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Unpaid Teens Bag
Groceries for Wal-Mart
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.
[back to top]
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."
[back to top]
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.
[back to top]
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."
[back to top]
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.
[back to top]
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).
[back to top]
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.
[back to top]
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."
[back to top]
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.
[back to top]
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 pe | 
