Union to target Wal-Mart

By Kimberly Morrison,
The Morning News
August 30th, 2008                     [back to top] 

The company that practically invented one-stop shopping is getting serious about adding physicals, vaccinations and virus treatment to the list.

Wal-Mart Stores Inc. announced in February - just after closing 23 of its walk-in clinics - that it planned to open 400 clinics in its retail stores by 2010. Don't call it a Wal-Mart clinic, it's The Clinic at Wal-Mart. They are located inside the stores and co-branded, but operated by local medical outfits.

RediClinic operates the two in Northwest Arkansas, and St. Vincent Health Systems, a part of the Catholic Healthcare Initiatives system, has partnered with Wal-Mart to open four co-branded clinics in Little Rock stores.

Thus far, the retailer has opened 39 clinics nationwide.

The clinics are designed to serve basic care needs - health screenings and routine ailments - for about $60. Clients don't have to make an appointment and can see a physician's assistant or nurse practitioner as quickly as 15 minutes after walking in.

"I hear really positive feedback," said Kellie Robertson, a nurse practitioner who works at the Fayetteville Clinic at Wal-Mart at the store on Mall Avenue. "Patients appreciate that we are convenient and available."

There's an appeal for Wal-Mart as well. Like its low-cost prescription drug program, customers can come in for discount health care and end up shopping around.

"From a business perspective, it makes sense," said Scott Alaniz, an analyst with Rogers-based Boston Mountain Money Management Inc. "You are generating traffic into the stores, and that is always good."

Wal-Mart isn't the only retailer looking to capitalize on the retail clinic. Target, Kroger and drugstore chains CVS, Walgreens and Rite Aid have also opened retail clinics in recent years. CVS in 2006 acquired MinuteClinic, and the clinics inside its drugstores account for the majority of MinuteClinic's 500-plus locations.

Wal-Mart's model is slightly different. The retailer hopes that partnering locally with clinic operators and going the co-brand route will build trust through brand recognition, said Christi Gallagher, a Wal-Mart spokeswoman.

Gallagher said the clinics play a critical role in health care by being more accessible and affordable, particularly to the uninsured and those without a primary care physician.

"It really does go back to two of our fundamental models that, No. 1, the clinics are providing a one-stop shopping experience and also to have a store of the community where customers see a clinic that they are familiar with," Gallagher said.

Not everyone is sold on the retail environment as the right place to get treatment for contagious ailments like pink eye or respiratory infections, which are among the conditions treated in the retail clinics.

"Selling tires alongside food won't contaminate the food," said Dan Raftery, president of Raftery Resources Network, a corporate consultant agency based in Antioch, Ill. "Inviting flu victims into the same space as otherwise healthy folks is another story."

A recent MSNBC article on in-store health clinics called this the "yuck" factor and said retail clinics battle a perception issue.

Gallagher said Wal-Mart is focused on those who want and need the services provided by in-store clinics, and she said that for the Wal-Mart shopper, the clinics make sense.

"I think Wal-Mart customers are used to one-stop shopping and convenience, and the more things they can mark off and do in once place, the better," Gallagher said.

Growth in the industry of "convenience care" - the catch-all term for clinics operated in retail, supermarket and drugstores - supports Gallagher's perspective.

There are more than 1,000 convenience care clinics operating in 34 states, according to Merchant Market, an industry consulting and research group. In 2006, there were just around 200 nationwide, and those were mostly MinuteClinics.

With Wal-Mart's plan to add 400 to the national tally within just a year and a half, the in-store clinic may be on a path to becoming a relatively common sight.

By Patricia Callahan
and Sam Roe,
Chicago Tribune
August 29th, 2008                      [back to top] 

Federal regulators on Thursday night directed retailers across the country to stop selling and to recall nearly 900,000 dangerous bassinets, one of the largest child product safety actions in years.

The move followed a day of confusion for consumers, retailers and even regulators who were unclear about which bassinets contained a design problem similar to one that resulted in the deaths of two babies.

In fact, a Tribune reporter on Thursday bought two bassinets at Baby Depot at Burlington Coat Factory on the West Side. Before the reporter left the store, an employee checked the model numbers to see whether those versions contained the deadly flaw. She told the reporter they did not.

But she was wrong. Both had the dangerous design.

Much of the confusion stems from the U.S. Consumer Product Safety Commission's issuing a consumer alert late Wednesday about the bassinets but not stating which model numbers were affected. The alert was issued after Tribune inquiries.

Then, Thursday evening, the agency released 66 model numbers affected and announced that six major retailers voluntarily agreed to recall the products in question: convertible "close-sleeper/bedside sleeper" bassinets manufactured by the now-defunct Simplicity Inc. of Reading, Pa.

The retailers recalling the bassinets were Wal-Mart, Toys "R" Us, Kmart, Big Lots, Target and J.C. Penney. It remained unclear Thursday night how many other retailers sell the items.

At Baby Depot, where the Tribune bought flawed bassinets, a store manager referred calls to corporate headquarters but no one could be reached. The model numbers on both bassinets were among those cited Thursday by the safety commission.

Because of the holiday weekend, Baby Depot and other Illinois stores have until the end of Tuesday to cease sales of the bassinets.

In its consumer warning, the commission urged people not to use Simplicity bassinets with drop-down sides that allow a parent easy access to a baby but create a gap where a baby can slide through and hang to death. Two babies have died that way. The commission's alert came 11 months after the first baby's death. A second child died a week ago.

"Due to the serious hazard these bassinets pose to babies, CPSC urges all consumers to share this safety warning with day-care centers, consignment stores, family and friends to ensure that no child is placed to sleep in a Simplicity convertible bassinet covered by this warning," the alert said.

The commission said it issued the alert because SFCA Inc., a former Simplicity creditor that purchased Simplicity's assets in May "has refused to cooperate with the government and recall the products."

SFCA countered by saying Simplicity products are not its responsibility. "The products in question were manufactured and distributed by Simplicity Inc., a company that is no longer in business," SFCA said in a written statement. "SFCA purchased Simplicity's assets at auction after Simplicity Inc. went out of business and has no legal liability for any products distributed previously by Simplicity."

But one of the deadly bassinets the Tribune purchased Thursday carried a shipping label with the name "SFCA Inc." This seemed to contradict the written statement SFCA issued Thursday: "The CPSC product alert does not involve any product manufactured and distributed by SFCA Inc."

Asked to explain this discrepancy, SFCA spokesman Paul Nathanson would not comment directly. Instead, he wrote in an e-mail: "As far as I know none of these model numbers were manufactured and distributed by SFCA."

Julie Vallese, a spokeswoman for the safety commission, would not comment on its dispute with SFCA. She said the agency decided not to pursue a forced recall because such an action could end up in court and take years to resolve.

Instead, the agency is directing the nation's retailers to stop selling the bassinets. Vallese said she hoped all stores would comply. If not, the agency would have to study whether it could use its authorities under the recently enacted Consumer Product Safety Improvement Act to compel stores to cease sales.

In Illinois, the rules are tougher. Once the commission has issued a consumer warning, retailers have three business days to remove the item from shelves, said Cara Smith, deputy chief of staff for state Atty. Gen. Lisa Madigan.

Smith said the state plans to subpoena information from SFCA to determine which firm is responsible for the flawed cribs. "Consumers were left high and dry because of the acquisition of Simplicity by SFCA," she said.

She said it was alarming that the safety commission did not take action on the bassinets after a baby died last year. "It's unspeakable," she said. "It's another massive problem."

Even the newest versions of the bassinets -- allegedly fixed to prevent future deaths -- allow parents to assemble the product in a way that still contains a potentially deadly gap. Though a baby is less likely to wriggle through that gap if parents follow the age recommendations, it's still possible, said Nancy Cowles, executive director of Kids In Danger, an advocacy group based in Chicago.

By law, that gap would not be allowed in a crib. But because the product is a bassinet, it's not illegal.

Cowles and others criticized the safety commission for failing to recall the bassinets last fall, when the first baby died. A recall might have prevented the second death, she said.

"For the CPSC to say, 'We're acting quickly' when there was a death ... a year ago is obviously not true," Cowles said. "Whether they were stymied by the company or their own slow-moving bureaucracy, this child is dead because of it."

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Shawnee infant's death spurs warning on bassinet

By JIM SULLINGER
and BRAD COOPER,
Kansas City Star
August 29th, 2008        .           [back to top]

Federal officials on Thursday urged retailers to stop selling Simplicity bassinets connected to two infant deaths, including one last week in Shawnee.

The Consumer Product Safety Commission secured agreements with Wal-Mart, Toys "R" Us, Kmart, Big Lots, Target and J.C. Penney to voluntarily stop selling the nearly 900,000 bassinets.

The commission action stops short of an official recall because the government found itself in a legal no man's land as it worked to get the bassinets away from unsuspecting parents Thursday.

Kennedy Renee Brotherton The Simplicity 3-in-1 and 4-in-1 convertible bassinets have metal bars spaced farther apart than 2 3/8 inches, which is the maximum distance allowed under federal safety standards.

The commission's order was prompted by the Aug. 21 death of 5-month-old Kennedy Renee Brotherton at the home of her aunt and uncle in Shawnee.

A year ago, 4-month-old Katelyn Marie Simon of Noel, Mo., was found dead, hanging partially out of her bassinet. McDonald County officials blamed the bassinet and ruled the death an accident.

Thursday's action was complicated by the fact that Simplicity Inc. of Reading, Pa., is no longer in business. Its assets were purchased in April by another Reading company, which said it would not issue a recall because it didn't make the bassinets.

"These retailers stepped up to the plate because of the situation with Simplicity going bankrupt," said Julie Vallese, a commission spokeswoman.

The confusion extended to the bassinet model numbers, which commission officials were unable to pin down until late Thursday.

"Clearly in this case we see a loophole in the law," said Sally Greenberg, executive director of the National Consumers League. "You cannot have a consumer safety products system that works effectively if companies are allowed to escape responsibility by going out of business."

The commission said the Simplicity 3-in-1 and 4-in-1 convertible bassinets had metal bars spaced farther apart than 2 3/8 inches, which is the maximum distance allowed under federal safety standards.

It noted that the metal bars were covered by a fabric flap attached to Velcro.

"If the Velcro is not properly re-secured when the flap is adjusted, an infant can slip through the opening and become entrapped in the metal bars and suffocate," the commission said in a statement.

After Simplicity filed bankruptcy, its assets were acquired in April at an auction by SFCA Inc., also in Reading, Pa.

Amanda Lahan, an SFCA spokeswoman, said the company wasn't issuing a recall because it didn't manufacture or distribute the defective bassinets.

Lahan said the company, which also makes children's products, has no legal liability for any products distributed previously by Simplicity. Company officials said they did not sell or distribute the Simplicity bassinets after acquiring the assets.

David Arkush, an official with the consumer advocacy group Public Citizen, said that under a new law the commission can order a recall on its own but only if it files a lawsuit against the manufacturer.

"In this particular case, I don't know who the commission could sue," he said.

Vallese, the product safety commission spokeswoman, said this isn't the first time the agency has had to sort product responsibility when a company went out of business. The agency had a similar problem with space heaters, but some retailers stepped in to compensate consumers.

"We've been through this before," she said. "It doesn't happen often."

Despite the commission's warning Wednesday, a Simplicity 3-in-1 close-sleeping bassinet was on Wal-Mart's Web site Thursday morning for purchase.

A Wal-Mart spokesman, Bill Wertz, released a statement several hours later saying the company was taking the products off its shelves.

"We are working with the supplier and (the commission) and are directing store managers to remove product identified in the commission's press release from store shelves and initiating a register block to prevent sale," he said. "In addition, we are in the process of removing this product from sale at Walmart.com."

Dan Blegen, a Kansas City corporate lawyer, said retailers should take the product off their shelves voluntarily because they could be liable in a lawsuit if the product injures or kills someone.

"The retailer is taking on a great deal of potential liability by continuing to sell a product that there is a (commission) warning about danger and there's a known risk of injury," he said.

In the situation where the manufacturer doesn't exist any more, sale of a dangerous product can put the retailer in the middle of a legal bull's-eye, Blegen said.

"You protect yourself by pulling it off the market," he said.

Jeff Slaton, a Springdale, Ark., lawyer, filed a lawsuit recently against Simplicity and Wal-Mart on behalf of Katelyn Simon's mother.

"Simplicity failed to warn of the danger of an infant becoming stuck," the lawsuit stated. "Simplicity Inc. and its engineers should have known the defective condition would lead to the death of infants and continued the design and sale of the product willfully, wantonly and with conscious indifference to its consequences."

Slaton thinks the product safety commission didn't act fast enough.

"The sad thing about this is that this (bassinet) should have been recalled right after Katelyn's death," he said.

From 2000 to 2004, the commission reported 97 babies and children under 5 died from crib-related deaths. Another 11,300 children were hurt from cribs and crib mattresses in 2006.

Arkush said the commission has a history of acting slowly to recall dangerous products.

The Consumer Product Safety Improvement Act of 2008 makes it easier for the commission to order a recall, Arkush said. Under the previous law, the commission had to hold what amounted to a trial before issuing a recall - a process that could take months.

"It's really a new day," Vallese said. "We are using those new authorities very aggressively."

Bassinet safety Consumer Reports recommends babies sleep in full-size cribs, not bassinets. But if you use a bassinet, follow these safety guidelines: Buy a bassinet or cradle with a wide, stable base and a sturdy bottom. Look for a JPMA (Juvenile Products Manufacturers Association) sticker. Buy a cradle that barely rocks. Rocking can cause the baby to press against the sides of the cradle. Make sure there are no splinters, no sharp points or edges, and no small choking hazards. Do not use a co-sleeper (an infant bed that attaches to an adult bed). There are no safety standards for co-sleepers. Move your baby to a crib as soon as she pushes up on her hands and knees or reaches the maximum weight for the bassinet or cradle. Source: Consumerreports.org

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Keep Wal-Mart out of Lodi

Dear johnny,

Right now, Wal-Mart is trying to build a new supercenter in Lodi -- whether residents like it or not.

The retail giant wants to build a 226,441-square-foot store in downtown Lodi, but this is not the kind of sustainable growth the city wants or needs.

That's why it's already taken six years of hearings, reports, lawsuits, and environmental studies for Wal-Mart to proceed with its plans. Clearly the people of Lodi don't want a huge new big-box store coming to town.

But Wal-Mart is pushing ahead anyway -- and it's up to us to stop them.

Make sure Lodi's city leaders hear from you as they decide whether to allow Wal-Mart to go through with its plans. Click here to use our simple tool to email the Mayor, City Council, and Planning officials and tell them to end it once and for all and say no to Wal-Mart:

http://action.walmartwatch.com/Lodi

As the Stockton Record reported this week, Wal-Mart already has at least 20 stores within 44 miles of downtown Lodi. Does the city really need another one?

What's more, while Wal-Mart may claim to benefit the communities it moves into, the truth is that the retail giant is an irresponsible corporate citizen and a bad neighbor.

One of the primary reasons why residents have opposed the Wal-Mart project is environmental. With a new supercenter always comes increased noise, traffic and air pollution, as well as runoff pollution from its parking lots.

The Lodi planning commission plans to review its final environmental report and make a decision next month, but it hasn't released the report yet. Write the planning commission and tell them that if they have a draft of the report, they should release it so that citizens can review it and voice their opinions before the final decision is made:

http://action.walmartwatch.com/Lodi

Wal-Mart founder Sam Walton once wrote, "If a community does not want us there, we will go somewhere else."

In communities across the country, residents have stood up to Wal-Mart and won.

Now it's Lodi's turn. Tell the City to say no to Wal-Mart in your community:

http://action.walmartwatch.com/Lodi

Sincerely,

David Nassar
Wal-Mart Watch

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Wal-Mart goes purple with Marketside

By Jonathan Birchall
The Financial Times
August 26 2008                           [back to top]

The design of Wal-Mart’s new small format Marketside stores, which will open in the Phoenix, Arizona area in coming weeks, marks a dramatic break with the branding of the rest of Wal-Mart’s more than 3,400 low-cost US stores.

Pictures of one of the first four new 15,000 sq ft stores, which Wal-Mart says are part of a pilot, have appeared on the website of the city of Mesa, southeast of Phoenix.

The design includes a natural wood finish around the entrance, and deep-purple awnings - the same colour that will be used on the aprons of the staff, and on its website, www.marketplace.com. The Marketside name appears in lower case green lettering, with no reference to its parent company.

The first four stores have been built in former drugstore sites. Wal-Mart has indicated that the pilot will involve up to ten stores. It has acquired at least two other sites in the Phoenix area where it is planning to build new stores from scratch.

The new Wal-Mart stores will be competing directly with Tesco’s new Fresh & Easy small format stores. Tesco has opened 20 stores in the Phoenix area in less than a year, with another 16 sites announced so far.

Both retailers say their formats are aimed at providing fresh and prepared foods in a convenient neighbourhood location.

Unlike Fresh & Easy’s minimalist hard-discount stores, planning documents indicate that the Marketside stores will have some foods heated and prepared on the premises, including rotisserie meats and breads.

Marketside is the first new format to be launched by Wal-Mart since it started its supermarket-sized Wal-Mart Neigborhood Market stores in 1998. It is also the first format not to use the Wal-Mart name since it created the Sam’s Club warehouse store in 1983.

Wal-Mart has projected that the pilot, if successful, could evolve to between 1,000 and 1,500 stores with over $10bn annual sales.

A number of other leading US supermarket chains are also now testing new small format grocery stores, including Safeway and Supervalu.

© Copyright The Financial Times Ltd 2008.

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As costs climb in China, manufacturers look elsewhere

By RICK MONTGOMERY,
Kansas City Star
August 26th, 2008                     [back to top]

If Americans watching the Beijing Games were stunned by China’s changing economy, wait until they see price tags on Chinese-made goods this Christmas and beyond.

What’s bad news for consumers may be good news, experts say, for humanity: China is losing its distinction as the world champion of cheap manufacturing.

With pressures building against sweatshops and pollution in China, however, “Indonesia and Vietnam are just waiting to take their turns,” said Chris Kuehl of the Kansas City business consultant Armada Corporate Intelligence.

Consider the portable, 1,500-watt SteamMax Cleaner sold by a local outfit, Top Innovations, though made in China.

A tangled Bird’s Nest of factors — from labor reforms to shipping costs to the slashing of subsidies for exporters — has driven up the cost of making the $159 SteamMax and Top’s other household products by nearly 30 percent in two years.

“Until this year we’ve been able to absorb a lot of the increases” and kept pricing competitive, said company executive Benny Lee. “But you can’t absorb 30 percent.”

Costs have climbed so dramatically that about one in five multinational manufacturers in China has decided to move operations to other developing nations, according to a recent survey by Booz Allen Hamilton consultants.

Countries most cited in the study as alternatives were India, Vietnam, Thailand, Malaysia and Brazil, in that order.

“Generally, it’s a positive development,” said Jeff Willis of China Leads, a Kansas-based provider of Internet tools for U.S. companies seeking business in China. “What you’re seeing is the onward-forward march of China’s economy and inexorable rise of a middle class.”

Over the last quarter century, hundreds of millions of Chinese citizens crawled out of peasantry to work in low-wage factories, making “Made in China” a Wal-Mart staple. But eventually those workers developed skills that enabled many to seek higher wages from other manufacturers.

Just as predictably, government reforms to protect employees would arrive in the form of collective bargaining laws, overtime pay and limits on consecutive hours worked.

Also hurting manufacturers are China’s failings in keeping its air healthy and its products safe.

Dozens of factories that were forced to close for the Olympics will reopen in time to meet Christmas orders. But the least efficient plants are shuttered for good, part of the government’s five-year plan to build up renewable energy sources.

The U.S. toy market, reeling from last year’s reports of lead paint in China-made toys, is demanding stricter quality control and laboratory testing.

The testing has cut deeply into the profits of smaller manufacturers such as Phoenix-based Adorable Originals, maker of dolls and children’s clothing sold in boutiques. Chief executive officer Melanie Corpstein said the company will not raise prices anytime soon.

“I don’t think this is the right time to be asking for more from our customers, many of whom are struggling on their own,” said Corpstein. “But we are absolutely looking at factories in other countries. I feel it’s time for that.”

Last month, world-famous German teddy bear maker Steiff announced it was pulling out of China after only four years.

A Steiff executive told the Stuttgarter Nachrichten newspaper that it took six months to train workers on the bears’ intricate stitching, and “by then you might have already lost them to an automobile factory next door.”

“The workers there are actually protesting. We see walkouts. We see strikes,” said John Kennedy, a University of Kansas political scientist who just returned from rural Shaanxi province.

“You could see companies leaving China for the reasons they left America: Workers’ rights were strengthened and local governments began enforcing environmental laws.”

Such things should delight Americans who want greater accountability from the communist leadership, he said: “But will Americans say, ‘OK, I’m willing to pay double at Wal-Mart to make it happen’?”

Top Innovations has produced its small steam appliances in Chinese factories for about a decade. In recent months a confluence of pressure points has recast the low-cost calculus:

•Scaled-back subsidies. Last summer Beijing, under global pressure to curb its trade surplus, notified Top and other houseware exporters that key tax rebates of 13 percent or more would be sliced to 5 percent.

“And then they tell you it takes effect in just 10 days,” said Lee, a Taiwanese American who moved to Kansas City in 1995. “You’re not even given time to prepare for an 8 percent loss.”

China first dangled the export tax breaks in 1985 to lure billions of dollars in manufacturing.

•Overtime pay. A Chinese labor law that took effect Jan. 1 required employers to pay higher wages for overtime, to eliminate 12-hour shifts for temporary workers and to offer employment contracts and a social security program.

•High transportation costs. Fuel prices have jacked up the bill for shipping Top merchandise from a Shenzhen factory to a Kansas City distribution site.

It costs about $4,000 for one container to make that trip today, compared with about $2,500 two or three years ago.

The rising value of the Chinese currency versus the U.S. dollar — up 21 percent since 2005 — adds to the struggles of U.S. companies forking out yuan to pay for workers, parts and energy bills, said Albert Keidel of the Carnegie Endowment for International Peace.

If firms such as Top Innovations are considering moving some operations out of coastal China — once the epicenter of low-cost manufacturing — is the end of globalization in sight?

La-Z-Boy is opening a production line this month in North Carolina, signaling a desire to produce closer to a reliable U.S. customer base. But few forecasters go as far as economists Jeff Rubin and Benjamin Tal, who argued in a report last spring that “globalization is reversible.”

Lee can envision his steam vacuums being assembled in Vietnam or inland China — perhaps the next frontiers for a peasantry to climb the income ladder with factory jobs.

Chinese leaders “have learned from the Western world how to help the worker, and that’s good news for the worker,” he said.

“But it can become very difficult for the industries” to sustain profits at the box-store prices U.S. consumers have come to expect.

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U.S. Inspectors To Monitor Safety of Chinese Exports

By Sarah Rubenstein,
The Wall Street Journal
August 25th, 2008                        [back to top]

Recent problems with tainted products from China, including the blood-thinner heparin and toys with lead paint on them, have meant increased pressure on the FDA to keep an eye on products before they leave that country and head for the U.S. Lawmakers recently pushed to get the agency more money for foreign inspections.

Now, the U.S. will station a bunch of inspectors in China. Health and Human Services Secretary Mike Leavitt, who has oversight over the FDA, told Bloomberg that as many as 15 inspectors will be assigned to Beijing, Shanghai and Guangzhou in October. HHS has also said the FDA would open a China office.

Leavitt told Bloomberg that China’s government has already been working to improve the safety of the country’s exports. “I don’t think they’ve got the problem completely solved, but it was clear to them that the made-in-China brand was affected by product-quality problems and they moved aggressively to begin making progress,” he said.

Leavitt added: “Will there be problems in the future? Yes. Will there be as many of them? I don’t think so.”

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No big push to unionize stores in U.S. - yet

'Won't do anything until Obama bill approved'

ALLISON LAMPERT
The Gazette
Friday, August 22, 2008              [back to top]

A collective agreement imposed last week at a Quebec garage won't generate new efforts to unionize Wal-Mart's U.S. stores, UFCW delegates say.

But the first contract won by Wal-Mart workers in North America will help galvanize union support for new labour legislation advocated by presidential candidate Barack Obama, said David Cook, a delegate from St. Louis, Missouri.

"In terms of unionizing Wal-Mart stores in the U.S., we won't do anything until the Obama bill is approved," Cook said.

Obama has co-sponsored a bill that would bring U.S. labour laws more in line with Quebec's legislation governing the workplace. It would allow U.S. unions to run accreditation drives without holding a vote and give arbitrators the ability to impose collective agreements.

Cook said the union intends to use the new Quebec contract to generate support for the bill among members.

"It's because of the (labour rules in) the Obama bill - which Quebec already has - that the workers got this agreement."

Wal-Mart fiercely opposes card-based certification, arguing it doesn't reflect the will of workers and goes against the democratic principle of holding a vote, company spokesperson Andrew Pelletier said recently.

But union officials have accused Wal-Mart of sabotaging union votes, either by offering workers short-term raises or by threatening to close down store departments.

© The Gazette (Montreal) 2008

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Wal-Mart to air economy-focused ads

By Kimberly Morrison,
The Morning News
August 22nd, 2008                       [back to top]

Wal-Mart Stores Inc. said Friday it is launching a series of economy-focused TV ads during the Democratic and Republican national conventions.

The 15-second ads highlight some of the company's top initiatives, including its $4 prescription drug program, and communicate how supercenter shopping saves on gas.

The ads will run on cable news networks including CNN, MSNBC and Fox News during the Democratic convention in Denver and the Republican convention in St. Paul, Minn.

The campaign is part of a larger effort by Wal-Mart to communicate price savings, the company said.

The ads, stylized like campaign ads, cast Wal-Mart as a consumer advocate in a challenging economy.

Wal-Mart declined to say how much the company is spending on the ad campaign, but reported to the Securities and Exchange Commission that it spent $540 million in advertising last year. Wal-Mart is the fifth largest spender on retail advertising behind Macy's, Nextag.com, Target and Sears, Roebuck and Co., which owns Kmart.

Data collected by The Nielsen Co. shows the retailer last year spent 25 percent of its advertising budget on network TV, 20 percent on cable TV and another 18 percent on other TV broadcasts, including Spanish-language channels.

Wal-Mart U.S. Chief Executive Eduardo Castro-Wright said in a release that the new ad campaign reinforces for its customers that the company is "there for them" through economic hardship.

Analysts had months ago predicted that Wal-Mart would fare well as consumers became increasingly strained by inflation, as well as housing and credit woes. Many continue to be encouraged by its strong quarterly sales compared to the retail industry overall.

"While we still think it is too soon to say that Wal-Mart is back on top of its game, the company is posting its strongest sales numbers in recent memory despite, or potentially because of, the weakening economy," Joseph Beaulieu, analyst with Chicago-based Morningstar, said in an Aug. 7 note.

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Wal-Mart looks to political convention ads to lure shoppers

By Nicole Maestri,
Reuters
August 22nd, 2008                       [back to top]

TV viewers may be undecided about how they will vote in the upcoming presidential election, but if Wal-Mart has its way, they should not be undecided about where to shop.

As the Democratic and Republican National Conventions get underway, Wal-Mart is preparing to launch a series of TV ads that will highlight how consumers, worried about the economic climate, can save money by shopping at the discount retailer.

The ads will run on cable news networks like CNN and MSNBC during the Democratic National Convention in Denver, Colorado, and the Republican National Convention in St. Paul, Minn. The ads will start on Aug. 25 and run through Sept. 7.

In rolling out the ads, Wal-Mart cited a survey by Voter/Consumer Research of Washington, DC according to which more than half of all Americans surveyed – including three quarters of African-Americans and about two thirds of Hispanics — said they are more likely to shop at Walmart discount stores now compared with six months ago. It also said that nearly half of registered voters who are currently undecided between presidential candidates Sen. Barack Obama and Sen. John McCain say they are more likely to shop at Walmart today than they were six months ago.

“Americans are facing unprecedented financial challenges and we see them in our stores every day — working men and women living paycheck to paycheck and faced with difficult decisions,” said Walmart U.S. CEO Eduardo Castro-Wright in a statement. “… This new advertising campaign reinforces that we will continue to be there for them.”

The ads will highlight Wal-Mart’s $4 generic prescription drug program, which it says has saved Americans an estimated $1 billion. It will also tout how consumers can save money and gas by taking a one-stop shopping trip to its stores.

It is an interesting time for Wal-Mart to link itself with the presidential election.

Labor groups have asked federal regulators to look into whether Wal-Mart broke the law during company meetings with store managers where it warned about the consequences of a proposed labor law backed by Democrats. At issue is whether Wal-Mart’s discussion of the law, which would make it easier for workers to unionize, amounted to an effort to dissuade employees from voting for Obama.

Wal-Mart denies that it tried to influence voting.

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Wal-Mart Said to Close 42 Fuel Stations

Progressive Grocer
Aug 21, 2008                         [back to top]

Wal-Mart Stores and Tesoro Corp. have reportedly agreed to cease operations of 42 Mirastar fueling stations at Wal-Mart locations across the western United States.

Tesoro will continue operations at 32 remaining fueling stations at Wal-Mart centers, according to Tesoro spokeswoman Sarah Simpson, who was quoted in an online report by the San Antonio Business Journal. Simpson declined to say why Tesoro is closing the stations, stating only that it was a "business decision" for the company.

Wal-Mart and San Antonio-based Tesoro had been developing fueling facilities on Wal-Mart properties since 2000.

Tesoro operates more than 800 retail locations throughout the United States with the exception of Texas. The company saw its net earnings plummet from $443 million during second quarter 2007 to $4 million in second quarter 2008 as unfavorable market conditions continued to afflict the refining industry.

Tesoro is an independent refiner and marketer of petroleum products. The company operates seven refineries in the western United States.

2008 VNU eMedia Inc. All rights reserved.

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Wal-Mart to Give Coughlin $6.75 Million

By Robin Mero,
The Morning News
August 21st, 2008                   [back to top]

BENTONVILLE - Tom Coughlin settled with Wal-Mart for $6.75 million Thursday, minutes before jury selection was to begin in a lawsuit the retailer filed to void a 2005 retirement agreement worth more than $17 million to the former executive.

Terms of the settlement won't be released for 20 days, by court order, but the retailer filed a report with the U.S. Securities and Exchange Commission on Thursday afternoon disclosing the payout amount.

"Mr. Coughlin will forego all outstanding rights and claims under the Retirement Agreement, as well as any additional unpaid or withheld benefits ... estimated at a value of approximately $17 million, not including health benefits," the filing stated.

Coughlin is satisfied with the outcome, although he was looking forward to his day in court, attorney Tim Brooks said shortly after the mid-day settlement announcement.

Wal-Mart attorneys wouldn't speak to reporters, but a spokeswoman issued a brief comment Thursday afternoon. "We are satisfied the settlement is fair to both parties and we are ready to put this one behind us," said Daphne Moore.

Carl Tobias, a civil litigation specialist at the Richmond School of Law, said Thursday he wasn't surprised the case settled, as neither side would gain from trial publicity. He called the payout amount reasonable.

"When you go to trial, it's always risky. I'm sure the Wal-Mart lawyers would have been good, and aggressive, and may have new information," Tobias said. "That sounds like a lot of money in the abstract but, if I were he, I'd feel pretty fortunate - given that he pled to the criminal charges."

Questions that remain include whether Coughlin will receive health benefits, and who will pay two years' worth of attorney fees. Coughlin's reported poor health led a federal judge to sentence him to home confinement, rather than prison.

Wal-Mart filed the fraud, misconduct and breach of fiduciary duty lawsuit in 2005 in Benton County Circuit Court, attempting to void the retirement agreement made with Coughlin, now 59, when he ended his 28-year employment in January 2005.

An internal investigation uncovered years of fake invoices and expense accounts for items ranging from all-terrain vehicles and hunting club memberships to a taxidermy bill for stuffing a wild boar for Coughlin.

Results of that internal investigation were forwarded to federal authorities and led to a criminal conviction in U.S. District Court.

Coughlin is serving a 27-month sentence of home confinement and was ordered to pay $411,218 in restitution to the company and a $50,000 fine.

As executive vice president, Coughlin was earning more than $4 million annually in salary and bonuses. He was vice chairman of the board of directors and reported to Lee Scott, president and chief executive officer.

The retirement deal promised medical care until age 65, millions of dollars in transition payments, and 186,407 shares of restricted stock Coughlin otherwise would have forfeited, according to the suit.

Coughlin maintained rights to the retirement deal, which was drafted by Wal-Mart attorneys and released both parties from liability for claims related to Coughlin's employment, "whether known or unknown."

Jury selection in the civil trial was to begin at 1 p.m. Thursday. The settlement was announced minutes before, and prospective jurors were turned away from the courthouse steps.

For three hours Thursday morning, Coughlin sat at a courtroom conference table with attorneys Steve Vowell and Tim Brooks. Coughlin's wife, Cynthia, and daughter were also in the courtroom, which was otherwise empty. His other two attorneys, Bill Putman and W.H. Taylor, went in and out of the courtroom throughout the morning.

Coughlin and his family left the courthouse about 12:30 p.m. He moved slowly, which Taylor attributed to recent surgery to have both knees replaced.

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Union to target Wal-Mart

The Gazette
August 21st, 2008                       [back to top]

Union leaders are preparing to use the history-making collective agreement won by a Wal-Mart garage in Quebec to organize more of the retailer's Canadian stores. The United Food and Commercial Workers, which negotiated the contract, is especially interested in Wal-Mart Canada Corp.'s Supercentres, which have undercut rivals and forced wages down in Ontario, the UFCW's Canadian president told The Gazette. "There's a reson why we get calls in our office from Wal-Mart employees," president Wayne Hanley said during a gathering of UFCW Canadian and U.S. delegates in Montreal this week. "The delegates that I talk to are hoping it will be a spring board for other unionizing efforts across the country."

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Wal-Mart may not enter Vietnam

VietNamNet Bridge                         [back to top]

Randy Guttery, General Director of Metro Cash & Carry Vietnam, has given some predictions about the domestic distribution market.

He said that in general, the opening of the distribution market will benefit customers, the market and local production as well, as producers will have more opportunities to bring their products to customers.

However, he said that Vietnam should think carefully about the roadmap on the opening of the market to make it suitable to the country’s infrastructure development and the demand of the national economy.

Vietnam needs to consider the possible impacts of the opening of some hypermarts on traffic, traffic jams and other issues, he said.

Once an employee of the world’s well-known Wal-Mart, he believes that it is not very likely that Wal-Mart will arrive in Vietnam, though many Vietnamese people think that the giant distributor will enter Vietnam as soon as it is allowed. The hypermart chain will only make investment in a market if it believes that it can gain the turnover of $700mil after two years of investment, while Vietnam’s market is not developing as rapidly as that.

Talking about the operational supermart system, he said that some big supermarts want to follow the wholesale model like Metro’s. However, they cannot do that, because there is a difference between wholesale and retail, and retailers should focus on the work of retailers.

Regarding competition in the distribution market, he said that supermarts and distribution points will have to face two redoubtable rivals, Tesco and Dairy Farm.

Both have origins, more or less relating to China, where the retail skills are very good, he said.

He also said that when more foreign supermart investors arrive in Vietnam to do business, domestic consumers will realise where they need to go, to wholesale points to buy retail, or to retail points to buy retail.

(Source: TBKTSG)

@ VietNamNet

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Trial in Wal-Mart v. Coughlin to start Thursday

Associated Press