billion in assets.

Wal-Mart has fought hard against the Chicago ordinance and criticized its detractors. The company has argued that it pays reasonable wages and benefits and that states and municipalities do not have the right to dictate its employment policies (see BusinessWeek.com, 7/19/06, "Rollback Ruling Favors Wal-Mart").

But look more closely and the move to raise wages seems like a key building block for a company in transition. Wal-Mart studied its customer base closely last year and discovered that many of its shoppers were quite affluent, not just the lower and middle income customers it targeted. In a bid to get these affluent shoppers to linger more in its stores and presumably buy more, higher-margin goods, Wal-Mart has launched several initiatives in the past few months: It introduced a trendy line of clothing called Metro7, moved to double the number of organic products at its stores, and has started remodeling half of its stores with wider aisles, faux-wood floors, and nicer restrooms.

SOFT SALES. A higher wage structure seemed to fit the image of this new Wal-Mart. At least in theory, if Wal-Mart takes better care of its employees, they in turn will take better care of the customers, especially the affluent shoppers it is trying to court. "Wal-Mart finally recognized that retail is not just about prices," says Patricia Edwards, managing director and portfolio manager at Seattle-based Wentworth Hauser & Violich, a money manager with $8.2 billion in assets including Wal-Mart shares. "To be good at retail you have to have not just good prices but the right shopping experience; people can be put off by rude clerks, dirty restrooms, and long lines."

But will raising wages by 60 cents an hour change employees' behavior? Maybe not enough. "I don't see the possibility of attracting different types of customers just by raising wages," says Barry Shaked, chief executive of Retalix, which provides technology solutions to the retail and food industry. In fact, Shaked believes that Wal-Mart is making a mistake by trying to go upscale. "Wal-Mart is trying to have something for everyone and in the process it will lose its current customer," he warns.

Already Wal-Mart's transition isn't going as smoothly. According to Virginia Genereux, a Merrill Lynch analyst, Wal-Mart's newer stores' sales per square foot slipped a little in June. Considering these are likely the ones with the new store redesign in place, it's a worrying slip. Charles Grom, an analyst with J.P. Morgan Securities, says that existing stores could see soft sales too, because of the extensive remodeling that will go on over the next few months. "Once the remodels are done, they better be firing on all cylinders," says Seattle portfolio manager Edwards.

Only time will tell whether the higher wages will translate into better service at Wal-Mart. But George Rue, chief investment officer for New Covenant Trust Company, which manages $1.5 billion and owns Wal-Mart shares, points out that employees will obviously take any wage increase they can get. "Whatever the motivation, better wages from one of America's largest employers is always a good thing," he says.

Copyright 2000- 2006 by The McGraw-Hill Companies Inc. All rights reserved.

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Wal-Mart seeks talks with China group

By JOE McDONALD
The Associated Press/BEIJING
AUG. 9                                                         [back to top] 

Wal-Mart Stores Inc. has asked to hold talks with China's state-sanctioned labor group after employees formed the retailer's first Chinese unions, the labor group and a state news agency said Wednesday.

No date has been set for a meeting, said Li Jianming, a spokesman for the All-China Federation of Trade Unions. He declined to say what Wal-Mart asked to discuss. Phone calls to spokespeople at Wal-Mart's China headquarters weren't answered.

The official Xinhua News Agency quoted the vice president of Wal-Mart China, Li Chengjie, as saying it wants to cooperate with the ACFTU "in a more effective and harmonious way."

The ACFTU is the umbrella group for unions permitted by the communist government. It has been campaigning for two years for the formation of unions at all 60 Wal-Marts in China and had accused the company of blocking its efforts. A letter from Wal-Mart to the ACFTU requesting talks asked for them to take place with "no media presence," Xinhua said.

China doesn't allow independent unions, and activists are frequently jailed and harassed. The ACFTU often is regarded not as an advocate for better pay and working conditions for employees but as an intermediary that represents employers to workers.

Wal-Mart, based in Bentonville, Arkansas, opened its first store in China in 1996 and has 28,000 Chinese employees. It has few unions elsewhere in its worldwide operations.

The new Wal-Mart unions are relatively small, with about 25 to 30 members each. Unions in China represent the workforce of individual companies or stores, rather than a whole industry. All unions must be affiliated with the ACFTU.

Three of the Wal-Mart unions are in Shenzhen, with others in the eastern city of Nanjing and in Quanzhou in the southeast.

The ACFTU says expanding its presence in private and foreign companies is one of its key goals. The group's leaders say they hope the success at Wal-Mart will boost efforts to form unions at other private companies.

About 26 percent of China's 150,000 foreign-financed companies have official labor unions, according to the ACFTU.

The group had hoped to raise that to 50 percent this year. But an ACFTU leader quoted Wednesday by state television said that after the Wal-Mart votes, it was raising that target to 60 percent.

Copyright 2006, by The Associated Press. All rights reserved.

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Wal-Mart increases starting wage

By Carlie Kollath,
Drug Store News
Tuesday, August 8, 2006                 [back to top] 

Wal-Mart announced yesterday that it has raised the starting rate in more than 1,200 Wal-Mart stores and Sam's Clubs throughout the country. The move comes on the heels of the passing in Chicago of a "living-wage" ordinance and mounting criticism concerning the company's labor policies. The company did not disclose what the new rates will be, but various published reports are noting that the wages will go up 6 percent.

The company also is implementing new pay ranges, with the maximum being near the top of the market in many regions, according to Wal-Mart. However, it did not disclose specific numbers for the new ranges.

In addition, Wal-Mart announced that the company was raising pay increases for associates displaying "excellent annual performance and customer service." Discretionary increases will now be reinvested into the annual performance evaluation process allowing the company to increase the amount of the "above target" reward, which impacts a larger percentage of associates.

"Wal-Mart pays competitive wages, and we continue to transform our pay plans as we grow," said Susan Chambers, executive vice president of the people division for Wal-Mart Stores. "These start rate changes, combined with our competitive benefits like affordable health care, 401K and profit sharing and annual incentives for our hourly associates, make us an even more attractive employer, which is why people stand in line to apply for Wal-Mart jobs."

Start rates and pay ranges are being reviewed annually and will be adjusted to respond to changes in each market, the company noted. Any associate paid below his or her facility's new start rates will have his or her pay increased to fall within the new range.

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Wal-Mart Raises Wages, Inserts Wage Caps

By MARCUS KABEL
Associated Press
08.08.2006                                          [back to top] 

Wal-Mart Stores Inc. said its raising wages at nearly a third of it's 4,000 U.S. stores and introducing wage caps at all stores in an effort to remain competitive with other retailers and meet a need for workers and managers as it continues to expand.

Workers at more than 1,200 stores will see their paychecks grow by an average 6 percent, and the world's largest retailer said it will begin introducing wage caps for the first time on each type of job in all stores.

The nation's largest private employer said Monday the changes would help it remain competitive with other retailers and meet a need for workers and managers as it continues to expand.

Wal-Mart has more than 1.3 million U.S. employees, which it refers to as associates.

The announcement comes less than two weeks after Chicago became the largest city in the nation to require big-box retailers to pay a "living wage," despite objections from Wal-Mart and other businesses. Chicago's City Council adopted an ordinance requiring major retailers to pay at least $10 an hour plus $3 in fringe benefits by mid-2010. Mayor Richard M. Daley could veto the measure but would need two aldermen to drop their support in order to avoid having his veto overridden.

Gerald Celente, director of The Trends Research Institute in Rhinebeck, N.Y., an independent think tank that follows economic and other trends, said Wal-Mart appeared to be reacting to negative publicity about its pay following the Chicago ordinance.

"The increase in starting salary is a very smart thing to do," Celente said.

Wal-Mart denied any connection to the Chicago vote. The pay increases began before the vote and have taken effect at more than 1,200 stores spread across the country, Wal-Mart spokesman John Simley said.

"It's part of a wider effort that's been under way for more than two years, not related to the Chicago ordinance," Simley said. He said the pay restructuring started in June 2004 when Wal-Mart introduced new classifications for each type of job.

The retailer's pay and benefits have been under fire from union-backed critics, who call them skimpy. Wal-Mart has defended its average full-time hourly wage of $10.11 and launched lower-cost health plans this year with premiums as low as $11 month in some areas.

"We've created about 240,000 jobs in the last three years and we are continuing to grow. We need to ensure that we have the most appropriate classification and pay programs to meet our growth needs," Simley said.

The changes help in two ways, Simley said. Higher starting pay makes Wal-Mart more attractive to new workers and the wage caps give current associates an incentive to move up to higher positions if they want to make more money.

Some associates are already making more than the new caps allow for their positions, Wal-Mart said without providing numbers. But no one will receive a pay cut as long as they are in that position, the company said in a statement.

Union-funded campaign group WakeUpWalMart.com called the pay caps an effort to drive out workers who had been there longer, in order to cut costs.

"Wal-Mart should be ashamed," WakeUpWalMart.com spokesman Chris Kofinis said.

Wal-Mart's Simley said the changes were not aimed at cutting costs and would not impact the company's earnings.

Retail analyst Don Gher from Coldstream Capital Management in Bellevue, Wash., which manages about $1 billion in assets including Wal-Mart shares, said both the pay raises and the pay caps were in line with practices at many other retailers and in other businesses.

"It is nothing that is ground breaking. It appears to be something where they continue to tweak their system," Gher said.

The Bentonville, Ark.-based retailer did not specify the new starting rates or give examples for the new pay caps. Simley said the numbers vary too much by local market conditions across the country to provide an accurate average figure.

The new caps come in the form of pay ranges established for each type of job.

Starting rates will be increased at more than 1,200 stores, with the average hike about 6 percent, Simley said.

"This does not translate into an across the board pay increase for all associates," Simley said.

He said the pay changes would not have an impact either way on Wal-Mart's personnel costs for the year.

Susan Chambers, executive vice president of the company's People Division, said in a statement that Wal-Mart remained competitive with benefits including health care, 401K plans, profit sharing and annual incentives.

Chambers said that was why "people stand in line to apply for Wal-Mart jobs."

As of July 31, the company operated 1,146 Wal-Mart discount stores, 2,098 Supercenters that combine a supermarket with general merchandise, 567 Sam's Clubs warehouse stores and 107 Neighborhood Market grocery stores.

Copyright 2006 Associated Press. All rights reserved.

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Fifth Wal-Mart union set up in China

By JOE McDONALD
Tue, August 8, 2006                      [back to top] 

BEIJING (AP) -- Employees at a Wal-Mart store in southern China on Tuesday set up the retailer's fifth Chinese union in two weeks, amid a quickening official campaign to unionize the country's 60 Wal-Mart outlets, news reports said.

The latest union is in Shenzhen, the city where Wal-Mart opened its first mainland Chinese outlet in 1996, the official Xinhua News Agency and the Workers Daily newspaper said. Employees at two other Shenzhen Wal-Marts, as well as in the eastern city of Nanjing and Quanzhou in the southeast, also have set up unions.

The rapid series of votes are a victory for the All-China Federation of Trade Unions, the umbrella group for unions permitted by the communist government. The ACFTU spent two years lobbying for the creation of Wal-Mart unions and accused the company of blocking its efforts.

Xinhua on Tuesday quoted an unnamed ACFTU official who complained that the latest organizing effort at the Shenzhen store faced "repeated and various obstacles," though it gave no details.

Phone calls to Wal-Mart's China headquarters, also in Shenzhen, weren't answered.

Wal-Mart Inc., based in Bentonville, Ark., employs 28,000 people in China. It has few unions in the rest of its worldwide operations.

China doesn't allow independent unions, and activists are frequently jailed and harassed.

The ACFTU says expanding its presence in private and foreign companies is one of its key goals. The group often is regarded not as an advocate for better pay and working conditions for employees but as an intermediary that represents employers to workers.

Liang Yaofa, deputy chairman of the Shenzhen Federation of Trade Unions, said he hoped the new Shenzhen union would "explore a brand new way for developing union activities in big transnational companies in China," Xinhua reported.

Labor officials hope Wal-Mart "would respect their employees' wishes to join trade unions" and provide "essential conditions" for them to operate, Liang said.

The newest Wal-Mart union in Shenzhen has 28 members, the Workers Daily said.

The newspaper, published by the ACFTU, quoted the group's vice president on Monday as expressing hope the votes would help its campaign to expand its presence to other Wal-Mart outlets.

"This experience will have great significance to our doing better at building grassroots unions, including in foreign-invested enterprises," Xu Deming was quoted as saying.

About 26 percent of China's 150,000 foreign-financed companies have official labor unions, according to the ACFTU. It says it hopes to raise that to 50 percent this year.

The president of the ACFTU, Wang Zhaoguo, who also is a member of China's parliament, reportedly said last month that he would propose a law making unions mandatory for foreign companies.

Current Chinese law gives employees the right to form unions but doesn't say what companies are required to do.

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Number of Wal-Mart unions rises to four in China

Wanadoo Jordan
07-08-2006                              [back to top] 

Workers at two more Wal-Mart outlets in China have unionised to bring the total number of trade unions at its outlets in the country to four, state media have reported.

Workers clear up the grounds around a new Walmart store in Beijing © AFP

On Saturday night 31 employees at a Wal-Mart store in Nanjing, capital of the eastern province of Jiangsu, convened to announce the establishment of the third trade union in Wal-Mart's Chinese stores, Xinhua news agency said Monday.

A few hours later 12 employees at a Wal-Mart outlet in Shenzhen city in the southern province of Guangdong elected their first trade union committee, according to the agency.

Previously two other unions had been set up, one of them also in Shenzhen, the other in the southeastern province of Fujian.

For the past two years the world's biggest retailer had resisted efforts to set up local unions. These are all affiliated with the All-China Federation of Trade Unions, which was established by the ruling Communist Party and claims some 150 million members.

However Wal-Mart has always maintained its employees were free to set up unions if they wished and insisted it was "in total conformity with Chinese law."

Joining the union offers staff no guarantee against exploitation, with the official trade union often criticized by international labor rights groups for favoring business interests over workers' rights.

China's law bans workers from forming independent unions or organizing collective bargaining outside the official unions.

Wal-Mart has opened 60 stores in 29 cities and is said to employ more than 30,000 people across the country. It arrived in China in 1996.

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More trade unions set up in Wal-Mart outlets in China

ShanghaiDaily.com
7/8/2006                                      [back to top] 

World's leading retailer Wal-Mart saw two more trade unions established in its outlets in China over the weekend, making the total number hit four just a week after its first trade union was formed in Fujian Province, Workers Daily reported today. Saturday night, 31 employees of Wal-Mart's Xinjiekou store in Nanjing, capital city of east China's Jiangsu Province, convened to announce the establishment of the third trade union in Wal-Mart's Chinese stores. And 12 employees of Wal-Mart's Qianjinlu store in southern city of Shenzhen elected their first trade union committee a few hours later in the wee hours of Sunday. "The rapid development and promising future (of the trade unions) are heartening," Xu Deming, vice president of the All-China Federation of Trade Unions (ACFTU), was quoted as saying. "We'll draw on their successful experience to push forward the establishment of grassroots trade union in enterprises including the transnational ones," Xu said. Wal-Mart's 60 Chinese outlets employ 23,000 people. The first trade union was set up at Wal-Mart's Jinjiang outlet on July 29 after 30 employees appealed to the local federation of trade unions. The second was set up last Friday at Wal-Mart's Hujing store in Shenzhen. Wal-Mart has a tradition of not allowing trade unions in its outlets. However, with mounting pressure from the ACFTU and the public, Wal-Mart China has earlier said in a statement that "Should associates request the formation of a union, Wal-Mart China would respect their wishes and honor its obligation under China's trade union law." According to China's trade union law, enterprises or institutions with 25 employees and above should establish trade unions, and employees have the right to join the ACFTU.

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States' Healthy Approach to Wal-Mart Maryland's law was overturned, but Massachusetts' wins praise

How states are tackling the problem of health care for big box retailers

By Howard Gleckman
AUGUST 7, 2006                                [back to top] 

When a federal judge in July overturned a Maryland law that would have required Wal-Mart (WMT ) to offer more generous health insurance to its workers, "a lot of people were really upset," says Cynthia Murray, who has worked at the retail giant's Laurel (Md.) store for six years. Murray, who makes $9.47 an hour, has the option of buying insurance through the company but says she can't afford the premiums, which cost her and her husband as much as $109 every two weeks.

The law would have required the Arkansas retailer to either spend 8% of its Maryland payroll on health care for its workers in that state or contribute that amount to a state insurance fund. While the law was written to cover any nongovernment employer with more than 10,000 workers, Wal-Mart was the only company that would have had to change its policies as a result. On July 19, U.S. District Judge J. Frederick Motz ruled that the state law, which was adopted last January, violated federal employee-benefits rules (see BusinessWeek.com, 7/19/06, "Rollback Ruling Favors Wal-Mart").

With Washington getting nowhere in its efforts to insure 44 million Americans who don't now have coverage, states are where the action is. More than half of the states, and many municipalities, are considering legislation to prod companies into providing their workers with some health-care coverage.

"CREATIVE APPROACH" NEEDED. Many employees and activists have taken the Maryland decision as an indication that local politicians won't be able to make any progress for the uninsured. And indeed, if the Maryland ruling stands, legal experts say it will be tough for states to copy Maryland's scheme of imposing such a tough mandate on Wal-Mart or other high-profile employers.

But that's not the end of the story. If Maryland provides an example of what states can't do, Massachusetts may offer an example of what they can.

The Bay State earlier this year adopted a landmark law that requires all residents to buy health insurance and imposes a penalty on employers that do not offer coverage. While businesses have fought many mandatory health-care plans, this one has relatively wide support. John Simley, a spokesman for Wal-Mart, says the company backs the overall thrust of the Massachusetts plan, though he says it has concerns about some details. "It is a creative approach," he says.

THE BAY STATE DIFFERENCE. The law has several key differences from the Maryland law. It covers nearly all medium and large employers in Massachusetts, not just a handful. It also imposes a modest penalty on companies that don't offer coverage—just $295 per worker, rather than 8% of payroll.

That makes the Massachusetts legislation look a lot more like a tax, which states can impose without running afoul of federal law, rather than a mandated health-care policy. "In Massachusetts, we are simply taxing employers who don't have a health plan," says Wendy Mariner, a professor of health law at Boston University, "And [the federal government] doesn't preempt anybody from raising taxes to cover people who need health care."

The two states provide contrasting models for politicians and activists around the country who are wrestling with the complex issues of health-care insurance. Many of the uninsured have jobs but are either not offered insurance at work or, like Murray, feel they can't afford the premiums. This is a huge issue for states, because they often end up footing the bill when these workers end up on the Medicaid rolls.

ON THE BANDWAGON. At least 30 states are considering Maryland-type "Fair Share" laws—most aimed at Wal-Mart and other big box retailers. Benefits lawyers say Motz's decision could make it much tougher to impose such an insurance mandate on employers. Although his ruling technically applies only in Maryland, it was written so broadly that other judges could easily adopt the same reasoning.

"It could have a dampening effect on Maryland-type proposals," says Alice Burton, director of the State Coverage Initiatives program of the nonprofit Robert Wood Johnson Foundation. But, she adds, "I don't think it has a dampening effect on the sense of urgency states have to solve this problem."

And states are not alone in jumping on the bandwagon. On July 26 the Chicago city council passed an ordinance that would require Wal-Mart, Home Depot, and other big retailers to provide at least $3 an hour in benefits for workers there, as well as pay a minimum hourly wage of $10—all by 2010. Mayor Richard M. Daley opposes the measure and has until mid-September to veto it.

If it becomes law, the same coalition of retailers that challenged the Maryland law is expected to head back to court to head off this measure. Says Steve Cannon, general counsel of the Retail Industry Leaders Assn., a business group that challenged the Maryland measure: "These laws take different approaches, but the intent and the effect are really the same. They insert the state or the city in between employers and employees and mandate how that relationship should exist."

BROADER MAY BE BETTER. These aggressive new laws are being pushed by unions, who see Wal-Mart as the poster child of the nation's low-wage, low-benefit employers. "We think these are good bills," says Paul Blank, campaign director of WakeUpWalMart.com, a labor-backed advocacy group. "Even if this ruling is upheld, there are other ways to accomplish the same thing." (See BusinessWeek.com, 8/2/06, "Wal-Mart Foes Hop a Bandwagon.")

Simley, the Wal-Mart spokesman, agrees that the battle won't end with Judge Motz. "What they are doing is political," he says. If the Maryland ruling stands, he predicts, "they'll try to design [insurance mandates] in a different way."

Legally, at least, states may have more luck with plans like Massachusetts', broader approaches that don't just target a handful of high-profile businesses. If state politicians can structure legislation that looks more like a broad tax, rather than a narrow, mandated policy, they are likely to fare better in the face of legal challenges.

They may even end up winning over some of the businesses that have been opposing their efforts. Wal-Mart's Simley says that the Massachusetts plan has the benefit of being more evenhanded than some of those proposed elsewhere. "It strikes a balance between the private sector, government, and individuals," he says.

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Employees unionize at Chinese Wal-Mart

Reuters
Sat Aug 5, 2006                                 [back to top] 

SHANGHAI (Reuters) - Employees of retail giant Wal-Mart have set up their second trade union in China, pushing toward the Chinese labor federation's goal of unionizing every Wal-Mart store in the country.

The second union was established by 42 employees of a Wal-Mart outlet in the southern boomtown of Shenzhen, the official Xinhua news agency reported on Saturday.

The first was set up late last month in the southeastern province of Fujian. A senior official of the state-controlled All-China Federation of Trade Unions has said the body will work toward establishing a union in every Wal-Mart outlet.

The U.S. retail chain, which employs more than 30,000 people at stores across China, has long resisted pressure to unionize its workers in the United States and elsewhere.

But retail analysts say the Chinese government appears recently to be placing more emphasis on unionizing the sector, both to develop the services industry and to assert control over an increasing number of workers leaving the state sector.

A spokeswoman for Wal-Mart in China earlier said she had no knowledge of the first union. On Saturday, Xinhua quoted a Wal-Mart statement as saying, "Should associates request the formation of a union, Wal-Mart China would respect their wishes and honor its obligation under China's trade union law."

© Reuters 2006. All rights reserved.

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Unions launch bus tour against Wal-Mart

(The following report appeared at CNN.com on August 4.)

Brotherhood of Locomotive Engineers and Trainmen            [back to top] 

NEW YORK — WakeupWalmart.com, backed by the United Food and Commercial Workers International Union, has launched a nationwide bus tour to make its case against Wal-Mart's low wages and restrictive employee benefits.

The "2006 Change Wal-Mart, Change America" tour is traveling from New York City westward across 19 states, making 35 stops and culminating in a Labor Day event in Seattle.

"The idea is to build public awareness and put political pressure on the retailer," said Chris Kofinis, communications director for WakeupWalmart.com. "Wal-Mart has to realize [that] its negative impact on our economy and society is not being ignored."

Wal-Mart (up $0.14 to $44.23, Charts) questions the motives behind the campaign. "This is a union funded publicity stunt that's more about politics than anything else," said David Tovar, spokesman for Wal-Mart. Tovar points out Wal-Mart's $23 a month health plans offered to employees and its creation of tens of thousands of jobs a year. "The fact is they're attacking the wrong company."

WakeupWalmart.com is highlighting the stores' impact on the communities in which they're located, the company's use of tax subsidies and the working conditions of other countries that supply the No.1 retailer with many of its products.

The tour's stops are to include townhall and community meetings, state fairs, sporting events and public squares that the group will canvas to sign up new members.

The first stop was at a community meeting held in a Bronx, New York church on Tuesday. The organizers of the tour hope to sign up 25,000 new members nationwide.

The United Food and Commercial Workers International Union is a part of Change to Win, a coalition of unions that broke off from the AFL-CIO, in the summer of 2005 over differences about union growth and funding priorities. The AFL-CIO also has efforts against Wal-Mart's labor practices underway.

The Change to Win coalition includes the Service Employees International Union (healthcare workers and service staff), United Farm Workers of America, UNITE HERE (hotel workers and service workers), International Brotherhood of Teamsters, United Brotherhood of Carpenters and Joiners of America, and Laborers' International Union of North America.

© 2006 Brotherhood of Locomotive Engineers and Trainmen

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Small banks should not fear Wal-Mart: Stern

By Benno Groeneveld
Fri Aug 4, 2006                                  [back to top] 

ALEXANDRIA, Minnesota (Reuters) - There is no evidence that a bank proposed by retail giant Wal-Mart Stores Inc. (WMT.N: Quote, Profile, Research) would crowd out small community banks, as many such institutions fear, Minneapolis Federal Reserve President Gary Stern said on Friday.

Stern said his major concern about Wal-Mart's proposed move into banking was that it would run counter to his hope that the existing bank savings net could be reigned in over time.

"In the best of all possible worlds, we would avoid mixing banking and commerce, but we have to deal with the world we have," he told the Independent Community Bankers of Minnesota's annual convention.

Stern, who is not a voting member on the Federal Open Market Committee in 2006, did not address the economy or monetary policy in a speech on banking issues.

Legislation to close a loophole that allows retailers such as Wal-Mart to own a bank was introduced in the U.S. House of Representatives in July.

Debate centers on industrial loan companies, or ILCs, and their potential to open branches nationwide. There are about 60 ILCs chartered in seven states, mostly owned by large financial services firms.

"By law it might be hard to prevent Wal-Mart from having an ILC when other large companies do," Stern said.

Yet many community banks have done well even in the face of competition from much larger banks, he said, adding that the combination of retailers and banks "has not been especially successful in the past."

Separately, Stern termed "unwise" calls to raise the level of deposit insurance for bank accounts provided by the Federal Deposit Insurance Corp.

The FDIC insures deposits at about 8,800 banks and savings associations, and is the primary federal regulator of state-chartered banks that are not part of the Federal Reserve system. The agency insures up to $100,000 in individual bank deposits and up to $250,000 in retirement accounts.

Few households have anywhere near the $100,000 FDIC maximum on deposit in banks, Stern said, and raising the limit would promote excessive risk-taking.

"I wouldn't carry too far the argument that we have a bunch of unsophisticated consumers who somehow can't deal with financial affairs ... most people actually do," he said.

The central banker also said that proposed reforms to mortgage providers Fannie Mae (FNM.N: Quote, Profile, Research) and Freddie Mac (FRE.N: Quote, Profile, Research), limiting the growth of those companies' mortgage portfolios, were "necessary but insufficient."

"Society is providing the safety net, but not getting many of the promised benefits in return" from the government-backed mortgage companies, Stern said.

© Reuters 2006. All Rights Reserved.

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Wal-Mart's Mexican Unit to Launch Bank

FinancialNewsUSA
08/04/2006                                 [back to top] 

City of Industry, CA --The Mexican unit of Wal-Mart Stores Inc. (NYSE:WMT) has filed for a retail banking license with local regulators, the latest retailer to enter the realm of financial services in Mexico in recent years. Wal-Mart de Mexico, or Walmex, said in a release Wednesday it will make an announcement "the moment that this process results in the granting of a banking license." The unit had 818 retail stores and restaurants at the end of June. China Direct Trading Corp. (OTC BB:CHDT) announces recently that investors over the past few weeks have been flooding the company with sourcing business. Investors have realized that China Direct and its many subsidiaries have the capability to source most items made in China through its 25 years of relationships with factories and trading companies throughout China.

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Wal-Mart Says Auf Wiedersehen

BusinessWeek                                   [back to top] 

For the world's biggest retailer, Germany provided an expensive lesson in how not to enter a foreign market. Wal-Mart (WMT ) underestimated German labor unions and local competitors such as Aldi. On July 28, after nine years of losses, Wal-Mart announced it will sell its 85 German stores to Dusseldorf-based Metro for a price one insider says was tens of millions less than the value of unsold merchandise and other physical assets. Wal-Mart will take a $1 billion charge.

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Chicago to Wal-Mart: Pay a living wage

John Bachtell
People's Weekly World Newspaper,
08/03/06                                                             [back to top] 

CHICAGO — A packed gallery erupted into jubilation as the City Council passed an ordinance July 26 making Chicago the largest city to set minimum wage and benefit standards for retail giants like Wal-Mart. The measure passed 35-14, despite furious opposition by Wal-Mart, a unified corporate community and Mayor Richard M. Daley.

Wal-Mart and Target threatened to freeze their business plans if the measure passed. They shamelessly bought off aldermen, religious leaders and the media. They tried to pit Chicago against the suburbs and especially to split the African American and poorest communities.

The victory resulted from a massive two-year campaign by a multiracial, grassroots coalition uniting the Chicago Federation of Labor (CFL), Jobs with Justice, ACORN, many grassroots community organizations and religious leaders.

Supporters picketed, rallied, and swamped aldermen with thousands of phone calls and petitions. A boisterous rally of 500 people filled the council lobby before the vote with chants of “Hey, Daley, you know! Seven bucks is far too low!”

CFL President Dennis Gannon remarked, “Today’s vote sends a message that our elected officials and community members alike are not interested in the creation of low-paying jobs that fail to provide a living wage or adequate health care benefits for working families. The choice between no job and a low-paying job is a choice between bad and worse.”

Big business nationally is pressing Daley to veto the ordinance. The big-box retailers vowed to get it overruled in court. But Alderman Joe Moore, a principal sponsor, told the World supporters anticipated a court challenge but were confident the measure would stand. Meanwhile his office has been inundated by calls from others across the country seeking to emulate the victory.

The ordinance mandates a starting wage of $9.25 in 2007 in retailers with stores of 90,000 square feet or greater with at least $1 billion in annual sales. By 2010, that wage will increase to $10 an hour with automatic cost of living increases thereafter. Three dollars an hour must be devoted to health care. The ordinance covers 34 currently operating stores. For three hours the audience listened with rapt attention as aldermen blasted the greed of Wal-Mart and other giant corporations. They cheered wildly when a point was scored and hooted when an alderman tried to justify a “no” vote. It was an unprecedented debate in the council.

In introducing the ordinance Moore invoked President Franklin Roosevelt, who declared in signing the Fair Labor Standards Act 68 years ago, “No business that depends on paying less than a living wage has the right to exist.”

Moore said, “The same old tired arguments are being waged against a minimum wage — that it would cost jobs, drive business away and destroy the economy. They were wrong then and they are wrong now.”

“Wal-Mart made $11.2 billion in profits last year, second only to Exxon,” he said. “Our job is not to safeguard the profits of the world’s largest corporations. It is to protect the well-being of our constituents.”

Opposing aldermen warned big retailers would abandon the city, tax revenues would be lost, their constituents were desperate for jobs at low wages, supporters were racists and the ordinance was unconstitutional.

To claim their constituents opposed the measure, they could only cite postcards and “robo-calls” paid for by Wal-Mart. In fact the ordinance was very popular, including among African Americans and Latinos, where polls showed 90 percent supporting the living wage law.

At one point Ald. Bernard Stone suggested Moore was really Robin Hood and “wants to steal from the rich and give to the poor.” The audience erupted.

Later Ald. Billy Ocasio remarked, “People are arguing for businesses that have the largest profits take from the people who have the least. I would happily become one of Robin Hood’s merry men.” The audience stood and cheered again.

“For Wal-Mart to grow they have to enter the urban market. They picked the time and place for this battle,” said African American Ald. Freddrenna Lyle, also a principal sponsor, alluding to Wal-Mart’s bluff to abandon the city if the ordinance passed.

“Is our opposition racist? It’s racist that they trotted out African American ministers to castigate, threaten and berate the African American elected officials,” she said. A majority of African American aldermen supported the ordinance.

Opponents had also charged organized labor with racism because it would deny jobs to the African American community. Lyle acknowledged influences of racism in the building trades. Yes, she said, “every institution has problems. But the face of commerce is white.”

To the charge that the aldermen were stooges of the unions, Lyle declared, “Maybe those of us who are voting for the ordinance are stooges of Dr. Martin Luther King Jr. who died in Memphis fighting for a living wage for sanitation workers.

“Without organized labor, there would be no pension plans and health benefits. No other single institution has had that empowering impact on the African American community,” she said to cheers.

Reflecting on the victory, James Thindwa, director of Chicago Jobs with Justice, told the World, “Wal-Mart opposed this measure not because they can’t afford it. They are afraid this will be repeated across the country. The Wal-Mart model predicated on low wages will collapse. We have drawn a red line around our values — beginning with dignity for workers.”

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A new Wal-Mart greeting: checking or savings?

BY SUSAN HARRIGAN
Newsday 
August 2, 2006                                               [back to top] 

As the parking lot began to fill up outside the Wal-Mart store in Valley Stream one morning last week, Josephine Dimarzo was wandering through the store's maze of shelves stacked with clothing, furniture, diapers, cameras, toys, televisions, pet food and other paraphernalia of everyday life.

Dimarzo, 83, said she had come to Wal-Mart to look for thread. At the moment, however, her attention had been caught by a rack of socks beneath one of the store's ubiquitous "Always Low Prices" signs. The Valley Stream resident was considering buying two pairs.

One of many bankers' worst nightmares is that sometime soon, Wal-Mart browsers such as Dimarzo might be able to consider buying another type of good -- Wal-Mart-brand checking and savings accounts, home mortgages and other financial wares that provide banks' bread-and-butter business.

Using a loophole in the nation's banking laws, the world's largest retailer is seeking to open a bank with limited powers known as an industrial loan company, or ILC. Although Wal-Mart says it will use the new company sole