Businesswre

US: Wal-Mart Cuts Prices Of Over 16,000 Items

Thousands of adolescents work as unpaid baggers in Wal-Mart's Mexican stores. The retail giant isn't breaking any laws, but that doesn't mean the government is happy with the practice.

By Joseph Contreras
Newsweek
July 31, 2007                                            [back to top]

Wal-Mart prides itself on cutting costs at home and abroad, and its Mexican operations are no exception. That approach has helped the Arkansas-based retail giant set a track record of spectacular success in the 16 years since it entered Mexico as a partner of the country?s then-leading retail-store chain. But some of the company?s practices have aroused concern among some officials and nongovernmental organizations (NGOs) that Wal-Mart is taking advantage of local customs to pinch pennies at a time when its Mexican operations have never been more profitable.

Wal-Mart is Mexico?s largest private-sector employer in the nation today, with nearly 150,000 local residents on its payroll. An additional 19,000 youngsters between the ages of 14 and 16 work after school in hundreds of Wal-Mart stores, mostly as grocery baggers, throughout Mexico?and none of them receives a red cent in wages or fringe benefits. The company doesn?t try to conceal this practice: its 62 Superama supermarkets display blue signs with white letters that tell shoppers: OUR VOLUNTEER PACKERS COLLECT NO SALARY, ONLY THE GRATUITY THAT YOU GIVE THEM. SUPERAMA THANKS YOU FOR YOUR UNDERSTANDING. The use of unsalaried youths is legal in Mexico because the kids are said to be ?volunteering? their services to Wal-Mart and are therefore not subject to the requirements and regulations that would otherwise apply under the country?s labor laws. But some officials south of the U.S. border nonetheless view the practice as regrettable, if not downright exploitative. ?These kids should receive a salary,? says Labor Undersecretary Patricia Espinosa Torres. ?If you ask me, I don?t think these kids should be working, but there are cultural and social circumstances [in Mexico] rooted in poverty and scarcity.?

In a country where nearly half of the population scrapes by on less than $4 a day, any income source is welcome in millions of households, even if it hinges on the goodwill of a tipping customer. And Wal-Mart did not invent the bagger program that, as a written statement from the company notes, pre-dates the firm?s arrival in Mexico, nor is it alone within the country?s retail sector in benefiting from the toil of unpaid adolescents. But in Mexico City, for example, the 4,300 teenagers who work in Wal-Mart?s retail stores free of charge dwarf similar numbers laboring unpaid for Mexican competitors like Comercial Mexicana (715) and Gigante (427). Although Wal-Mart?s worldwide code of ethics expressly forbids any ?associate? from working without compensation, the company?s Mexican subsidiary asserts that the grocery baggers ?cannot be considered workers.? The Mexico City government?s top labor official dismisses that contention as so much corporate hogwash. ?To my mind, that is not an accurate description because the bagger is providing a service on the store?s premises that benefits the company by serving the customer better,? argues Federal District Labor Secretary Benito Mirsn Lince. ?In economic terms, Wal-Mart does have the capability to pay the minimum wage [of less than $5 a day], and this represents an injustice.?

Certainly, Wal-Mart?s bottom line is healthy. Wal-Mart de Mexico reported net earnings of $1.148 billion in 2006 and $280 million in profits in the second quarter of this year, a 7 percent increase in real terms over the same period last year. Buoyed by the handsome bottom-line results of the preceding 12 months, Wal-Mart de Mexico Chief Executive Eduardo Solsrzano announced plans in February to add 125 new stores and restaurants to its existing network of 893 retail establishments during the course of 2007. That ambitious expansion plan will represent new investment totaling nearly a billion dollars, according to company spokesmen.

And in its defense, Wal-Mart says it fully complies with a 1999 agreement covering the teenaged baggers that the Mexico City municipal government negotiated with the Supermarkets and Department Stores Association of Mexico. The company also says it goes beyond the obligations of that accord, awarding bonuses twice a year to baggers who maintain high grades in school and also providing accident insurance that covers the kids not only when they are on duty, but also when they are en route between home and workplace. The company?s written statement cited a study conducted by the Mexican government and a U.N. agency that found that teenagers participating in the baggers? program were less likely to use illegal drugs than peers who panhandled or hawked merchandise on city streets.

Wal-Mart says the bagger program was designed ?in accordance with the International Labor Organization?s (ILO) guidelines.? That?s questionable: Article 2 of the ILO?s Convention 138 specifically prohibits the employment of 14-year-old children. (When asked by NEWSWEEK specifically about this clause, a Wal-Mart spokesman said in a written response: "With respect to your questions about the ILO, I repeat that we subscribe to an agreement signed between the Supermarkets and Department Stores Association of Mexico and Mexican labor officials. I suggest you share your doubts with Mexican authorities as to whether the [1999] accord [with the Mexico City municipal government] is in line with ILO guidelines.") A study conducted by three student researchers at the Autonomous University of Mexico documented violations of the 1999 agreement at a Wal-Mart Supercenter store in southern Mexico City. These included inadequate training and forcing youngsters to work a double shift, thereby exceeding the six-hour limit per day established by the accord. Then again, things could be a lot worse. In February 2005, Wal-Mart agreed to pay the U.S. Labor Department $135,540 in civil money penalties to settle charges of 24 child-labor violations. Some of the accusations involved minors who operated forklifts, chain saws and other potentially dangerous equipment. Stuffing groceries into plastic bags would seem considerably less hazardous.

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Wal-Mart Canada Set to Roll out Clearly Canadian Brands' Healthy Snack

Businesswre                  [back to top] 

Clearly Canadian CCBEF (the "Company") is pleased to announce that its new line of Glengrove Organics dried fruit and nut products will be sold at Wal-Mart Canada stores and all Ontario stores of Sobey's, one of Canada's top grocers.

Brent Lokash, CEO of Clearly Canadian, stated, "Wal-Mart and Sobey's are high volume retailers and provide great consumer exposure for our Glengrove Organics line. This is a significant step toward establishing one of Clearly Canadian Brands' products as a major national organic snack brand in Canada and strengthening our platform to launch this line into the U.S."

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Doubts cast on Wal-Mart price war

By Tu Lei
chinadaily.com.cn
2007-07-31                                   [back to top]

Wal-Mart recently waged its largest ever price war since its presence in China 11 years ago. However, many consumers cast doubts on the real purpose of this retail giant's price campaign.

Beginning July 5, all of Wal-Mart's 80 shops gave a discount up to 20 percent to more than 1,000 items, mainly foodstuffs, according to insiders. It is the first time in Wal-Mart's history that it has cut so many items' prices.

The move suggests Wal-Mart is eager to lure more customers in China, a market in which it has not enjoyed the competitiveness it has at home.

However, the price reductions are not attractive enough, and some discounted products' prices are still higher than those in other markets.

A package of 120-gram Lays potato chips is priced at 7.5 yuan after a 45 percent discount, higher than that of Wumart, another supermarket chain store in Beijing. Meanwhile the price of one package of Qiaqia sunflower seeds is 5.4 yuan in Wal-Mart, but it only costs 4.8 yuan in Carrefour.

"My wife cares about the prices so much, but she was disappointed when back," said a buyer surnamed Li.

"I have been to Wal-Mart twice these days, but hardly found the discounted items," said another anonymous buyer.

Home supplies and home appliances are included in the new pricing package, with lowered rates of 10 and 15 percent respectively.

Miss Wang plans to buy a Midea electrical kettle in Wal-Mart at the new price, but she found the price was 269 yuan after a 10 percent discount, while the product's price in Carrefour is 238 yuan.

Wal-Mart's discounted prices fail to match those of its competitors, which suggests that offering the lowest prices is not part of the company's strategy.

Dong Yuguo, supervisor of the public relations department at Wal-Mart, said the price reduction is the result of controlling costs and our suppliers' efforts to provide better prices in a proper time."

"Our 'Every Day Low Prices' strategy can not ensure buyers get goods at the most favorable prices," said Dong, who emphasized Wal-Mart’s weak distribution system can not help reduce cost.

Wal-Mart's strategy is based on big-dimension purchasing, flexible logistics channels, advanced information technology systems, and sophisticated shop management, which ensure the lowest prices for global buyers. However, according to an anonymous expert familiar with the matter, in China its competitive edge is blunt.

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Fired Wal-Mart worker protests

Edwin Lopez, who was fired from the Wal-Mart on Farmington Avenue, talks to Attorney General Richard Blumenthal at a protest outside the store in New Britain on Monday. Lopez claims his termination was racially motivated.

By SCOTT WHIPPLE,
New Britain Herald 
July 31st, 2007                               [back to top]

NEW BRITAIN - Michael Edwards says he stands up for what he believes.

Edwards could lose his job at the Farmington Avenue Wal-Mart because on Monday he held a sign that read, "You can roll back your prices, but not our rights," as he joined the Connecticut Working Families protest there with about 50 other people.

The protest was sparked by the July 9 sacking of Edwards' best friend and co-worker at Wal-Mart and allegations of ongoing racism at the store.

Edwin Lopez, 47, a city resident, was fired after seven years on the job for charges he claims were fake. He said his firing had more to do with race and that other current and former Wal-Mart employees have also been unfairly disciplined or fired because of race.

His manager, whom he declined to name, used obscene language toward him and laughed in his face, Lopez said. He also said his wife, who still works at the store, is the subject of ridicule by management.

"It's not just Hispanics," Lopez said. "This guy also disrespects Polish-speaking people who work there."

According to Lopez, his former manager, a New York City native, walks around the store muttering: "I hate the f---ing people in New Britain." Lopez said he told his boss "to watch his mouth," and called a district manager to complain as well.

He left a voice mail in which he used the word "freaking," he admitted.

"That's as far as I went," he said. "I would never use the other 'F' word."

In the days that followed, Lopez said, he was the subject of verbal abuse and finally fired.

He said he was told his dismissal was because he swore at someone in the home office, but Lopez insists his firing had more to do with his heritage and because Wal-Mart "doesn't like Spanish-speaking people."

"They need to clean up management and begin with this store," Lopez said. "Workers need to stop being scared."

Edwards, who worked with Lopez in the lawn and garden department, said he has been protective of his friend's wife. On Tuesday, Edwards stood with Lopez at the rally against Wal-Mart although he risks losing his own job.

The corporate folks in Bentonville, Ark., view the situation differently.

"While it is our policy not to comment on personnel matters, I can tell you that the facts surrounding Mr. Lopez's termination are very different than what he suggests," said David Tovar, director of media relations, from Wal-Mart headquarters. "Mr. Lopez's termination had nothing to do with speaking Spanish or ethnicity; it was for disciplinary reasons."

Tovar would not elaborate, saying only that Wal-Mart policy "allows associates to communicate in any language they know. In fact, the policy requires associates to communicate in a language common to the customer if you are able to do so in order to better serve our customers."

Connecticut Attorney General Richard Blumenthal isn't convinced. He told protesters he will investigate allegations of systematic discrimination against Spanish-speaking employees by Wal-Mart.

"Racism has no place anywhere," he said.

Phil Sherwood, Democratic candidate for alderman in New Britain's 4th Ward, said when he worked for Wal-Mart he saw harassment and intimidation of racial minorities.

"Wal-Mart is currently the target of the largest class-action lawsuit in U.S. history," Sherwood said. "The issue is [sexual] discrimination."

Dukes vs. Wal-Mart Stores Inc. alleges female employees of Wal-Mart are denied advancement and training opportunities, paid less than men for the same or comparable work, steered to lower-wage departments, subjected to a sexually hostile work environment and retaliated against when they attempt to address sex discrimination.

Sherwood believes "the lack of Spanish-speaking manager" could be a problem. "It breeds an atmosphere of insensitivity."

Connecticut Working Families is a coalition of community organizations, labor unions and neighborhood activists "united to fight for a fair economy."

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Joint venture with Wal-Mart is imminent

SiliconIndia
Monday , July 30, 2007                    [back to top]

New Delhi: Telecom-to-retail group Bharti Enterprises Monday said the creation of a joint venture with US retail juggernaut Wal-Mart, which is set to come to India, is very much on the cards.

"Work is on, people are being hired, land is being seen ... launch of a joint venture is imminent with the roll-out (of stores) being slated for next year," Mittal told reporters on the sidelines of a conclave organised by the Confederation of Indian Industry (CII).

He said both the parties were engaged in various legal and licensing issues, "There are no problems with the legal issues; however, real estate pricing is a concern."

Bharti Enterprises' wholly owned subsidiary Bharti Retail had signed an agreement with the US retail behemoth last year in cash-and-carry segments like wholesale trade and support-related areas like cold chains, logistics and transportation, where the government allows 100 percent foreign direct investment.

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Kicking ass, saving souls: Religious action figures coming to Wal-Mart

Wal-Mart has seen the light. It has noted the signs. The dollar signs, anyway.

Mary Vallis
The Post                            [back to top] 

The world's largest retailer, and the biggest toy seller in the U.S., will be lining its shelves with a series of "Tales of Glory" biblical toys.

The faith-based toy line, which will appear in the pre-school aisle of 425 select Wal-Mart stores in mid-August, is produced by one2believe, a California toy company urging parents to join "the battle for the toy box" by bringing home muscular Samson and Goliath action figures instead of the usual Transformers and Spider-Men.

The toys' release is billed as the first time Wal-Mart has offered a full line of faith-based toys.

"I think parents are dying for something for their young child that they can give them that they know is going to give them a positive image," said David Socha, the company's founder. The company's goal is to "spread the word of God to children throughout America."

"What's nice is that they're real, as opposed to other superheroes that are out there. Kids can relate to people who didn't have superhuman powers, but relied on God's strength."

Not everyone is so optimistic about the plan to stock plastic figures of Jesus, Mary, David and Goliath, however. From the BBC News web site:

One religious leader does not consider Wal-Mart in the fold.

"They'll carry anything that sells," says David Croyle, president of FamilyLife, a non-denominational ministry of Campus Crusade for Christ. "This simply signals intelligent buying within Wal-Mart."

For David Socha, CEO of One2believe, it's a dream come true. "Our goal is to give the faith-based community an alternative to Bratz dolls and Spider-Man," he says.

The One2believe web page is a gold mine of unintentional comedy. If you click and drag on this animation you can make Samson repeatedly punch Goliath in the face (if only they had battled it out in "real" life!). I'm waiting for the Moses/Noah grudge match: "I didn't need no damn ark to save my people! I just pointed and the water got the hell out of my way!"

And here's a beautiful full-colour gallery of the creepily robotic Old and New Testament figures (all courtesy of One2believe).

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Bredesen Frustrated by Board of Regents Pace on
'Wal-Mart 101'

By ERIK SCHELZIG
Associated Press                               [back to top] 

NASHVILLE (AP) - It's been nearly a year since Gov. Phil Bredesen announced a proposal to create a community college curriculum designed to prepare students to become managers at big-box retailers like Wal-Mart.

Yet there is no sign that any such "Wal-Mart 101" program will be available at two-year schools across the state anytime soon.

Asked in a recent interview with The Associated Press about what the holdup is, Bredesen responded: "The Board of Regents - and the general difficulty of moving things forward in the educational system."

The Board of Regents oversees two-year schools and public universities that are not part of the University of Tennessee system.

"The Board of Regents on that one has not picked up the idea and carried forward on their own in some fashion," Bredesen said.

Bredesen said he prefers state officials to move aggressively on new ideas. He said he'd rather have to tell officials to slow down rather than have to constantly prod them into action.

The governor said that he sometimes has to ask UT President John Petersen to rein in the pace of new programs, but that that rarely occurs with the Board of Regents.

Board of Regents Chancellor Charles Manning could not immediately be reached for comment Thursday.

Bredesen acknowledged that the Board of Regents may have been distracted by debate during the legislative session over several community-college related subjects like his ultimately doomed proposal to give free tuition to high-school graduates who average a 19 on their ACT college entrance exams. Bredesen has vowed to bring back the community college scholarship proposal next year.

Meanwhile, the state last week announced that as part of Eastman Chemical Co.'s $1.3 billion reinvestment in its Kingsport facilities the state will pour $1 million into tailoring programs at Northeast State Technical Community College to the company's work force needs.

The "Eastman 101" program will address specific job skills for mechanics, lab analysts and chemical operators. The proposal also could benefit other companies in the region because they could hire graduates of the programs.

Although the job training program will be at a Regents college, it won't be available at campuses across the state the way Bredesen envisions the "Wal-Mart 101" program

"We had the opportunity to do the '101' with somebody, so we obviously grabbed that and took it," Bredesen said. "The other one (for big-box retailers) I'm still interested in and we're still pushing for it."

Copyright 2007 The Associated Press. All rights reserved.

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Mom-and-pops strategize vs. big boxes

By Bryce Benson                            [back to top]

"Local businesses—unite!"

That could have been the battle cry of the Chico Independent Business Forum held at the City Council chambers Friday (July 27).

About 25 local business owners were there—instead of at the Friday night concert going on across Main Street—to listen to Jeff Milchen, co-founder of the American Independent Business Alliance, outline a strategy for helping local businesses thrive against "big box" stores such as Wal-Mart, Home Depot and Best Buy. The California Healthy Communities Network and Lyon Books sponsored the gathering.

Nearly 40 cities across the country and one in Canada have implemented the innovative model to strengthen hometown businesses and prevent their displacement by chains.

While groups such as the Downtown Chico Business Association are great at what they do, "not all businesses are located downtown," Milchen said. "But almost all businesses are affected when a giant retailer like Wal-Mart comes to town."

His idea for IBAs started when he lived in Boulder, Colo. He and David Boluc, owner of Boulder Book Store, realized that locally owned business needed to organize in order to combat the growing power of global chains, which Milchen says are "unsustainable and drain communities of their culture and uniqueness."

Started in 1998, the Boulder Independent Business Alliance grew from 10 members to more than 160 within two years. Its success led Milchen, along with BIBA's assistant director, Jennifer Rockne, to start the nonprofit AMIBA in 2001.

Using what they had learned in Boulder, Rockne and Milchen developed a three-pronged approach: public education, group promotion and advertising, and building effective and lasting relationships with local government.

BIBA runs a continuing ad campaign that both creates a brand name and informs the public of the benefits of shopping locally. Along with the ads, BIBA uses marketing tools such as storefront decals, BIBA bookmarks for local bookstores, bumper stickers that instruct people to "Put Your Money Where Your House Is!" and BIBA paper cups for independent coffee shops.

In Chico, where the expansion of the southside Wal-Mart and the addition of a Wal-Mart supercenter on the north side are in the planning stages, Milchen's presentation found a receptive audience.

"This is a critical time in Chico's development," said Heather Lyon, owner of Lyon Books. "Sustaining local ownership and local self-reliance is vital to Chico's long-term economic vitality."

Heather Schlaff, of the Wal-Mart watchdog group Chico Advocates for a Responsible Economy, said Chico's long-term economic vitality would be best served if the addition of another Wal-Mart were rejected. Phil Tucker, of the California Healthy Communities Network, agreed with Schlaff: "With two of these in a town the size of Chico, they'll be competing with each other, lowering prices, until Chico's independent stores are gone."

Tucker, a resident of Napa, said he became interested in the big-box debate after coming across Big-Box Swindle, a book by Stacy Mitchell (available at Lyon Books).

Mitchell is a senior researcher for the Institute for Local Self Reliance. Her home state of Maine in June became the first state to require cities to evaluate the impact of proposed big-box stores (larger than 75,000 square feet) on jobs, local businesses and municipal finances. Only stores that won't adversely affect the local economy can be approved. The Informed Growth Act goes into effect in September 2007.

"Retail is not like other industries like manufacturing because you can't increase how much people spend," Mitchell said from her home in Portland. "So even though stores like Wal-Mart generate a lot of sales tax, all they're doing is taking revenue away from locally owned businesses."

In California, a bill similar to Maine's was passed in 2006 but vetoed by Governor Schwarzenegger. The Permit Streamlining Act, SB 1523, would have required that economic-impact reports similar to Maine's be prepared for any retail center larger than 100,000 square feet.

"I am unable to support this bill that effectively sends a message to retailers and others that California is 'closed for business,'" Schwarzenegger wrote in his veto message.

But Mitchell thinks just the opposite. The bill would have told California cities that they care about local business and their communities. A study in Maine showed that for every dollar spent at big-box stores, only 15 cents stays in the community, while for every dollar spent at a locally owned store, 50 cents stays in the community.

Local state Sen. Sam Aanestad (R-Grass Valley) voted no on SB 1523. Low prices benefit low-income people, he said, and big-box stores deliver low prices, driving down prices elsewhere. "That's what the free market system is based upon—competition," he said.

Yet no one has been hurt more by Wal-Mart than the low-income family, Mitchell said. "Wal-Mart lowers wages in a community faster than they lower prices."

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Wal-Mart's Seiyu to post H1 operating loss-Nikkei

by Emi Foulk and
Taiga Uranaka
Reuters
Fri Jul 27, 2007                                    [back to top]

TOKYO, July 27 (Reuters) - The Japanese unit of Wal-Mart Stores Inc. (WMT.N: Quote, Profile, Research), Seiyu Ltd. (8268.T: Quote, Profile, Research), will post an operating loss for the first half of the year as weak sales sidelined its forecast return to profit, the Nikkei business daily said on Friday.

Shares of Seiyu fell 3.1 percent in late afternoon trade, compared with a 1.6 percent drop in the Tokyo index of retail stocks (.IRETL.T: Quote, Profile, Research).

Seiyu, 53 percent owned by the world's largest retailer, likely suffered an operating loss of 2 to 3 billion yen ($17 million to $25 million) in the six months to June, falling well short of its forecast 2.8 billion yen profit, the newspaper said.

Wal-Mart has struggled since its 2002 arrival in the world's second-largest retail market, leading some analysts to suggest the retailer should pull out of Japan -- as it did from South Korea and Germany last year.

Seiyu has posted five straight years of losses since Wal-Mart first took a small stake in the company, although it has forecast a return to profit this year.

The U.S. company has invested more than $1 billion in the 390-store Japanese supermarket chain, remodelling 70 locations last year, but has yet to see anything more than temporary upswings in sales.

Seiyu's first-half same-store sales fell 1 percent year-on-year, dragged down by weak sales of clothing and electric appliances, as well as poor weather, the Nikkei said.

A spokesman for Seiyu, which is scheduled to announce its results on Aug. 14, said the report was speculation.

The U.S. retailer's strategy of selling discounted products in bulk may not be conducive to shopping habits in Japan, where consumers tend to buy groceries more often and in smaller amounts.

While Seiyu has benefited from Wal-Mart's knowledge of cost-efficient distribution and information systems, its store layouts and product development have failed to impress Japanese shoppers, the Nikkei said.

(C) Reuters 2007. All rights reserved.

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Wal-Mart Apparel Faces Back-to-School Test

By Reuters,
New York Times
July 26th, 2007                                  [back to top]

NEW YORK (Reuters) - It's back-to-school season and that means it is time to see if Wal-Mart Stores Inc.'s efforts to revamp its apparel offering can muster a passing grade with shoppers.

The world's largest retailer has struggled with poor apparel sales after its efforts to compete with Target Corp. and sell hipper clothes, like skinny jeans and velvet blazers, backfired with its shoppers, who were looking for basic, classic and affordable clothing.

For the past year, Wal-Mart has been trying to fix its mistakes and has marked down unsold clothing, scaled back its trendy Metro 7 apparel line and said last week that Claire Watts, who oversaw its apparel merchandising, had resigned.

Wal-Mart has said it hopes to show improvements during the back-to-school season. But it remains to be seen whether the retailer can entice shoppers back into its clothing aisles, or if they will head to rivals like Kohl's Corp. , J.C. Penney Co. Inc. and Target to buy fashionable but affordable school clothes.

"No one can beat (Wal-Mart) on price, but everyone is eating their lunch on fashion," said Patricia Edwards, a portfolio manager with Wentworth, Hauser and Violich that owns Wal-Mart shares.

"If price is not that different and you get fashion for an extra $1 more, people will pay that dollar" and buy clothes at Wal-Mart's competitors, she said.

STRUGGLES

Last year, Wal-Mart downplayed its discount roots in hopes of convincing shoppers to buy higher-margin goods, like clothes or home goods, that could bolster slowing U.S. sales growth.

It touted its George ME fashion line by guest designer Mark Eisen, and its own Metro 7 clothes that were designed "with the highly stylish, fashion-conscious customer in mind."

But the success that Target has found pedaling cheap-chic clothes, like those by Isaac Mizrahi, was not easy to emulate, and Wal-Mart's core low-income shoppers did not warm to the new styles or higher prices.

Wal-Mart has since admitted that it moved too far too fast. It is now following a "back-to-basics" strategy -- trying to stock items like T-shirts or shorts in a wide selection of colors and sizes that emphasize its low prices.

But winning back-to-school clothing dollars may be tough.

"One of the challenges at Wal-Mart has been how do you promote the cross-shopping behavior among customers?" said Craig Johnson, president of retail consulting firm Customer Growth Partners.

Moms may buy toothpaste and toilet paper at Wal-Mart, but he said they often buy clothes at Kohl's or J.C. Penney, which have recently revitalized their apparel departments.

He also noted that Wal-Mart has become an acceptable place for children and teenagers to buy electronics, but it does not have the same cachet when it comes to clothing.

A kid will brag about a new tech gadget he got, Johnson said. "Nobody says: 'Hey! Look at these great denim jeans I got at Wal-Mart'."

BACK ON TRACK

Improving its apparel sales could help Wal-Mart jump-start same-store sales, a key retail gauge that measures sales at stores open at least a year.

Last fiscal year, its U.S. same-stores sales rose at their lowest level since Wal-Mart began reporting such figures in 1980. This year, it has continued to struggle, with its April same-store sales falling 3.5 percent -- its largest ever publicly reported decline.

Edwards said apparel and home sales account for 15 percent of Wal-Mart's revenue, so any improvement would be positive.

She said Wal-Mart needs to work on striking a balance between selling the low-priced goods it is known for but adding fashionable touches shoppers want.

Bernard Sosnick, a retail analyst at Oppenheimer, said a store visit last week showed Wal-Mart continues to struggle to get its apparel departments ready for back-to-school.

"There were items that I'd seen on the racks several months ago still not marked for clearance, and these items and the items for clearance impeded the full transition to back-to-school and fall merchandise," he said.

Sosnick said the announcement that Watts, who oversaw Wal-Mart's high-fashion forays, was resigning was a welcome change.

Edwards said she is not betting that back-to-school will mark a definitive apparel turnaround for the retailer. Rather, she thinks the focus will fall on the holidays.

"There's a lot of competition out there and Wal-Mart needs to sharpen their pencils and figure out how to compete, because the game has changed," Edwards said.

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Wal-Mart Project Is Back on for Mall Site ; Retailer Is Required to Find New Tenant

Thomas J. Prohaska
NEWS NIAGARA BUREAU
July 25, 2007                                  [back to top]

The Wal-Mart supercenter project is back on at the Lockport Mall site, but the deal has been altered so that Wal-Mart will be responsible for finding a new tenant for its existing store.

The retail giant, in a letter disclosed during Tuesday's Town Board work session, requested to have its 185,000-square-foot combination supermarket and discount store placed on the agenda for the Aug. 14 work session of the Planning Board.

Town Supervisor Marc R. Smith said Tuesday that the approval process could be completed by the end of August.

"I wish they'd kept the pedal to the metal. They'd be done by now," Smith said, adding that he found, while collecting signatures on his nominating petitions for re-election last month, that the No. 1 concern of voters was getting the supercenter deal accomplished.

Wal-Mart slammed the brakes on the project six months ago, when it appeared to be on the brink of long-delayed approvals from the town Planning Board and Zoning Board of Appeals.

The reason for the delay appeared to be objections lodged by the mall's current owner, General Growth Properties of Chicago, to the terms of a property swap. Wal-Mart was to buy most of the mall on South Transit Road and turn over its lease on the existing store a quarter-mile to the south to General Growth for reuse.

Councilman David H. Knight said in April that General Growth raised its price for the South Transit Road mall by $1 million. Phil Serghini, a Wal-Mart spokesman, would not confirm the figure. At one point, Wal-Mart said it was scouting other locations in the area in case it could not buy the virtually empty mall. "That was always our preferred location," Serghini said Tuesday. "We do not have a completed deal with General Growth, but we're confident we'll have one in a couple of weeks. We're finalizing the details."

The mall situation will not change. The Bon-Ton store there will survive the demolition of the rest of the mall and become a stand- alone store, sharing a parking lot with the Wal-Mart supercenter.

"That's an excellent location for us. We will continue to stay in that mall," Bon-Ton spokesman Mary Kerr said.

Smith said the real snarl arose when General Growth discovered how much it would have to charge a tenant at the old Wal-Mart store. The lease on the existing Wal-Mart, held by Cleveland-based Developers Diversified Realty, required General Growth, or anyone else subleasing the site, to pay rent of $7 per square foot.

"You can't get that in Lockport," Smith said. "The going rate in our area [for retail space] is $5 per square foot. . . . They didn't think they could break even at $7."

"Wal-Mart will be retaining its lease obligations at its current location after Wal-Mart has relocated to the Lockport Mall site. Wal-Mart's Relocation Team will be seeking a new tenant for the current store," wrote Leslie M. Senglaub, Wal-Mart's Rochester attorney, in a letter dated July 19 to town Building Inspector Eugene Nenni.

Senglaub wrote in her letter that the Planning Board would have to change its report of findings on the project to take note of the elimination of the property swap.

"I don't see any problem with putting them back on [the agenda]," said Planning Board Chairman Richard Forsey. "If they haven't changed any of their plans and they're still able to change the outside of the Bon-Ton building, as General Growth was going to do, that should go through quite smoothly."

Wal-Mart needs site plan and special-use permit approval from the Planning Board and approval of variances from the Zoning Board of Appeals, which next meets Aug. 28.

Smith said Wal-Mart will still be paying for new sidewalks near the mall on Shimer Drive and Locust Street Extension, along with improved water lines near the mall.

(C) 2007 Buffalo News. via ProQuest Information and Learning Company; All Rights Reserved

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Wal-Mart CEO Addresses Hispanic Community

Chain Store Age
Wednesday, July 25, 2007                          [back to top]

Wal-Mart president and CEO Lee Scott emphasized his company's efforts in the Hispanic community during an address to the members of the National Council of La Raza, the largest national Hispanic civil rights and advocacy organization in the United States, at their annual meeting in Miami on Tuesday. Scott pointed out that nearly 154,000 Hispanic associates are employed at various levels across the company in the United States. He added that the company works with many Hispanic suppliers, such as Gruma and La India Spices.

The Hispanic community is not only working at Wal-Mart, Scott noted, but also shopping there. According to Scott, 14% of the 127 million customers who shop the U.S. stores are Hispanic. And that 14% represents strong buying power, which among Hispanics is projected to reach nearly $1.2 trillion by 2011.

“At Wal-Mart, we believe we are uniquely positioned to seize that opportunity and give Hispanic Americans the shopping experience they want and deserve,” Scott said.

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Class Action Sought on Fuel Claim

Associated Press
07.25.07                                         [back to top]

OKLAHOMA CITY - Three Oklahoma County consumers are seeking class-action status on a lawsuit that claims they've been overcharged for gasoline because it was stored at hotter than usual temperatures.

The lawsuit claims 13 retailers and oil companies kept gasoline at temperatures higher than the petroleum industry standard of 60 degrees Fahrenheit, causing the fuel to expand and provide less energy per gallon.

"The sellers of hot motor fuel are able to pocket these billions of additional dollars in temperature-inflated profits merely because the fuel they are selling is warmer than 60 degrees Fahrenheit, and customers are ignorant of the truth," the lawsuit claims.

Defendants in the lawsuit include 7-Eleven Inc., Albertson's LLC, ConocoPhillips (nyse: COP - news - people ) Co., Shell Oil Co., Texaco Refining and Marketing Inc. and Wal-Mart Stores Inc. (nyse: WMT - news - people )

Vance McSpadden, executive director of the Oklahoma Petroleum Marketers Association, questioned the reasoning behind for the lawsuit.

McSpadden said gasoline is often stored underground in tanks that generally remain around 60 degrees. Storage tanks that are above ground are more susceptible to temperature changes, but McSpadden said the benefit consumers get from colder temperatures in the winter would offset the impact of warmer temperatures in the summer.

"This is a feel-good deal for the consumer, but I don't think there's any basis to it at all," McSpadden said. "If there is, it's very small. It's certainly not billions of dollars."

If the lawsuit were successful, McSpadden said it would likely cause gasoline prices to increase because retailers would have to install equipment to adjust the sales volume to account for temperature variances. That cost would likely be passed on to consumers, McSpadden said.

"This isn't against the major oil companies," McSpadden said. "The people who are going to have to spend money on this new equipment are individual retailers, generally independent businessmen."

The lawsuit seeking unspecified damages was filed by attorney Jona R. Hefner on behalf of plaintiffs Hadley Bower, Larry O. Bower, Kristy DeAnn Mott and Oklahoma City manufacturing company TEMCO.

"We spend a lot of money on gas," said TEMCO manager Russ Godfrey. "Any penny we could save here or there would be nice since gas is so expensive now."

Copyright 2007 Associated Press. All rights reserved. 

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High costs low prices: Why Wal-Mart should not be supported

progressiveu.org
July 25th, 2007                                     [back to top]

When most people picture prison, they don’t see endless shelves of food, clothing, toys, cleaning products, and other basic household goods, but for almost two hundred and fifty immigrants locked overnight in a Wal-Mart this was the case.Though extreme, this is consistent with the Wal-Mart corporations focus on money over people, the workers were shut in to do janitorial duties off the clock.

In California there are 167 Wal-Marts, 35 Sam’s Club’s and 9 distribution centers, who knows how many people were exploited to keep these stores running. Wal-Mart’s corrupt corporate culture and unfair labor relations should not be supported.

Wal-Mart Inc. is the worlds largest retailer, setting the national and international standards for the corporate industry... According to the documentary , Wal-Mart : The High Cost of Low Price, directed by Robert Greenwald, the five members of the Walton family make approximately eighteen billion dollars a year each, yet...Only one percent of their total wealth is donated to charitable funds, Bill Gates donates fifty-eight percent. If five of the ten wealthiest American’s don’t support charitable causes, will the next generation of corporate executives follow in their footsteps? Likewise, Wal-Mart employees donate more than their significantly wealthier employers. Employees donated five million dollars to the Critical Need Fund, established to aid fellow Wal-Mart employees in times of crisis, the Walton family donated six thousand. If representatives of a company as wealthy as Wal-Mart cannot demonstrate philanthropic behavior, their business is not worth monetary support.

The corporation’s stance on safety and security, as well as their actions to prevent it, are extremely dangerous... Eighty percent of crimes at Wal-Mart occur in the parking lots, and an unintentionally released crime report conducted by the Wal-Mart corporation discovered a way to completely eliminate parking lot crimes, at a relatively low price, but they illegally withheld this information. Rapes, murders, abductions, could be completely eliminated in these expansive parking lots, yet this greedy company has chosen not to care for it’s number one priority, the customer.If the most powerful corporation’s policy places finances over employee and customer welfare, what kind of a message is being sent to other businesses around the world?

Wal-Mart Inc. has done very little to support the average employee, and has participated in some exceptionally careless labor practices... According to wakeupwalmart.com, in 2004 Wal-Mart Inc. spent 1.5 billion dollars on healthcare, and 1.4 billion dollars on advertising, an accurate depiction of the company’s emphasis on healthcare. Clearly, image and revenue is as important as the health and well being of the employees.Because a significant number of employees cannot afford the healthcare system created by the company, they are encouraged to go on welfare, managers are supplied with local welfare agencies by the corporation. The amount of Wal-Mart employees relying on welfare costs taxpayers 1.5 billion dollars nationally, and eighty six billion dollars in California. Wal-Mart would rather have the average citizen, who’s money they are allegedly saving, cover the health expenses of their workers.To lower costs, Wal-Mart has purposely not supplied it’s stores with enough money to hire an adequate amount of workers. This has resulted in store managers using whatever means necessary to get all tasks taken care of. In 2003 one store was found guilty of hiring illegal immigrants, and locking them in over night to do janitorial work. This is an extreme example of the pressure managers are under to cut labor costs.

On walmartfacts.com, the company claims that, "They might be right for some companies but there is simply no need for a third party to come between our associates and their managers," in regard to unions. This is the lighter version of their dislike for unions, a system created to protect the American working man. The anti-union package at each store costs seven thousand dollars, more then they spend on security. In addition, there is a twenty-four hour anti-union hotline and rapid response team with a corporate jet which costs over seven million dollars. This sizable anti-union program directly contrasts their claim that they are not anti-union. Also, it shows that the company is well aware of it’s questionable business practices, since the amount of money it spends to protect their image is excessive. Though Wal-Mart contends that there main priority is to deliver low costs to their consumer, they have done so by exploiting the very people in which they claim to help.

One hundred and seventy six million people shop at Wal Mart every week. The top reason people shop at Wal-Mart is the low prices, something few companies can compete with. Regular Wal-Mart shopper Kelly King stated " It is the employees choice to work there," a common argument amongst shoppers. Many argue that since there has been so much negative media concerning the company Wal-Mart has taken steps to improve their corporation. Studies have shown the average amount of money saved shopping at Wal-Mart does not balance out the public expense. Also, many employees work there because it is their only option, and because they work their they can only afford to shop there. Much of Wal-Mart’s defense for it’s actions is ineffectual. Since the negative press surrounding their healthcare system was so great they have created less expensive healthcare plan. Yet this decrease in costs of the healthcare detracts from an increase in costs of premiums, which are between one thousand and three thousand dollars.

To prevent the dominance of Wal-Mart’s corrupt corporate culture and unfair labor relations support for their company should be eliminated. A company that places finances over employee and customer care does not deserve support. A company that’s image outweighs the basic freedoms of our constitution does not deserve support. A company that is extremely wealthy but donates very little does not deserve support. We must be stronger than low prices and stop Wal-Marts monopolization of the public, industry and economy.

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Cities weigh effects of big-box stores

By J.M. BROWN,
Contra Costa Times
July 25th, 2007                                 [back to top]

VALLEJO -- If independent business owners in Vallejo want to halt the encroachment of "big-box stores," they must band together to prove why consumers lose when they support discount retailers, advises a national expert.

Keeping out Wal-Marts and the like requires collective marketing and lobbying of local government leaders, said Jeff Milchen, co-founder of the American Independent Business Alliance, during a presentation Monday.

Milchen's ideas resonate in Vallejo, where groups are opposing Wal-Mart's plan for a Supercenter on the former Kmart property on White Slough. Wal-Mart wants it to replace the regular Wal-Mart store that is to close when American Canyon's opens soon.

Vallejo's anti-big-box movement has "been happening a long time," massage therapist Glynda Velasco said. "It's a matter of being pro-active."

Vallejo is not the only local town second-guessing the benefits of large corporate stores. Sparked by the growth of Starbucks, Benicia also recently considered banning formula stores. To go with Wal-Mart or to fight it is also an issue in Concord, where the company wants to build on the north side of Highway 4.

The other side of the argument is the sales tax revenue a large store brings to a city. The Vallejo City Council voted last month to cut public safety and transportation to balance a $9 million budget deficit. Critics say the city should focus more on seeking new businesses, including corporate investments, to increase sales tax revenue. Advertisement

Considering discounts are often the biggest draw for big-box stores, Milchen said independent businesses might consider creating a universal customer loyalty card program that offers discounts or other incentives for buying from locally owned stores.

Because small businesses "rise and fall together," Milchen, a Montana-based consultant, told Monday's crowd of 30 small business owners and advocates they might also think about creating a logo or brand to display at all their stores to remind customers of the importance of investing locally.

One activist in the Wal-Mart controversy agreed. Residents must do more than oppose big-box development. They have to "establish a vision of what we do want in Vallejo," said. Joe Feller, a member of Vallejoans for Responsible Growth.

Although big-box stores often seduce cities with promises of new jobs and increased tax dollars, cities often lose out in the end, said Milchen, who is touring Bay Area cities this week and will be in Concord tonight.

Jobs and tax dollars are lost when corporate competitors force out smaller stores or restaurants, and cities often have to invest thousands in road and sewer improvements to accommodate large developments, he said.

"Local life is undermined in a lot of ways," Milchen said.

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Wal-Mart warns two Chinese suppliers over labour practices

AFX News
July 25, 2007                                           [back to top]

BEIJING, Jul. 25, 2007 (AFX International Focus) -- US retail giant Wal-Mart (NYSE:WMT) Stores Inc said it has cautioned two of its Chinese suppliers amid allegations they exploited workers.

Wal-Mart audits have detected possible irregularities by Yue Wing Cheong Light Products and Mainland Headwear Holdings, said Jonathan Dong, spokesman for Wal-Mart China.

The companies, both based in the southern manufacturing centre of Shenzhen, have been ordered to issue a report on the suspected violations within 120 days and make any necessary changes, he added.

The companies' books showed discrepancies between paper records of worker attendance and computerised versions, as well as possible overtime violations, he said.

The discrepancies could be due to either sloppy record-keeping or the deliberate employment of workers off the official books.

'But we didn't find underage labour violations at either factory,' Dong added.

The companies were among four accused in June of a range of labour violations in the production of official merchandise for the 2008 Beijing Olympics.

The report by the International Trade Union Confederation said the manufacturers recruited children, flouted health and safety standards and paid half the legal minimum wage.

Dong said its two suppliers have been classified as 'Orange alert' vendors, part of an internal colour code system used by Wal-Mart for suppliers whose labour practices raise concerns.

The next alert above that is 'red', which terminates a supplier's contract.

'The purpose is to try to help suppliers grow,' Dong said in defending Wal-Mart's decision not to issue a red card.

'There is a learning curve for some suppliers. You can't just instantly disqualify them.' Representatives of the two companies could not be immediately reached for comment.

Yue Wing Cheong supplies general merchandise such as handbags while Mainland Headwear, whose shares are listed in Hong Kong, produces hats and similar products.

Copyright AFX News Limited 2007. All rights reserved.

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Wal-Mart discounts could spur price war

The retailer applies cuts to more than 16,000 items as it tries to revive sluggish sales.

Associated Press
July 24, 2007                                [back to top]

Wal-Mart Stores Inc., the world's largest retailer, set the stage for price wars Monday as it announced that it was cutting prices on more than 16,000 items starting this week in a bid to turn around sales for the crucial back-to-school season.

Shares of key retailers such as Sears Holding Corp. and J.C. Penney Co. were down as investors worried about how ensuing price wars would affect profit margins. Wal-Mart rose 5 cents to $48.11.

Wal-Mart's price cuts, which range from 10% to 50%, will be backed by an ad campaign on how to save money as gas prices remain high and kids head back to school. The cuts are deeper and involve even more items than in the year-earlier period and top the 11,000 items discounted in advance of last year's holiday season, spokeswoman Melissa O'Brien said.

Bentonville, Ark.-based Wal-Mart has been playing up its low prices since late last year after getting hurt by a focus on trendy merchandise in an effort to get affluent customers to buy more than just groceries.

Although the upscale strategy worked in electronics, it failed in home furnishings and apparel, resulting in sluggish sales since last fall.

This fiscal year, Wal-Mart has averaged a same-store sales gain of a meager 1%, compared with rival Target Corp.'s 4.1% increase, according to Thomson Financial.

Same-store sales are sales at stores open at least a year and are considered a key indicator of a retailer's health.

In April, Wal-Mart's same-store sales dropped — the weakest performance since it began publishing monthly sales in 1980.

Last year, Wal-Mart's same-store sales averaged a 2.1% increase, and Target had a 4.9% increase.

Wal-Mart did enjoy some improvement last month, when it posted a better-than-expected same-store sales gain of 2.4%, indicating that its more aggressive discount strategy might be resonating with shoppers.

"We'll provide families savings where it counts, and continue to work closely with key suppliers, reduce packaging and lower shipping costs as we steer this program through fall and beyond," Bill Simon, chief operating officer of Wal-Mart Stores U.S., said in a statement.

Retail consultant Burt Flickinger III applauded Wal-Mart's move but noted that the jury was still out on whether it would be effective.

"While it is a smart strategic move, it is going to add profit margin pressure," Flickinger said. "There is also no guarantee that it will increase customer count and sales."

Flickinger also noted that rivals such as Target have capitalized on Wal-Mart's weakness in recent months as the biggest retailer confused shoppers with its upscale strategy. He also added that Wal-Mart faced increased competition from drug and grocery chains who are aiming to get a bigger share of the back-to-school business.

Under Wal-Mart's new pricing plan, $1 will buy four wide-ruled notebooks, two bottles of Elmer's glue and a 24-pack of crayons. A $50 budget will purchase a week's worth of school clothes, and $80 will buy two pairs of prescription glasses at the Wal-Mart Vision Center.

The price-cutting campaign comes as Wal-Mart has also been making changes to its merchandising team.

The company said Friday that Claire Watts, a top Wal-Mart apparel executive, had resigned. She had been behind the failed makeover to trendy items from low-price basics.

As part of the changes, Wal-Mart promoted Dottie Mattison, formerly chief merchant for Walmart.com, to senior vice president overseeing women's apparel, jewelry, shoes and accessories as well as product development. Mattison will be based in the company's fashion office in New York.

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Shame and Shoplifting at Wal-Mart

By Pallavi Gogoi,
Business Week
July 24th, 2007                             [back to top]

Earlier this year, Lisa King Fithian entered the self-checkout lane at the Wal-Mart store in her hometown of Attalla, Ala., with a lava lamp and a pet playpen. According to court documents, she then failed to scan the two items, worth $26.97, to add them to her bill and tried to leave the store. Fithian, 46, later pleaded guilty to theft in court, although she maintained the entire incident was a misunderstanding.

Fithian's sentence was unusual. The local judge, Kenneth Robertson, had been thinking about shoplifting penalties that would be different from the fines and brief jail terms, which tend to be ineffective. He talked with the local Wal-Mart Stores manager about having Fithian go out in public with a sign around her neck declaring her crime. The manager, Neil Hawkins, gave the green light. So one Saturday Fithian wore two sandwich-board signs that declared, "I am a thief; I stole from Wal-Mart."

Since then, this town of 6,859 has become a real-life experiment in whether shaming can reduce shoplifting. More than 20 people have endured the modern-day version of The Scarlet Letter in recent months. Angela Bates wore a sign in the streets after pleading guilty to taking five tank tops, two skirts, and a pair of shorts from the Attalla Wal-Mart. Billy Williams did, too, after allegedly trying to take a fishing reel, lures, and hooks from the store. And Paula Regina Cox had to face her neighbors with a shoplifting sign when the police arrested her for allegedly taking six C Ds? worth $99 from Wal-Mart. Fithian, Bates, and Williams could not be reached for comment; Cox did not return phone calls seeking comment.

The placards are a sign of how much retailers such as Wal-Mart (WMT) are struggling with theft these days. The retail industry lost $41.6 billion to shoplifting and other fraud last year, up 11% from the previous year. The judicial system is also looking for alternative approaches because of the ineffectiveness of traditional punishments and the overcrowding of U.S. jails. "The conventional form of punishments, where shoplifting offenders pay a fine or go to jail, don't work to the extent of the embarrassment of standing in front of a store," says Robertson.

Shrinking Profits

Shaming punishments have been used in other states, including California, Georgia, Tennessee, and Texas, and have been applied to a variety of crimes. But Attalla's is one of the most aggressive efforts to use shaming to deter shoplifting. Robertson says that the problem required some creative thinking. "We have mechanisms in place that allow a judge to send offenders to court referral programs for DUI and offer treatments for other sorts of crimes," he says. "But there's nothing in place for a thief, so I decided to do my own therapy." The problem is particularly acute for Wal-Mart. As the world's largest retailer, with $350 billion in annual revenues, it has the most to lose from shoplifting. Its rate of shrinkage, the industry's term of art for shoplifting and employee theft, has long been below the industry average of roughly 1.6% of sales. But the company has acknowledged that theft is having an increasingly negative impact on sales and warned that its second-quarter profit would fall at the low end of analyst expectations in part because of the losses. Analysts estimate that Wal-Mart's shrinkage has risen from half the industry average and is approaching 1%, with losses at about $3 billion a year. "We are concerned about shrinkage and are investigating the cause and are taking steps to correct it," said Eduardo Castro-Wright, CEO of Wal-Mart Stores USA earlier this year.

Wal-Mart executives have been debating the optimal shoplifting policies for its stores. Last year, the company decided to give store managers the option of not prosecuting first-time shoplifters under 18 or those who steal items valued at $25 or less. But earlier this month, it decided to get more aggressive. The company authorized its store managers to prosecute first-time shoplifters as young as 16, compared with the previous limit of 18. A company spokesman, David Tovar, says, "We [lowered our prosecution guideline] in response to suggestions from our associates."

Technology's Limits

The challenge is in striking the right balance between making stores welcoming and making them secure. By its very nature, the retail business is one where companies try to create a warm environment where shoppers can touch, feel, and try out merchandise. Stopping customers from getting too close could end up driving them away. "To keep shrinkage low with metal detectors and security might be a draconian environment, like going to the airport vs. going to the mall, which encourages shopping with its fountains and music," says Richard Hollinger, professor of criminology at the University of Florida, who conducted a recent survey on retail shoplifting with the National Retail Federation. The retail industry, from Wal-Mart and Target (TGT) to Sears Holdings (SHLD) and J.C. Penney (JCP), has tried fighting back. In recent years, retailers have upgraded their technology and joined a shared database with law enforcement agencies to reduce shrinkage. But the rate of loss remains consistent. According to the National Retail Federation/University of Florida study, shrinkage as a percentage of sales ticked up to 1.61% last year, from 1.60% the year before. "Despite our best efforts we haven't managed to reduce the rate of crime—and that's because we are in the business of opening our doors to people," says Joseph La Rocca?, vice-president of loss prevention at the National Retail Federation.

Another Progressive Move?

Attalla is a microcosm of the challenges. The town lies 60 miles northeast of Birmingham, Ala., and has a reputation as one of the state's more progressive towns. It claims to have been the first U.S. city with electric streetlights. Once a large railroad hub, Attalla has struggled in recent years. The median household income is $28,600, about $8,000 less than the state average and $18,000 less than the national average. And shoplifting has been on the rise. Judge Robertson says that in the last 15 years, the number of incidents in his municipal court has tripled. Wal-Mart, a longtime local presence, is bearing the brunt of that. "Out of the 10 cases or so that we handle every week, 80% takes place at Wal-Mart," says Robertson. Since Robertson took action, he has had the whole-hearted support of local politicians. "Shoplifting is an epidemic in large stores and there's got to be some deterrent to the offenders and to others," says Charles O'Rear, Attalla's mayor. "Our judge found an innovative and effective way to make public spectacle of these thieves, and when they decided to use this form, I endorsed it."

Questionable Efficacy

The approach is not without controversy, though. Some critics say that wearing an embarrassing sign amounts to cruel and unusual punishment, although the accused in Attalla typically have the choice of wearing a sign or serving time in jail. Other legal experts question whether the punishment is even effective. "Judges are in a poor place to measure general deterrence, and it is purely speculative to suggest that shaming is a marginally more effective general deterrent than other available alternatives," says Dan Markel, assistant professor at Florida State University College of Law. Markel points out that in one well-known case, an offender went back to stealing mail after having to wear a sign board that read "I stole mail. This is my punishment." Even Wal-Mart has tried to put some distance between itself and the practice. Although Hawkins, the local store manager, had approved of Fithian's punishment and agreed to have her stand outside his Wal-Mart store, headquarters wasn't sure that was such a good idea. Immediately after Fithian's first day of shaming, Wal-Mart said shoplifters would no longer be allowed to wear the signs on store property. Spokesman Tovar says in a statement: "While the punishment is likely a deterrent to shoplifting, we have communicated with the judge that moving forward, we would prefer that these actions not be completed on store property. We do not oppose the use of wearing the signs, but we think it should take place on public property—like at the Courthouse—and not on our property. We also feel that the sentence should be supervised by law enforcement. Our associates should not be involved in that process."

Judge Robertson is convinced that the shaming punishments are beginning to take effect. "My job as judge is to cause a change and try to deter such crimes from happening in the future," he says. "When I offer them the sign in lieu of the fines, the person always drops their head in shame and I've always felt that it's a sign that they acknowledge something. If you pay a fine, you don't really accept your guilt."

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US: Wal-Mart Cuts Prices Of Over 16,000 Items

Namnews                                     [back to top]

Wal-Mart has launched a major price offensive and has said it will cut the prices of over 16,000 products this week, as it tries to boost sales for the back-to-school shopping season, and rebound from poor results in recent months. The retailer also said it would launch a new advertising campaign that moves away from its yellow "smiley-face" character and instead shows actors talking about why they turn to Wal-Mart for low prices.

Wal-Mart is reducing prices on back-to-school merchandise like pencils, pens and notebooks by 10-50%, and has marked down prices on more items so far this year than at the same point a year ago. It said it will introduce new price changes week by week, and will focus on top brands. Bill Simon, COO of Wal-Mart's U.S. stores, said, "We'll continue to be more aggressive on pricing and already are working with key suppliers on upcoming plans for fall and holiday".

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Al Sharpton and Wal-Mart's Lee Scott allies for immigration bill

The Associated Press
Tuesday, July 24, 2007                                    [back to top]

MIAMI BEACH, Florida: Civil rights activist the Rev. Al Sharpton and Wal-Mart CEO Lee Scott became unlikely allies Tuesday in their call to revive immigration legislation as they spoke before the largest U.S. Hispanic civil rights organization.

"Congress needs to pass a comprehensive immigration reform bill now," said Scott, who heads the world's largest retailer.

Scott attributed his views in part to his Mexican-American granddaughter, who has helped him to understand immigration as more than "simply a cerebral exercise."

But Hispanics also provide a major part of the chain's business, roughly 14 percent and growing, Scott acknowledged. And their relatives are increasingly shopping at Wal-Mart Stores Inc. in countries such as Argentina and Guatemala.

Sharpton, who has often railed against corporate America, went further in his support for a bill that would provide a path to legalization for many of the nation's more than 12 million illegal immigrants. He denounced TV and radio shows that foster an "us against them" mentality.

"I want to say what a lot of people won't say. The immigration debate is not simply about border security, it is a problem of America dealing with race," Sharpton told the audience of more than 1,000 community, political and business leaders, at the National Council of La Raza's annual conference.

"No one is calling for English-only tests when it comes to fighting in Iraq," he added.

Sharpton dismissed the notion that immigrants are taking jobs from black Americans.

"What jobs?" he demanded. "Blacks were doubly unemployed by whites before anyone came across the border."

President George W. Bush's plan to legalize as many as 12 million unlawful immigrants while fortifying the border and strengthening enforcement collapsed in the Senate last month. The measure fell 14 votes short of the 60 needed to reach final passage. Three-quarters of the Senate's Republicans voted to derail the bill.

Copyright © 2007 The International Herald Tribune

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Wal-Mart in price-cutting mode

No. 1 discounter, battling gas price pressures and housing softness; cuts prices on 16,000 products ahead of back-to-school season.

By Parija B. Kavilanz,
CNNMoney.com 
July 23 2007                                        [back to top]

NEW YORK (CNNMoney.com) -- As Wal-Mart continues to struggle with soft sales amid a housing slowdown and gas price pressures, the retailer announced Monday that it will cut prices further on 16,000 items this week to spur sales for the back-to-school shopping season.

Wal-Mart (Charts, Fortune 500), the world's largest retailer, said in a statement that it hopes to save families with children 10 to 50 percent on school-related merchandise through its new discounts.

Wal-Mart said its plans are based on this year's report from the National Retail Federation, which says families on average will spend $563.49 on school-related purchases for their kids.

Back-to-school pricetag: $18.4B Wal-Mart spokeswoman Melissa O'Brien told CNNMoney.com via email that this year's back-to-school discounts "are wider than last [year's] and very focused on name brands popular for back to school."

Further, O'Brien said the price cuts on the 16,000 items exceeds the discounts it set on 10,000 items just before the 2006 holiday shopping period.

"We know it's tough right now and Americans are looking to us to provide the best value, and we will," Bill Simon, Wal-Mart's chief operating officer, said in a statement.

Sales of Wal-Mart stores open at least a year, a key measure of retail performance known as same-store sales, continue to trail same-store sales growth at its main competitor Target (Charts, Fortune 500), the No. 2 discounter.

Although Target is in the same discount category as Wal-Mart, its sales haven't been hit as hard as Wal-Mart's in recent months because Target appeals to slightly higher-income shoppers whose disposable incomes are less affected by gas price swings.

Wal-Mart 'killer' machine set to strike again However, Wal-Mart surprised its detractors last month with better-than-expected June same-store sales, helped by strong demand for its expanded array of name-brand electronics, including the newly launched Dell computers and other flat panel televisions.

No doubt, Wal-Mart is eager to keep fueling last month's sales momentum heading into the important back-to-school sales season, which typically the second most-important selling season after the fourth-quarter holiday period.

"Some of this is publicity on Wal-Mart's part," Richard Hastings, chief retail analyst with Bernard Sands. "One the other hand, the lower one-third of consumers are experiencing less buying power because of higher gas prices, paying more for healthcare and childcare. Wal-Mart smells blood and it is responding to their diminishing purchasing power."

"Wal-Mart is definitely getting more aggressive on pricing. It's hitting hard on prices to drive traffic to drive its sales," said another analyst who did not want to be named.

At the same time, Hastings said it's getting harder for Wal-Mart to be price competitive. "Prices are falling everywhere in the mass market so it has to try even harder to keep its lower price leadership position."

As part of the new price rollbacks, Wal-Mart said it offer customers 4 wide ruled notebooks for $1, $2 for a 10-pack of No.#2 pencils, 2-pack erasers and 10-pack Bic pens, a Texas Instrument or Casio scientific calculator for $10 and a week's worth of school clothes for $50.

The retailer said in a statement it will change prices on a weekly basis, "depending on the seasonal need," and the top brands that customers want

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Wal-Mart Launches Price-Cutting Plan

By ANNE D'INNOCENZIO
Associated Press
07.23.07                                                 [back to top]

NEW YORK - Wal-Mart Stores Inc., the world's largest retailer, said Monday it is cutting prices on more than 16,000 items starting this week in a bid to turn around sales for the critical back-to-school season.

The price cuts, which range from 10 percent to 50 percent, will be backed by a new ad campaign on how to save money as gas prices remain high and kids head back to school. The cuts are deeper and involve even more items than in the year-ago period and top the 11,000 items discounted right before last year's holiday season kicked off, according to Melissa O'Brien, a company spokeswoman.

Wal-Mart (nyse: WMT - news - people ) has been playing up its low prices since late last year after getting hurt by a focus on trendy merchandise in an effort to get affluent customers to buy more than just groceries. While the upscale strategy worked in electronics,such as $1,000 flat-panel TVs, it failed in home furnishings and apparel, resulting in sluggish sales since last fall.

So far this fiscal year, Wal-Mart has averaged a same-store sales gain of a meager 1 percent, compared to rival Target Corp. (nyse: TGT - news - people )'s 4.1 percent increase, according to Thomson First Call.

Same-store sales are sales at stores open at least a year and are considered a key indicator of a retailer's health.

In April, Wal-Mart's same-store sales dropped - the weakest performance since it began publishing monthly sales in 1980.

Last year, Wal-Mart's same-store sales averaged a 2.1 percent increase, while Target had a 4.9 percent increase.

Wal-Mart did enjoy some improvement last month when it posted a better-than-expected same-store sales gain of 2.4 percent, indicating that its more aggressive discount strategy may be resonating with shoppers.

"We'll provide families savings where it counts, and continue to work closely with key suppliers, reduce packaging and lower shipping costs as we steer this program through fall and beyond," Bill Simon, chief operating officer, Wal-Mart Stores U.S., said in a statement.

Under Wal-Mart's new pricing plan, $1 will be able to buy 4 wide ruled notebooks, 2 bottles Elmer's glue (4 oz.) and a 24-pack of crayons. A $50 budget will be able to purchase a week's worth of school clothes, and $80 will buy two pair of prescription glasses at the Wal-Mart Vision Center.

The price cutting campaign comes as Wal-Mart has also been making changes to its merchandising team. The company said on Friday that Claire Watts, a top Wal-Mart apparel merchant, has resigned. The executive had been behind the failed makeover to trendy items from low-price basics.

As part of the changes, Wal-Mart promoted Dottie Mattison, formerly chief merchant for Walmart.com, to senior vice president overseeing women's apparel, jewelry, shoes and accessories as well as product development. Mattison will be based in the company's trend office in New York City.

Wal-Mart share rose 6 cents to $48.12 in early afternoon trading.

Copyright 2007 Associated Press. All rights reserved.

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Large retailer faces lawsuit: Case claims Wal-Mart’s leases to optometrists are illegal

By Lynn Larowe ,
texarkanagazette.com
July 22nd, 2007                                              [back to top]

Wal-Mart is being sued for allegedly violating Texas law in its dealings with optometrists who lease space. “It’s not reasonable and it’s illegal,” said Mark Burgess of the Texarkana law firm Crisp, Boyd, Poff and Burgess. “They should not have any influence over the days and hours these doctors work.” Optometrist offices located next door to Wal-Marts are leased from Wal-Mart for a percentage of the doctor’s monthly earnings. The leases Wal-Mart uses have a section where doctors must fill in the hours they will work each day of the week. One former Wal-Mart optometrist testified in a deposition that he was given the hours and days he had to fill in on his lease by Wal-Mart. Wal-Mart will not sign the lease unless the hours and days the doctor will operate are filled in, Burgess said. Burgess says, as a lease holder, Wal-Mart’s concern should be limited to how much rent they receive per square foot and whether the premises are being adequately maintained. Doctors cannot work for anyone other than themselves or another doctor.

The offices come fully furnished with the necessary equipment in place. The businesses must have separate entrances because Texas is a “two door state,” where there must be a literal wall of separation, according to the Texas Optometry Act. After an optometrist has been in business next to a Wal-Mart for a couple of years, pressure to increase hours and days worked is exerted with the threat of a lease cancellation for noncompliance, court documents say. Burgess recently negotiated an undisclosed settlement agreement for Texarkana optometrist Brad Aaron in federal court in the Eastern District of Texas. A second suit filed by Burgess and two Corpus Christi lawyers, Buddy Bell and Tony Canales, names Doris Forte and “others similarly situated.” This lawsuit was filed in federal court in the Southern District of Texas. Burgess says he hopes the judge presiding in Forte’s case will certify the suit as a class action.

“We’ve chosen the class method because that’s the only way we can protect the doctors who are still there,” Burgess said. Forte’s suit, much like Aaron’s, alleges Wal-Mart threatens to cancel leases if doctors don’t increase the hours and days they work. Texas law explicitly prohibits a money-making operation like Wal-Mart from influencing the hours, times and appointment schedules of optometrists. Texas is the only state with such a law on the books. The law describes its purpose as protection of the public’s visual health, by not allowing money to come between a patient and optometrists. Tennessee has a similar statute but it does not give as much latitude for relief from the courts as the Texas Optometry Act does.

According to depositions and other court documents, Wal-Mart allegedly leaves alone the recently recruited optometrist for a couple of years before applying the pressure to work more. Doctors are often recruited straight out of optometry school and lease the turn-key operations from Wal-Mart as a means by which to start a practice in a location where a steady stream of customers is guaranteed. “It was not in our best interest to tell doctors this was what would happen over the years,” said a former Wal-Mart optical division employee Shawna Ledsome. Doctors who lease from Wal-Mart don’t sell glasses and contact lenses. They perform eye exams and write the prescriptions necessary for a patient to get the corrective eye equipment. Wal-Mart has house vision centers where the prescriptions can be filled. Many customers of optometrists next to a Wal-Mart enjoy the convenience of simply walking next door to get their glasses or contacts. Walk-ins to Wal-Mart vision centers are often directed to the optometrist’s office next door if they have no prescription.

According to court records on the cases, Wal-Mart employees working in the vision department as statewide and regional managers and recruiters are allowing doctors to develop new practices and then applying pressure to increase hours and days in the office, the suit alleges. Some doctors practicing a stone’s throw from a Wal-Mart are open seven days a week. Most start at five days a week and are gradually and inevitably influenced by Wal-Mart employees who warn of having to start a practice elsewhere while enduring the strain of a change in income. “The threat to take away quality of life was substantial,” Ledsome said in her deposition. In a deposition of Ledsome by Burgess and a Wal-Mart lawyer, Jim E. Cowles of Dallas, Ledsome says staff knew they were breaking the law, yet continued. Cowles did not return a call to his office Friday.

“We just hoped we wouldn’t get caught,” she said. Ledsome says her boss, Mike Morry, wasn’t worried when he was informed a doctor had threatened to sue. “He said we’re stronger than he is, we’re bigger than he is, he’s going to bend to us.” Forte and Aaron have both ended their associations with Wal-Mart. Burgess says Forte’s suit, if won as a class action, could mean judgments for many Texas Wal-Mart optometrists, even if they aren’t specifically named in court documents. Forte’s suit asks that Wal-Mart be prevented from continuing the practice of pressuring optometrists to work more and more hours by court order. The suit also seeks damages and the recovery of attorney’s fees and court costs.

“We have found the optometrists across the state are a hard-working group of professionals,” Burgess said. “If this continues, patients will suffer right along with the doctors.” The pressure to see more patients by working more hours on more days of the week may mean doctors spend less time with patients, reducing the quality of care the patients receive, Burgess said. “They’re your eyes,” Burgess said. “You only have two of them.”

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COVER STORY : better Is bigger ?

By STEVE PAINTER ,
nwa news
July 22nd, 2007                               [back to top]

Twenty years ago, No. 2 U. S. retailer Kmart had its sights set on overtaking No. 1 Sears as No. 3 Wal-Mart continued to expand its then-regional base. Today, Kmart and Sears are under the same umbrella, Sears Holding Co., and in the No. 6 spot among U. S. retailers. Bentonville-based Wal-Mart Stores Inc. is No. 1 and nobody else is even close. Being No. 1 is good. It can also be hard to sustain over the long haul. Ask the folks at A&P, the oncedominant supermarket chain that has slipped to No. 21 among food retailers, a list Wal-Mart also now tops. Or the folks at the former Sears, Roebuck & Co., who sat atop the retail world for years with their combination of catalog sales, Main Street stores and, eventually, mall-anchor stores. Being No. 1 entitles you to be the most-copied player in your field; the target of groups that contend you’re a big part of what’s wrong with the world; and the object of complaints from investors who don’t understand why you can’t seem to do anything right anymore. “You are everybody in the world’s favorite target,” said Ryan Matthews, founder and chief executive of Black Monk Consulting in Eastpointe, Mich. “They [Wal-Mart ] do something, everybody on the planet is looking at them. If they have a good idea, the competition will immediately copy them.” Depending on how you figure it, Wal-Mart last year accounted for 7. 5 percent of all U. S. retail sales or, if you don’t include cars, gasoline and restaurant food, 15. 3 percent of retail sales. Its nearest retail competitor, The Home Depot Inc., generated about onefourth of Wal-Mart’s sales and doesn’t go head-to-head with No. 1 on all that many product lines. Nos. 2 through 6 combined came up more than $ 20 billion short of Wal-Mart’s sales last year. “I think of Wal-Mart as a phenomenon in and of itself,” said Claudia Mobley, director of the Center for Retailing Excellence at the University of Arkansas at Fayetteville. “They get lambasted by the [retail ] analysts because they’re not making their [sales ] numbers, but the difference between No. 1 and No. 2 is bigger than it’s ever been.” The center is at the Sam M. Walton College of Business. He’s the guy who built this retail phenomenon. “Speaking generally about size,” said Wal-Mart spokesman John Simley, “size affords us certain unique strengths that we can employ to help people save money so they can live better. They enable us to work more effectively with vendors to reduce packaging, improve products and develop efficiencies to lower prices.” And with size comes responsibility, Simley added, “which is why Wal-Mart is the largest charitable benefactor in America.” “And the experience of [Hurricane ] Katrina is a very good demonstration of that. We delivered food, water and clothes to families who had lost everything, and they had nowhere else to turn.” WAL-MART FACT: If Wal-Mart’s employees all lived in the same place, they would make up the fifth-largest city in the United States, behind Houston and ahead of Phoenix. If Target Corp. ’s employees had their own city, it would be a bit smaller than Wichita, Kan. An advertising agency Wal-Mart hired last year appeared to gloat about scoring such a huge account with an ad about itself proclaiming, “It’s good to be on top.” Wal-Mart soon fired that agency, citing reasons other than the ad, but the message rings true, retailing experts say. Because of its size and retailing clout, Wal-Mart has been able to consistently obtain tangible concessions from suppliers, said Peter Fader, professor of marketing at the University of Pennsylvania’s Wharton School of Business. “It’s also fair to say, power doesn’t come strictly because of size, it’s because of competence,” he said. “It’s not like they were born the 900-pound gorilla. They had to earn it.” Matthews said that, being the biggest, Wal-Mart places the biggest orders, making them “everybody’s most important customer and, in some cases, the only important customer.” The company blazed a new path on radio-frequency identification technology for product tracking and implemented other changes to streamline its supply chain, such as requiring vendors to have information systems that mesh with Wal-Mart’s. “That was not negotiable,” Matthews said. “There’s no question that Wal-Mart has used its clout to drive certain industry practices.” Other retailers, he noted, improved their efficiency as a result of logistics innovations demanded by Wal-Mart. The scale at which Wal-Mart operates gives it the ability to deliver products at previously unreachable prices and still make money, said Don Delzell, a partner in the consulting firm Retail Advantage of Redondo Beach, Calif. He contends that Wal-Mart was solely responsible for bringing the price of flatpanel T Vs? down to a level its working class customers could afford. That same scale means no other large retailer can go head-to-head with Wal-Mart on price, he said. “No one will be as good as they are at leveraging overhead, building and sustaining a supply chain, and merchandising,” he said. “You cannot match them. You cannot undercut Wal-Mart, unless Wal-Mart allows you to undercut.” WAL-MART FACT: The Pentagon in Arlington, Va., home to the U. S. Department of Defense, covers 6. 5 million square feet and is the workplace of 26, 000 people. Wal-Mart’s retail space is the equivalent of 127 Pentagons. Delzell’s specialty is merchandise strategy. Wal-Mart’s size, he said, is a huge advantage across many categories, such as televisions, camping gear or paper towels. It’s a disadvantage, he said, as the giant retailer tries to match its home decor and clothing offerings to customer lifestyles that vary across the country — products that relate to how people view themselves and how they want to be viewed. A drill that works for $ 20 works anywhere, he said, but a casual shirt for $ 20 won’t be a hit in every market. Clothes and home decor choices are based more on emotion and matters of taste, said Patricia Edwards, a fund manager with Hauser & Violich in Seattle. “A mower doesn’t necessarily say a lot about who you are. Your home and your clothes do,” she said. Simley, the Wal-Mart spokesman, countered that taste is “as individual as each customer, but it’s true with most product categories, not just home and apparel.” Wal-Mart’s struggles in those categories show up repeatedly in sales reports. The company has embarked on a “customer segmentation” strategy, seeking to tailor different mixes of products to different geographic regions and income levels. Delzell finds those efforts are not specific enough to make a difference. The company failed in its effort to develop trend analysis at the regional level, he said. The people in the field didn’t have the necessary training, he said, and buyers didn’t pay attention to what the research showed. “Every effort they’ve made to change their approach to that has failed,” he said. Edwards said Wal-Mart’s store-of the-community push, aimed at refining product offerings based on local preferences, is a step in the right direction and credits the efforts of Eduardo Castro-Wright, head of the Wal-Mart stores division. “I think he understands the problem, but it’s a difficult thing to get,” she said. Added Delzell: “Nobody’s done it really well.” Simley responded that Wal-Mart is about halfway into its three-year store of-the-community initiative. And so far, “the indications are the customers recognize and appreciate the efforts to make the stores even more relevant to their needs.” Carol Spieckerman, a Bentonville based consultant who works with Wal-Mart vendors, said vendors need to take the initiative to get the right products to the right places. Because Wal-Mart does not have regional buyers, she said, the door is open for vendors to help determine the right products for the right stores. “It’s sort of manage or be managed,” said Spieckerman, a partner in newmarketbuilders. Matthews sees other pitfalls in Wal-Mart’s size that are difficult for the company to overcome. In a given market, he said, they might quickly drain the low-pay retail labor pool, hiring workers who didn’t initially make the second or third cut and, in some cases, hiring back people who quit or were fired. “That really doesn’t happen,” Simley said. He pointed out the retailer gets thousands of qualified applicants for just a few hundred jobs. Matthews said it’s even harder trying to effect change throughout such a large organization. Huge companies tend to resist change, he said, which means they can’t attract change agents to the company. However, Simley said, “We still live by Sam Walton’s credo, that everything around us is always changing, and that to succeed, we have to stay out in front of that change. Just walking through a store today, you can see evidence of that.” One attempt at change last year turned sour for Wal-Mart: hiring high-profile advertising executive Julie Roehm. She was gone by year’s end, fired for alleged misconduct and violation of company policies. The two sides are battling in court. WAL-MART FACT: Home Depot, Kroger, Costco, Target and Sears / Kmart combined generated less sales revenue last year than Wal-Mart. But, collectively, they made more money. Some speculation in the retail world is that Wal-Mart needs to get smaller — in format — to keep getting bigger. Dollar stores have found a sizable customer base below Wal-Mart’s price levels, in a format that takes less time to shop. Tesco PLC, the United Kingdom’s largest retailer, is entering the U. S. market this year with small-scale stores in the West that will offer fresh and prepared foods in addition to the convenience of getting in and out quickly. “I think it’s real important for them [Wal-Mart ] to have something credible in that general area,” said Fader, the University of Pennsylvania marketing professor. Wal-Mart has nothing as small as Tesco’s planned format in the United States. Its international operations, however, include a wide variety of sizes, some of them quite small by the company’s U. S. standards. Nine years ago, Wal-Mart opened its first Neighborhood Market, a traditional-size supermarket without all the general merchandise of a supercenter. Since then, it has added only 117. The company plans to open 15 to 20 Neighborhood Markets this year. Simley said Wal-Mart doesn’t comment on other companies such as Tesco, but added, “Our business is always evolving, and we’re always looking for new and innovative ways to serve a new and increasingly diverse customer.” Despite its enormous size, and its saturation of some markets, Wal-Mart will be under pressure to grow even more, Matthews said. “No publicly held company ever told Wall Street, ‘ We’re big enough, ’” he said.

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Mid-Michigan Wal-Mart evacuated

By Gabe Gutierrez ,
WJRT
July 22nd, 2007                                 [back to top]

A gas leak forced hundreds of customers and employees to evacuate a Mid-Michigan Wal-Mart on Sunday afternoon.

It happened around 3:00 p.m. at the Wal-Mart Supercenter on Saginaw Street in Grand Blanc Township.

Grand Blanc fire crews responded to a gas leak near the back of the store in a stock room.

Witnesses say a forklift accidentally smashed into a heater and ruptured a gas line. Management then evacuated the building and employees had to wait outside for about an hour and a half. Nobody was injured. But some employees tell us they were waiting to be tested for carbon monoxide poisoning just in case. Those employees said it was not the way they expected to spend their Sunday afternoon.

We tried to speak with Wal-Mart management about the situation. They're keeping quiet, saying they need to speak with the corporate office first.

Things were mostly back to normal around 6:00 p.m. and customers were allowed to walk in the store.

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USA : Wal-Mart apparel top-brass resigns

By fiber2fashion.com
July 21st, 2007                           [back to top]

Wal-Mart Stores Inc revealed that Executive Vice President for apparel merchandising, Claire Watts, resigned on Thursday so as to “pursue other interests”.

This announcement came after the Company’s shift from low-priced clothing to fashion wear, failed to improve garment sales.

Spokeswoman said that Watts, who joined Wal-Mart in 1997, will officially leave Bentonville, Ark., retailer next week.

Chief Merchant for Walmart.com, Dottie Mattison, has now been promoted to Senior Vice President for women's apparel, jewelry, shoes and accessories as well as product development. Mattison will directly report to Chief Merchandising Officer, John Fleming.

Experts believe that the low apparel sales, which make up for Wal-Mart’s 10-15 percent share, are the main cause of loss at same-store results, since last fall.

Many analysts further opine that the recent changes in top management are part of Company’s efforts to revive overall sales.

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Not copying Wal-Mart pays off for grocery chains

By GARY McWILLIAMS,
Kansas City Star
July 21st, 2007                                       [back to top]

“They can’t put cookie-cutter stores out there anymore.” Sandra J. Skrovan, senior vice president at TNS Retail Forward

After years of decline brought on by fighting Wal-Mart Stores Inc. on price, the nation’s grocery chains are on the mend.

The supermarkets are winning back shoppers by sharpening their differences with Wal-Mart’s supercenters, stressing less-hectic stores with exotic or difficult-to-match products, and greater convenience.

Last year, sales at supermarkets open at least a year rose 4 percent, the biggest increase in five years, according to retail consultants TNS Retail Forward. While the gains are modest, the supermarkets got more good news recently when Wal-Mart announced it would cut back on new supercenter openings for the next several years.

Earlier this decade, the hidebound supermarket business was expected to fall before Wal-Mart’s supercenter rollout and the rise of membership clubs like Costco Wholesale Corp. and high-end specialty chains like Whole Foods Market. Many chains did collapse — 26 filed for bankruptcy this decade — and a wave of consolidation swept the business. But the survivors rallied by redesigning stores, introducing a more relaxed shopping experience, and marrying low-priced staples with higher-margin breads, meats and wine. Now, the stronger chains like TheKroger Co. and SuperValu Inc. are taking market share from weaker, often regional, grocers.

Supermarkets have begun to attract new investment. Hedge fund Cerberus Capital Management LP recently joined two retailers in acquiring Albertsons, and Britain’s Tesco PLC is expected to begin rolling out 100 U.S. stores in the Southwest this year. TheGreat Atlantic & Pacific Tea Co., once a symbol of the big chains’ decline, recently acquired rival Pathmark Stores Inc. for $700 million.

Many of the chains are still learning to sidestep Wal-Mart. They are cutting back on drugs and health and beauty products, which are Wal-Mart strengths, to stress fresh produce, higher-quality meat and easy-to-prepare foods. Subdued lighting and high-end selections buttress the nonsupercenter experience.

Instead of aisles with common brands, the supermarkets are adding tables providing ingredients for planned meals, luring the customer who shops for dinner instead of stocking up on groceries weekly, said Paul Weitzel, managing partner at grocery consultants Willard Bishop LLC.

Safeway Inc. has converted about half of its 1,755 stores into “Lifestyle” markets with wood floors, on-site bakeries and high-end private-label brands. The third-largest food retailer after Wal-Mart and Kroger, it expects to convert all its stores by 2009.

Safeway has also invested in precise temperature controls for its produce and other perishable foods as they move from suppliers to stores. And it strives to find food its competitors don’t offer, said Steven A. Burd, Safeway’s chairman. For instance, it worked with growers to get individual-sized watermelons two years before others. It also works with a single meat supplier to offer its own brand of tenderness-tested beef.

Kroger has an outlet for every consumer: urban no-frills stores that stock a limited set of groceries at ultra-low prices, conventional supermarkets and larger stores with housewares, and stores aimed at upper-crust shoppers that offer more produce and prepared foods. David B. Dillon, Kroger’s chief executive officer, estimated the chain gained share last year in 26 of the 32 areas where it competed against supercenters.

Becoming more competitive on price has meant skimpier margins. Kroger’s gross margin, or profit after product costs, slumped to 24.5 percent at the end of last year from 27.7 percent at the end of fiscal 2001. Safeway’s gross margin was 28.8 percent last year, down from 31.1 percent in 2002.

Wal-Mart hasn’t lost its zeal for the food business. Last year it opened 276 supercenters, helping boost its share of the U.S. grocery business by one percentage point, to 15.3 percent (19 percent including its Sam’s Club wholesale unit), according to a JPMorgan estimate.

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Wal-Mart's Fashion Maven Departs As Trendy Merchandise Languishes

By Ylan Q. Mui,
Washington Post
July 21st, 2007                                       [back to top]

The Wal-Mart executive who tried to dress up the no-frills discount retailer in skinny jeans and sateen bedsheets has resigned, the company said yesterday, after shoppers failed to respond to the trendy new merchandise.

Claire A. Watts, executive vice president of apparel merchandising, will leave her post next week to pursue "other career interests," Wal-Mart spokeswoman Sarah Clark said. Watts joined the company in 1997 as divisional merchandise manager of product development and became a vice president two years later.

Her departure highlights the troubles that have befallen Wal-Mart's foray into fashion. The strategy was intended to attract more affluent shoppers and encourage existing customers to buy more than cheap toilet paper and laundry detergent. But the company moved too quickly, suffering from distribution troubles and poor response in the nation's heartland. Sales at stores open at least a year, a key measure of health in retail, have been tepid, with apparel and home sales dragging down performance.

Charles Grom, an analyst with J.P. Morgan Securities, estimated that clothing accounts for 10 to 15 percent of Wal-Mart's total sales. In a research note yesterday, he called Watts's departure and the installation of her replacements "long overdue."

"We think that the changes . . . are steps in the right direction," he wrote.

Watts had been a rising star at Wal-Mart. Under her tenure, the folksy retailer with headquarters in Bentonville, Ark., opened an office in New York to stay abreast of developments in fashion and design. She helped oversee the debut of the chain's hip Metro 7 clothing line in fall 2005 that was advertised in a glossy spread in Vogue magazine. Watts received the Sam M. Walton Hero Award and the Sam M. Walton Entrepreneur of the Year Award, the highest internal honor given to the company's senior management. She has been named one of Fortune magazine's 50 most influential women in business.

"Claire is a talented merchant," Clark said. "The company continues to move in the right direction, and much of that credit goes to Claire."

But Wal-Mart's gamble on fashion hasn't paid off. Last fall, chief executive H. Lee Scott Jr. said Wal-Mart had introduced its Metro 7 line too quickly. The clothes were in 1,500 Wal-Mart stores across the country. Company officials said Metro 7 was more suited to just 600 locations, mainly on the coasts.

In January, the retailer announced a reorganization of top management as part of a three-year plan to boost sales and profitability under Eduardo Castro-Wright, president of the company's U.S. stores. The move stripped Watts of her responsibility for home goods.

Clark said she could not provide additional comments about the reason for Watts's departure or her severance package. Watts's duties will be split between Mark Larsen, who oversaw merchandise for babies, children and men, and Dottie Mattison, who worked for Walmart.com.

Marshal Cohen, a senior analyst with consumer research firm NPD Group, said Watts's departure did not mean that fashion was dead at Wal-Mart. But he said the retailer needed to refocus on the desires of its core customers rather than chase after trendsetters.

"It's more than just one individual leader can really do," he said. "It's going to take a whole cultural change."

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Hualian denies Wal-Mart bid report

By Jiang Jingjing
China Daily
2007-07-21                                [back to top]

Beijing Hualian, one of China's biggest retail groups, has denied a published report that it is in talks with hypermarket giant Wal-Mart on a possible takeover bid.

Britain's Daily Telegraph reported that Wal-Mart has asked advisers at investment bank Credit Suisse to draw up plans to buy all or part of the Beijing-based retailer.

The newspaper cited an anonymous inside source that said the two parties have held preliminary talks and both have been "looking hard" at the possible deal.

A Wal-Mart booth at an exhibition in Zhengzhou, capital of Central China's Henan Province. Sha Lang

But Beijing Hualian's spokeswoman Li Yiping fimly denied the report. "We do not have such moves (underway with Wal-Mart)," she told China Daily.

Dong Yuguo, spokesman for Wal-Mart China said corporate policy does not allow him to comment on media reports or market speculation.

One expert said it is unlikely that Wal-Mart would seek local acquisitions at this stage. "It is too early for Wal-Mart to do so in China," said Wang Yao, deputy secretary-general of China General Chamber of Commerce.

Wang said the US firm is at the phase of laying a solid foundation in China, so developing on its own is the right strategy at the moment.

Wang also noted that management models for local retailers are very different from international giants like Wal-Mart, so mergers and acquisitions carry many potential risks.

Wal-Mart announced in February that it would acquire 35 percent of Taiwanese chain operator Bounteous Company Ltd (BCL), the owner of Trust-Mart. The deal also includes an option that allows the US company to possibly become the dominant shareholder under certain conditions.

Dong told China Daily that the partnership with Trust-Mart has gone smoothly. "Trust-Mart is a very good company. We have a lot to learn from each other."

BCL operates 101 hypermarkets in 34 Chinese cities, all still under the Trust-Mart name. Wal-Mart, which entered the Chinese market in 1996, now has over 70 stores in the country that employ more than 37,000 people

Beijing Hualian is partly owned by Beijing municipal government and has some of its shares listed in Shanghai. Analysts estimate the firm's value exceeds $1 billion.

The local company recently formed a 50-50 joint venture with Taiwan-based Shin Kong Mitsukoshi to open the luxury department store Shin Kong Place in Beijing's central business district.

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Top Wal-Mart apparel merchant resigns as Wal-Mart struggles to reinvigorate sales

The Associated Press
Published: July 20, 2007                               [back to top]

NEW YORK — Claire Watts, a top Wal-Mart apparel merchant, has resigned as the world's largest retailer struggles to reinvigorate its fashion business. The executive had been behind a failed makeover to trendy items from low-price basics.

Watts, executive vice president of apparel merchandising at Wal-Mart Stores Inc., resigned Thursday to "pursue other interests," according to Sarah Clark, a spokeswoman for the world's largest retailer said Friday.

Watts will officially leave the Bentonville, Arkansas, retailer next week, Clark said. Watts was not in the office and was unavailable for comment.

As part of the changes, Wal-Mart promoted Dottie Mattison, formerly chief merchant for Walmart.com, to senior vice president over women's apparel, jewelry, shoes and accessories as well as product development. Mattison, who had worked for Gap Inc. for 12 years, will report directly to John Fleming, chief merchandising officer. Mattison will be based out of the company's fashion office in New York City.

Mark Larsen, general merchandising manager of men's and children's apparel, who used to report to Watts, will now report to Fleming.

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Wal-Mart plots bid for Chinese retail giant

By Mark Kleinman
20/07/2007                                      [back to top]

Wal-Mart's $1bn bid for Chinese retail giant Wal-Mart facts Wal-Mart: a history Wal-Mart is examining a deal to invest in one of China's biggest retail groups in a move that would dramatically expand its presence in the world's most populous country, The Daily Telegraph can reveal.

Wal-Mart operates about 70 stores in China

The Arkansas-based company has asked a team of advisers at Credit Suisse, the investment bank, to draw up plans to buy part or all of Beijing Hualian, a hypermarket operator which owns scores of stores in the capital and other cities across China.

The two sides are believed to have held some preliminary talks about a deal, although it was unclear what stage these negotiations had reached.

One person familiar with the situation said Wal-Mart may decide not to go ahead with an investment in Beijing Hualian but added: "They have been looking hard at this."

Analysts speculated that Beijing Hualian, which is part-owned by Beijing's municipal government and has some of its shares listed in Shanghai, would be worth well over $1bn.

One of the company's most senior executives, Yves Chen, quit earlier this year to run the Chinese operations of the American retailer Home Depot.

If Wal-Mart does proceed with a formal offer to invest in the Chinese group, it would greatly accelerate its growth prospects there.

Wal-Mart operates about 70 of its own hypermarkets in the country, although a deal signed in February to acquire 35pc of the owner of Trust-Mart, a Taiwanese-founded chain, gave it a stake in a further 100 outlets.

Other foreign retailers, including Tesco and the French group Carrefour, have also invested heavily in China in recent years.

A Wal-Mart spokesman said the company had "made no announcement about any deal" and refused to comment further. Beijing Hualian could not be reached for comment.

Wal-Mart's interest in Beijing Hualian has also emerged at a time of rising tension between the US and China over a host of trade issues, including the safety of Chinese exports and the Asian country's massive trade surplus.

Wal-Mart has come under intense fire from pressure groups which have branded it "anti-US" over its reliance on Chinese-manufactured goods.

Information appearing on telegraph.co.uk is the copyright of Telegraph Media Group Limited and must not be reproduced in any medium without licence. For the full copyright statement see Copyright

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Wal-Mart to Double Stores in China

Chain Store Age
Thursday, July 19, 2007                         [back to top]

Wal-Mart Stores plans to more than double its stores in China in the next five years to tap into the growing personal wealth of the country's 1.3 billion people, according to a report by Bloomberg. The expansion will help the company broaden its reach beyond its current 84 stores across 46 Chinese cities into smaller cities, where competition is less fierce, the report said. Wal-Mart expects the growth to help it garner 20% of China's retail market.

Wal-Mart has opened 12 stores in mainland China so far this year, on track to beat 2006 openings of 15, the company said. The retailer sped up its expansion earlier this year by acquiring a 35% stake in China's Trust-Mart. Wal-Mart said at the time that the move may lead to its taking ownership control of Trust-Mart's more than 100 hypermarkets.

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Wal-Mart to sell $298 back-to-school PC

By Jose Vilches,
TechSpot.com
Published: July 19, 2007                             [back to top]

The back-to-school season is just starting, and with it many PC vendors are looking to get a jump on the lucrative shopping season. This Wednesday, retailing giant Wal-Mart began selling a $298 system from Everex which sports Windows Vista Home Basic, OpenOffice 2.2, and is reportedly bloatware-free.

The Everex Impact GC3502 features the energy-efficient 1.5GHz VIA C7 CPU, 1GB DDR2 533 MHz SDRAM, a VIA Chrome9 HC IGP graphic card, Realtek High-Definition Audio, 10/100 Ethernet LAN, 6 USB ports, Microphone and headphone jack, as well as VGA, Ethernet and RJ-11 ports. Keyboard, mouse and stereo speakers are also included. It does not include a monitor, though.

Obviously, the system is not likely to entice gamers and enthusiasts. However, budget-conscious shoppers needing to manage their email, surf the Web, listen to music, and do basic productivity tasks, will welcome the Everex’s PC.

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Wal-Mart plans big expansion in China

By Jean Loo and
Dune Lawrence
Bloomberg News
Thursday, July 19, 2007                                  [back to top]

SINGAPORE: Wal-Mart Stores, the world's biggest retailer, plans to more than double its stores in China in the next five years.

The expansion will help the Bentonville, Arkansas-based company broaden its reach beyond its 84 stores across 46 Chinese cities. Wal-Mart expects to have a 20 percent share of the country's retail market with the expansion, said Terrence Cullen, the vice president of China operations.

"To date, no real market leader has emerged and our eyes are on market leadership of some sort," Cullen said in an interview Thursday in Singapore. "What we'll see is aggressive organic growth, probably accelerating each year over the next few years."

Wal-Mart is considering buying all or part of Beijing Hualian Hypermarket, the Daily Telegraph in Britain reported Thursday, citing unidentified people close to the talks.

Hualian officials could not be reached for comment. Wal-Mart agreed to buy a stake in the Chinese retailer Trust-Mart in February.

"The quickest way to do it is to buy into local retailers. It all depends on what price they have to pay for it," said Anthony Teoh, a Hong Kong-based analyst who covers retailers at South China Finance & Management.

"When you're looking at the valuations in the retail sector, foreigners have to pay pretty steep prices at the moment."

Overseas retailers have been expanding in China as the nation opens its domestic market to foreign competition. Per-capita disposable income in towns and cities rose 12.1 percent last year and China's retail sales increased 14 percent.

"Retail demand is growing," said Paul Tang, chief economist at Bank of East Asia.

"Retailers are responding to the Chinese government's 11th five-year plan to bolster consumer demand. The overall economy growth is also quite good, and it all helps to increase consumer confidence."

Wal-Mart faces rising competition as growth in China draws more retailers. Carrefour, Europe's largest retailer, this month increased its target for new stores in China, where it plans to open 20 to 25 outlets a year, up from the previous forecast of 20.

China's share of world consumer spending may almost triple to 14.1 percent by 2015, from last year's 5.4 percent, according to Credit Suisse. That would surpass the share of consumer spending in Britain, Germany and Japan, according to the research.

China's 2006 retail sales grew 14 percent to $770 billion.

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What's on sale at China's Wal-Marts?

Forget about the frozen food and bulk toilet paper. Wal-Mart shoppers here are more likely to find live crabs, 'black chicken'... and a blow-dry. advertisement

By Suzanne McGee
July 19, 2007                                           [back to top]

SHENZHEN -- In search of hairy crabs, pork-floss buns and compact towels that will dry easily in the open air, this southern boomtown's migrant workers and up-and-coming entrepreneurs flock to Wal-Mart's (WMT.N) new Supercenter. No longer do they go from one tiny storefront to the next, selecting vegetables at one and, at the next, a duck hanging from a hook above the sidewalk. Instead, they are discovering the concept of one-stop shopping. "The produce here is clean; I know it doesn't have pesticides, and the quality is more reliable," says one middle-aged shopper, browsing through stacks of carefully wrapped organic Chinese greens. "Besides," the customer adds, "it's a joy to shop here." This Supercenter opened its doors on the outskirts of Shenzhen just a year ago. Today it is bustling with customers. If Wal-Mart builds it, it seems, Chinese shoppers will come: This is Wal-Mart's fourth store in Shenzhen and one of 78 outlets the retailing giant operates in China, where sales growth hovers at nearly 30% annually, compared with a mere 2% or so in the United States, according to analysts. Shawn Gray, vice president of operations for Wal-Mart China, says the company is hunting for three more Supercenter sites in Shenzhen alone. Chinese customers say Wal-Mart makes shopping for daily necessities downright pleasant. Worried about getting your goods home on a bicycle? No problem: Wal-Mart's shuttle buses travel up to three miles to ferry customers and their shopping bags. Wondering what to do with your grandchild while you stock up on groceries? There's a supervised children's playground available for a nominal cost, right next to the toy and book department. But customers say it's what's on the shelves -- and the novelty of the shopping experience itself -- that brings them back to the store, sometimes as often as daily. Here, a look at what's in store. Makeup and makeovers: After spending decades in look-alike padded jackets and boxy Mao suits, Chinese women have become fashion addicts. But many are still trying to figure out what styles suit them and which skin care and cosmetics products they should use. To help them out, Wal-Mart's cosmetics counters here are staffed with a team of "beauty technicians." "We tested taking them out, and our (cosmetics) sales dropped 40%," says Gray. But Wal-Mart goes a step further. Just beside its cosmetics counters are rows of beauty-salon chairs in front of mirrors. For about $1.50, women can have their hair washed and blown dry into a style of their choice. And after paying for their purchases, they can arrange for additional services -- from manicures and pedicures to hair extensions -- with an entrepreneurial woman who offers her services through the store. "She has been a fantastic partner since the day we opened," Gray enthuses. Portable closets, cots and chairs: Chinese homes are relatively tiny -- 750 square feet would be considered large -- so space is at a premium. That's why Wal-Mart stocks plenty of folding chairs. "Going into the holiday season, (shoppers) will purchase a lot of these for visiting family and friends," Gray says. Closet space is almost nonexistent, so Wal-Mart offers zipper-front portable closets. And don't expect big multipacks of paper towels -- most homes are too small to stash extras. One of Wal-Mart's compact best sellers? A folding cot that's a favourite with overworked executives who want to nap in their offices after lunch. The folding cots are relatively expensive at $12, but Wal-Mart is selling 40 a week. LCD TVs: China's workers earn far less than their North American counterparts -- a salary of $300 a month makes you a consumer, and $1,000 a month puts you in the middle class -- but they are eager to spend on electronics, so Wal-Mart stocks dozens of the latest models of LCD TVs. Outside the store's front door, a Chinese manufacturer, Skyworth, has set up a festive tent, where salespeople use microphones to hype the rebate offered to any local citizen turning in an old-style TV, however decrepit, in exchange for a new Skyworth model. "Black chicken" and instant "hot pots": In the ground-floor food department, most of the chicken breasts are charcoal-coloured, the meat coming from a Chinese breed. "It is good for ladies' skin," explains the store's general manager, Stanley Liu. There is also more of this black chicken for sale than beef; the Chinese haven't developed much taste for beef, Liu explains, particularly in the south, where grazing land is almost nonexistent. Nor are they keen on frozen products. Aside from a few freezer cases stocked with dumplings and ice cream, virtually all the food on offer here is fresh. The Chinese version of a frozen lasagna? A package containing all the ingredients needed for a made-from-scratch hot pot, a common Chinese dish -- from the fresh pork and vegetables right down to the spice package. "Dump all that in the boiling water, you'll have a nice hot pot or pork soup," explains Gray. But shoppers are coming to understand organics, particularly since the store began organizing bus tours to local organic farms. "It was so new, it helped explain the concept of chemical-free and organic," Gray said. Live shrimp and hairy crabs. Chinese shoppers don't want to buy dead fish, even if impeccably displayed on beds of ice. They prefer to select their fish and seafood while it's still alive. That's why Wal-Mart's extensive fish section contains more fish tanks than display counters -- and small nets to bag your selection. Young shoppers are eager to help. "We come here every day; he likes to help select the fish," says one mother of her toddler son. The hairy crabs, a seasonal delicacy from Zhejiang province, cost a whopping $35 per pound -- but still sell well, Gray says. And a crowd surrounds the depleted shrimp tank, where shoppers avidly seek out the most aggressive and fastest-moving shrimp for their evening meal. Tasting tea. Coffee giant Starbucks has made inroads in China, but at Wal-Mart, it's all about tea -- specifically, green tea, which consumers can sample before buying. "In China, we have a tea culture, and I get to learn about that while working here," says a young woman dressed in traditional Chinese robes. She swishes water through the tea leaves in an earthenware pot until the brew is just right. The tea is then decanted into a glass (sanitized after each customer has used it) for the customer to try. About two-thirds buy the tea they try, the associate says. Pork floss and red-bean buns: Forget raisin bread and doughnuts. In China, favourite bakery treats include red-bean bread and pork-floss buns. Pork floss? It's basically dried and shredded meat, Gray explains. "They take a (pastry) or a bun, split the top and dip it in a kind of sweet mayonnaise, then dunk that into a container of the pork floss." Wal-Mart's bakers, and butchers, work behind glass windows, so shoppers can see them in action. Safety lessons: Wal-Mart wants to give the Chinese consumer a total experience, whether it's offering a circle of toddlers lessons in road safety or good manners, or providing a picnic spot where customers can take their just-purchased takeout dinners (which include two meat dishes, rice and vegetable soup). The goal? To capture a growing share of a market that exhibits more purchasing power with each passing year. "This is a great market," explains Gray. "The dormitories will be torn down and replaced with high-rise apartment buildings, and the income level of our customers will keep rising."

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Wal-Mart Brings Customer Reviews Online

by Mike Sachoff
Thu, 07/19/2007                               [back to top]

Wal-Mart today said it is adding customer reviews and ratings on its Web site.

The new feature will allow customers to submit ratings and reviews of merchandise available online only as well as products sold in stores.

"Reviews and ratings is the No. 1 customer-requested feature online at Walmart.com, and we're pleased to offer this service to better help our community of customers shop smart and make informed decisions about the products they purchase both in our Wal-Mart stores and online," said Cathy Halligan, Walmart.com's chief marketing officer.

Wal-Mart had a test of customer reviews and ratings in June to receive customer feedback and gauge overall results. Customer reviews more than doubled the company's expectations during the test phase and they received the most reviews in the categories of electronics, home and garden, media and baby.

"We know close to 75 percent of Wal-Mart's 130 million customers are online which presents a significant opportunity for our online reviews and ratings platform to connect our customers to one another, and also help them further engage, communicate, share opinions, and learn more about products available at Wal-Mart," added Halligan. "It's all part of our continued commitment to be the premier multi-channel retailer."

Wal-Mart says that customers can submit a review by viewing a product online or by email invitation sent a few weeks after they have placed and received an order. The product reviews are published within five days of submission.

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Bharti-Wal-Mart formal pact soon

N. Anand
The Hindu
19/07/2007                                      [back to top]

CHENNAI: Bharti Enterprises is all set to sign a formal agreement with the U.S. largest retailer, Wal-Mart Stores Inc.

Talking to The Hindu on Tuesday, Bharti Enterprises, Founder, Chairman and CEO, Sunil Bharti Mittal, said work was under progress and they were in the process of recruiting employees and identifying land. A formal agreement with Wal -Mart with regard to franchising and branding would be signed soon.

Recently, Bharti Enterprises Joint Managing Director, Rajan Bharti Mittal, had said that apart from providing choice and quality to consumers at affordable prices, the efficient supply chain management and ‘on time’ availability of goods would help fight inflation. Bharti’s retail chain will provide ready outlets to the relatively ‘unknown’ brands of small manufacturers, which are sold as private labels.

“We are now studying the supply chain management. Land has not been picked up. We will open a chain of stores early next year to carry out cash and carry business. Foreign direct investment in retail is not allowed in the front-end,” said Mr. Sunil Mittal.

On the life insurance front, Bharti has tied-up AXA. Bharti AXA Insurance Company would start cross selling financial and wealth management products to Airtel customers in the next few months.

Talks are also on with AXA to get into the general insurance sector that would be kick-started during this quarter.

Even though, the group has a suite of financial products, Mr. Sunil Mittal ruled out the possibility of entering the banking sector, at least for the time being.

Bharti had joined hands with the EL Rothschild Group to export fresh fruits and vegetables exclusively to markets in Europe and the U.S.

© Copyright 2000 - 2006 The Hindu

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Wal-Mart's purchase cut hurts Chinese suppliers

chinadaily.com.cn
2007-07-18                                               [back to top]

Although retail giant Wal-Mart made no comments on a report that it had cut US$6 billion worth of purchase orders in China, several Chinese suppliers reported receiving fewer orders from the company this year, the National Business Daily said on Wednesday.

A manager with the Boshan Linaer Garments Co in Shandong Province complained that Wal-Mart, their biggest client, began cutting autumn orders as early as last year. Now they have also cut spring orders for next year.

According to him, the reason could be slow sales or simply a shift to other countries due to the appreciating renminbi.

Other companies such as Weifang Zuo Bang Garment Co and Langsha Sock Industry Co have also been hurt by Wal-Mart order cancellations. "We are working hard to explore new clients," said the manager of a T-shirt factory that had supplied Wal-Mart for several years.

In the past years, China has become an important source of cheap products for Wal-Mart. The retail behemoth has purchased nearly a thousand products types in China each year, ranging from dresses, shoes, electronic devices and toys to daily necessities. Last year US$18 billion worth of Chinese products were procured by Wal-Mart, almost one tenth of the country's total export value to the United States.

According to Wu Jianguo, a specialist in business research at the Shanghai Business School, Wal-Mart will not eliminate China from its list of global purchase bases as long as China remains a global processing powerhouse and the company's sales keep growing.

However, for Chinese suppliers, reliance on Wal-Mart should be considered risky. Instead they should upgrade their products constantly and promote domestic sales to diversify their client base, said Wu.

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Asda Apologises To Harry Potter Publishers Over Price Slur

Namnews                                                   [back to top]

Asda yesterday apologised to the publishers of the new Harry Potter book amid a row which had threatened to keep the hotly-awaited work off its shelves. In a press release earlier this week, Asda had accused publishers Bloomsbury of "attempting to hold children to ransom" by increasing the recommended sale price of the seventh and final Potter book - due out on Saturday - to £17.99. The row, which Bloomsbury said centred on unpaid bills and had nothing to do with the pricing policy, saw Bloomsbury cancel delivery of Asda’s 500,000 copies of "Harry Potter and the Deathly Hallows".

But now Asda has apologised with spokeswoman saying, “Asda apologise unreservedly to Bloomsbury for its press release dated July 15 and withdraw this statement and we look forward to a good relationship with Bloomsbury going forward including selling the latest Harry Potter book from 0001 am BST on Saturday July 21 and many other Bloomsbury books in the future." Minna Fry, marketing director of Bloomsbury, said, "We are pleased that this situation has been resolved and look forward to working with Asda in the future."

Asda had pledged to sell the book for £8.87 but has not revealed the price copies will be sold at in the wake of the row. They had pointed out that the first book in the series, "Harry Potter And The Philosopher's Stone," had an recommended retail price of £11.99 in 1997.

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Tesco & Asda check abuse claims in B'desh

By indiatimes.com
July 17th, 2007                                [back to top]

LONDON: Supermarket firms Tesco and Asda have said they were looking into allegations of worker abuse at garment factories used by their suppliers in Bangladesh. The retailers’ comments came after a Guardian investigation claimed that workers making clothes were paid as little as 4 pence an hour. Tesco said it had done all it could to ensure “high standards and good conditions” in the country. Asda said any abuse was “unacceptable” and it may audit its factories. The textile industry is a large employer in Bangladesh. In its report, the Guardian claims that garment workers are regularly forced to work 80 hours a week in factories where conditions are often violent, and where staff do not have access to trade unions. Allegations of abuse of workers in South Asia’s textile industry are nothing new. We have done all we can to ensure that high standards and good conditions are maintained Charities such as War on Want have campaigned for years to improve the pay and conditions for garment workers in Bangladesh and last year wrote a report based on interviews with 60 workers from six garment factories. The group claimed that retailers could only sell their clothes at very low prices by pressuring suppliers in developing economies to keep costs down. As a result, suppliers in countries such as Bangladesh have had to drive down wages and extend working hours, as there is stiff competition for the retailers’ business from other developing nations such as China. Asda told the Guardian: “We find abuse of any kind unacceptable.” The retailer blamed the problem on the fact that one of their approved suppliers was outsourcing its work to another factory without its knowledge and against its wishes. Tesco said it had taken steps to improve working conditions. “We have stuck by Bangladesh, continued to invest in modern factories and done all we can to ensure that high standards and good conditions are maintained,” the UK’s largest supermarket firm said in a statement. The company added that in many ways it would be easier for them to stop sourcing garments “in countries that have economic and social problems, which are beyond the capabilities of any organisation working alone to fix”. However, the company added that it would not be “right for the people of Bangladesh or what our customers would expect us to do”. Tesco said it had just completed unannounced audits at all of its 48 sites in Bangladesh.

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Wal-Mart to Test Bible Action Figures

By MARCUS KABEL
Associated Press
07.17.07                                         [back to top]

Wal-Mart said Tuesday it will test sales in some stores of biblical action figures whose makers say they are aimed at Christian parents who prefer their children play with Samson, David or Noah rather than with a comic book character or Bratz doll.

Wal-Mart Stores Inc. (nyse: WMT - news - people ) spokeswoman Melissa O'Brien said the toys made by One2believe, a Valencia, Calif., company, will be offered in 425 of Wal-Mart's 3,376 discount stores and Supercenters.

One2believe Chief Executive David Socha said his products were part of a "battle for the toy box" with dolls and figures that he said carry negative messages.

"If you're very religious, it's a battle for your children's minds and what they're playing with and pretending. There are remakes out there of Satan and evil things," Socha said.

Wal-Mart's O'Brien said the Bentonville, Ark.-based retailer believes there is demand for faith-based toys.

The toy line will be on some Wal-Mart shelves starting in August, mainly in the Midwest and South but also in California and as far northeast as Pennsylvania, O'Brien said.

"It is a test. It's not a national rollout," O'Brien said.

The toys, based on biblical stories, include a 3-inch figure of Daniel in the lion's den, a 12-inch talking Jesus doll and 13-inch Samson action figure.

Wal-Mart has always carried some faith products, mainly stationery, books and music, but this is the first line of toys with a faith theme, O'Brien said.

"I think there is an interest in faith-based toys and we are testing it in our stores," O'Brien said.

It is a leap in scale for One2believe, which so far has mainly sold its figures directly to churches and ministries and through its Web site, Socha said.

Copyright 2007 Associated Press. All rights reserved

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Harry Potter & The Dark Lord Waldemart

Dear Friend,                                              [back to top]

If He-Who-Must-Not-Be-Named ran a company, it would probably look a lot like Wal-Mart.

His stores would treat employees like lowly house elves. They would discriminate against minorities like giants and werewolves. And they would run every mom 'n pop shop like Ollivanders and Honeydukes out of business.

In fact, Wal-Mart is just the sort of company Harry Potter would stand up to. And that's why we've created a new web video featuring Harry, Ron, Hermione, and the rest of heroes from Hogwarts.

Check out Harry Potter & the Dark Lord Waldemart:

http://waldemartwatch.com

In a few weeks, the seventh and final installment of the Harry Potter series will be released, and Wal-Mart stands to sell millions of copies.

But in order to drive customers into their stores, Wal-Mart is selling the books dirt cheap -- 50% below the suggested retail price. Wal-Mart's prices are so cheap that they're actually losing money on each sale.

The business move is having a devastating effect on book stores across the country. Here's what BusinessWeek Magazine had to say about the "twisted economics" of Harry Potter:

"It's like being in the trenches with the bullets flying over you," says Sonia Benster, owner of The Children's Bookshop in Huddersfield, England.

Independent booksellers can't even begin to compete on that scale. While many plan to fight back with special midnight parties -- in the belief that it's no fun to wear a wizard hat in Wal-Mart -- others are just opting out of the frenzy..."It's sad that what little profit the industry can make off Harry Potter is being stripped away," says [Alexander Book Co.'s Bonnie] Stuppin. "If I ran my business that way, I wouldn't be here."

Visit WaldemartWatch.com and take the vow not to buy Harry Potter & the Deathly Hallows at Wal-Mart:

http://waldemartwatch.com

Andy Barron, Wal-Mart's senior vice president and general merchandise manager, claims that when it comes to Harry Potter, his stores are "committed to the best price and plenty of copies."

But there's a lot more to selling products than low prices and stocked shelves. Wal-Mart has an obligation as the world's largest retailer to set the highest possible standard for corporate responsibility in the world.

As Professor Dumbledore said in Harry Potter & the Chamber of Secrets, "it is our choices... that show what we truly are, far more than our abilities."

Watch Harry Potter & the Dark Lord Waldemart, and make the choice to wait in line somewhere else on July 21st:

http://waldemartwatch.com

Yours Sincerely,

David Nassar
Wal-Mart Watch
Paid for by WalmartWatch.com,
a campaign of Five Stones and
The Center for Community and Corporate Ethics

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Wal-Mart Truck Fleet Rolls Fuel Savings

By MARCUS KABEL
Associated Press
07.17.07                                       [back to top]

BENTONVILLE, Ark. - Wal-Mart Chief Executive Lee Scott laid out ambitious environmental goals in late 2005 as the world's largest retailer sought to burnish its reputation against mounting criticism.

Nearing the two-year mark, Wal-Mart Stores Inc. is still compiling a major report on how far it has come with the program overall, including reducing waste, using more renewable energy and stocking more green products.

But one division says it is already well under way to meet its goals. Wal-Mart's fleet of about 7,200 semitractor-trailer trucks is already about 15 percent more fuel efficient and the company knows what changes it needs to make to meet a target of 25 percent by late next year.

The annual savings in carbon dioxide, a greenhouse gas, would be equal to taking 67,744 cars off the road.

"We're real proud of where we've gotten to already," said Tim Yatsko, senior vice president of transportation for Wal-Mart Stores Inc.

Industry experts and environmentalists say Wal-Mart is ahead of other trucking operations. The Sierra Club, an ally of Wal-Mart's union-backed critics, says the retailer's demand for vehicles could prompt truck makers to bring more efficient models to market faster.

"They are pushing beyond what the trucking industry has already decided to do. Because of their size, I think they will create economies of scale for more efficient trucks," said Daniel Becker, director of the Sierra Club's global warming program.

Wal-Mart's fleet regularly ranks among the top 10 private fleets in corporate America, alongside company-owned lines such as Pepsi, Tyson Foods and Sysco Corp. Its trucks will drive about 900 million miles this year ferrying goods to about 4,000 U.S. stores.

Becker said he shares union criticism of Wal-Mart over its labor practices but that Wal-Mart deserves recognition for its fuel effort. The Sierra Club is a member of the union-funded group Wal-Mart Watch that attacks the retailer over issues including wages and benefits.

Great Dane Trailers, which is developing a more aerodynamic trailer for Wal-Mart, says the retailer is more involved than any other carrier in developing fuel efficient trucks.

"Wal-Mart is doing more than any other fleet I know of," said Charles Fetz, vice president of research and development at Great Dane.

Analyst Chaz G. Jones from Morgan, Keegan & Co said he is not aware of any other trucking operator pushing as hard as Wal-Mart on fuel efficiency. He noted that company-owned truck lines have more incentive to save fuel because they cannot easily impose a surcharge on customers for higher diesel prices, as many for-hire carriers do. Wal-Mart needs to keep fuel costs capped to avoid raising prices on its shelves.

The targets set by Scott in December 2005 were a 25 percent improvement in three years and a 100 percent increase by 2015.

The federal Environmental Protection Agency estimates that Wal-Mart's goal of 25 percent will reduce its fleet's emissions of carbon dioxide by about 345,000 tons a year. Doubling fuel efficiency will cut out over 690,000 tons a year.

That latter target would cut carbon emissions by the same amount as getting rid of 135,489 passenger cars or about one 225-megawatt power plant, according to the Alliance to Save Energy, an industry group.

The Sierra Club's Becker says those savings are "nothing to sneeze at" for a single fleet, considering that new fuel efficiency standards for passenger vehicles under debate in Congress would cut 285 million tons of CO2 annually in 2020 from the much larger number of cars, light trucks and SUVs.

Wal-Mart's Yatsko said the fleet is already running about 15 percent more efficiently at an average of about 7 miles per gallon compared to a 2005 base of about 6 mpg.

Cutting the average mpg by one gallon saves Wal-Mart between $35 million and $50 million a year, Yatsko said.

The 15 percent gain has come mainly from three changes: A fuel additive mix, more fuel-efficient tires and small diesel generators called Alternate Power Units added to tractors to provide power for things like heating and air conditioning in the cab, allowing the big truck engine to be turned off rather than idling when the truck is parked.

Yatsko says Wal-Mart knows where the remainder will come from to meet the 25 percent target by late 2008.

New trucks that are already coming to market will yield about 8 percent more efficiency due to more aerodynamic design and lighter components. Another few percentage points will come from tire innovations that Yatsko said he is not ready to make public just yet.

Yatsko said that the 25 percent gain will apply to most of the fleet but not to all of it by late 2008. Wal-Mart will need to switch out its older trucks over time but expects to have at least half the fleet up to date with the most efficient trucks by the end of 2008 and the rest completed by 2010.

As the retailer continues to look for fuel gains in components, driving practices, tires, fuel and other areas, the total effect could be a savings of 28 or 30 percent from the 2005 base by the time the entire fleet is updated, Yatsko said.

That leaves the 100-percent goal.

Yatsko says the biggest piece of the solution will come from future hybrid diesel-electric engines. Wal-Mart is pitching in $2 million a year for research and development by two teams of national truck manufactures - International Truck with ArvinMeritor Inc. and Peterbilt with Eaton - and has agreed to buy the prototypes.

New hybrid engines will deliver about a 50 percent efficiency increase on top of the 25 percent set for next year, Yatsko said.

Wal-Mart is also working with Great Dane on prototype trailers that would cut fuel use with the help of aerodynamic designs, including adding a cover or skirting down the sides at the bottom of the truck and crimping the back end of the trailer so that the sides and top turn in.

The effect of that back end design could add 5-6 percent to fuel efficiency by cutting wind drag, Yatsko said.

All of this work has to pay for itself, Yatsko said. Changes and additions to the fleet have to provide a return on investment or they cannot be sustained, he said.

"I definitely think we're leading the industry," Yatsko said.

Copyright 2007 Associated Press. All rights reserved.

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New Horry County development to include Wal-Mart

By K Grainger,
WPDE News
July 17th, 2007                                     [back to top]

Wal-Mart plans to build another store between Conway and Myrtle Beach. This new superstore isn't the only retail store planned. County planning officials say a home improvement center and strip mall will be included. The development is happening on Highway 501 between Myrtle Trace and Gardner Lacy Roads on 100 acres of highway property. County planners said Wal-Mart has submitted formal plans, and the home improvement center, yet to be named, has just completed a traffic study. Also in the works could be another strip center adjacent to the property. Nearby communities are concerned about what this could mean for traffic, not only on 501, but also in their neighborhood. Charlotte Blacker has lived in the Myrtle Trace community for 19 years. She said of all the places she's lived, this is her favorite. She enjoys her neighbors and how private the community is. She's worried about how many people may travel through her community if Wal-Mart builds on Highway 501. "So there'll be a lot of traffic most likely cutting through here, and the community itself really isn't set up for that," added Blacker. Drivers on Highway 501 are not too thrilled about the idea either. Worried they could sit in traffic even more. That's exactly what Dottie Panella was doing around 1 p.m. Monday afternoon when she said, "Well I'm staring at it, because I know I don't have to go that way. I have to go straight across. I won't take 501. I avoid it at all costs." "I think it's great for the communities here, but I don't know about how they're going to like the traffic on 501. It's pretty rough now," added Karen Ulrich. Plans call for access to the development off Highway 501 and Myrtle Ridge Drive. The County Planning Department believes Wal-Mart could be ready to build by sometime next month.

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Board O Ks? shopping complex, Wal-Mart

By KRISTIN WILSON-PIKE ,
The Patriot-News
July 17th, 2007                                            [back to top]

The Newberry Twp. supervisors last night unanimously granted conditional-use approval for a proposed 47-acre shopping complex that would include a Wal-Mart supercenter. The board approved the use with conditions that the developers meet with the township's fire and police departments, as well as the recreation board. While the hearing attracted a standing-room-only crowd, residents' comments focused mostly on potential traffic impact and changes to roads. There was little controversy about the proposed use. The shopping complex, called Newberry Point, would be built near Interstate 83 between Pleasant View and Cartref roads. It would include an 185,000-square-foot Wal-Mart supercenter, a 43,200-square-foot strip mall with room for eight to 10 retail stores, and five lots that would be sold for independent development. Rite Aid has committed to one of the lots, development attorney Tom Scott said. Residents were most concerned about how the development would effect already congested traffic coming off I-83 onto Cartref and Pleasant View roads. Plans show the intersection of Cartref and Pleasant View would be eliminated, redirecting Pleasant View through the shopping complex. Although there would be a dedicated lane for through traffic on the new road, two stoplights would add time and hassle for residents who live along Pleasant View Road, several residents said. "I can no longer get to my home without going through this mess," said Linda Bluur. "I don't care if I'm two minutes from a Wal-Mart. That's not where my priorities are." Jay Mc Kiernan?, of the township's recreation board, suggested that sidewalks, bike paths and a community center be conditions of approval for the shopping complex. His proposal sparked considerable debate as supervisors disagreed whether it made sense to build sidewalks that would not connect to anything. Residents were also at odds over whether they wanted sidewalks and bike paths. The recreation board was asked to work with the developer to come up with recreational uses that made sense. The developers of Newberry Point will next come forward with a preliminary land development plan that must receive approval from the township supervisors. Before any construction can begin, developers need both preliminary and final land development approval.

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Are shutters closing in India for foreign retailers?

By Rina Chandran ,
Reuters
July 17th, 2007                                          [back to top]

SINGAPORE (Reuters) - Will the foreign retail gold rush in India be over before it has begun? The country has topped a list of the most attractive emerging markets for retailers' investment for the third year, according to consultancy A.T. Kearney, but the clock is ticking for foreign retailers to establish a base in one of the world's fastest growing economies. A.T. Kearney, which compiles the Global Retail Development Index, has said foreign companies may have only two years to grab the opportunity in India before local competition wins the battle. While foreign giants like Tesco and Carrefour sit on the fence until regulation is clarified, Indian companies, such as Reliance Industries and the Tata group have expanded quickly, grabbing prime retail spots, quickly building supply chains and hiring all the talent. "The window of opportunity for foreign retailers in India is open today, tomorrow and next year," said Hemant Kalbag, chief executive at A.T. Kearney India. "From then on, even though the market is nowhere near peaking, it'll be a diminishing opportunity," he said. And foreign players will also find it tough to build economies of scale quickly, given soaring property prices, the lack of a supply chain, regional differences and a shortage of talented staff. "India is still very attractive, but already, the low-hanging fruit is being grabbed by local retailers," said Unmesh Sharma at Macquarie Research. The main concern to industry giants, such as the world's biggest retailer, Wal-Mart Stores Inc. and India's Pantaloon Retail, is that the government may not relax foreign investment limits or may even increase retailing restrictions.

TO CAP IT ALL

The opening up of India's retail industry, valued at nearly $350 billion and forecast to double in size by 2015, has sparked political concerns and angry protests from small shop owners, who fear massive job losses. Foreign single-brand retailers are allowed 51 percent in a joint venture with an Indian partner, while multiple-brand retailers are limited to operating though cash-and-carry or franchise deals. Bharti Enterprises Chairman Sunil Mittal has said there are delays to signing an agreement with Wal-Mart on a cash-and-carry venture because of the restrictions. Britain's Tesco has criticised the "frenzy" about entering India and said it would only launch subject to a change in laws, while Carrefour has shelved its plans until regulation is clarified, shifting its focus instead to Russia, which ranks No. 2 after India on the A.T. Kearney index. Global retailers have scoured the globe for greater international revenues to counter softer sales in developed markets but success is elusive. But timing -- identifying markets on the cusp of embracing modern retail -- and building a presence before competition is critical to success, A.T. Kearney said. "Two out of three retailers don't succeed outside the home market and at least 10 percent withdraw, particularly in Asia, which has unique requirements in terms of customer understanding and infrastructure issues," Kalbag said. Wal-Mart quit South Korea and is struggling in Japan, while Carrefour abandoned South Korea and Japan, and Tesco left Taiwan.

LOCAL KNOWLEDGE

Many Asian consumers prefer to buy smaller amounts of food and groceries more often, while low car ownership in countries like India leave many unable to travel long distances to shop at hypermarkets. The Indian grocery scene is dominated by small family owned stores that are less than 500 sq. ft. on average and which offer home delivery and credit. Latecomers to India will probably look for acquisitions or venture partners to get up to speed, but may find buyouts pricey, analysts say. Shares in Indian market leader Pantaloon Retail trade at 47 times forecast earnings, with Shopper's Stop trading on 43 times earnings -- much higher multiples than their Asian or Western peers. Wal-Mart trades on a multiple of around 16 times earnings. "Any acquisition will not be cheap," Sharma said. But some industry players believe foreign retailers still have time to establish a foothold in the market. "I don't think we are even close to the window closing," said Andrew Levermore, chief executive, Hyper City? Retail India Ltd. "There are at least another five years before we even start to see a solid countrywide offering of modern retail. Consolidation will take 10 years after that. Full maturity is 20 years away."

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Diamond Foods Opens Office for Wal-Mart

Associated Press
07.16.07                                                       [back to top]

STOCKTON, Calif. - Diamond Foods Inc., which produces nuts and snacks, said Monday it opened a sales office in Bentonville, Ark., that will work exclusively with Wal-Mart Stores Inc., the world's largest retailer.

Wal-Mart (nyse: WMT - news - people ) is based in Bentonville. Jeff Bladdick, a former vice president of sales for Wal-Mart and Sam's Club, will lead the office.

Diamond has been a Wal-Mart supplier for 15 years.

Copyright 2007 Associated Press. All rights reserved.

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Brown is urged to act over 4p-an-hour sweatshop pay

By CLAIRE SMITH,
news.scotsman.com
July 16th, 2007                                                [back to top]

GORDON Brown, the Prime Minister, has been challenged to prove his anti-poverty credentials by forcing supermarkets and clothing chains to improve conditions in their factories. The call follows claims from campaigners that the drive to produce cut-price clothing for the shelves of supermarkets and chain stores is creating unacceptable conditions for workers in the developing world. An investigation into factories in Dhaka, Bangladesh, which produce garments for Primark, Tesco and Asda, discovered staff who worked for 80 hours a week for wages of as little as 4p an hour. The discovery was particularly embarrassing for Tesco, whose chief executive Terry Leahy was asked by Mr Brown last month to become a special adviser to the government on business matters. Paul Collins, of War on Want, said: "Voluntary self-regulation has not worked. Gordon Brown should take action to stop future exploitation of workers overseas who are making clothes for sale in the UK and who are working 80 hours a week and have no right to form a union. "These companies are driving down prices and pushing up profits and their workers are paying the real price in terrible pay and conditions." The investigation into working practices in Dhaka, the capital of Bangladesh, uncovered the conditions of workers in factories producing clothes for major high-street stores. Employees reported working for 84 hours a week, and said they sometimes worked through the night and felt "threatened and frightened" at work. Employees in the factories said they were not allowed to join a union, had witnessed physical abuse and seen fellow workers sacked for taking time off to take relatives to hospital. Tesco, Primark and Asda are all signatories to the Ethical Trading Initiative, a voluntary code of conduct which sets out basic rights for employees, including a working week of no more that 48 hours, voluntary overtime not exceeding 12 hours a week, and payment of a "living wage". Yesterday, Asda said it would investigate the claims that workers producing clothes for its George clothing range were toiling in inadequate conditions. The company will "re-audit" factories in Asia, it said. A spokesman said: "We find abuse of any kind unacceptable. As an organisation we are committed to sourcing in Bangladesh and are helping to improve workers' rights - something that we have seen happen over the past five years." A spokesman for Primark admitted that the company was aware of the problem. "Labour conditions in the Bangladeshi garment industry are an issue of considerable concern for Primark." The company spokesman said it was up to the Bangladeshi government to take action to ensure conditions improved for its workforce. Meanwhile, Tesco claimed the examples given misrepresented the company's policy on ethical trading. A spokesman said: "Tesco puts ethical trading at the heart of its operations and so it's hugely disappointing that some sections of the media choose to misrepresent our position. "It is in everyone's interest that we continue buying from Bangladesh to raise working and living standards and we have a strong ethical trading programme to help achieve this." John Coventry, of Action Aid, which has campaigned to highlight the impact UK supermarkets have on the lives of workers overseas, said it was time for the UK government to act. He said there was clearly a need for more regulation to ensure the UK's appetite for cheap goods did not have negative consequences in other countries.

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Wal-Mart checks Bangladeshi worker abuses

By news.com.au ,
Agence France-Presse
July 16th, 2007                                         [back to top]

LOW-cost British clothing retailer Asda, owned by US giant Wal-Mart, has launched an investigation into allegations that its production facilities in Bangladesh were abusing the rights of their workers, The Guardian reported today.

The newspaper, which interviewed workers from seven different factories in the country, said that the factories, which also supplied retailers Tesco and Primark, forced workers to work up to 84-hours a week for low wages under difficult conditions.

The three factories make up about 43 per cent of Britain's value-clothing market.

Workers from the factories reportedly said they were refused access to trade unions and claimed that four workers had been fired within the past month for trying to organise a union.

The Guardian said that workers at the factories had wages so low that, despite working up to 84 hours a week, they were struggling to provide enough for their families.

A spokesman for Asda said that the retailer would re-audit all of its facilities in Bangladesh, telling the paper: "We find abuse of any kind unacceptable."

"It appears that one of our approved factories, which are audited up to three times a year, has subcontracted this work to another factory without our knowledge and against our wishes."

Primark said that it had already audited all of its Bangladeshi suppliers within the previous six months and had "agreed a programme of remediation" with those falling short of its code of conduct.

Tesco, meanwhile, said that it could not act on the allegations made in The Guardian because the newspaper did not specify in which factories the abuses occurred. A spokesman added that the retailer had recently conducted unannounced audits of all its Bangladeshi production facilities.

The Guardian quoted a factory owner in Bangladesh, who supplies only the United States and Germany, as saying that buyers left him with no choice but to keep wages low: "Buyers who come to Bangladesh tell us, 'We are businessmen, we want to make money. If we see cheaper prices in China, we will go there'."

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The wrong gas at Wal-Mart

By Linda Paige,
WZZM13 NEWS
July 16th, 2007                                [back to top]

Fremont - A gas station in a small West Michigan town faces a big bill to repair cars damaged by their product.

This, after drivers who thought they were gassing up with regular, were actually getting diesel.

It happened in Fremont at the Wal-Mart gas station.

Wal-Mart customer, Vern Nyson, had problems starting his car last weekend, "Saturday we just got back from Muskegon and I was low on gas and I stopped into Walmart, Murphy oil and filled it up, came home and washed the car and went to move it and it had problems. It would start up and quit startup and quit several times."

Words echoed by many whose cars suddenly stopped running.

Some customers who only put in a few gallons may not know they have diesel flowing through their fuel lines.

Nyson says, "I called this morning and made arrangements to have my car brought in to Dur Speet where I bought it one month ago."

"Were going to have a busy day," says Don Clark, one of the Service Managers.

Tom Schuiteman, Part Owner Deur Speet says, "At this point we have approximately 12 to 13 vehicles."

Murphy Oil sent a letter to the dealerships and repair shops authorizing them to fix the cars and bill the company.

"So far they've been very good about making sure the customers are taken care of and giving us the ability to fix them," says Schuiteman.

Don Clark, Assistant Service Manager says, "We're draining the fuel tanks, flushing the fuel lines, replacing the fuel lines where necessary, and getting them full with fresh fuel."

Schuiteman says, "The customers we've talked to some are frustrated with the experience, obviously. Some enjoy driving a nice rental car. We're trying to expedite the process."

An attendant at the gas station tells WZZM 13 that the affected cars were fueled on Saturday between 3PM and 5PM.

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Potter publisher halts Asda order

By bbc,
Reuters
July 16th, 2007                                 [back to top]

Bloomsbury blamed "invoicing issues" for the cancellation The publisher of the final Harry Potter book has cancelled an order to supply 500,000 copies to Asda supermarkets.

Bloomsbury said it had taken the decision because it had not been paid by the chain.

But Asda claimed the publisher was unhappy that it had criticised the book's price tag of £17.99.

It has assured UK customers the issue will be resolved in time for the book launch on Saturday, although Bloomsbury said "dialogue has not opened yet".

'Very aggressive' Asda spokesman Ed Watson told BBC Radio Five Live the chain - owned by US giant Wal-Mart - was not aware that the deal had been cancelled, and said the chain's criticisms of Bloomsbury's pricing policy was behind the decision.

He added: "It just seems funny that after we expose the potty Potter price hike, Bloomsbury are trying everything they can to stop kids getting hold of Harry Potter at a price they can afford."

Bloomsbury marketing director Minna Fry said the order had been cancelled due to "invoicing issues", but acknowledged the firm had been annoyed by Asda's comments.

She said: "Asda have had a problem with our pricing of Harry Potter for a while now, and they sent out a very aggressive press release saying that we were ripping off children.

"We think at 608 pages, £17.99 is extremely good value."

Many bookshops are planning to open at midnight to satisfy demand for the final book, Harry Potter and the Deathly Hallows, which will bring to an end JK Rowling's tales of a teenage wizard's adventures.

Special stamps Meanwhile, the Royal Mail has issued commemorative stamps to celebrate the young wizard's success.

One of the Harry Potter stamp sets One set of heat-resistant stamps has the Hogwarts School crests There are seven first-class stamps, each featuring the sleeve artwork from a different Harry Potter book.

And there is also a separate sheet with five stamps featuring the crests of Hogwarts School and its four houses - Hufflepuff, Slytherin, Ravenclaw and Gryffindor.

The Royal Mail said the stamps have "some heat-resistant ink that will reveal exciting secrets if you touch them".

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Wal-Mart's makeover: Tega Cay supercenter's design sets it apart from other stores

Karen Bair
July 15, 2007                                        [back to top]

Jul. 15--The Tega Cay Wal-Mart few people wanted is setting the trend for Stonecrest, whose shops in front of the supercenter will mirror the Wal-Mart's village design.

"The town council wanted it to look and feel like a little town," said Scott Hallihan, managing partner for Stonecrest's developer. "We took Wal-Mart's design and made our buildings synergistic with theirs. Pedestrian-oriented. Wide sidewalks, fountains, plants."

Stonecrest stores will resemble village shops both along S.C. 160 and on the side facing Wal-Mart.

"We spent a lot of money to design the building," he said.

Many Tega Cay residents, envisioning a big, gray box and sprawling parking lot, protested when the supercenter was proposed. The town council established strict architectural standards and traffic patterns to protect their wooded, residential, recreational community.

Think kiosks, fountains, trees, flagpoles, a lanai, places where men and children can lounge while moms shop.

"We also aren't getting the usual discount retailers that follow Wal-Mart," Hallihan said. "It's mid-grade. Not boutique and not discount. That Wal-Mart is not your typical Wal-Mart Supercenter. We feel it's a nice community, and we want to put in shops as nice as possible."

Last week, Stonecrest's developers -- Metropolitan Development Group of Raleigh, N.C. -- were negotiating with a bank and a restaurant.

"It will be an upscale, casual restaurant," Hallihan said.

Other retailers that have been acquired include Sport Clips men's haircutting, a pizza chain, a game shop, a nail salon, a furniture/mattress store, a women's clothing store, a Chinese restaurant and a sandwich shop.

The 26,000 feet of retail shops on 5 acres at Stonecrest Boulevard and S.C. 160 is expected to be complete in mid-January, with stores opening in mid to late February. Some multi-family housing and more commercial development also is planned for the 140 acres at Stonecrest.

"We didn't have space for a fountain in this phase," Hallihan said, "but I want to do a fountain in future phases."

Envy of the Southeast

Tega Cay's Wal-Mart, expected to open by mid-2008, is becoming the envy of other towns that have a Wal-Mart in their future, a company representative said.

"People all over the Southeast are holding up the Tega Cay designs and saying, "Can we have this?" said Tara Stewart, the company's spokesperson in the Carolinas. "The Tega Cay store is totally unique."

There are also "a number of interior changes," Stewart said.

"Skylights," she said. "We spent too much time and money on the outside not to pay attention to the inside."

Wal-Mart also plans to put a Subway, PCA Portrait Studio, Smart Style Hair Salon and a Wood Forest Bank in the store.

Although wood and a variety of colors and textures outside will create the facade of village shops, the Wal-Mart will have just two main entrances. Two fountains, one at each end, and two gazebos accompanied by additional seating will adorn the front. This Wal-Mart also will feature a lanai with seating. The parking area will be dotted with trees and flowered planters.

According to Tega Cay Mayor Bob Runde, the flags of the United States, South Carolina and Tega Cay will fly from three flagpoles, and a Tega Cay police station will be housed inside.

Truckers dare not enter from I-77 via any route but Dam Road.

"We can fine them heavily, and we fine them more each time it happens," Runde said.

The amenities will not affect Wal-Mart prices, although the company's store managers do select merchandise geared to their clientele, Stewart said.

"Our buying power is extensive," she added. "The cost of a building doesn't affect the cost of a gallon of milk. It's apples and oranges."

If and when the Newport Wal-Mart is built, it also will have a design unique to that community.

"We began the community concept a few years ago," Stewart said. "In Belmont (N.C.), the store has a top like Belmont Abbey. The Charleston store has a Charleston green and Palmetto trees. The Los Angeles store is very art deco. In Abbeville, the store resembles mountain log cabins. We don't put in a big, gray box anymore."

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Group continues Wal-Mart fight: Battle focuses on permit for store's oil-change bay

Milwaukee Journal Sentinel
Sunday, July 15, 2007                                              [back to top]

Jul. 15--HARTFORD -- The opponents of a Wal-Mart Supercenter on the city's west side are still fighting, taking their case to a three-judge state appeals panel hoping to get their "day in court."

Meanwhile, construction of the 185,000-square-foot department store on 22 acres continues, as do the legal expenses for the city and the opposition group, Hartford Citizens for Responsible Government.

Hartford Citizens for Responsible Government is asking a state appeals court to overturn Washington County Circuit Judge David C. Resheske's decision to not hear the group's appeal of a city Plan Commission decision last August to allow Wal-Mart to include an oil-change bay without a conditional use permit.

HCRG appealed that decision to the city's Zoning Board of Appeals in November, which ruled in favor of the Plan Commission.

By law, HCRG had until the end of the day on Jan. 2 to appeal that decision to circuit court.

According to court testimony, HCRG member Jan Hatch delivered the appeals paperwork to the Washington County Clerk of Courts office about 4:30 p.m. on Jan. 2, just as the office was closing.

Hatch handed the paperwork to a clerk there but was told it wouldn't be filed until the next day, Jan. 3.

Resheske ruled that HCRG had missed the deadline.

Plymouth attorney Elizabeth Rich said the issue is whether the paperwork was deposited at the courthouse on time.

"We're alleging (in the appeal) that the legal standard is that if you deposit it with the clerk, then it is legally filed," Rich said.

If the appeals court agrees with HCRG, then the case will be sent back to circuit court.

"Only at that time will we be able to get into the merits of the case," Rich said. "We're looking for our day in court."

"The clock doesn't lie," Mayor Scott Henke said. "They needed to get it there on time and they didn't do that. It's their right to continue to appeal. But I think it's really just frivolous at this point, in my opinion."

When completed, the project is expected to add $14 million to the city's tax base, generating about $280,000 in tax revenue annually.

Wal-Mart will take up 22 of the site's 44 acres. Other commercial development, roadways and a bike trail, paid for by Wal-Mart, will account for the rest.

Highway 60 is in the process of being widened to four lanes. Traffic lights will be installed at Independence Ave. and Wacker Drive.

Supercenters are larger than ordinary Wal-Mart retail stores. They include a grocery store, as well as a larger automotive department and service center.

Challenging the decision

In her appeal of the zoning board's decision, Hatch called the board's ruling "arbitrary and capricious" and said it "was not supported by the evidence on the record."

At the appeals board hearing in November, an attorney representing the group argued that the automotive section required the permit because automotive service is not explicitly listed as a permitted use for that area.

Lawyers for the city and for Wal-Mart argued that the department store was a permitted use and that each of its departments was thereby also permitted, as long as they are under the same roof as the rest of the store.

The proposed Wal-Mart automotive section would take about 6,700 of the store's 185,000 square feet.

The appeals board sided with the city and Wal-Mart.

The project has been a lightning rod for controversy ever since it first was announced.

Disputed from beginning

In March 2006, aldermen voted 7-2 to annex almost 44 acres of farmland in the Town of Hartford on the north side of Highway 60. They also voted to rezone the property for commercial use and approved a developer's agreement with Wal-Mart.

About 32 people spoke at a public hearing that night, with 25 opposing the project, saying it would add to the city's traffic congestion and hurt downtown businesses.

HCRG forced recall elections against two aldermen who voted for annexation.

The first recall was held in October when 3rd District Ald. Kathleen Isleb defeated challenger Randy Geoffroy 327-171. The second was in November when Hatch ran against 1st District Ald. Jacki Lokken. Lokken beat Hatch 434-91.

Cost of challenge

The recalls and legal wrangling so far have cost the city about $45,000, Henke estimated.

Meanwhile, construction of the Wal-Mart continues. It is expected to be completed by May or June, Henke said.

Money also is a concern to HCRG, Rich said, saying the group will not seek a court injunction to stop construction pending the outcome of the appeal.

"The group just doesn't have the funds to seek a temporary restraining order," Rich said.

Copyright (c) 2007, Milwaukee Journal Sentinel

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Big holes to fill when Wal-Mart moves out

Omaha World-Herald
Sunday, July 15, 2007                                   [back to top]

Jul. 15--Hanging on a lamppost across from the empty store, the sign reads "Wal-Mart Security Cameras in Use."

Well, maybe not.

The empty storefront in the shopping center on 84th Street in La Vista still bears the outline of the Wal-Mart logo, visible, like a stencil, across its blue facade. The store closed in October 2006 when a Wal-Mart Supercenter opened in Papillion's new Market Pointe at 72nd Street and Giles Road.

In that La Vista shopping plaza and others like it, the closing of a Wal-Mart store -- often because a new, larger Wal-Mart Supercenter opened nearby -- leaves a void.

In the Omaha area alone, two Wal-Marts have closed. And because of the size -- the La Vista Wal-Mart space had more than 100,000 square feet -- it can be hard to find another occupant.

Wal-Mart Realty's Web site last week listed nine former Wal-Marts available for lease in Nebraska, although company spokesman Ryan Horn said several of them were partially occupied or in the process of being leased.

Catha Selk moved her hair salon, formerly four doors over from La Vista's empty Wal-Mart, to Market Pointe, opening last week.

"Most of us here have a clientele base, but we've got a few newer girls who rely on walk-ins, and we've seen a dramatic drop in the walk-ins," said Selk, who took over the business on June 1 after managing it for several years.

Walk-in traffic had increased dramatically in only the first two days in the new location, she said, with people coming in from Panera Bread and the Wal-Mart Supercenter.

La Vista Mayor Doug Kindig said the area along 84th Street used to be known as the golden mile.

"First, obviously, there's the loss of sales tax dollars," said Kindig. "But second, just the idea that you have a deserted section of your town. . . . You don't want to have a dead part of your city."

Wal-Mart still is paying rent on the space, Kindig said, but city officials don't have a lot of options or prospects for the property at this time.

In Omaha, Ambassadors Worship Center bought a former Wal-Mart at 103rd and Fort Streets for $3.7 million.

Churches are not an uncommon use for former store locations, said company spokesman Horn.

"We have a number of churches that have bought Wal-Mart stores. . . . We've had some cities purchase stores and use them as courthouses or city offices. We've seen that happen a number of times. There have been a number of very creative uses," he said.

Retail, however, is by far the most common new usage, Horn said.

In Columbus, Menards took over a Wal-Mart property. But a second former Wal-Mart has been empty for two years, according to City Administrator Joseph Mangiamelli.

"That is a concern -- that we don't have that occupied with a new retailer or some alternative use," Mangiamelli said.

The chamber of commerce is working with the owners to market the site, he said.

"The building is leased by Wal-Mart for a number of years in the future yet, so there isn't that urgency, because the owner has that income coming in," Mangiamelli said. "But it is on the market, and it's better to have it occupied than vacant."

Meanwhile, Menards plans to move from the first Wal-Mart site, Mangiamelli said, so that location will be vacant again as well.

Kirk Hanson of DKC Development Ventures LLC, which is overseeing construction of Menards' new building, is working, with help from the city, to find a new use for the site.

"It does take a creative mind-set, and we're still going through some plans on what we can do," Hanson said. "Do you cut it up and try to get smaller local-type tenants in there? How many big boxes can go to Columbus? So your pool can be limited."

Although "cutting up" a big-box store doesn't have to be prohibitively expensive, Hanson said, using the space effectively is a concern.

"You're still buying or developing the whole property. How do you pull value out of every square foot that you have?"

The former Wal-Mart space in La Vista is listed for rent at www.wal-martrealty.com, which also lists available space in Hastings, Columbus and Scottsbluff.

The purpose of Wal-Mart Realty is to "find productive uses" for these empty buildings, Horn said. "Our philosophy is that these are solid buildings that can be re-used and are of great value to other businesses, other members of the community."

Like city officials and mall owners, Wal-Mart wants to find good, productive uses for its former facilities, Horn said. "Whether we rent them or own them, it doesn't matter. We do everything we can to get a good use for those buildings to help those communities that were so good to us."

Everyone, including Wal-Mart officials, is working hard to get the La Vista space rented, even though the company told La Vista officials its lease runs until January 2011, Kindig said.

"I've talked to developers and they say, 'Oh, that's just around the corner,'" Kindig said. "My comment to that is, short term for developers is three to five years, but short term to elected officials is three to five days."

State regulations limiting the types of incentives the city can offer potential lessees are frustrating, Kindig said.

"Until we can get some state legislation that allows us to do more, we're kind of restricted," he said. "TIF, tax-increment financing, is very restrictive for retail, and it's something the state has to start looking at."

For the time being, Kindig said, La Vista may have to put up with the empty store.

"I wish there was a quick fix, but we see it as more of a long-range problem."

Copyright (c) 2007, Omaha World-Herald, 

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Wal-Mart fights Kauai ban on 'big-box' stores

By Andrew Gomes
Honolulu Advertiser
Saturday, July 14, 2007                                 [back to top]

A recent Kaua'i County ban on new "big-box" stores shouldn't apply to a planned expansion of Wal-Mart's existing store to a supercenter with a full-line grocery store, according to the retailer.

Wal-Mart yesterday announced it believes its project was approved before the ban because the county approved a masterplan years ago for its 119,000-square-foot Lihu'e store that included future phases to enlarge the store up to 185,000 square feet.

The company said it intends to argue its position at an Aug. 14 public hearing before the Kaua'i Planning Commission considering its application to build onto its store.

The County Council in May passed an ordinance prohibiting development of any retail or wholesale establishment bigger than 75,000 square feet.

Councilman Jay Furfaro said he was surprised by Wal-Mart's position, especially since the company did not raise the issue before the ordinance was passed.

"You can't reach back and say, 'We're grandfathered,' " Furfaro said. "They have not received their final permit (for expansion), so it should be subject to the ordinance."

Wal-Mart in a statement said the ban shouldn't apply to a project that was already approved.

"Fairness seems to require that the county stand behind its earlier approval of the expansion to accommodate a full line of groceries," Wal-Mart spokesman Kevin Loscotoff said in a statement. "We owe it to our customers to try to move forward — respectfully and within the law — to provide the products and services they tell us they want and need."

The company cited a March survey by SMS Research that found 56 percent of Kaua'i voters supported the expansion plan compared with 38 percent in opposition.

The superstore ban was proposed by Mayor Bryan Baptiste and drew unanimous support from the county's seven council members, some of whom cited a need to preserve Kaua'i's rural character and protect local stores from retail giant competition. Kaua'i already has Costco and Kmart stores.

Some residents testified in support of the ban, though others argued against it for reasons including cheaper prices and the idea that limiting store size would promote urban sprawl.

© COPYRIGHT 2007 The Honolulu Advertiser

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Wal-Mart won't sue over big- box law: Says it won't push to get partial repeal on city ballot

Rob O'Dell 
The Arizona Daily Star
Saturday, July 14, 2007                                  [back to top]

Jul. 14--Wal-Mart announced Friday that it will not sue Tucson to force a partial repeal of the city's big-box ordinance onto the November ballot

Company representative Delia Garcia sent a letter to Mayor Bob Walkup and the rest of the City Council stating that Wal-Mart wasn't pursuing legal action to put its "Consumer Choice Initiative" on the ballot.

City Clerk Kathy Detrick rejected Wal-Mart's 22,000 signatures last week because City Attorney Mike Rankin said Arizona law prevents citizens from using the initiative process to change zoning laws or modify them.

"Engaging in a lawsuit with the city of Tucson wasn't the right alternative in this case," Garcia said.

However, Garcia insisted the decision for Wal-Mart to abandon its initiative wasn't bad news for the company because 22,000 Tucson voters supported the initiative, which if approved would have repealed the portion of the city's big-box ordinance restricting food and beverage sales to no more than 10 percent of a store's total space.

Had the petitions been accepted, the company needed 11,615 valid signatures from registered city voters to get the initiative on the ballot.

Garcia said the 22,000 voters who signed could spur the council to "take action on their behalf."

"The mayor and council has the ability to change the ordinance themselves," Garcia said.

Although Wal-Mart didn't sue, Garcia said the company felt it had a good case to make in court and would have prevailed had it sued.

Garcia said Wal-Mart just decided against it because a lawsuit wasn't "the right move. Publicity wasn't a factor," Garcia said.

She said the initiative was never a publicity stunt to put political pressure on the council. "We were really serious about it," Garcia said.

In her letter to the council, Garcia repeatedly pressed the company's talking points, that Wal-Mart saves consumers money and that residents value the convenience and affordability of Wal-Mart's big-box stores that feature one-stop shopping.

Council members said Wal-Mart's decision was the right one.

"I think that's appropriate," Walkup said. "I'm pleased to hear it."

Walkup thinks the city has gotten past the polarizing big-box debate and the council's pragmatism on big boxes was shown by the April vote to waive the big-box ordinance for a potential Wal-Mart at East 36th Street and South Kino Parkway for developer Eastbourne Investments Ltd. "The big boxes are being well-served by council," he said.

He said the council will approve a development if it's in the right part of town and the big box serves the area well. By contrast, Walkup said, "There are some places where a big box of any kind does not fit the community. Every application will receive a fair hearing."

Councilwoman Nina Trasoff said the big-box ordinance was "a zoning decision the council made. You can't do rezonings by initiative," she said.

She said she thinks it's possible Wal-Mart knew the law from the beginning and was trying to make a power play with the initiative, which she said was unfortunate because the council just showed flexibility and allowed the big box for Eastbourne.

Wal-Mart opponent Chris Tanz said she was glad to learn the city wouldn't have to fight an expensive legal battle against Wal-Mart, and that Wal-Mart opponents wouldn't have to spend the time, energy and money to beat it at the ballot box.

"Engaging in a lawsuit with the city of Tucson wasn't the right alternative in this case."

Delia Garcia
Wal-Mart company representative

Copyright (c) 2007, The Arizona Daily Star

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Wal-Mart, Moody's and GE Show That Consumers Are Living on Borrowed Time

By TradingMarkets Research
Friday July 13                                                [back to top]

After softness on Tuesday and Wednesday, the major U.S. indices jumped 2% on Thursday to record levels. The market is mixed on Friday due to disappointing retail sales, but the S&P 500 should finish the week with a gain of about 1.1%. The catalyst for this week's big move was bullish retail data on Thursday and news of a $38-billion bid from Rio Tinto PLC (NYSE:RTP - News) for Alcan Inc. (NYSE:AL - News). Granted, there are signs that the river of deal flow is slowing. But it certainly hasn't stopped flowing with news on Friday that an activist investor has taken a large position in Target (NYSE:TGT - News). This may or may not result in a private equity play on the retail giant, but it has already boosted Target shares to within 1% of their 52-week high. Nevertheless, the outlook is not rosy for all things retail. On Friday morning the Commerce Department reported a 0.9% drop in retail sales. Wall Street had expected flat sales, so the data are putting a damper on investor enthusiasm. In fact, I think that investor concerns about growth are weighing on Wal-Mart shares, which rose only modestly on Thursday despite a big market rally and the announcement of strong sales for June. I believe investors are concerned about two big clouds on the horizon for consumer spending: Oil prices and real estate.

Gas Prices Pinch Wallets

Crude oil prices remain stubbornly high at almost $73 per barrel, and national gasoline prices finished June at over $3.00 per gallon. This is a big red flag for retail sales. High gas prices during summer driving season are leaving consumers with less money to spend at the mall. For June, investors had feared that retail sales would slow to a pace of 1.5% to 2.0%. Fortunately, the news on Thursday was better than expected: A survey of large U.S. retailers showed June growth of 2.4%, including a 2.4% gain in sales at industry giant Wal-Mart (NYSE:WMT - News). So for now it seems that the overextended U.S. consumer will live to shop another day.

Subprime Saga Continues

The stock market is also shrugging off ominous signs about the mortgage market. Earlier this week Standard and Poor's and Moody's Corp. (NYSE:MCO - News) downgraded hundreds of subprime bonds. Critics say that the bond rating firms are locking the doors after the subprime horses have left the barn. Indeed, Friday brought more bad news in real estate as General Electric (NYSE:GE - News) announced that it will sell its subprime unit. This business lost money in the second quarter, and rising delinquencies across the subprime landscape make further losses likely.

PowerRatings for Stocks In the News

What is the outlook for these stocks? The PowerRatings (for Investors) of these stocks vary widely:

General Electric has the highest PowerRating (for Investors) with a rating of 9, and the other attractively rated stocks are Wal-Mart and Target, two retailers. A rating of 10 is highest, and our data from 1995 through 2006 show that stocks with high PowerRatings have historically outperformed over the next twelve months. So for long-term investors the short-term challenges at GE, Target, and Wal-Mart could prove to be an opportunity.

The Credit Cycle Is Not Dead

As I discussed last week, the key to the outlook for U.S. equities is the credit cycle. High global liquidity has led to over $300 billion of deals during the first half of 2007, a record pace. And real estate has been the key driver of consumer credit during the current expansion in the U.S. economy. Eventually, subprime problems will hurt investor sentiment and bond spreads, and the credit cycle will turn from a tailwind into a headwind.

Why hasn't this happened already? With rising gas prices and falling housing activity, what has supported consumer spending over the last six months? Job growth. Non-farm payrolls have continued to expand, and the unemployment rate remains low. This is exactly what you would expect at the end of a long economic expansion. There is still lots of liquidity in the system, and this is driving strong demand and strong economic growth. Unfortunately, this eventually leads to wage pressures and deeply embedded inflation.

Credit problems take a long time to fully emerge. Problems spread from weak borrowers to strong borrowers, and from complex derivative products to the mainstream bond market. As this happens, sentiment about credit starts to turn sour, and bond spreads rise for all forms of risky credit.

As for real estate, it takes a long time for residential markets to adjust to lower prices. People hate taking losses on their homes, so they take them off the market instead. This makes real estate prices "sticky downward," which is how Keynes described wages (people don't like to take pay pay cuts, either). When people take homes off the market, it is difficult to get an accurate picture of housing prices, so the magnitude of the depth of the real estate recession is not fully evident.

The combination of these forces is going to make the downturn in the credit cycle a protracted, messy affair. For stock investors, it is important to remember that one week's rally does not mean that the laws of economics have been rewritten. Easy money has been the engine driving the U.S. economy, and the engine is now stalling. Stock prices are likely to follow suit, so it's more important than ever to emphasize stocks with attractive PowerRatings.

Rob Martorana, CFA, is Director of Content for PowerRatings.net. Rob was most recently at TheStreet.com as the Director of Content for Professional Products. Rob has spent 22 years on Wall Street, and was a portfolio manager and head of U.S. equity research at Barclays Private Bank. Robert also managed small-cap stocks at Schroder Capital Management International, was an equity analyst at Vontobel USA, and was an editor and senior industry analyst for The Value Line Investment Survey.

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New program boosting Wal-Mart's online fortunes

Marc L. Songini
Computerworld
July 13, 2007                                        [back to top]

Wal-Mart Stores Inc. this week announced that its three-month-old program that lets customers order products online and pick them up at its brick-and-mortar stores has been spread to 3,300 stores in the U.S.

The Site-to-Store program was launched in March with 750 stores.

The Bentonville, Ark.-based retail giant said the program is key to its effort to utilize as many sales channels as possible.

"One of the goals of Wal-Mart.com is to be the premier multichannel retailer," stated a Wal-Mart spokesman, in an e-mail. "By that, I mean we want to make it easier for customers to shop Wal-Mart, regardless of which channel they choose to do so -- online, in stores or a combination of the two -- as is the case with Site-to-Store."

Unlike traditional online sales programs, Site-to-Store does not charge customers for shipping ordered products to Wal-Mart stores.

Ken Perkins, an analyst at Retail Metrics LLC, a consulting firm in Swampscott, Mass., predicted that with Wal-Mart's success, more retailers are likely to adopt programs that let users order online and pick up their products at stores.

Rob Garf, an analyst at Boston-based AMR Research Inc., added that the new program is another indication that Wal-Mart has picked up its online business after a slow start.

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Whither, Whether, Wal-Mart?

Seth Jayson
Motley Fool
July 12, 2007                                   [back to top] 

Wal-Mart (NYSE: WMT). It's big. It's bad. (Well, some people say so.) And it's vitally important to America, or at least American financial journalists, who like to try and use every financial pronouncement from the Bentonville behemoth as a bellwether for the entire economy.

Today's happy-happy-joy-joy retail news is headlining the surprise gain in Wal-Mart's same-store sales. A coupla percent gain, 2.4%, to be precise, wouldn't be news at a lot of other outfits, but when you're as big as Wal-Mart, little things become big things.

But what does it really mean beyond Wal-Mart?

I've long had a suspicion that Wal-Mart isn't a good barometer of overall economic demand from consumers, as some imply. Instead, I see it as something of a contrary indicator -- it sure seems to have operated as one over the past few years, at least. As consumers have opened up their wallets to drive record results and focused retailers like Best Buy (NYSE: BBY), or hipper discount peer Target (NYSE: TGT), Wal-Mart had languished.

Now that gas prices are going through the roof and the home-loan ATM is shutting down, does the return to prominence at Wal-Mart signal something good about the U.S. economy? Are consumers more resilient and spendy than we thought?

My first thought is "no way." In my vast experience as a cheapskate, I've found that people seem more likely to shop at Wal-Mart when they feel pinched financially, and they're willing to put up with the crammed, zoo-like stores just to save a few bucks. People who feel affluent, I think, head further upscale, whether that's Target, or a trip to the mall to blow a few bucks at Urban Outfitters (Nasdaq: URBN). If they're not feeling up to those apparel price points, there's always Gap's (NYSE: GPS) Old Navy. Foodies feeling flush can dump the whole paycheck at Whole Foods (Nasdaq: WFMI).

Wal-Mart's latest results highlighted success in groceries, which would seem to lend some support to the pressured consumer hypothesis. Honestly, who goes to Wal-Mart for food, other than those who feel the need to make a single trip to a single store? But strangely enough, if we want to go with a "sky is falling" thesis, there's a fly in our ointment. Electronics and other discretionary gadgets also did well, though that seems to be based on a bump from the arrival of computers from Dell (Nasdaq: DELL).

In other words, I think good news for Wal-Mart signals bad news for the economy, and probably for many other retailers. It's been a heck of a party, but if people are swapping caviar for Cheez Whiz, I think the good times may be winding down.

Or maybe, just maybe, this is too much navel-staring for a single short sales call. Sometimes a cigar is just a cigar, and if you get it from Wal-Mart, it's going to be a cheap one. Perhaps a decent month's comps for Wal-Mart may be just as mundane.

©1995-2006 The Motley Fool. All rights reserved.

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Wal-Mart settles drug death claim

The Associated Press
July 12, 2007                                 [back to top]

Wal-Mart Stores Inc. has settled a wrongful death lawsuit claiming a pharmacist at a Frederick store sold a too-strong insulin drug to a diabetic man who died after taking it, the company's lawyer said Thursday.

Terms of the settlement reached during a mediation session Wednesday in Baltimore are confidential, attorney Christopher R. Dunn said. He said the case was settled amicably, with no admission of liability or fault by anyone.

John Simley, a spokesman for Bentonville, Ark.-based Wal-Mart, said: "This was the best way to resolve the matter."

An attorney for the family of Keith Scofield, who died in January 2006, didn't immediately return a telephone call from The Associated Press.

Scofield used over-the-counter medications to treat his Type 2 diabetes and did not require prescription-strength insulin, according to the lawsuit filed in May in U.S. District Court in Baltimore by Scofield's mother Josephine Regis, of Sterling, Va., and other family members.

On Dec. 13, 2005, Scofield visited a Wal-Mart pharmacy in Frederick and ordered Humulin R (u-100), an over-the-counter insulin medication, the lawsuit states. Instead, he was given Humulin R (u-500), a drug available by prescription only that contains five times the insulin of the requested medication, according to the complaint.

Scofield injected the drug on Dec. 20, 2005, lapsed into a diabetic coma and died on Jan. 2, 2006, the lawsuit states.

Wal-Mart shares rose $1.15 to $48.83 Thursday

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Gettelfinger wants help vs. Wal-Mart

By SVEN GUSTAFSON ,
businessweek.com
July 12th, 2007                                     [back to top]

United Auto Workers President Ron Gettelfinger used the solidarity between labor and civil rights groups to urge NAACP delegates Wednesday to fight against labor practices at Wal-Mart Stores Inc. and for universal health care.

Gettelfinger said the union and the civil rights organization should use their long history of pursuing common interests to help workers, who are bearing an increasing share of their employer-provided health care benefits.

He singled out Wal-Mart in particular, saying the retail giant pays low wages and denies affordable health care benefits to many hourly workers, forcing a high percentage of its employees onto government health care assistance programs.

That's causing taxpayers to pick up the tab for employees of a company that posted a record $11.2 billion profit last fiscal year, he said.

"When we look at some of labor's major concerns -- the loss of manufacturing jobs, the health care mess, unfair trade agreements and the deterioration of workers' rights -- it's a straightforward conclusion that what's wrong with America is also what's wrong with Wal-Mart," Gettelfinger said. Dan Fogleman, a spokesman for Bentonville, Ark., retailer, cited the company's work seeking ways to increase affordable health care as a founding member of a business-labor coalition and its in-store clinics and $4 generic medicines for employees. He said full-time hourly workers average $10.51 an hour and often participate in company benefit plans.

"Clearly, the facts don't bear out the allegations," Fogleman said.

Gettelfinger's remarks came less than two weeks before the UAW enters into contract negotiations with the Detroit Three automakers.

The cost of health care benefits, which domestic automaker say hurts their ability to compete against their Japanese competitors, is expected to be a key issue.

Gettelfinger did not discuss the upcoming negotiations in his remarks, and he told reporters after his speech that he would not negotiate in the media.

Negotiations start July 20 with Ford Motor Co. and Chrysler Group and July 23 with General Motors Corp.

"We're not going into this negotiation in a concessionary mode, I'll say that," he said.

In 2005, the UAW granted health care concessions to Ford and GM, but it refused to grant the same deal to Chrysler because of its stronger financial condition at the time. But Gettelfinger has said a reversal of fortunes at Chrysler, which lost $618 million in 2006, means the union needs to find ways to help the automaker.

He said Wednesday that the union has had ongoing discussions with Chrysler, but the two sides were not close to a deal.

Gettelfinger also called the nation's health care system "too expensive and too exclusive," citing rising costs and the growing numbers of uninsured. The UAW, which supports a single-payer health care system, also supports making interim fixes including expanding state children's health care systems and lowering the Medicare eligibility to age 55, he said.

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Speaker: Retailer has creep element

By DAVID IRVIN ,
nwanews.com
July 12th, 2007                                  [back to top]

Mike Troy spoke in Rogers on Wednesday about the negative press image of Wal-Mart Stores Inc. a day after a union-backed critic of the world’s largest retailer compared the company to Harry Potter’s nemesis Lord Voldemort.

As the senior editor of the trade publication Retailing Today, Troy said he has seen a decade’s worth of slings and arrows aimed at the Bentonville company and a growing media bias against it.

At a luncheon Wednesday sponsored by the Bentonville / Bella Vista Chamber of Commerce at the John Q. Hammons Center in Rogers, he discussed his theory of the “negativity loop” and why Wal-Mart has such trouble making nice with the media.

“There’s a certain aspect in which it creeps people out” how large and powerful Wal-Mart is, Troy told a group of supplier representatives. Troy said Wal-Mart’s media relations problems stem from inadequate staffing of its media relations department in the 1990s.

He said “rampant” store growth opened the retailer to criticism from the national and local media, and the increasing scale of the corporation allowed for more opportunity for things to go wrong.

With more than 1. 8 million employees, there are bound to be some complaints that find their way to the media, he said. “With that many people working, the opportunity for things to go wrong just explodes,” he told the group of about 35.

What with the efforts of wellfunded opposition groups — as when Wal-Mart Watch compared the retailer to the Harry Potter villain Lord Voldemort — and their criticism’s rapid distribution through the Internet, Wal-Mart finds itself in a thorny media environment. The “Dark Lord Waldemart” campaign came complete with a new Web site and anti-Wal-Mart videos that spread across sites like www. youtube. com.

Besides Wal-Mart Watch, a group called Wake Up Wal Mart?. com funded by the United Food and Commercial Workers International Union also opposes Wal-Mart health-care and wage practices through vigorous media campaigns.

Part of the success of these groups is their fast response time to media inquiries, Troy said.

Asked by the Arkansas Democrat-Gazette for a response to Troy’s remarks, Wake Up Wal Mart?. com responded by e-mail after about 10 minutes.

“Wal-Mart has no one to blame but themselves for their terrible public image, and the reality is their image will change when they actually change for the better,” Laura Tatum, a spokesman for Wake Up Wal Mart. com, wrote in the e-mail.

Wal-Mart declined to comment about Troy’s comment Wednesday.

Tony Hawk, the director of business development at the Soderquist Center for Leadership and Ethics at John Brown University in Siloam Springs, said negative press coverage hurts those committed workers at the home office in Bentonville.

“I have an incredible regard for them and love the culture there and hated to see everything get slanted so negatively,” Hawk said after Troy’s presentation, adding that he worked as a supplier in the Wal-Mart headquarters for nine years. “It hit people in the heart. People believe so much in the company inside the organization that when those kinds of negative things come up, it just kind of cuts at them.”

Troy said Wal-Mart has beefed up its public-relations staff and is more proactive today than it was 10 years ago in releasing information to the media from the company’s perspective. Besides his post at Retailing Today in Tampa, Fla., Troy is also editor of Connecting Northwest Arkansas, a supplier magazine that covers Wal-Mart and Sam’s Club.

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A Whole New Wal-Mart

Tom Van Riper
07.12.07                                               [back to top]

Bentonville, Ark., retail giant Wal-Mart had some good news Thursday. The company said it outpaced expected sales growth with a 2.4% gain over June last year. Google it's not, but it is better than the company's recent results.

In May, the company reported a tepid 1.1% same-store sales increase. Anemic, yes, but better than the 3.5% decline they racked up in April, a month that battered several retailers, thanks to cold weather and an early Easter holiday. Those problems didn't seem to hurt Wal-Mart's main rivals. Same-store sales grew 7% at Costco and 5.8% at Target over May 2006.

Last November the company suffered its first drop in same-store sales in 10 years. Shares of the aging discounter are essentially unchanged from where they were five years ago, meaning that an investor who bought the stock in July 2002 has made an approximate 1% return, the rate of Wal-Mart's dividend yield.

While overall revenue grew 10.4% last year to $349 billion, sluggish same-store sales helped limit profit growth to less than 1%. Wal-Mart shares are up 3.6% in 2007, less than half the 8% climb of the S&P 500.

With the company's core rural consumers saturated with stores, union-pandering urban politicians making it tough to impossible to open big city locations, and overseas missteps in key markets like Germany and South Korea, there's reason to believe Wal-Mart's growth phase is near its end.

But don't bet on it. Retail experts say the company is already on the right track to resuscitating growth. The secret: simple retailing, few drastic moves. Refurbish stores, don't give up on all high-end merchandise and stick to down market growth overseas. That's how Wal-Mart can break out of the sales doldrums and squeeze more profits out of stores.

A 50-state face-lift is the place to start. Brighter lighting, improved displays and wider aisles of refurbished stores are succeeding in keeping shoppers in the store longer, according to America's Research Group president Britt Beemer. He estimates that customers patronizing remodeled stores are staying 10 to 15 minutes longer than they used to. "Consumers have given very positive feedback. I have to believe this will increase the company's average ticket," says Beemer.

The company says it expects to complete the upgrade of 1,800 stores, mostly supercenters, by October. A spokeswoman says that so far, remodeled stores have yielded sales increases of between 0.5% and 1.5%.

Squeezing more profits out of new and improved domestic stores will help. The bigger potential prize comes from overseas, which provides Wal-Mart with 20% of its annual sales. Analysts think the company can grow that number significantly, provided it sticks to markets that cater to their bargain basement niche, at least for now.

"They should have success where there is a significant population of poor people, says Mark Husson, a retail analyst at HSBC, who cited Argentina and Mexico as natural markets to keep investing in.

China is also important to future growth, naturally, with some growing towns perfectly set up for a big box on their outskirts. Focusing on those markets should help Wal-Mart get past the mistakes that forced it to fold its tent in South Korea, where poor real estate choices gave it bad locations, and in Germany, where it misread the local norms for shopping hours and labor laws.

The company now gets about half its overseas business in the U.K., where it is now No. 2 in grocery sales. But rival Tesco, which has the kind of market clout there that Wal-Mart has across the Atlantic, claims much better profit margins, thanks to its ability to wrangle discounts from suppliers.

Back on the home front, some critics are already writing off Wal-Mart's foray into upscale goods as a failure. A store can't be all things to all people, right? Not necessarily, says Beemer, who thinks the concept of nicer items goes hand in hand with brighter, remodeled stores. But the key is to stick to bath towels, linens and other home products, and leave the high-fashion clothing to others.

About half of America goes into Wal-Mart in a year, and they're not all down market, Beemer says, adding: "They can still bring in better goods, and sell them at lower prices."

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Stores Post Lackluster Sales in June

By ANNE D'INNOCENZIO
Associated Press
07.12.07                                                        [back to top]

The nation's consumers, uninspired by this season's fashions and rattled by high gas prices and the weakening home market, shopped gingerly last month, extending the misery of retailers who have struggled with a spending slowdown since February.

As merchants reported their June sales results Thursday, the disappointments cut across many segments of the industry including Macy's (nyse: M - news - people ) Inc. and trendy apparel chain Bebe Stores (nasdaq: BEBE - news - people ) Inc. One notable exception was Wal-Mart Stores Inc. (nyse: WMT - news - people ), which posted results that beat Wall Street expectations.

"Retail sales are generally soft as we expected. Consumers look like they are holding back on discretionary purchases particularly in apparel," said Ken Perkins, president of RetailMetrics LLC, a research company in Swampscott, Mass. He added that shoppers are "facing a long list of headwinds as they head into the rest of the summer."

Wal-Mart, the world's largest retailer, had a 2.4 percent gain in same-store sales, beating the 0.8 percent predicted by analysts polled by Thomson Financial. Same-store sales are sales at stores open at least a year. The results excluded sales from fuel.

Costco Wholesale Corp. (nasdaq: COST - news - people ) reported a 6 percent gain in same-store sales, in line with the 6.1 percent estimate.

Macy's suffered a 2.7 percent drop in same-stores sales, worse than the 0.8 percent decline expected.

Limited Brands (nyse: LTD - news - people ) had a 3.0 percent gain, slightly better than the 2.9 percent forecast from Wall Street.

Among teen retailers, Bebe posted a 5.4 percent drop in same-store sales, worse than the 2.2 percent projected decline. But Pacific Sunwear of California Inc. (nasdaq: PSUN - news - people ) posted a 4.5 percent same-store sales increase, better than the 3.2 percent estimate.

Copyright 2007 Associated Press. All rights reserved.

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San Diego City Council Defeats Wal-Mart Ban

Chain Store Age
Wednesday, July 11, 2007                              [back to top]

In a surprise victory for Wal-Mart Stores, San Diego's City Council on Tuesday failed to override the mayor's veto of a ban on some big-box stores in the city. Councilwoman Donna Frye reversed sides after supporting the ban three times since September, resulting in a 4-4 deadlock that fell one vote short of putting the measure into law.

Frye said she was uneasy with a blanket ban and would work for a new law that requires tougher scrutiny of new Superstores.

The measure would have prohibited stores of more than 90,000 sq. ft. that use 10% of space to sell groceries and other merchandise that is not subject to sales tax. It took aim at Wal-Mart Supercenter stores, which average 185,000 sq. ft. and sell groceries. Costco Wholesale Corp. and other membership-style retailers would have been exempt.

Supporters of the ban argued that Wal-Mart puts smaller competitors out of business, pays workers poorly, and contributes to traffic congestion and pollution. Opponents said the mega-retailer provides jobs, low prices and more choices for consumers.

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RUSSIA: Property developer to back Wal-Mart

Progressive Newsletter

The Russian property development company Macromir stated that it will support Wal-Mart’s market entry in Russia. According to local media in Russia, Macromir said yesterday that it has been in partnership talks with Wal-Mart since May. If the companies reach an agreement, then either Wal-Mart will lease facilities in shopping complexes, which Macromir has already started building, or the Russian company will do construction especially for Wal-Mart. Macromir is a real estate investment and management company which was established in 2002 by Andrei Rogachev, a founder of the Pyaterochka retail chain and shareholder of X5 Retail Group. Rogachev holds a majority stake in Macromir, which is expected to be listed on the London Stock Exchange by late 2008 or 2009. Market participants, however, doubt that Wal-Mart has already made a final decision to enter the Russian market, because otherwise the chain would be holding talks with several companies at the same time, the RBC Daily newspaper wrote today. A source close to the negotiations explained that the discussion is about Wal-Mart arriving on the Russian market in the hypermarket format, which means that the stores will have an area of around 20,000 square meters

Duluth up in arms against Wal-Mart

By EILEEN DRENNEN,
Atlanta Journal-Constitution via nexis
July 11th, 2007                                                  [back to top]

Plans to build a Wal-Mart Supercenter are stirring controversy in Duluth.

Nearly 1,200 people have signed an online petition opposing the retail giant's plans to build a store on 27.5 acres on Peachtree Industrial Boulevard, between Chattahoochee Drive and Sugarloaf Parkway. Worried residents from surrounding neighborhoods are calling and sending e-mails to Duluth City Hall and each other.

They will get a chance to voice concerns to Wal-Mart at a public meeting at 7 p.m. Thursday at the Red Clay Theater on Duluth's Main Street.

Glen Wilkins, senior manager of public affairs for Wal-Mart, said he looks forward to answering questions and setting the record straight about his employer's history and plans. He said he's heard from a number of residents who support the proposal for a third Wal-Mart in the area.

There are two within five miles of the proposed site --- one on Pleasant Hill Road in Duluth and another in Suwanee.

"We're trying to relieve pressure on the other stores," said Wilkins. "We're following the rooftops and we're following the customers. Growth has been created, and we're responding to that growth."

Homeowner Len Boyer has lived in Canterbury Woods --- just across Peachtree Industrial from the proposed site --- for nine years. The operations manager for a general contractor, Boyer said he's obviously not opposed to development.

It's the scale of the proposed store, he said, that concerns him. The store would have 176,305 square feet.

As chairman of his subdivision's "Stop Wal-Mart" committee, he created a Web site --- www.smartgrowthgwinnett.com --- to chronicle the opposition and inform neighbors.

"I would love to see something go in there that fits" the area, he said. "As a homeowner and someone who works in development, I don't see how big box retail fits the letter of Duluth's zoning ordinances."

The proposed site is zoned for such businesses, but the retailer has asked the city of Duluth for exceptions to its zoning code, such as permission to have landscaping closer to the store and to construct a roof that's flat, rather than pitched.

Wal-Mart had planned to make its case June 27 at a meeting of the Duluth Zoning Board of Appeals.

Due to the protests, the retailer asked for its requests to be deferred for a month. It will make its presentation to the board on July 25.

In a memo posted on the city's Web site on July 6, the mayor and City Council sought to make sure that everyone understood the legal realities surrounding the proposed development --- namely, that the Peachtree Industrial land is already zoned for commercial development.

That means "a Wal-Mart store or any other similar retail development is allowed . . . " and that "Georgia law does not allow the city to prohibit the use as long as the project is developed in accordance with City of Duluth standards.

"As such," the memo concluded, "this matter will not come before the Mayor and Council."

Even so, resident Marline Santiago-Cook expressed her concerns at a council meeting Monday. She lives in the Castlemaine subdivision, across Peachtree Industrial from the proposed site. A few of her neighbors from nearby subdivisions were in the audience as well.

She told the mayor and council she knew they wouldn't have the ultimate say in the matter but said she just wanted to go on the record as someone who loved the city and the area.

"We're not anti-growth and development," she said. "We just think it's too big for that location, and that something like the Forum in Norcross would be a better fit."

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Recession in retail sector has started

Wal-Mart starts catching shoplifters to survive the nasty slowdown

Thomas Gomez
Jul. 11, 2007                                              [back to top]

The retail sector has started tumbling. The retailers are all coming out with lower guidance. The car sells are in real trouble. Many dealerships will close in the next two years. The car prices will also tumble as people refuse to buy new cars with higher insurance and gasoline costs.

Wal-Mart Stores Inc. this week tightened its rules on prosecuting young shoplifters, lowering the age at which it will prosecute and authorizing store managers to call the police if a parent doesn''t appear within an hour to retrieve a child.

The policies, which went into effect Monday, now include prosecuting first-time shoplifters as young as 16 years old, compared with the previous limit of 18. The company also will prosecute younger shoplifters whose parents don''t quickly respond to a store's call, and children repeatedly caught stealing.

These cost control measures are early signs of recession in the retail sector.

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Wal-Mart to Prosecute Teen Shoplifters

By MARCUS KABEL
Associated Press
07.11.07                                                  [back to top]

Wal-Mart is recommending its stores prosecute shoplifters at a younger age, tightening guidelines for store managers as it seeks to put a cap on rising theft that has eroded its profit.

Wal-Mart Stores Inc. (nyse: WMT - news - people ) said Wednesday it issued new guidelines to its U.S. stores this week lowering the age at which it recommends they prosecute first-time shoplifters to 16 from 18.

The change comes two months after Wal-Mart said an increase in shoplifting, employee theft and other inventory loss was among factors hurting profitability in the first quarter. A year ago, Wal-Mart relaxed its policy by recommending stores only prosecute first-time offenders when the items stolen are worth $25 or more, a guideline that remains in force.

Wal-Mart spokesman John Simley said the latest guidelines were not a response to the company's May statement of concern about theft. Instead, he said, they were the result of suggestions from stores around the country going back to the start of the year.

"The fact is, it (the anti-theft policy) is always evolving, it's always moving," Simley said.

Simley said prosecuting at the age of 16 was in line with most other retailers.

The policy applies to first-time shoplifters. The guidelines are a suggestion and store managers have leeway to prosecute anyone accused of theft, Simley said.

The new policy shortens the time a store will wait for parents before calling police on a child suspected of shoplifting. The wait time is now one hour versus 90 minutes under previous rules.

Wal-Mart also will prosecute repeat offenders regardless of age, Simley said.

Eduardo Castro-Wright, president and CEO of Wal-Mart's U.S. store division, put the spotlight on theft in a mid-May conference call with analysts. He said first-quarter profit margins were dragged down by problems including higher shrinkage, or losses due to shoplifting, employee theft, paperwork errors and supplier fraud. He said the problems could be worsening.

Wal-Mart has declined to detail the theft problem or how much it has grown. Simley said the company still has a lower overall loss rate to theft than the industry average.

Theft cost retailers $41.6 billion last year, according to an annual survey by the National Retail Federation and the University of Florida. They found the theft rate as a percentage of sales ticked upward slightly to 1.61 percent of sales in 2006 from 1.60 percent in 2005.

Copyright 2007 Associated Press. All rights reserved.

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Shares of Big-Format Stores Fall

Associated Press
07.10.07                                          [back to top]

Shares of the nation's big-format stores, including department stores and discounters, fell Tuesday amid disappointing profit outlooks from two key retailers.

The Home Depot Inc. (nyse: HD - news - people ), the world's largest home improvement store chain, on Tuesday cited continued weakness in the housing market and the sale of its wholesale distribution business as it issued a bleaker-than-expected financial outlook for the year. And Sears Holdings Corp. (nasdaq: SHLD - news - people ) surprised Wall Street Tuesday, warning its second-quarter earnings will likely fall well below projections because of more disappointing sales at its Sears and Kmart stores.

Meanwhile, the nation's merchants are slated to announce sluggish same-store sales results Thursday as consumers continue to be rattled by high gasoline prices and a weak housing market. Same-store sales are sales at stores open at least a year and are considered a key indicator of a retailer's health.

Here is how the stocks of some key big-format stores fared Tuesday:

Wal-Mart Stores Inc. (nyse: WMT - news - people ), down 92 cents at $47.58

J.C. Penney Co. (nyse: JCP - news - people ), down $1.37 at $71.15

Target Corp. (nyse: TGT - news - people ), down $1.91 at $64.81

Sears Holding Corp., down $17.20 at $154.21

Costco (nasdaq: COST - news - people ) Holding Corp., down 85 cents at $60.51

Macy's Inc., down $1.52 at $40.13

Home Depot Inc., up 2 cents at $40.25

Copyright 2007 Associated Press.

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Wal*Mart Selects Knowledge Networks as Online Research Partner to Help Manufacturers Target Key Shopper Segments More Effectively

KN receives access to retailer's proprietary Segmentation Lens due to nationally representative panel, expertise

PRNewswire                                                   [back to top]

MENLO PARK, Calif., July 10 /PRNewswire/ -- Wal*Mart has endorsed Knowledge Networks as the online panel research company to conduct custom studies using the retailer's proprietary Segmentation Lens. Through Knowledge Networks' services, manufacturers selling to Wal*Mart have the ability to understand how the retailer's target segments -- Brand Aspirationals and Price Value and Price Sensitive Affluent shoppers -- respond to strategies and tactics, and thus the opportunity to target key consumers with greater accuracy.

These groups will become the backbone of Wal*Mart's customer strategy moving forward; both Wal*Mart and its manufacturer suppliers will grow by looking at every piece of research through the eyes of these key segments. Knowledge Networks has coded its entire online KnowledgePanel(SM) according to the Wal*Mart segments, meaning that the segments have already been identified and can be easily studied

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San Diego City Council defeats Wal-Mart superstore ban

Associated Press
Tuesday, July 10, 2007                                   [back to top]

In a surprise victory for Wal-Mart Stores Inc., the City Council on Tuesday failed to override the mayor's veto of a ban on some big-box stores in the nation's eighth-largest city.

Councilwoman Donna Frye reversed sides after supporting the ban three times since September, resulting in a 4-4 deadlock that fell one vote short of putting the measure into law.

Frye said she was uneasy with a blanket ban and would work for a new law that requires tougher scrutiny of new superstores.

"I do not like the idea of having giant superstores, but I also believe there is a way to deal with this issue that will be inherently better for our city," said Frye, who narrowly lost a write-in bid for mayor in 2004.

Mayor Jerry Sanders called the council vote an "enormous victory for San Diego consumers."

"Government should not tell consumers where they can and can't shop," he said.

The measure would have prohibited stores of more than 90,000 square feet that use 10 percent of space to sell groceries and other merchandise that is not subject to sales tax. It took aim at Wal-Mart Supercenter stores, which average 185,000 square feet and sell groceries. Costco Wholesale Corp. and other membership-style retailers would have been exempt.

Supporters of the ban argued that Wal-Mart puts smaller competitors out of business, pays workers poorly, and contributes to traffic congestion and pollution. Opponents said the mega-retailer provides jobs, low prices and more choices for consumers.

The Bentonville, Ark.-based retailer has about 2,000 Supercenter stores, including 27 in California, but none in the San Diego area. The retailer has 18 regular Wal-Mart stores in the San Diego area, including four within limits of the city of 1.3 million people.

Wal-Mart, which was considering a petition drive to overturn the measure if it became law, welcomed the decision.

"The ordinance was so anti-competitive and so anti-consumer," said Amy Hill, a company spokeswoman.

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Lawmakers want Wal-Mart tax probe

By DAVID MILES,
santafenewmexican.com
July 10th, 2007                                            [back to top]

Loophole allows multistate corporations to avoid state income taxes.

Twenty state legislators Tuesday sent a letter to Gov. Bill Richardson asking him to investigate Wal-Mart’s tax records in New Mexico to make sure the corporate giant is paying its fair share of state taxes.

The letter cited a Wall Street Journal article that detailed how Wal-Mart nationally has saved millions of dollars in taxes by having a subsidiary pay rent to a real-estate investment trust — or REIT — owned by another subsidiary, which receives tax-free dividends from the REIT.

“If Wal-Mart has used the captive REIT structure to avoid state income taxes, the state has the power and duty to make Wal-Mart return this money and pay what it owes,” legislators said in their letter.

A Richardson spokesman declined to comment on the letter, saying he had not seen it. Efforts to reach a Wal-Mart spokesman Tuesday were unsuccessful.

Lawmakers signing the letter included several legislative leaders, such as Senate President Pro Tem Ben Altamirano, D- Silver City, and House Speaker Ben Luján, D-Nambé. Other local legislators who signed the letter included Reps. Luciano “Lucky” Varela and Peter Wirth, both Santa Fe Democrats.

The letter comes after three failed attempts by Wirth to shepherd a bill through the Legislature to close what he says is an “$80 million loophole” that allows multistate corporations like Wal-Mart to avoid paying New Mexico corporate-income taxes.

Wirth’s proposal would have required such corporations to file a combined tax return with their subsidiaries to reflect the total income of the entire corporation.

Wirth on Tuesday said his proposal and the REIT issue address similar types of loopholes used by corporations. “I think it’s a fundamental fairness issue,” he said. “When you have loopholes that are being used by out-of-state businesses, it is New Mexico businesses that are being hurt.”

Although Wirth’s bill repeatedly ran into opposition from several business groups during this year’s 60-day legislative session, he said the proposal is starting to pick up steam. “There’s kind of a sense of outrage that the system is not fair to New Mexico businesses,” he said.

Wirth said he plans to take a closer look at tax issues surrounding multistate corporations such as Wal-Mart before deciding whether to resurrect his proposal next year.

His bill that died at the end of the 2007 session would have generated an additional $80 million a year in corporate-income tax revenue for the state, according to a fiscal impact report on the bill. However, the measure also would have included an estimated $60 million in tax cuts for corporations, making the state’s net revenue gain $20 million a year.

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Wal-Mart report delayed

By Ian Thompson                                                 [back to top]

SUISUN CITY - It will be August when Suisun City residents get their first look at the draft report on how building a Wal-Mart Supercenter in eastern Suisun will affect the area.

Suisun City's Planning Department hoped to release the draft environmental Impact report on the proposed store this month but have pushed back the date. "We are now looking at first week of August," Suisun City Planning Director Heather McCollister said.

Wal-Mart wants to build a 230,000-square-foot supercenter just west of Walters Road and north of Highway 12.

The retail giant is also on the verge of building another supercenter in Fairfield but has been stalled by a lawsuit filed last by the Fairfield Neighbors Promoting Smart Growth group.

Suisun City planners are taking their time with the draft to ensure every aspect of the project is examined in a document that is expected to be 3 inches thick.

Once the draft is released for comment, the city plans to hold several neighborhood meetings to discuss the document and collect comments from residents. Wal-Mart's opponents have already been busy. Groups such as the Suisun Alliance and the Suisun Citizens League have already fired salvos, saying the project saying it will increase crime and traffic, destroy local small businesses and that its proximity to Travis Air Force Base will encroach on the base and endanger its existence.

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Indian retailers to protest against Wal-Mart entry

The Associated Press
Tuesday, July 10, 2007                                      [back to top]

MUMBAI, India: Millions of operators of small shops plan to protest next month against larger local companies and foreign firms like Wal-Mart who are venturing into the country's booming retail sector, union leaders said Tuesday.

"We will tell Wal-Mart and all other big Indian corporations like Reliance and Bharti to get out. They must not take away this business from small workers," said Rajendra Thacker, general secretary of the Mumbai Mahanagar Vyapari Seva Parishad, or Save Mumbai Business Group.

Demonstrations and street rallies have been planned for Aug. 9 in all major cities and towns, including Mumbai, New Delhi, Chennai and Calcutta, Thacker told reporters.

Wal-Mart is close to entering the country's protected retail business through a joint venture with local conglomerate Bharti Enterprises Ltd. Indian laws bar foreign multi-brand retailers like Wal-Mart Stores Inc. from setting up shop on their own.

India's top business group Reliance Industries Ltd. already has opened more than 50 stores across the country, mainly selling groceries, vegetables and grains.

The entry of large corporations into the retail sector has sparked protests in India where the estimated US$280 billion (€215 billion) market is dominated by more than 12 million mom-and-pop shops. Sales through company-owned big-box stores — also called organized retailing — currently account for less than 5 percent of the market.

While Wal-Mart's Vice Chairman Michael Duke's February visit to India sparked protests from some political parties, Reliance stores in central and eastern India were recently attacked by political activists and traders.

Vinod Shetty of India FDI Watch warned the protests would grow with small retailers also planning demonstrations outside big malls and stores. "If you take away their business, they will come into your offices, they will come into your homes," he said.

India FDI Watch is a grouping of labor unions, trade associations, environmentalists, non-governmental organizations and academics seeking to prevent foreign direct investment in India's retail sector.

The Indian government has not raised any objection to foreign joint ventures, but officials have said they would scrutinize agreements once finalized.

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Wal-Mart 'Site to Store' in 3,300 stores

The Associated Press
July 10, 2007                                         [back to top]

Wal-Mart Stores Inc., the world's largest retailer, said Tuesday it completed the rollout of its "Site to Store" shipping service in 3,300 stores across the country.

The program allows customers to order products from its Web site, most of which are not available in stores, and have them shipped for free to a local Wal-Mart store.

Since the rollout of the program began in March, about one-third of all Walmart.com sales have been placed through the "Site to Store" service.

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Wal-Mart is deaf to its best advisers

By Ritson, Mark
nexis
July 10th, 2007                                                [back to top]

In many ways Wal-Mart is a massive success story - especially in the US, where the retailer started.

Two-thirds of Americans visit a Wal-Mart on a monthly basis; more than 138m visit its stores in an average week. As its chief marketing officer, John Fleming, succinctly put it: 'Wal-Mart is the only retailer in the world without a traffic problem.'

Look beyond such mind-boggling figures, though, and a very different picture emerges. A sorry share price and missed profit targets suggest all is not well.

Until recently, this has heen mostly conjecture, bul last week a leaked internal-positioning ivpnrt laid hare the sorry state of the Wal-Mart brand and the challenges it must overcome.

The report, prepared last year for the retailer's senior managers by its ad agency, GSD&M, lays out a company with big brand issues. It concludes that Wal-Mart's obsessive emphasis on lowering prices has led it to forget its original brand values and left it as little more than a commodity business. 'Shopping at Wal-Mart used to mean saving money and being patriotic, being a member of the community, being part of the "American Dream",' said the report. 'Today, it just means saving money. All value - no values.' It confirms this by referring to brand-tracking data showing a gradual decline in consumers' trust and respect for Wal-Mart.

The report also spells out the difficult competitive environment in which Wal Mart? operates. The store is 'not the smart choice in categories where saving money and time are not the be-all, end-all drivers'. Its value position is preventing it from succeeding in the higher-margin categories such as electronics, apparel, grocery and pharmacy, where specialists including Best Buy and Kohls are deemed superior. Wal-Mart is also threatened in its own category by Target, which, the report concludes, has been 'incredibly successful at re-selling the bar of what people expect from a discount store'.

A rapidly commodifying brand that has lost touch with its heritage, facing apparently superior competition on all sides - it is a chief executive's nightmare. But the report also details the results of market research and goes on to recommend a 10-step plan to revitalise Wal-Mart.

It's possibly the most ambitious and important marketing plan of the past 20 years, a textbook piece of marketing strategy, the kind of work we rarely see in the UK, but have come to expect from ton-tier US marketers, who are - how can I say this? - generally better than their UK peers.

First, there is research that includes both ethnographic and protective work, leading to a major quantitative study of 2700 shoppers and their buying process, purchase drivers and trigger points. Next, behavioural segmen talion that presents rigorous but also actionable segments, and reviews each in light of their different aspirations and buying behaviours.

Finally there is a clear and concise call to arms with strategies to reconnect with these segments, reposition the Wal-Mart brand with its core values, and address the threat posed by Target in particular. 'If Target is about design and style - ultimately superficial attributes - Wal Mart can be about meaning and substance,' the report says.'Rather than objectifying our products and putting them on pedestals, Wal-Mart can celebrate our products in the context of people's lives.'

There are only two things wrong with the report. First, it has been leaked to the media, which is why I am writing about it and why you and, presumably, Wal-Mart competitors are reading about it.

Second, Wal-Mart was so impressed with the report that it fired GSD&M at the end of 2006, ending a 20-year relationship.

30 seconds on... GSD&M report on Wal-Mart Wal-Mart's former ad agency GSD&M conducted a report on the retailer last year as it sought to retain its business.

The agency, based in Austin, lexas. conducted consumer interviews across the US and took some of the respondents shopping.

Among the problems the agency listed in the report was the 'hillbilly' stereotype of the US retailer's shoppers.

It also cited Wal-Mart's public relations troubles, including a class-action lawsuit filed on behalf of 1.6m existing and former female employees who allege discrimination in terms of pay and promotion because of their gender.

The report also claims that as the retailer branches out into electronics and clothing, its One-stop shopping format becomes a time-consuming irrelevant obstacle It continues: ?"copie don't buy electronics, home decor and apparel in zero time.'

Wal-Mart's obsessive emphasis on lowering prices has led it to forget its original brand values

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Walmex Net Profits Up 7 Percent in 2Q

Associated Press
07.09.07                                                 [back to top]

Wal-Mart de Mexico SA, the country's largest retailer, reported a 7 percent increase in second-quarter net profit after inflation, even as same-store sales grew less than 1 percent due in part to a slowdown in consumption.

The company reported net profit of almost 3 billion pesos ($280 million) during the period, compared with nearly 2.8 billion pesos ($260 million) in the same quarter last year.

Walmex - as the Mexican unit of Arkansas-based Wal-Mart Stores Inc. (nyse: WMT - news - people ) is known - reported a 9 percent increase in total sales after inflation, to 51 billion pesos ($4.7 billion).

Same-store sales refers to sales at stores opened at least a year.

Second-quarter sales were affected by a slowdown in the Mexican and U.S. economies, as well as an absence of positive factors the company took advantage of in 2006, including the presidential elections and the World Cup, Walmex president and CEO Eduardo Solorzano said in a statement.

As a result, Solorzano said, Walmex implemented an "aggressive" cost-reduction program in all areas except consumer service, which held the increase in operating expenses to 6 percent over the same period last year.

Copyright 2007 Associated Press. All rights reserved.

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Why so nervous about robots, Wal-Mart?

by Alorie Gilbert                                [back to top]

Wal-Mart-bashing appears to be a national sport these days, with legions of Wal-Mart critics growing faster than the retail empire can build new stores. In particular, the company's labor practices are a lightning rod for criticism. So it's no wonder that the company has struck a rather defensive note regarding a rumored interest in robotic labor. I got a dose of Wal-Mart's defensive posture first-hand last week when reporting a feature story News.com published today on the future of inventory-checking robots. After an executive at Frontline Robotics informed me that Wal-Mart is eyeing robot technology, I called Wal-Mart for confirmation.

Wal-Mart representative Christi Gallagher, the company's spokeswoman on supply chain and technology issues, took my call. She also happens to be the media point person on labor relations and employment litigation.

As soon as I mentioned robots, Gallagher seemed eager to end the call. "We are not looking into robots in any way, shape or form," she said abruptly. I tried probing for more, but she had nothing further to offer.

The response was curious because, when a public relations person is faced out-of-the-blue with questions on a random topic like robots, he or she would typically pause, jot down some notes, and say something along the lines of, "Gosh, I have no idea about that, but I'll check into it for you."

And I am apparently not the first to hit a Wal-Mart nerve with a robot story. As I noted in today's story, the company's attorneys took a particular interest in an eWeek report in May about a robot Wal-Mart is apparently testing in a Utah store. The robot, developed at Utah State University, is designed to guide visually impaired shoppers and locate products for them.

Wal-Mart's lawyers called the university after it learned of the story, and a university representative then retracted earlier statements about Wal-Mart's interest in investing in further development of the robots.

So why is Wal-Mart so touchy about robots? My hunch is that Wal-Mart's interest in robots goes far beyond helping the visually impaired shop. I think it's intrigued by the notion of using robots in its warehouses, distribution centers and stores to monitor and check inventory -- a job mostly done by people today, as one Frontline Robotics executive noted.

"After hours, robots could run around stores in a systematic pattern and take a complete inventory of all the shelves," said Rob Richards, chief operating officer of Frontline. "We have people now that do that."

But to my mind, robot-talk is the least of Wal-Mart's labor woes, which include accusations of sexual discrimination, low pay, poor benefits, worker safety violations and child labor law violations. The company has also been embroiled in widespread overtime pay disputes and is in trouble with the Department of Labor over employing illegal immigrants.

So, Wal-Mart, relax about robots!

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Wal-Mart, P&G Lead a Parade

IHT
In-Store Marketing Institute                         [back to top]

Procter & Gamble joined with Wal-Mart on July 1 to turn Parade magazine into a veritable co-equity FSI program.

The marketing powerhouses ran multiple full-page ads promoting the availability of various P&G brands at Wal-Mart. Published by Parade Publications, New York, Parade is delivered to 32 million households weekly as an insert in 380 Sunday newspapers. The publication has a total audience of 73.6 million, according to data from MRI, New York.

An ad for Prilosec OTC touted the brand's NASCAR sponsorship and invited readers to "get relief at Wal-Mart ... and get an exclusive Legendary NASCAR Moments DVD.” An ad for CoverGirl featuring celebrity spokesperson Rihanna advised, “You're 3 steps away from a great new summer look at Wal-Mart.” And an ad (in some markets) for Charmin compared the brand’s Ultra Strong and Ultra Soft varieties, encouraging shoppers to “Go to Wal-Mart and choose the one that's best for you.”

In stores, these and other P&G brands (such as Bounty, Tide and Gain) received endcap placement along Action Alley and within packaged goods aisles.

The effort coincided with the latest edition of P&G's brandSaver stand-alone FSI program, which also was distributed through July 1 newspapers. (See Related Articles.) Valassis, Livonia, MI, handles that program for P&G.

Wal-Mart is a regular advertiser in Parade, often securing the inside cover for spreads of seasonal merchandise. The July 1 issue also contained a center spread advertising outdoor grills, along with Kingsford charcoal and Sam’s Choice beef patties. Elsewhere in the issue, Sam's Club ran a full-page ad pitching backyard grills and patio furniture.

In Parade's June 17 issue, Sam's Club and P&G teamed for a back-page ad promoting Prilosec, Pantene, Crest, Gillette Fusion, Head & Shoulders and Always. The ad included a free guest pass to the club.

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Wal-Mart's problem is one of attitude

Our view: Its move to circumvent city's big-box law via petition drive, public vote, was cynical and can only earn it more ill will

The Arizona Daily Star
Sunday, July 08, 2007                                     [back to top]

Jul. 8--Wal-Mart will do nothing to enhance its reputation if it pursues a legal challenge to Tucson's so-called big-box ordinance.

The ordinance is part of the city's zoning code and says big-box stores -- stores larger than 100,000 square feet -- can use no more than 10 percent of the store's space for food and beverage sales.

The law was designed to keep out Wal-Marts in part because of the impact they have on smaller businesses, but also because unions and their supporters object to Wal-Mart's employment practices.

Despite the ordinance, Wal-Mart has done well in the suburban areas contiguous to Tucson, and in March the City Council also granted a waiver to Eastbourne Investments Ltd. for a major development that will probably include a Wal-Mart near South Park Avenue and East 36th Street.

Shortly after that waiver was approved, Wal-Mart announced a petition drive in the hope of repealing, through a ballot initiative, the part of the big-box ordinance that contains the 10 percent provision.

It was an arrogant and cynical move and served mainly to reaffirm the beliefs of Wal-Mart's harshest critics.

As Tucson City Councilman Steve Leal put it, "They want what they want, when they want it. It's more of an attitude problem than a legal problem."

However, it also a legal problem.

Wal-Mart collected the required number of signatures for its ballot initiative and went to deliver them to City Clerk Kathy Detrick. Acting on the advice of City Attorney Mike Rankin, Detrick rejected the petitions.

Rankin says state law clearly holds that the initiative process cannot be used to change zoning laws. There are at least three cases where the Arizona Supreme Court has made this explicit.

In the most recent case, from 1997, the court noted, "The State Zoning Enabling Act expressly delegates zoning powers to other levels of government, including the governing body of an incorporated city. . . . Zoning ordinances cannot be passed by initiative without circumventing the constitutionally required notice and hearing."

The same ruling states, "To protect property owners' constitutional rights within the comprehensive legislative scheme governing zoning, this court has held that initiatives cannot be used to legislate zoning."

The court said ". . . we do not review the substantive validity of any proposed zoning ordinance but only prohibit altogether the use of initiative to enact zoning laws."

As of Friday, Wal-Mart hadn't decided whether it would mount a legal challenge to the city's rejection of its initiative petitions. Based on the rulings from the state Supreme Court, it appears such a challenge would be a waste of time in Arizona.

Wal-Mart would probably be wiser to invest its time and money in improving its image with those who see it as a "my way or the highway" kind of business.

Local politicians certainly went the extra mile in trying to clear the way for a possible Wal-Mart as part of the Eastbourne project. In that case, most members of the City Council agreed with the wishes of the adjacent neighborhood, which supported inclusion of a Wal-Mart, and dictated that a waiver of the big-box ordinance was in order.

Consumers seem to either love or hate Wal-Mart, depending to some extent on their level of political awareness.

Those who pay no attention to politics or ideology see the place only for the convenience it offers. Liberals tend to see the company as a retail brute intent on keeping wages and benefits down and locking out unions.

If Wal-Mart hopes to ever see another waiver of the big-box ordinance in Tucson, it needs friends among the Democrats who dominate the City Council and who object to it on principle.

Attempting to circumvent the City Council's power by launching what is clearly an illegal challenge is a good way to kill the possibility of ever winning another waiver of the big-box ordinance.

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The Wal-Mart Weekly: Sourcing almost everything from China

By Brian White,
blogginstocks.com
July 6th, 2007                               [back to top]

Welcome to the 18th installment of The Wal-Mart Weekly, a weekly column dedicated to bringing you insight, wit, facts, results, opinions and just a bit of everything else when it comes down to a very hot topic these days: Wal-Mart.

Last week I discussed how Wal-Mart Stores (NYSE: WMT) seems to have quite a bit of stock in its clothes and shoes departments, but does not seem to have the selection one would expect for departments that take up a lot of floor space. Filling a niche need at Wal-Mart in these two areas is not happening, but it sure has plenty of stock for boring clothes and shoes!

So, from the lack of innovative merchandising in those two areas last week, I'll move on to something completely unrelated this week: the sourcing of so much retail inventory from China. There is a reason for "Always Low Prices" these days at Wal-Mart, and it's due to one country alone.

Take a wild guess on which country. Let's dig in.

The prime reason for growth Wal-Mart's torrid growth in the last 15 years has coincided with much sourcing from mainland China throughout almost all its product categories. One thing that Sam Walton trumpeted loudly for as long as he was heading Wal-Mart was the phrase "Buy American."

Walton passed away in 1992 and shortly thereafter, the retailer began expanding store counts like crazy as well as converting regular stores into Supercenters and building new Supercenters. Sam's Clubs began expanding too, and before you knew it, Wal-Mart was poised to become the largest retailer in the world right before the new century began.

What caused all this growth? What did Wal-Mart do right to attain such a huge amount of sales that kept on growing year after year? Many pundits point the finger right at the retailer's strategy to procure as much as possible from China while wringing out as much cost as possible from other suppliers, many of whom were based in the U.S. Every manufacturer had a choice: give Wal-Mart a decent portion (or a huge one) of your business and watch your company roll in cash -- which turned out to be a 'temporary high' for many -- or don't sell to Wal-Mart and see your competitors take sales just due to store exposure. This became the decision of the day for years as Wal-Mart grew in its retailing power.

Consumers choose Wal-Mart, not the other way around.

What kept Wal-Mart buying from many Chinese suppliers when it came to auto parts to shoes to clothes to leafblowers was the lower price the retailer could get as opposed to American suppliers.

Of course, Wal-Mart passed those cost savings on to customers, who took notice and bought more and more goods every year as the retailer grew. Did anything make all those American consumers choose Wal-Mart? Low, low prices.

And every year, they seemed to get lower. As expected, American consumers -- many of whom want everything as cheaply as possible -- just kept on buying.

What happened? All that consumer enthusiasm and pocket change fueled an unstoppable Wal-Mart expansion that continues to this day. As more and more customers kept on buying Chinese-made goods, Wal-Mart kept building stores to service that need until it was that country's sixth-largest trading partner. And, as far as I know, Wal-Mart is not an individual country just yet, although its trade volume with China makes it look like one on paper.

Is the end of Chinese trade coming for Wal-Mart?

After a good dozen years of consumers buying more and more stuff for their homes, apartments, cars and kids (and themselves), millions of consumers started seeing American jobs get shipped oversea. The American companies that still sourced to Wal-Mart shipped everything they could to China in terms of production instead of letting companies from that country get all the retailer's business. End result: a large majority of Wal-Mart's goods now are made in China and sold to the retailer by Chinese suppliers themselves (with different levels of quality and brand names) or by American suppliers who have been forced to compete on cost by sending manufacturing of their goods to China as well.

Will Wal-Mart try to get back to buying from a more varied supplier base soon, which most likely would mean higher prices? I doubt this will happen without more consumer backlash. Buying from other countries would most likely mean higher prices than Wal-Mart currently offers, which can be a death knell in the retailing industry. Hint: Target also sources quite a bit of product from China, but merchandises it in such a way that consumers are responding more to Target than to Wal-Mart.

So there it is -- consumer wishes for every-low prices cause Wal-Mart to source more and more from China and the American retailing economy ends up in an odd circle. That circle is the American need for constant bargains (at the expense of a neighbor's job, perhaps) along with Wal-Mart's need to grow like crazy and become the largest retail company the world has ever know. Is there any going back? I sincerely doubt it.

If Wal-Mart ever changed its slogan from "Always Low Prices" to one like "Always the Best" (read: quality), then we would all know something was up.

See you the same time and same place next week for another installment of The Wal-Mart Weekly. Until then, have a great weekend.

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Reliance, Beating Wal-Mart to India, Lures Shoppers, Investors

By Saikat Chatterjee
Bloomberg
July 5, 2007                                                      [back to top]

A Suhiksha retail store in New Delhi  -- Ram Pukar doesn't need Wal-Mart Stores Inc. to make him worry about his fate as a fruit salesman in a New Delhi suburb. Homegrown stores owned by Reliance Industries Ltd. have already cut his profit in half.

India's biggest company by market value is ``trying to drive us out of business by offering cheap rates,'' said Pukar, who sells mangoes and pomegranates from his cart a kilometer from where a Reliance Fresh convenience store recently opened.

Investors concerned that Reliance Chairman Mukesh Ambani's lack of retail experience will be a handicap should think again. The Mumbai-based company is investing $6 billion in the stores, supported by record profits from operating the world's third- largest oil refinery. The stores are opening as India's retail sales surge, rising as much as 35 percent a year driven by a burgeoning middle class.

The supermarket chain's sales will reach $25 billion by 2011, Reliance forecasts, more than its total revenue last year. The growth, combined with profits from oil, will drive Reliance shares to 2,060 rupees ($51) in the next 12 months, Goldman Sachs Group Inc. analysts said in a June 18 note. That would be a 21 percent gain from yesterday's closing price.

``They have entered a virgin area, very, very early, which is growing at a phenomenal pace,'' said Chakri Lokapriya, who manages $470 million in shares, including Reliance, at BNP Paribas Asset Management U.K. Ltd. in London.

Reliance shares are up 34 percent already this year, giving the company a market value of $59 billion. The company's net profit reached 109 billion rupees in the year ended March 31.

Competition

Reliance is getting into the market before Wal-Mart, the world's biggest retailer, because the Indian government doesn't currently allow foreign companies to open supermarket chains in the country. Carrefour SA and Tesco Plc, Europe's biggest food retailers, have also expressed interest in entering the market. Retail outlets owned by foreign companies that sell only a single brand of products are permitted.

The Indian government has commissioned a study about the impact of large retailers on the nation's economy before making a decision on allowing foreign investment in retail. The results are expected to be released within months.

Wal-Mart is instead exploring a wholesaling joint venture with India's Bharti Group, controlled by billionaire Sunil Mittal. Wal-Mart aims to sell goods to retailers, including the small store owners, to help them ``lower costs and increase profits,'' wrote Kevin Gardner, a spokesman for the Bentonville, Arkansas-based company, responding to questions in an e-mail.

The jockeying comes as economic growth in India is creating a large middle class. By 2010, there will be 65 million middle- income households, up from about 40 million last year, according to McKinsey & Co. estimates.

Jostling for Space

``The economy is growing by more than 9 percent and even if Reliance takes between 20 percent to 25 percent market share of the organized retailing, they will still have a very huge business,'' said Suhas Naik, who manages the equivalent of $100 million in stocks, including Reliance Industries, at IL&FS Ltd. in Mumbai.

For now, most produce shopping takes place on street corners where pushcart vendors jostle with each other for space. The vendors shout out what they have on offer to lure customers --who then elbow each other to pick the best vegetables from wicker baskets lying on the ground. Such outlets control 96 percent of the country's retail market, according to New Delhi-based consulting firm Technopak Advisors Pvt.

Reliance and other retailers, such as Pantaloon Retail India Ltd., want to change all that. Reliance's stores sell vegetables, fruits and even flowers used for offerings to Hindu deities under one roof. The stores also sell staples such as sugar and rice for less than the neighborhood stores.

Avoiding the Heat

Reliance, which opened its first store Nov. 3, is reaping its home-court advantage to grab more shoppers like Kavita Gupta. Gupta enjoys the unaccustomed pleasure of shopping in an air- conditioned store.

``The shopping experience has become much better, I can avoid the heat outside and can get most of the stuff I need under one roof,'' Gupta, 37, said.

Other companies are following suit: Bharti Group and Aditya Birla Group are among other companies that are starting nationwide retail chains. Reliance spokesman Tushar Pania declined to comment on the company's plans.

`Total Starvation'

Street vendors and some politicians are fighting the trend. The Indian government's communist allies oppose any opening to overseas retailers on the grounds that it will displace small retailers and hurt the livelihoods of those who work there.

India's Congress Party, which leads the ruling coalition, wants to have safeguards in place before it allows foreign investors greater access to the nation's retail industry, which accounts for about 7 percent of the Indian workforce.

Others have taken a more violent approach. A group of protesters belonging to the Indian Justice Party stoned a Reliance store in New Delhi last month.

``We feel that big companies shouldn't enter the retail business be it Indian or foreign,'' said Udit Raj, chairman of the party, in an interview in New Delhi. ``Small vendors are facing total starvation.''

Reliance Fresh outlets in Ranchi, in eastern India, and Indore in central India have been attacked by traders. On May 27, vegetable vendors held a one-day strike to protest the opening of Reliance Fresh stores. Traders also went on protest marches in the western city of Ahmedabad against retail chains, the Press Trust of India reported.

As for Pukar, he's not optimistic that either the country's cart vendors or the nation's consumers will win. He said, ``once we are gone, Reliance will raise the prices.''

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Woman Files Beef Lawsuit Against Tyson & Wal-Mart

By Janie Gabbett,
The Cattle Network
July 5th, 2007                                        [back to top]

A Muskogee, Okla., woman is filing a lawsuit against Wal-Mart and Tyson Foods Inc. alleging hamburger meat she purchased made her sick, according to a local media report.

KOTV in Tulsa said Melinda Pierce filed the complaint after she had bought some Tyson hamburger meat at the Muskogee, Okla., Wal-Mart on June 4, ate it and fell.

Last month, Tyson foods voluntarily recalled packages of ground beef made in its Sherman, Texas, plant on June 2nd and sent to Wal-Mart stores in 12 states, including Oklahoma.

Tyson foods spokesman Gary Mickelson told Meatingplace.com the company has not been contacted nor have they seen the lawsuit. "If she contacts us, we certainly will be glad to look into it," he said.

Wal-Mart told KOTV it has not seen the lawsuit, but that food safety is a priority.

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Newberry Twp. officials: Strong support for proposed Wal-Mart Supercenter, strip mall project

By CHARLES SCHILLINGER,
The York Dispatch
July 5th, 2007                                           [back to top]

A project that includes a Wal-Mart Supercenter and other stores is headed to the Newberry Township supervisors for conditional use approval.

Plans are still in preliminary phases, so there aren't many details yet.

However, a spokesman for Wal-Mart, Jim Davis, confirmed a store is planned for the township.

The store would be part of a strip mall off Pleasant View Drive and Old Trail Road, near Interstate 83.

Along with a Wal-Mart and adjoining stores, the mall would include several free-standing commercial buildings that typically house banks and restaurants.

If approved by the township, the Wal-Mart store would become the sixth to land in York County. Two other plans are still in play in Windsor and Carroll townships.

Both of those stores have met with opposition. But as of now, that hasn't been the case in Newberry Township.

Supervisor Chairman George Knoll said he's seen no opposition forming to date, and added he supports retail businesses moving to the township.

"If you live here, either you drive 18 miles Advertisement one way, or 12 miles the other way to get to a store," Knoll said, of the township that sits between Harrisburg and York. "With gas $3 a gallon or close to that, this is an opportunity for people in the township to get what they need and not travel all over the countryside."

'Oh, boy': Township manager Donald Keener said even with recent publicity, the office has not received much interest in the municipal process or in preventing Wal-Mart from building in Newberry Township.

"The general feeling I've gotten is that most everybody has been, 'Oh, boy, great, we're getting a Wal-Mart, a shopping center close to home,'" Keener said. "I'm sure there's other people that feel differently out there, but that's what I've heard more than anything else."

Davis said it's well known there are citizens' groups that don't like Wal-Mart and other big chain stores. But sometimes, it works out that the company and community are in agreement about the need.

"Sometimes, the fear of the unknown takes over, and citizens don't give Wal-Mart or other retailers a chance to present their case," he said. "Then there's some who greet Wal-Mart with open arms, and they realize the positive effects on the economy and tax revenues."

As plans are still new, there's been no determination as to the size of the store, but Davis said Wal-Mart Supercenters typically employ between 250 and 500 people. A Supercenter is a Wal-Mart that sells grocery products; there is no set size for Wal-Mart Supercenters.

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Public process betters Northcross Wal-Mart

The Austin American-Statesman.
July 5th, 2007                                                [back to top]

In certain Austin precincts, the hottest issue going is Wal-Mart's plan to build a Supercenter in the aging Northcross Mall on Anderson Lane.

Lincoln Property Co., which owns the moribund mall, is renovating the east end of the facility for new tenants. The west side will be demolished to make room for the first of Wal-Mart's two-story urban Supercenters, which includes a garden section.

Some North Austin residents, who organized as Responsible Growth for Northcross, oppose Lincoln Property's plan and the Wal-Mart. Last week, the group sued Lincoln Property and the City of Austin, arguing that the city's approval of the site violates city regulations.

The lawsuit notwithstanding, the public process worked to change the project for the better. Concerned neighbors and involved city officials persuaded Wal-Mart to radically alter its plans for the Northcross store.

Original plans were for a 225,000-square-foot store, operating 24 hours a day, with a gas station and a tire and lubrication station on site. The plan approved last month is for a store of 192,000 square feet that will close from 1 to 5 a.m. most of the year. The gas station and lube center are gone, too.

Assistant City Manager Laura Huffman said the company also plans other changes to enhance the property. They include an attractive façade, outward-facing stores and a more pedestrian-friendly look.

None of that had to be done, Huffman explained, because Lincoln Property came to the city with a fully entitled site plan that needed no variances or exceptions. After neighbors raised an alarm, however, Lincoln and Wal-Mart went back to the drawing board and presented a plan with changes to appease the neighbors. That plan went through the city approval process, too.

A traffic study completed after the project was scaled back found that traffic shouldn't overburden the streets and intersections. It predicts about 20,000 cars a day in and out of the mall, compared with 8,000 a day now.

As the lawsuit attests, however, not all the neighbors are pleased with the changes or believe that traffic won't be a problem. Some will not be mollified no matter what Wal-Mart does because it's an international corporation with entrenched opponents. Others want a much smaller development at Northcross than Lincoln proposes.

But there are probably just as many residents who will be pleased with the project when it's completed. Lincoln and Wal-Mart plan a major upgrade for the failing mall, including new restaurants, a fitness center and a pharmacy, among other amenities.

An attractive Northcross Mall should fit in with the neighborhood around Anderson Lane and Burnet Road, even improve it. Obviously, not everyone will be won over by the renovation, a scaled-back Wal-Mart and the process that begat them. But Wal-Mart and Lincoln listened to neighborhood concerns and designed a smaller, friendlier Wal-Mart and additional improvements in the renovation. The wrangling also resulted in major changes in the way the city examines major developments.

Because of the uproar over the Northcross Wal-Mart, the City Council now requires that any development of more than 100,000 square feet go through a special permitting and public hearing process. The council also widened the area in which residents must be notified about large projects to a mile.

Out of all this, Northcross gets a face-lift, Wal-Mart gets a more central location, shoppers get more choices and the city gets higher sales and property taxes. In short, the process worked to the benefit of most — though not all — involved.

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Retail giant seeks a sweeter deal to put a Supercenter in Newtown

By CATHY ZOLLO,
Herald Tribune 
July 5th, 2007                                      [back to top]

SARASOTA -- Wal-Mart is asking the city of Sarasota to sweeten the deal to put a Supercenter in Newtown.

A memo from Wal-Mart real estate manager David Roetto outlined how the city could urge Wal-Mart to move forward with the project, which has been stalled for several months while the retail giant re-evaluates it.

His proposal includes:

More city money for the environmental cleanup that is needed on the land selected for the store, which was once a city-run garbage dump.

A promise from the city to hold $3 million in real estate contracts along U.S. 301 until after the store is complete to make the project look better on paper.

Less going to the community from the $1.6 million in rebates Wal-Mart would get for developing in an enterprise zone and for cleaning up the site.

The retailer had promised to donate all the money to local organizations.

Wal-Mart is scheduled to make a presentation to commissioners either this month or in August, but commissioners were split on whether to proceed with talks.

At least two of them are moving beyond Wal-Mart entirely.

"It's unfortunate for the community because obviously there is a lot of support," said Commissioner Kelly Kirschner, who plans to contact Trader Joe's, a discount grocery chain that favors organic products.

Wal-Mart officials declined to comment on recent happenings with the Newtown deal.

The retailer raised hopes for almost two years that it would plant one of its stores in northern Sarasota and revitalize the community around it.

The plan would have turned a polluted former dump and some nearby property into a magnet for enterprise.

But beginning in April, the retailer began signaling that all was not well with the deal, and that profit numbers did not meet the company's expectations.

That is when Wal-Mart came back to the city asking for more.

Commissioner Fredd Atkins, who represents the district where the proposed store would sit, also said he wanted to start looking for a different taker for the site.

Roetto's letter does not ask the city to do anything about the upcoming minimum wage referendum, but Wal-Mart is concerned about it nonetheless, said John Hawthorne, the city's Newtown Redevelopment Director.

In response to thousands of petition signatures, city commissioners in March approved putting a citywide minimum wage referendum on the November ballot. It lets voters decide if Sarasota businesses with 50 or more employees that receive at least $100,000 in city subsidies will be required to pay an hourly rate more than $3 above the state minimum wage.

If it passes, it guarantees for up to five years at least $9.93 an hour for workers at those companies. That is the poverty level for a family of four, according to the federal government.

Also at the top of Wal-Mart's list of concerns is the potential cost to clean up lead, arsenic and pesticides on the 18-acre site at the corner of U.S. 301 and Dr. Martin Luther King Jr. Way.

The city had already promised that its $4.9 million profit from selling the land to Wal-Mart will pay for the cleanup, and the city committed another $2.8 million -- a total of $7.7 million -- should the cost exceed the city's initial outlay.

As a cushion, the retail giant wants the city to sell part of the land that will hold a retention pond to the Florida Department of Transportation.

The state agency would then be responsible for building the pond and paying for its cleanup.

The project is at the bottom of a list of 40 similar ones in terms of how profitable Wal-Mart thinks it will be, according to internal city documents.

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Sam's Club Taps Finance Chief

By KRIS HUDSON,
Wall Street Journal
July 5th, 2007                                         [back to top]

Wal-Mart Stores Inc.'s Sam's Club membership-warehouse division named Liz Kirkwood its top financial officer. Ms. Kirkwood succeeds Sam Dunn as senior vice president of finance. Mr. Dunn left last month to serve as chief administrative officer of Wal-Mart's Japanese division, Seiyu Ltd. He had been Sam's Club's finance chief since 2002. Ms. Kirkwood, 41 years old, joined Wal-Mart's international operations as finance director in 2002. In 2005, she was named vice president of finance and accounting, risk, benefits and administration for Wal-Mart at its Bentonville, Ark., headquarters. Prior to moving to Sam's Club, she served as vice president in Wal-Mart's Global People Division. Sam's Club operates 580 clubs in the U.S. and posted $41.6 billion in sales last year.

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Wal-Mart Critics Leave Group

Associated Press News
July 5, 2007                                 [back to top]

The most aggressive of two union-backed groups campaigning since 2005 against Wal-Mart Stores Inc.'s business practices will lose its two top figures to the Democratic presidential race.

WakeUpWalMart's director Paul Blank and spokesman Chris Kofinis are expected to join the campaign of former U.S. Sen. John Edwards, Edwards' advisers said Thursday. A deal is not yet final but is expected to be completed in the next few days, they said.

Kofinis also said the deal was not done but added that WakeUpWalMart.com will continue and will become more aggressive in attacking the world's largest retailer over issues such wages, health care and global outsourcing.

Some analysts said the departure may be a signal of a weakening in the two-year-old union effort to pressure Wal-Mart from the outside after failing to unionize its stores.

WakeUpWalMart.com is one of two political campaign-style groups launched in 2005 by unions in an effort to harness public opinion to shame Wal-Mart to improve wages and benefits. The other is Wal-Mart Watch.

Wal-Mart maintains that its pay and benefits are competitive. Since the union campaigns started, the company has beefed up its public relations efforts, hiring more in-house staff as well as outside firm Edelman while launching a range of initiatives from lower-priced health insurance to environmental programs.

"We wish them well," Wal-Mart spokesman Dave Tovar said about Blank and Kofinis. "As always, our focus is on serving our customers and helping them save money so they can live better."

WakeUpWalMart.com, funded by the United Food and Commercial Workers, is widely seen as the more aggressive of the two groups. It has run television ad campaigns, held a national protest bus tour last year and garnered public support from Democratic presidential hopefuls including U.S. Sen. Barack Obama and Edwards, a former vice presidential candidate.

"WakeUpWalMart were always a little more aggressive. Blank and Kofinis were the opposition" for Wal-Mart's public relations efforts, said independent filmmaker Ron Galloway. Galloway was formerly a member of a pro-Wal-Mart advocacy group called Working Families for Wal-Mart that was organized on the retailer's behalf by Edelman.

Galloway said he had always expected Blank and Kofinis to move back to presidential politics after their stint with the union's anti-Wal-Mart effort.

Blank was political director for Howard Dean's 2004 Democratic presidential campaign, and Kofinis is a former political science professor who helped draft retired U.S. Army Gen. Wesley Clark into the same race.

Corporate reputation expert Steven Silvers said the move may signal that the union campaigns are reaching an end, with little new ground to cover after criticizing Wal-Mart for two years.

"At some point an activist group has to ask itself if it's preaching to the choir," said Silvers, from the Denver-based consulting company GBSM Inc.

"What they're doing is going from rhetoric to relevance," Silvers said. He said Blank and Kofinis can have more impact on Wal-Mart from the national platform of the presidential race.

Whether the union groups' publicity campaigns are driving shoppers away from Wal-Mart is a matter of debate. They claim they are persuading people not to shop at Wal-Mart, while Wal-Mart says a poll it commissioned found virtually no impact.

A March report by Banc of America Securities said union campaigns are beginning to hurt Wal-Mart's operations, but said the degree of impact was difficult to quantify.

© 2007 The Associated Press. All rights reserved.

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Lawsuit: Ground beef had E. coli

By DAVID IRVIN,
Arkansas Democrat Gazette
July 4th, 2007                                              [back to top]

A Muskogee, Okla., woman filed a federal lawsuit against Wal-Mart Stores Inc. and Tyson Foods Inc. on Monday, claiming that beef she purchased in early June gave her E. coli poisoning.

In her filing in U. S. District Court in the Eastern District of 0, 000 pounds of beef sold to Wal-Mart in 12 states — including Oklahoma — on E. coli concerns. The recalled ground beef was not labeled as Tyson product, according to information on the U. S. Department of Agriculture Web site.

However, Pierce believes the beef she purchased from Wal-Mart was from Tyson because of similarities between the product she purchased and descriptions of the packaging provided by Tyson in recall notices, the filing said.

At the time of the recall, Tyson said there had been no reports of illness, and on Tuesday both Tyson and Wal-Mart reiterated their commitments to food safety. “We did not know of this claim until Monday when we were contacted by a Tulsa TV station,” Tyson spokesman Gary Mickelson said in an e-mailed response. “We’ve since received a copy of the lawsuit and intend to investigate this matter.” Pierce said she has suffered pain, nausea and distress of her liver, kidneys and intestines, and has remained in the hospital since June 8, according to the filing. Pierce is suing the two Arkansas companies for negligence in handling and inspecting the meat and for failing to protect the public in the recall, the filing said.

John Simley, a spokesman for Wal-Mart, said the recalled meat was immediately removed from its meat cases in early June and a computer block was placed on the product so it couldn’t be sold. Simley also said the Bentonville retailer had not been served the lawsuit yet and he wasn’t aware of any other complaints of illness because of the recalled meat. He declined to comment on the suit.

The June 8 recall was comparatively small compared with other E. coli recalls occurring across the country at that time, including a 5. 7 million pound recall in Western states by United Food Group. There have been eight E. coli-related beef recalls in the United States already this year, though government officials recognize no trend or connection between them. A spokesman for the USDA’s Food Safety and Inspection Service could not be reached by phone for comment on Tuesday to confirm the illness. Pierce’s husband, Jim, is also seeking damages for disrupting “marital relations” with his wife, the filing said.

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Woman Kicked Out of Wal-Mart After 911 Call

AP
July 4th, 2007                                                  [back to top]

A Wichita woman is told she can never come back to a Wal-Mart where she summoned police after hearing a young girl who was getting her ears pierced crying and screaming.

Marilyn Johnson said she was issued a warning for tresspassing and then thrown out of the Wal-Mart after the incident Sunday.

Johnson said she called 9-1-1 after trying to talk to the girl's mother and the employee who was doing the ear piercing. She said the girl who she thought was about five years old was "crying her eyes out."

The 53-year-old Johnson said the women did not respond to her and continued trying to pierce the girl's ears. Johnson said she reported what she suspected was child abuse.

But Wichita police said the girl's mother and the employee were not breaking any laws.

Kansas law requires written and notarized consent from a parent or legal guardian before someone under 18 can get a body piercing or tattoo. The law does not say whether piercings or tattoos can be forcibly administered.

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S.E.E. Change? S.E.E. Change Go Slow

Andrew T. Gillies,
Forbes
07.03.07                                                 [back to top]

Two years ago, big business unveiled a splashy environmental campaign. Here's how things are going.

As interest in all things green has surged, business groups in Washington have jumped cheerfully in. But as one association's initiative illustrates, these high-profile efforts aren't without risks.

In September, 2005, chief executives from Dow Chemical, Sun Microsystems, Xerox and three others joined then Senate Majority Leader Bill Frist at an event near the White House to tout a new initiative called S.E.E. Change.

Sponsored by the Business Roundtable, an advocacy group representing 150 bosses of big companies, the initiative set out to burnish business "as a force for good" in matters of society and environment. Along with the event, the Roundtable took out full-page ads in several big newspapers and won widespread press coverage, including an item on Forbes.com.

In Pictures: A Gallery Of Green Spin The progress so far? S.E.E. Change (which stands for Society, Environment and Economy) has added 10 new members to a founding roster of 18 companies who committed to showcasing and tracking their sustainability efforts. Not an insignificant increase, but a long way from the S.E.E. objective of getting all 150 Business Roundtable companies on board.

"It's an aspirational goal," says Marian Hopkins, director of public policy for the Business Roundtable. "[S.E.E. Change participants] can be great advocates to other member companies."

Let's hope. As it's set up now, S.E.E Change has little organization heft. Part of the Roundtable's task force on environment issues, S.E.E Change has no separate budget or staff. "The main movers and shakers are the companies themselves," explains Hopkins.

On its own, that moving and shaking looks laudable enough. Eastman Kodak, for example, is looking to cut greenhouse gas emissions by 20% by the end of next year. Eli Lilly has pledged to reduce its purchases of hazardous materials by one-third by 2010 (from a baseline year of 2003).

But leaving companies to decide their targets and benchmarks won't placate certain folks in an energized environmental community. "Voluntary standards are just that: voluntary," says Erich Pica, director of domestic policy efforts with Friends of the Earth. "If they're serious about this, let's start setting minimal standards, and let's start moving them forward through the regulatory process."

If regulators do become more active, S.E.E. Change seems unlikely to appease them. Despite an emphasis on measurement, the initiative has no uniform metrics. As presented at the initiative's Web site, goals differ widely in substance and time horizon.

And with no standardized measure of progress, visitors to the S.E.E. Change site have to do an awful lot of clicking to find information on how goals are being met. S.E.E. Change profiles for each company vary in specifics listed. Most are flattering to the company, and only one, Caterpillar, gives much detail on its annual progress on S.E.E. Change goals.

Hopkins defends S.E.E. Change on the issue of metrics. "We worked really hard on that in the beginning," she says, noting that the Roundtable found it impossible to come up with one measure applicable to such a diverse group of businesses. Indeed, as we noted in our September 2005 story, one rationale for forming S.E.E. Change was to underscore the futility of broad benchmarks. Moreover, adds Hopkins, diversity of undertakings should be construed as a strength, not a weakness.

Another possible pitfall: consequences. S.E.E. Change faces no consequences for falling short of commitments. Hopkins argues that mere lack of exposure suffices. "The consequences are in the fact that the information is not up there for the world to see," she says.

Maybe. But an initiative without teeth may serve to tick off enviros and their friends in Congress, particularly if companies do miss their targets with no repercussions. Consider also the simmering frustration with corporate "greenwash"--the perception that a company overstates its environmental bona fides for public relations purposes.

"It may be that those who are arguing regulatory approaches say, 'Look, this just proves these guys can't or won't improve on their own,'" says Roger Ballentine, former Clinton Administration official and head of business consulting firm Green Strategies.

On the other hand, Ballentine, who has counseled clients such as Wal-Mart and SAIC on environmental matters, says companies can claim they'll face consequences in the stock market, as shareholder activists and others pay more attention to these matters.

And, at the very least, sometimes something is better than nothing. Says Ballentine: "Anytime companies acknowledge that sustainability and these kinds of issues require high-level attention, that's a good thing."

For now, S.E.E Change hasn't hurt its member companies' performance in the marketplace. Annualized over the last two years, shares of publicly-held S.E.E. Change member companies have averaged at 16% total return, just ahead of the S&P 500's 15%.

S.E.E. Change Member Annualized Total Return (Two Years)

American Electric Power 17%

Caterpillar 31%

Citigroup 11%

Coca-Cola 12%

Convergys 37%

E.I. Du Pont De Nemours 8%

Eastman Kodak 6%

Eaton 27%

Eli Lilly 3%

Fannie Mae 11%

FPL Group 26%

General Electric 5%

General Motors 2%

HSBC Holdings 12%

ITT 22%

McGraw-Hill 31%

Office Depot 24%

Pfizer 0%

Procter & Gamble 9%

Siemens 39%

Sun Microsystems 16%

Weyerhaeuser 15%

Xerox 15%

Prices as of June 18, 2007. Source: FT Interactive Data, via FactSet Research Systems.

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Russian property developer poised to bring Wal-Mart to Russia

RBC,
03.07.2007                                               [back to top]

The Russian property development company Macromir, which is being fostered by Andrei Rogachev, a founder of the Pyaterochka retail chain and shareholder of X5 Retail Group, intends to bring the global retail leader Wal-Mart to Russia. Macromir reported on Monday that it has been in partnership talks with the US-based retailer since May. If the companies reach an agreement, then either Wal-Mart will lease facilities in shopping complexes, which Macromir has already started building, or the Russian company will do construction especially for Wal-Mart. Market participants, however, doubt that Wal-Mart has already made a final decision to enter the Russian market, because otherwise the chain would be holding talks with several companies at the same time, the RBC Daily newspaper wrote today.

A source close to the negotiations explained that the discussion is about Wal-Mart arriving on the Russian market in the hypermarket format, which means that the stores will have an area of around 20,000 square meters.

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Attorney: Wal-Mart Collected On Deaths

By ELAINE SILVESTRINI,
The Tampa Tribune
July 3rd, 2007                                          [back to top]

TAMPA - When Karen Armatrout died in 1997, her employer, Wal-Mart, collected thousands of dollars on a life insurance policy the retail giant had taken out without telling her, according to a lawsuit filed in U.S. District Court.

Armatrout was one of about 350,000 employees Wal-Mart secretly insured nationwide, said Texas attorney Michael D. Myers, who estimated the company collected on 75 to 100 policies involving Florida employees who died.

Myers is seeking to make the Armatrout lawsuit a class-action case on behalf of the estates of all the Florida employees who died while unwittingly insured by Wal-Mart.

"Creepy's a good word for it," Myers said. "If you ask the executives that decided to buy these policies and the insurance companies that sold them, they would say this was designed to create tax benefits for the company, which would use the benefits for benevolent purposes such as buying employee medical benefits.

"If you asked me, I would say they did it to make more money."

Wal-Mart spokesman John Simley said he could not comment because the company has not been served with the lawsuit.

The company settled two lawsuits with employees represented by Myers in Texas and Oklahoma, one for about $10 million and one for about $5 million. He said Karen Armatrout came to his attention when Wal-Mart mistakenly gave her husband's phone number to an Oklahoman who called the retailer inquiring about the settlement.

Myers said he also has filed a lawsuit against Wal-Mart in Louisiana.

Payouts Up To $80,000 Richard Armatrout, who is retired, does not want to speak publicly about his case, Myers said. Armatrout did not respond to a message left by the Tribune.

Karen Armatrout was 50 when she died of cancer, said Myers, who said she had worked several years in the pharmacy of the store on West Waters Avenue.

Myers said the policy payouts ranged from $50,000 to $80,000, depending on the person's age and gender. They were taken out on all full-time Wal-Mart employees who, in December 1993, were between ages 18 and 70 and participated in the medical benefits plan.

He said the company stopped taking out the policies in 1995 but continued to receive payouts on employees who died, even those who had left Wal-Mart.

Wal-Mart, which said it canceled its policies in early 2000 because it was losing money on the arrangement, says the program was intended to reduce its income taxes to help pay rising employee health care costs. Workers were notified and given the opportunity to opt out, the company said. The Armatrout lawsuit says the policies were all written in Georgia, where the laws allowed such policies to be obtained.

The lawsuit says Wal-Mart used confidential information it received from employees for use in their employment, such as Social Security numbers and dates of birth, to obtain the life insurance policies.

Myers said this corporate practice is not uncommon. He estimates that up to 25 percent of Fortune 500 companies have taken out such policies on employees. The vast majority of the time, the employees didn't know, Myers said.

The practice evolved over time, Myers said. Corporations started by taking out large life insurance policies on key executives, getting tax breaks when they paid the premiums and collecting the payouts.

IRS Not Pleased, Attorney Says The amounts of those policies grew to the point that Congress limited how much a company could insure an individual for, Myers said.

Insurance companies then suggested buying lots of small policies on companies' work forces, the attorney said. He said the Internal Revenue Service has labeled the practice a sham and has successfully litigated the issue against several corporations.

Myers said his law firm has sued corporations for the practice, including Winn-Dixie and Fina Oil and Chemical. The latest case is its first in Florida.

The practice spread beyond top executives in the 1980s when the industry successfully lobbied states to allow employers to claim an "insurable interest" in the lives of rank-and-file workers.

Many employers seized on the practice because they could borrow against the policies, and the interest paid was tax-deductible.

Congress closed that loophole in 1996, but COLI - corporate owned life insurance - remained a popular investment strategy.

The chief appeal was that interest accrues over time on the money in such policies. When a worker dies, the employer collects without paying taxes on the gain.

In 2001, premiums on such policies swelled to $2.8 billion from $1.5 billion the year before, according to a report by CAST Management Consultants of Los Angeles.

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AMA urges probe of in-store clinics

By Bruce Japsen,
Chicago Tribune
July 2nd, 2007                                         [back to top]

In an attempt to ratchet up scrutiny on the proliferation of in-store clinics being opened by retail giants, the American Medical Association said last week that it will ask state and federal agencies to launch widespread investigations into the fast-growing patient-care model.

The AMA's policymaking House of Delegates, meeting in Chicago, said lack of regulation at retail clinics might be fostering liability concerns, health risks and potential conflicts of interest between the clinics' nurse practitioners who order prescriptions and the pharmacies that fill them. Often, the clinic is near the pharmacy counter in those retail stores. The AMA, the nation's largest doctor group, is reacting to moves by retailers such as Wal-Mart Stores Inc. and Deerfield-based Walgreen Co. that will effectively bring several thousand retail clinics to U.S. consumers in the coming years. One retail clinic operator run by giant CVS/Caremark Corp. was concerned enough about the AMA's clout on the issue that it deployed an executive here to defend its interests.

AMA action on such topics means the group and its affiliated state societies will push for increased regulation and attempt to slow the growth of the clinics. One clinic operator said last week the AMA's move would do just that and have an adverse effect by slowing a new concept that increases patient access to medical care and offers patients a convenient option.

"Our primary focus is patient safety and patient care, and the retail clinics have a different mission of selling products and prescriptions," said Dr. Rodney Osborn, a Peoria anesthesiologist who is president of the Illinois State Medical Society, an AMA delegation among the most outspoken on scrutiny of retail clinics. "We want these clinics to be accountable."

Even before the AMA's commitment to advocate for increased regulation, several state medical societies have been using their clout to push for new laws where retail clinics first popped up. In California, for example, store-based clinics are required to be a part of a medical corporation owned by a physician as part of regulations that doctors say have curtailed the spread of retail clinics there.

But retail clinic operators said last week that the AMA's move is more of a protectionist measure to put the interests of physicians ahead of patients.

By following the AMA's lead, "medical societies would actually be taking actions that would decrease access to care by putting more regulatory hurdles and burdens on the [retail] facilities," said Dr. Rebecca Hafner, an AMA member and medical director of strategic alliances for MinuteClinic, a subsidiary of CVS/Caremark, which operates nearly 200 retail clinics. "The net result of this is that it will make it harder for companies to open clinics."

Most clinics are open seven days a week with no appointment needed. They treat patients with routine maladies and are under physicians' supervision, though doctors usually are not on site. Most clinics are for ailments such as ear and sinus infections, strep throat and athlete's foot.