Article

Wal-Mart looks to Hispanic market

Citigroup cuts Wal-Mart to hold on card check concerns

Japan Today
March 31st, 2009                    [back to top] 

Supermarket chain operator Seiyu Ltd posted a net loss of 25.79 billion yen for the year ended in December 2008 as it remained mired in the red for the seventh straight year, according to earnings results posted in a government gazette Monday. As part of its restructuring steps announced in September, the company will shut down 12 more stores as of Tuesday to stem ballooning losses due to sluggish spending amid the recession, company officials said.

The firm also reported an operating profit of 156 million yen and logged a pretax loss of 4.76 billion yen on interest and other expenses. In addition to nine stores that have already been shut down, the latest step to close another 12, including one in Iwamizawa, Hokkaido, will nearly complete its plan to eliminate around 20 stores, or about 5% of its outlet network, by mid-2009.

Seiyu has been trying to get back on track since entering its capital tieup with Wal-Mart.

Sales have shown signs of improvement since late last year after Seiyu launched aggressive price-cutting campaigns, increasingly popular among price-conscious consumers, a Seiyu official said.

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The face of our movement

David Nassar
Wal-Mart Watch              [back to top] 

The photos keep coming in, and our movement to support Wal-Mart workers looks stronger than ever.

Last week I asked you to submit pictures of yourselves holding up a sign that says "I Support CHANGE for Wal-Mart Workers." The response has been terrific, and it shows that people across the country care about the way Wal-Mart treats its 1.4 million employees.

But our statement will be even stronger if you join in and submit a photo of your own. We'll forward all the pictures to real Wal-Mart workers, so they can see that the American people are standing with them as they deal with low wages, poor health benefits, discrimination, and dangerous working conditions.

Take a minute to submit your photo right now:

http://action.walmartwatch.com/photo

Whether it is Aubretia Edick in New York, intimidated workers in Jacksonville, Texas, or 1.6 million current and former female employees who are fighting Wal-Mart for discriminating against them -- Wal-Mart Workers need your support now more than ever.

Despite making billions in profits from the hard work of its employees, Wal-Mart refuses to pay a living wage, offer adequate health care plans, and provide a safe and fair work environment.

Wal-Mart gets away with it because its workers often have no other choice. They either accept Wal-Mart's poor treatment, or they have no job at all. No one should have to face this impossible choice.

Send a message to Wal-Mart workers everywhere that they have your support. Just a few minutes of your time could mean so much:

http://action.walmartwatch.com/photo

Over the years, your enthusiasm and involvement with Wal-Mart Watch has touched the lives of countless Wal-Mart workers all over the country.

All of us at Wal-Mart Watch are grateful for your support. Thank you so much for being part of this important movement.

Sincerely,

David Nassar
Wal-Mart Watch

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How Walmart Owns the Concept of Value Online

By Jack Neff ,
Advertising Age
March 30th, 2009                        [back to top] 

There aren't too many places where Walmart isn't dominant. The digital realm is one of the relative few, but not for long, as it ramps up a host of programs to vault the chain -- which has already distanced itself from value retailers in the offline world -- further ahead in the online one.

What makes Walmart's efforts so interesting is its ability to "own" the concept of value online. It launched free classifieds last year, and its site, thanks to its blogger outreach and online message boards, is already crammed with content about saving money that will only grow as it builds out Save Money Live Better, a portal for penny-pinching strategies. In fact, amid all the talk of how digital has allowed marketers to be their own creators and distributors of brand content -- some people would call this a media company -- perhaps no one has the potential to be as big a juggernaut as Walmart.

Suppliers Procter & Gamble Co. and Unilever, who used to bring digital and other marketing programs to Walmart, are now vying to piggyback on programs such as its ElevenMoms network of mommy bloggers or its SoundCheck digital-music initiative. It recently launched the release of the "Twilight" DVD almost solely with digital media and public relations. It's taking free classifieds on Walmart.com. And with a network of employees closing in on 2 million globally, the world's largest retailer is creating a fairly substantial in-house social network all its own.

"Digital has such an amazing role in how to help people on an emotional, logical and rational level. We want to use it to our full potential to help our customers," said Wanda Young, senior director-digital marketing at Walmart. Nonetheless, Ms. Young, who only joined the company in October, said the chain still has a way to go. "We are really just getting started in digital in helping build up our brand."

As of mid-March, Walmart had yet to finish a review to name its first digital agency of record. And the digital manifestation of its 18-month-old ad campaign, "Save Money Live Better," remains a work in progress.

Yet with its major competitors in value retailing -- such as Costco and dollar stores -- largely absent from digital media, Walmart stands to grab a much larger share-of-mind digitally than even its dominant share of wallet in the offline world. In that, it has the support of some heavyweight marketers.

Music, moms Soundcheck, a 3-year-old program, gained new life last year via a partnership with nine Unilever brands and substantial tie-ins to in-store displays. Unilever sponsored free downloads and streaming music videos from such artists as Beyoncé and the All-American Rejects at soundcheck.walmart.com and paired its products with new music releases in stores. The program from promo shop Lunchbox generated $26 million in sales for Unilever with a budget of between $1 million and $5 million, according to an entry in the Promotion Marketing Association's Reggie awards.

ElevenMoms, a mommy-blogger network that's already doubled to 22 bloggers and is still growing, also has become a conduit for programs from P&G's Pantene and Unilever's Suave, both handled by Rockfish Interactive, the Rogers, Ark., digital shop that created the ElevenMoms microsite.

But the highest-impact digital initiative yet for Walmart appears to be the recent launch of the "Twilight" DVD, which set a record for preorders on its website in March. Behind those sales was a social-media program that included a microsite for moms and daughters and an exclusive interview with "Twilight" cast member Taylor Lautner on Blog Talk Radio.

Among the newer initiatives is the internal social network created by Rockfish earlier this year where employees can share ideas and get answers to questions. The same service-oriented logic led it to offer free classifieds on Walmart.com -- one-upping Craigslist and Monster among others by making real-estate and job listings free. Walmart's strategy is to brand the retailer, drive traffic to the site and help customers at the same time, said Duncan Dreschel, director-customer engagement for Walmart.com. "We see part of our role as connecting customers to help each other," he said. "It also allows us to provide a more complete offering."

Already, Mr. Dreschel said, some people close deals struck on the website in the parking lot of their nearest store. How to further leverage that brick-and-click synergy has also crossed his mind. "We're looking at lots of things to make classifieds evolve," he said.

Walmart isn't entirely new to digital marketing. It's outspent most of its suppliers and rivals on online display for years, according to data from TNS. But the media buys often were made well before creative or even strategy had been discussed, said Kelly Mooney, president of Resource Interactive, Columbus, Ohio, which for several years has worked on a project based on Walmart's digital efforts. Now, however, digital is becoming more strategic for Walmart.

A Twitter search on "Walmart OR Wal-Mart" yields three or four new tweets every minute, many none too flattering. Walmart accepts this as part of the territory. "We do not see ourselves as trying to control what happens," Ms. Young said.

MOST IMPORTANT DIGITAL LESSON I'VE LEARNED You can't control what people say about you on the web, but you can be a good listener.

"The organic nature of the web means that when you are the world's largest retailer, people will talk," said Wanda Young, senior director-digital marketing at Walmart. "And we're OK with that. We believe the hallmark of a really great brand is that you are relevant. And part of the way you do that is listening to what your customers have to say."

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County Doesn't Want Wal-Mart Distribution Center Built

WFTV
March 30th, 2009                          [back to top] 

In this economy, with so many people hungry for work, Volusia County has joined the fight to chase away a big business.

Wal-Mart wants to build a new distribution center right at the Volusia-Putnam county line. The center would bring in hundreds of jobs, but Volusia County boils its answer down to one word: traffic.

Wal-Mart would bring hundreds of new jobs. It would also bring hundreds of new trucks that the county doesn't want.

A Putnam County field that produces nothing but potatoes is targeted as the new home for the massive Wal-Mart distribution center. The one-million square-foot complex could provide as many as 600 jobs, essential for a county the state labeled economically depressed.

"Everybody's looking for work. Everybody needs to work. And they need something around here to give people work. There's so many guys around here that's just doing whatever they can to get by," Pierson resident Tom Sowell said.

But because of the project's location, right up against the Volusia County line, the jobs are in jeopardy. Volusia County went in front of a judge Monday, with three nearby residents, to fight Putnam County and Wal-Mart.

"Why fight any effort to bring jobs into the area?" WFTV reporter George Spencer asked county spokesman Dave Byron.

"I think that's a very shortsighted way to approach this," he said.

Volusia County sees long term problems, primarily because the center would be 20 miles from the nearest interstate, meaning the 450 trucks coming in and out every day will use Volusia County roads.

Byron said it's also a quality of life issue for residents.

"Every five minutes they'll be looking at a trailer truck or have to follow a string of trailer trucks wherever they're going to go," he said.

The jobs would pay about $25,000 to $26,000 a year. The State Department of Community Affairs sides with Wal-Mart and Putnam County on this one. The hearings are expected to last all week.

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Alleged shoplifter sues Wal-Mart over forceful detention

By Kelly Holleran,
The Southeast Texas Record
March 30th, 2009                                 [back to top]  

A Port Arthur man has filed suit against Wal-Mart, claiming he was injured when store employees accused him of shoplifting and used force to detain him.

Michael Anthony Harris claims he was shopping at the Wal-Mart located at 4999 Twin City Highway in Port Arthur on March 13 and paid at a register in the back portion of the store.

Harris alleges he was leaving the store through its front entrance, when he was confronted by four Wal-Mart employees, including defendant David Treml.

The employees accused Harris of having items in his bags for which he did not pay, according to the complaint filed March 25 in Jefferson County District Court. Harris claims he immediately handed the bags to the employees.

"Plaintiff said, 'Just take the bag and let me go,'" the suit states.

However, the employees would not let Harris leave the store until police arrived, the complaint says.

Harris alleges workers then threw him to the floor and placed him in handcuffs.

"Plaintiff's arms were violently jerked as one of the employees secured Plaintiff with handcuffs," the suit states. "Defendants had no legal authority or justification to detain plaintiff."

According to the complaint, Harris asked the employees to release him from the handcuffs because of his pain, but the employees refused to do so until the police arrived several moments later.

When a police officer arrived, Harris claims the officer recognized the severity of his injury and immediately transported Harris to the hospital. Harris states he was told he had a dislocated shoulder.

Because of the incident, Harris claims he incurred medical costs and experienced physical pain and suffering, physical impairment, disfigurement, mental anguish and fear of a future disease or illness.

The plaintiff alleges Wal-Mart and Treml committed acts of negligencee, false imprisonment, intentional infliction of emotional distress, assault and vicarious liability.

Harris is seeking unspecified exemplary damages, pre-judgment interest at the maximum rate allowed by law, post-judgment interest at the legal rate, costs and other relief the court deems just.

He will be represented by Langston Scott Adams of Port Arthur.

The case has been assigned to Judge Milton Shuffield, 136th District Court.

Jefferson County District Court case number: D183-630.

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Ohio to review if Wal-Mart reneged on tax deal

Associated Press
March 28th, 2009                    [back to top] 

Economic development officials in Ohio say they will check whether Wal-Mart Stores Inc. violated terms of a tax agreement by closing an optical lab near Columbus.

Ohio gave the world's largest retailer a $1.8 million job-creation tax credit in 2001 on the condition that the company create and maintain jobs there.

Wal-Mart on Friday announced that it will close the lab, cutting 650 jobs. The lab makes eyewear for vision centers in Wal-Mart stores.

Kelly Schlissberg, a spokeswoman for the Ohio Department of Development, says the agency is reviewing its agreement with Wal-Mart to determine if the state can recoup money.

A message seeking comment was left Saturday for a Wal-Mart spokesman.

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Wal-Mart shuts down lab in Ohio

Associated Press,
03.27.09                             [back to top] 

Wal-Mart Stores Inc. announced Friday that it will shutter an optical lab in Ohio, cutting 650 jobs, as it looks to cut costs by fold its operations into facilities in Indiana and Arkansas.

The world's largest retailer said in a statement that eyewear orders previously sent to the facility in Lockbourne, Ohio, will be dispersed to labs in Crawfordsville, Ind., Fayetteville, Ark., and Dallas.

Wal-Mart (nyse: WMT - news - people ) also has contracts with Essilor of America and Carl Zeiss Vision, which both operate optical labs in the U.S. and Mexico.

Bentonville, Ark.-based Wal-Mart said the Indiana and Arkansas facilities will add a total of approximately 100 jobs.

"The decision, along with expansions and improvements to our other eyewear manufacturing facilities, will allow Wal-Mart to reduce costs and operate our optical business more efficiently," Volker Heimeshoff, divisional manager of health and wellness for Wal-Mart's U.S. division, said in a statement.

Wal-Mart said the employees who are being laid off will receive regular paychecks and benefits for the next 60 days and will be eligible for positions at area Wal-Mart and Sam's Club locations. Eligible associates will receive a severance benefit.

Copyright 2009 Associated Press. All rights reserved

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650 jobs lost as Wal-Mart shuts Lockbourne facility

By Tracy Turner,
THE COLUMBUS DISPATCH
March 27th, 2009                                 [back to top] 

Walmart is closing its optical lab on the South Side today and will lay off 650 workers, which will be central Ohio's largest mass layoff of the current economic downturn.

The lab, at 2525 Rohr Rd., processes eyewear orders for Vision Centers in Walmart stores. The company said today that it will continue to operate an optical merchandise distribution center at the same location.

Employees clutching layoff information packages consoled one another outside the facility today, some hugging and weeping.

George Wheeler, a seven-year employee who lives in Bexley said the company had addressed rumors about the future of their positions a couple of months ago, saying the facility wasn't going to close and jobs weren't going to be cut.

"It's a shock," he said. "They just hired people six weeks ago, and we got raises last month."

Company officials said the layoffs will allow the company to reduce costs and operate the business "more efficiently," said Volker Heimeshoff, divisional manager of health and wellness for Walmart U.S.

"While this is the right decision for our business, it is a difficult one," he said. "We know that we must focus on taking care of our Lockbourne associates and assisting them as they seek employment at other Walmart and Sam's Club facilities or with other employers."

The workers will be paid for the next 60 days and will be eligible for positions at area Walmart and Sam's Club stores, the company said.

The lab has a Groveport address though it is located in the village of Lockbourne near Rickenbacker Airport.

"Obviously, this is a terrible blow to that community," said Brian Harter, spokesman for the Ohio Department of Job and Family Services.

He encouraged Walmart workers to contact his agency about unemployment benefits, at 1-877-OHIO-JOB.

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Wal-Mart's Next Conquest: Latin America

Latin Business Chronicle
March 27th, 2009                        [back to top]

Last May, Michael Bergdahl, former director of human resources at Wal-Mart, told the First Global Forum on Customer Service in Santiago, Chile, “Our strategy of low prices has become a competitive advantage for us. So long as our competition focuses on how much they can get for their products, we focus on how little we can get for ours.” According to Bergdahl, this strategy generated revenues of about $13 billion in 2007, and in 2008, “we open a new store each day, and each week, 176 million customers buy from our stores.”

This year, disruptions from the global financial crisis have forced retailers to discard their earnings forecasts and alter their plans for investment and expansion. Nevertheless, Wal-Mart has emerged unscathed, and has even continued to grow. In February, the company announced its results for 2008, during which it registered $13.4 billion in income -- an increase of 5.2 percent from 2007. That’s quite an achievement in times like these.

CONQUERING LATIN AMERICA

Taking advantage of its strong performance in Brazil and Mexico, Wal-Mart has now undertaken the massive task of conquering the rest of Latin America. The company announced that this year, it will open stores in Argentina, Brazil, Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, Chile and Puerto Rico.

For Claudio Aqueveque, a professor at the business school of Adolfo Ibáñez University in Chile, the current recession represents an opportunity for Wal-Mart. “The problems our region is facing this year will lead to major changes in the behavior of consumers, associated with a greater sensitivity to price; and this means tuning in to [Wal-Mart’s] low-price strategy.”

Nevertheless, Jagmohan S. Raju, a professor of marketing at Wharton, warns that “Wal-Mart will have to face competition from local retailers who can operate on smaller margins and provide more personalized services than the U.S. retailer can offer.”

Alvaro Escobar, professor of economics and management at the University of Concepción in Chile, adds that Wal-Mart also could face barriers of a cultural and economic nature while expanding in Latin America. “Each country is a completely different market, with very dissimilar economic realities. So the great challenge for the multinational will be to figure out how to deal with the recession in each nation.”

CREATING DEMAND

According to Pablo Naranjo, a professor of business at the Adolfo Ibáñez University, income distribution in Latin America has deteriorated a great deal in recent years. “If the current crisis is affecting every layer of society, the most disadvantaged segments of the population are looking for more access to credit in order to stay afloat, especially when it comes to food.”

Naranjo adds, “Wal-Mart can be an attractive alternative for the population because of its leadership in [low] costs. But it will have to accompany its supply [of low-cost products] with options for credit, as it has done in Chile, for example.” He notes that when Wal-Mart recently bought D&S -- an important regional player that owns the Líder supermarket chain -- it set up a credit card known as the Presto Card, which can be used not only by consumers in Lider supermarkets but in other areas of business such as pharmacies, banking and travel agencies. “This approach would appear to be a good way to get closer to the reality of the country,” Naranjo says.

According to Aqueveque, Wal-Mart can take advantage of other opportunities related to the anticipated economic growth of the region. “Projections call for higher growth in developing countries [as a whole]. In fact, Wal-Mart’s financial results in Latin America in 2008 -- especially in Brazil and Mexico -- were quite positive compared with its operations in the rest of the world, so it seems to be a sure bet that the company will deepen its presence in the region.”

Nevertheless, Naranjo warns that in coming months Wal-Mart will have to overcome significant economic barriers. “With the economic outlook deteriorating, there will be less demand for products and services, and there are clear signs of rising unemployment, which affects consumers’ income. So, Wal-Mart will have to fight to maintain its plan [for expansion]. Along parallel lines, it will have to compete vigorously with other retailers that are already established in each country, and who are facing [their own] battle to survive these days.”

David J. Reibstein, professor of marketing at Wharton, agrees: “Although Wal-Mart is well-known for guaranteeing the lowest price on the market, it will face a tough competitive environment in Latin American countries because, in each one of them, it will have to create sufficient critical demand to justify a high volume and rotation of its products.” Given the current economic conditions, it will be very hard to achieve that, Reibstein notes.

MERGER POSSIBILITIES

According to Escobar, one of the most attractive opportunities for Wal-Mart is to grow by acquiring supermarket chains at competitive prices, as the retailer has done in Chile. In January, Wal-Mart bought 58.2 percent of the shares of D&S. “In the rest of Latin America, [Wal-Mart] will have to repeat the same strategy, or at least try to do so,” Escobar says.

Raju notes that “the crisis seems to be helping Wal-Mart but taking a toll on its competitors.” Naranjo agrees. “Without doubt, [Wal-Mart] has a great opportunity to take advantage of the credit-market collapse that other competitors have suffered from, and it can go on to make mergers and acquisitions, incorporating the financing solutions that those companies have already developed.”

Nevertheless, Naranjo says, this game involves some very tough practical challenges, such as managing a new company in a foreign language, installing more up-to-date business software, and maintaining the credit portfolios of local customers “who may be paying their bills later and later as a result of [rising] job losses in the middle and lower classes.”

Naranjo adds that if Wal-Mart manages to maintain the supply of credit offered by its “recently acquired competitors,” its strategy could work. “Credit generates forced loyalty; since the Latin American consumer today is not in a position to pay off his entire bill, he pays off only as much as he can. He continues to buy using credit; he continues to increase his debt, and he is forced to use credit again and again. In short, this source of credit is, in many cases, the only source [of credit] that people can currently obtain.”

ECONOMIES OF SCALE

Aqueveque notes that Wal-Mart also has in its favor the relative cultural homogeneity of the countries in questions. “This can be a positive thing for taking advantage of some product sectors and categories, and for generating regional economies of scale.”

Naranjo disagrees with that assessment, however. In his opinion, each country has its own pattern of consumption, and this will present an important challenge for the U.S. giant. “My impression is that Wal-Mart is still struggling to understand the Latin American consumer and his various ways of buying, which are constantly changing and depend a great deal on the economic instability of each country, which is exacerbated today by the global economic slowdown.”

For Wal-Mart to succeed in the region, “It must recognize the differences between consumers in each country, and stop thinking about Latin American culture as a single entity,” Naranjo says. “To achieve that, it will have to rely on the experience of its business partners in each country.”

POWER OF LOGISTICS

During the Chilean forum, Bergdahl said that logistics management has been a key factor behind Wal-Mart’s strong performance. This includes its modern distribution centers, its rapid turnover of inventory and its fleet of 7,000 trucks. “Our trucks arrived at New Orleans days before the U.S. government did, during the disastrous Katrina hurricane,” which battered the southern United States in August 2005, he noted.

Escobar agrees that Wal-Mart’s mastery of logistics is an important source of strength for the company. However, he argues that the retailer will need to pay even more attention to logistical elements if it wants to increase its presence in the Latin American market.

“The retailer’s business model, supported by its almost perfect logistics, will be difficult to emulate in our region,” Naranjo says. “Having a large number of shops and outlets [in Latin America] means facing a gigantic task in terms of managing assets.” One challenge he alludes to in particular is the delay in infrastructure development that characterizes Latin American countries.

REPLICATE STRATEGY

Aqueveque sees other opportunities for Wal-Mart’s growth. The giant retailer has successfully developed a multi-format strategy in its shops in Brazil and Mexico that it can replicate in other countries. This strategy involves moving into the supermarket business, shopping malls, department stores and financial services. In addition, “[Wal-Mart] can move into the pharmaceutical sector, as it has in the United States,” he says.

All that, says Naranjo, will mean significant costs for the retailer in terms of financing and human resources. However, Wal-Mart could compensate for that by achieving a high return on its investment while balancing the risks described above.

Bergdahl added during his Chilean forum presentation that “Wal-Mart manages to save its customers $2.5 billion in food costs each year, compared with other retailers.” Time will tell if the company will be able to provide the same benefit to its customers in Latin America.

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Recession Could Boost Wal-Mart's Home Push

By Mike Duff ,
BNET
March 27th, 2009              [back to top]

Wal-Mart not long ago began renovating its home furnishings departments, and it is making significant efforts to get consumer to take a hard look at what it can provide.

A couple of years ago, Wal-Mart did a deal to bring the Better Home and Gardens brand into the store. Licensed from the magazine publisher, it has become a core brand that provides the Wal-Mart line up with a fashion sensibility. Now, the retailer has launched a television advertising campaign to promote the brand and its ability to provide fresh looks for homes at affordable prices.

And Better Homes and Gardens isn’t the only home brand Wal-Mart is promoting these days. On Wednesday, Wal-Mart announced the launch a new home furnishings collection for teens dubbed Your Zone. Rolling out into stores nationwide and on Walmart.com, the bedding and furnishings included under the Your Zone umbrella were styled to be versatile and interactive in the sense that customers can mix and match elements to create their own interior designs. Bedding is available in bright patterns and reversible solids, and includes comforter sets priced from $28 to $40, sheet sets from $12 to $24 and window treatments for under $15. Your Zone also offers interchangeable rugs, pillows and throws, bulletin boards, display shelves and accessories. Furniture and lounge seating under the Your Zone brand launches in late spring.

Linda Hefner, executive vice president of home at Wal-Mart, said the Your Zone line “further strengthens our branded product offering. Teens love the fun products, and moms love the unbeatable prices,”

The mom part is probably to the point, as teens don’t aspire to decorate their rooms from discount stores quite as much as their mothers do, moms being more apt to consider the issue of price. Still, moves by Wal-Mart to add promotional elements like Twilight shops, which aligned with the DVD debut of the popular movie, are in part attempts to make it a cooler place to shop for young people.

In the end, though, price is critical. In remodeling its home departments, Wal-Mart spent a lot of money it didn’t want to. Traditionally, retailers cajole vendors into chipping for departmental remodeling. The problem Wal-Mart faced is that, after years of being pressured on price, and not just by Wal-Mart, but also by Bed, Bath & Beyond and Target among others, many home furnishings suppliers were in, near or just emerged from Chapter 11. You can’t get fixture allowances from a stone, after all. Or not as many as you might like.

Now that Wal-Mart has made the investment, it wants a return, hence the new products and the advertising. The recession, in this case, may play into Wal-Mart’s hands. With more people shopping Wal-Mart to save money, a wider range of consumers than normal will be exposed to the store exclusive brands and may develop a taste for the kind of home furnishings Wal-Mart is serving up. Even if they don’t bite themselves, they might serve up a heaping helping of new, inexpensive interior design for their kids.

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Sides hopeful in Wal-Mart bias suit

By STEVE PAINTER,
ARKANSAS DEMOCAT-GAZETTE
March 26th, 2009                                 [back to top]

Lawyers on both sides of a sex-discrimination lawsuit expressed optimism Wednesday after arguing their case late Tuesday before a panel of federal judges in San Francisco.

Wal-Mart Stores Inc. of Bentonville is seeking to overturn a lower court's decision to grant class-action status to claims that the company systematically discriminated against women in pay and promotion decisions. Under President Barack Obama's administration, the federal Equal Employment Opportunity Commission has weighed in on the side of the potential class, which could number as many as 2 million plaintiffs.

The lawsuit, filed in 2001, was certified by a federal judge as a class action in 2004, and the decision was upheld 2-1 by a threejudge panel in 2007. It is now pending before the 11-member panel of the U.S. Court of Appeals for the 9th Circuit.

Brad Seligman, a Berkeley, Calif., lawyer for the plaintiffs, said Wednesday that if each potential victim of the purported discrimination had to pursue a claim individually, most would receive nothing.

"I don't think that's acceptable in our system," he said. "The record in this case indicates overwhelmingly, class action is the only way for a remedy.

"I felt we got an opportunity to make our case, and I'm confident the court will make the right decision," he said.

Wal-Mart contends that classaction certification deprives the company of its right to defend itself against individual claims of discrimination.

"In our system, a defendant has a right to put on their case," Theodore Boutrous of Los Angeles, Wal-Mart's lead lawyer in the case, told the panel of judges. An audio recording of the arguments is available at the 9th Circuit's Web site, www.ca9.uscourts.gov.

Boutrous said Wednesday that he was pleased with the discussion, during which the appellate judges peppered lawyers from both sides with questions.

"The judges focused on what we believe are the most important aspects of the case," he said. "We think when proper standards are applied, the class should be decertified."

In December, Wal-Mart said it would pay between $352 million and $640 million to settle 63 class-action lawsuits, including one in Arkansas, alleging violations of wage-and-hour laws. The lawsuits claimed Wal-Mart employees were required to work off the clock or skip scheduled breaks.

Joseph Sellers, a lawyer in the Washington offices of Cohen Milstein Sellers & Toll PLLC, which also represents plaintiffs in the case, said the appellate judges in the case "were, as a group, very active, very thoughtful, very engaged."

He said he was "cautiously optimistic" that the panel will uphold certification of the class and allow plaintiffs to pursue back pay on the wage issues. Research in the case indicates women were paid on average $2,000 a year less than men in equivalent positions, according to the lawsuit.

Structuring a class-action claim to pursue compensation for being passed over for promotion, and the pay that would go with it, is likely to be more difficult, he said.

"That's an area that is tricky, and it's not entirely clear to me what path the court will take on that," he said.

Boutrous emphasized during the arguments that pay and promotion decisions are decentralized, with managers at the store level making those calls. He said the plaintiffs' case has not centered on seeking injunctions to cease purported discriminatory practices. "The focus has been in getting a big punitive award, a big backpay award," he told the panel. The case is Dukes v. Wal-Mart Stores Inc., 04-16688.

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'Plasma Pat' calls police to explain his case

By Elizabeth Dinh ,
ABC Action News
March 26th, 2009               [back to top]

Police are still looking for 60-year-old Joe Torma a.k.a. 'Plasma Pat'.

Officials say he took $300 cash from a Largo victim in February when posing as a Wal-Mart employee who could get a cheap plasma TV - but instead pocketed the money.

Detective Brendan Arlington, who is working the case, has received at least three calls from Torma. Police spokesman Lt. Mike Loux said it's unusual for a suspect to call police and talk about their case.

In the recorded phone calls, Torma said he was pushed to the crimes because he was faced with a sick wife and a string of bad luck. "You know, I've been married 44 years to this woman, you know? So I got homeless and did a few bad things. We lost our home, we lost our car, we lost everything we had, we had nowhere to live" Torma said.

He told the detective he has about 30,000 victims.

But near the Largo Wal-Mart on Missouri Avenue where police say Torma took off with a victim's money, is The Red Room Cafe.

There, bartender Charissa Van Overloop and owner Greg Petrakis say they both remember the night Torma was there and met the victim.

Van Overloop told us she doesn't have sympathy for Torma, despite his claims of being in a bad situation: "That's tough, but given the fact that he's bragging about ripping off 30,000 people, I would tell him to be like everyone else and get a real job instead of trying to take the easy way out."

Torma also told Detective Arlington he was hoping his children wouldn't find out about what he was doing. "Horrible, you know. My kids, I didn't want them to know I did nothing bad. They think I hustle. They think I play poker, they think that's all I play, you know," Torma said.

Over the phone, Torma also told police he was going to turn himself in. A week and a half after that promise, police have yet to see him in person.

Authorities think he is in Missouri, possibly on his way to Texas.

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Wal-Mart sued over alleged drug mislabeling

By Rob Young,
Appeal-Democrat
March 25th, 2009                     [back to top]

A pharmacist at the Yuba City Wal-Mart store mislabeled a pill bottle, resulting in a woman taking twice too much blood pressure medication and nearly dying, according to a $1.2 million lawsuit filed in Sutter County Superior Court.

After collapsing on a bus, victim Geraldine Schamanski's heart stopped five times in 24 hours. Her family was told two different times that she had died, said Yuba City attorney Nancy A. Southworth, who filed the lawsuit Friday on behalf of Schamanski and her husband, Raymond.

Besides Wal-Mart, the pharmacist and Asereth Medical Services are named as defendants. The latter company apparently supplied the pharmacist who mislabeled the bottle, said Southworth.

Michelle Bradford, a spokeswoman at Wal-Mart's Bentonville, Ark., headquarters, said company officials had not yet been served with papers in the case and could not comment.

Aside from a blood pressure problem, Schamanski was in "very good" health for a woman in her 70s before the pill mix-up. But if she had died from the overdose, the death probably would have been attributed to old age, said Southworth.

According to the lawsuit, Schamanski was taking two generic medications in early 2008 — nadolol, which is a beta blocker, and furosemide, a diuretic. The pharmacist gave Schamanski a pill bottle labeled furosemide that actually contained nadolol, causing her to take 80mg per day of nadolol instead of 40mg.

Schamanski collapsed after taking the double dose for at least six weeks. She "died" once in an ambulance on the way to the hospital, said Southworth.

Schamanski's Yuba City doctor quickly diagnosed the problem after looking at her medications and said the overdose "easily could have caused" the heart and lung problems that caused her collapse, according to the lawsuit.

Schamanski now has permanent heart damage and can no longer engage in her favorite pastime — taking a bus to area casinos to play bingo. The near-death experience has left both her and her husband, a disabled veteran, with anxiety, said Southworth.

Southworth said she negotiated unsuccessfully with Wal-Mart representatives for at least six months before filing the lawsuit and found "finger-pointing" going on between Wal-Mart and Asereth Medical Services.

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Wal-Mart launches "Your Zone" home furnishing line

By Nicole Maestri,
Reuters
March 25th, 2009                    [back to top]

NEW YORK (Reuters) - Wal-Mart Stores Inc (WMT.N), said on Wednesday that it is launching "Your Zone", a new line of home furnishings aimed at teenagers.

The collection, which includes bedding, rugs, curtains, pillows and bulletin boards, is arriving in its U.S. Walmart discount stores and is now being sold on its website, Walmart.com.

Walmart said the bedding includes comforter sets that are priced from $28 to $40, and sheet sets that are priced from $12 to $24. Furniture and lounge seating will arrive in stores in late spring, it said.

To try to boost sales in its home business, Walmart has been adding new home furnishings brands, like Better Homes and Gardens, and remodeling the home section in its stores.

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Upscale grocery stores lose customers to Kroger, Wal Mart

By Joe Crawford,
ST. LOUIS POST-DISPATCH
March 25th, 2009                             [back to top]

Nine months ago, it seemed as if upscale grocers such as The Market at Busch's Grove stood a chance at shining in a shaky economy.

Cost-conscious consumers would cut back on eating at restaurants, and opt instead to splurge on nicer groceries and prepared meals — touted as restaurant-quality food at a lower price.

Or that's what some analysts thought during the time Paul Poe was making plans to open a gourmet grocery store at the old Busch's Grove restaurant. But the venture hasn't gone exactly as planned.

"Obviously, frugal is in," said Poe, the general manager of the Ladue grocer that opened in December.

And in today's economy, frugal apparently means going straight for the store brand at Kroger or Wal-Mart, not trading down from restaurant food to high-end groceries, such as organic, natural or ethnic food.

When The Market at Busch's Grove opened, it employed 45 people. Now, three months after opening, that number has dropped to 25.

The food industry is faring better than other retail markets, said Jim Hertel, a managing partner at consulting firm Willard Bishop, but shoppers have changed their habits since the depth of the recession became more apparent in September and October.

In June, Barrington, Ill.-based Willard Bishop released a report stating that sales at upscale grocers were growing faster than at traditional supermarkets, such as Schnucks. But that doesn't seem to be the case anymore, Hertel said.

"I think things have changed dramatically since this summer," he said.

In fact, the situation basically has been reversed. A few factors, including food-price inflation and consumer fears about the economy, have driven shoppers to seek the cheapest-available groceries, he said.

A consumer research consultant working with the Food Marketing Institute has found that the economic recession dramatically has changed consumer shopping habits generally — changes that could be longer-lasting. Among the changes discovered by Information Resources Inc., some consumers are reducing costs by cutting out more expensive organic food and staying away from luxury items. The study was not geared to a specific income level.

"We've identified major changes in shopper rituals that will impact manufacturing and retailing strategies during the current recession and in the future," said Thom Blischok, president of consulting and innovation at IRI. "Shoppers are now overwhelmingly more focused and organized when planning their shopping trips."

As a result, IRI research shows that shoppers are altering their diets at home as an additional strategy to save money.

The National Association for the Specialty Food Trade Inc. reports that retail sales of specialty — or gourmet — food rose in 2008 until the fourth quarter, when sales began to fall.

Traditional supermarkets also have made improvements to meat and produce sections, Hertel said, allowing them to better compete with the "Fresh Format" stores, such as Straub's or Whole Foods.

Some higher-end stores are seeing more business at their delis — probably as people choose them over restaurants — but that boost serves mostly to "soften the blow," Hertel said.

"Everything is kind of moving down," he said.

Before he opened The Market at Busch's Grove, Poe said that while the economy was not the greatest in which to start a business, he believed the Ladue area was "underserviced" and he was confident in the business. He said he still expects business to pick up as local residents continue to discover the former restaurant is now a grocery store. And sales seem to be increasing as more people hear about the business. But Poe admits he anticipated business to be better than it recently has been.

"When we started the project, it wasn't nearly as bad of economic times as it is today," he said.

Unlike Poe, large bargain grocers are seeing benefits from the shift in consumer habits.

Kroger Co. announced Tuesday its fourth-quarter profits were up 8 percent compared to last year, and sales of its store-brand items hit an all-time high.

But more upscale chains haven't had the same success. At the Whole Foods location in Town and Country, store team leader Matthew Mell said lagging sales have caused a hiring freeze as well as a cut in hours for employees.

The marketing strategy also has shifted recently, Mell said. Instead of advertising small discounts on many items, the store has begun to offer bigger discounts on only a few. That way, the increasing number of bargain shoppers can find something there, he said.

"We are conscious that people are trying to make their dollars stretch," he said.

Straub's, which opened its fifth location in Ellisville in December, also has been catering toward more frugal consumers, said owner Trip Straub. While products such as Straub's chicken salad still might cost more than a competitor's — because, Straub said, it's better quality — the gourmet grocer is trying to keep costs down on basic items such as milk and eggs.

Straub's also has cut some employees' hours, he said, as the company adapts to a rapidly changing economic environment.

"It's been interesting," Straub said.

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Alderman's push for 2nd Wal-Mart could renew big box fight

By FRAN SPIELMAN,
Chicago Sun-Times
March 24th, 2009                      [back to top]

It looks like the City Council might have to relive the political donnybrook that gave birth to the big box minimum wage ordinance snuffed out by Mayor Daley's only veto.

Ald. Howard Brookins (21st) said Monday he plans to introduce an amended redevelopment agreement at the April 22 Council meeting that would allow Wal-Mart to build its second Chicago store at a former Chatham industrial site.

"There's no other way to get this moving. The [Daley] administration is not willing to do it themselves. The only way is to force their hand is by spelling out that Wal-Mart shall be permitted to come," Brookins said.

"I think there are 30 folks who will vote with me on it. It may open the door to bringing back another type of big box type ordinance."

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The Time Has Come For Wal-Mart To Put People Over Profits

By Ron Powell,
Progress Illinois
March 23rd, 2009              [back to top]

Our nation is mired in the current economic crisis in part because corporate America dictated the rules for too long and did so while fixated on generating the largest profits at whatever cost. These tactics led to the overextension of credit, job reductions, and the erosion of the middle class. The corporate greed on Wall Street and failed policies of the Bush administration have contributed to the staggering unemployment figures we now face.

Media outlets report on these issues daily and have exposed many of the most flagrant schemes. Yet still Wal-Mart is touted by some in the local press as the potential savior of Chicago communities.

Wal-Mart has long been the leader in establishing business practices that put profits over people. When Americans elected Barack Obama as the 44th President of the United States, the message was clear: The time has come to change the direction of America. Stop allowing our workers and our communities to be exploited so large corporations can grow their bottom line. Now in office, President Obama and his administration are seeking to restore the necessary balance between corporate America and the rest of us.

As the president works towards these ends in Washington, we should follow his lead, especially relating to Wal-Mart.

Throughout the 2008 campaign, Obama repeatedly stated his belief that Wal-Mart should pay a living wage. He understands that in order to strengthen the middle class, we must ensure that workers earn decent wages and receive comprehensive benefits. Indeed, the president recently stated: "You cannot have a strong middle class without a strong labor union."

Walmart, meanwhile, has a long record of suppressing its workers right to organize. Last year, The Wall Street Journal further exposed Wal-Mart's anti-worker culture by reporting that the company directed its managers and supervisors to actively discourage employees from voting for Obama due to his support for the Employee Free Choice Act. If passed by Congress, this piece of legislation will diminish the employer intimidation regularly used to discourage union drives.

In Chicago, Wal-Mart is still trying to call the shots at the expense of our communities and working families. The City Council has previously pushed back against the company's expansion because there are too many negative side-effects -- for workers, public programs, and our neighborhoods -- that accompany their expansion and market saturation. As Wal-Mart continues to look for opportunities in Chicago, aldermen should not be bullied into giving corporate greed free reign. If Wal-Mart wants to enter this market, then they need to step up by offering their workers a living wage and comprehensive health care.

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Wal-Mart Supercenters ring Chicago, grab share from Jewel, Dominick's

By Mike Hughlett,
Chicago Tribune
March 22nd, 2009                    [back to top]   

When Wal-Mart Stores Inc. opened a Supercenter in suburban Country Club Hills in 2006, Karen Talchik changed her shopping routine. With a Wal-Mart supermarket near her house, the Oak Forest teacher abandoned her old grocery standby.

She said the service sometimes isn't as good at Wal-Mart—the lines at the deli and checkout counters can be longer than she was used to—but the prices can't be beat.

"I stopped going to Jewel," Talchik said.

While Wal-Mart has been in the spotlight for trying, mostly unsuccessfully, to plant its flag in the city of Chicago, the behemoth has been quietly building its supermarket presence in the suburbs in recent years.

Wal-Mart's market share is still small compared to Chicagoland's grocery leaders, Jewel and Dominick's. But with several new stores, Wal-Mart gained share last year, seemingly at the expense of Jewel and Dominick's, data from market researcher Nielsen Co. indicate.

And more Wal-Mart Supercenters are coming to the area: six this year, including one that opened this past week in Orland Park, which gives it 19 now open. Six more are planned for 2010.

The Chicago area "in our mind is a priority because it is a market where we have an underserved customer," said Michael Lewis, president of Wal-Mart's Midwest division. "I see no reason why our share in [metro] Chicago should be different than in our developed markets elsewhere in the U.S.," he said.

It would be a tall order, given that Wal-Mart often has 35 percent to more than 40 percent share of the metro markets it dominates. While the retailer started in rural America, it commands that sort of grocery market share in such cities as Dallas, Indianapolis and Nashville.

In the Chicago area, Jewel-Osco, with 167 stores, has a commanding 39 percent share, compared to 6.5 percent for Wal-Mart Supercenters, according to Nielsen. And both Jewel and Dominick's, the area's No. 2 player with 80 stores and an 11.3 percent share, are renovating many of their local properties.

Union-led resistance to Wal-Mart has so far helped to shut the company out of the full-scale grocery business in the city of Chicago, and with roughly 30 percent of the metro area's population, the city is a critical market.

"Large metro areas represent a tremendous growth opportunity for Wal-Mart," said Mark Miller, a stock analyst at William Blair & Co. "Chicago and New York, I would say, are the two priorities for the company."

Arkansas-based Wal-Mart is the country's largest food retailer, and its main pitch has long been value. Its prices are routinely 13 percent to 18 percent less than its competitors in any given market, said Jim Hertel, a managing partner with food retailing consultant Willard Bishop.

A recent report by Credit Suisse analyst Edward Kelly indicates that gap is wider in the Chicago area. In Kelly's January survey, Jewel's prices were 23 percent higher than Wal-Mart's; Dominick's, 26 percent greater. Still, analysts say both traditional chains compete on price through promotions and private-label items.

With the economy imploding, Wal-Mart's low-price approach should help it grab market share across the country, analysts say. Indeed, the strength of its grocery business helped Wal-Mart post better-than-expected fiscal fourth-quarter financial results in February.

"Food is really driving business right now," said Jason Thomas, manager of the Wal-Mart Supercenter in Country Club Hills.

That outlet is one of eight Supercenters that Wal-Mart has opened in metro Chicago in the past three years. With its growing presence in Chicago's suburbs, Wal-Mart picked up almost 2 percentage points of market share last year, according to Nielsen data. Jewel and Dominick's each lost a point.

In its fourth-quarter earnings conference call, Supervalu Inc., Jewel's parent, said new Wal-Mart stores had resulted in some market share loss and negatively affected its same-store sales in the Chicago area. But the company also said it anticipates sales trends will improve, and that it had expected some share loss due to Wal-Mart's expansion.

Meanwhile, Dominick's spokeswoman Wynona Redmond said "the grocery business has always been extremely competitive and we believe we have an offering that is very well-received by Chicago."

Several customers at the Country Club Hills Supercenter said they have switched to Wal-Mart as their primary supermarket. For instance, Eddie Sanders Jr., a retired business professor, said he occasionally goes to his old mainstay, a Jewel store in Flossmoor, but Wal-Mart is his anchor supermarket now.

Wal-Mart's products "are just as good, but their prices are cheaper," he said as he selected oranges. "Also, there's the big-box thing. I can come and get hardware and meat and vegetables."

Still, Sanders sometimes sees service drawbacks. Occasionally items he wants aren't on the shelves, or "you can ask people where a product is, and they don't know," he said.

Wal-Mart is usually at the tail end of the University of Michigan's American Customer Satisfaction Index. In 2008, Wal-Mart scored 68 on a scale of 100, below the supermarket average of 76, and down from its rating of 71 a year earlier. Dominick's parent company, Safeway Inc., scored 75 last year, while Supervalu clocked in with 74.

Supermarket consultant Hertel said that Wal-Mart has been working in recent years to improve customer service.

But more important to its growth is its ability to bolster its presence in urban areas like Chicago, and it often is running into fierce opposition from unions that support local politicians. The grocery industry is the only retail business that's significantly unionized; workers at Jewel and Dominick's belong to unions.

And labor has long claimed that non-union Wal-Mart undercuts the wages and benefits of union workers. "If organized labor stands on the sidelines, we'll watch what we fought for with Jewel and Dominick's go right down the drain," said Dennis Gannon, president of the Chicago Federation of Labor.

Wal-Mart succeeded in opening a store on Chicago's West Side in 2006, but it's not a Supercenter and therefore doesn't have a full line of groceries. Last spring, the company backed down from opening a Supercenter on the South Side after encountering roadblocks from the city.

But the Tribune reported last month that Wal-Mart is preparing a push for as many as five new city stores, betting the economic crisis will make its proposition more appealing. The company has declined to confirm the number of stores or where they would be located. But it has said conversations with Chicago aldermen have focused on so-called food deserts—areas lacking supermarkets.

Hertel said cracking the city market is vital for Wal-Mart's overall Chicagoland strategy. "You've got to really look at where the population is. Clearly to the extent that the city represents a significant part of the population of the entire metro area, it is quite important."

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The Politics of Bonuses & Free Choice

By Al Norman,
The Huffington Post
March 22nd, 2009                      [back to top]  

This week, Wal-Mart President and CEO Mike Duke told the Arkansas Morning News, "We have a lot to be thankful for this year."

Compared to the rest of Wall Street, Wal-Mart's stock drop of 1.5% over the past year must seem like up to President Duke. The corporation was feeling so thankful, it told its 1.4 million workers they would be receiving an average of $667 as a 'bonus' payment. That computes to $933.6 million in one-time payments.

Duke told the media he was a "humbled and honored" CEO, "but never more so than today, because this is the time when I get to say thank you for all that you have accomplished over the past year."

The Wal-Mart bonuses became the Yang to AIG's Yin: The Good Bonus to balance out the Bad Bonus. In the depths of a recession, here was Uber Employer Wal-Mart remembering the needs of its toiling masses.

Wal-Mart's current free cash flow has everything to do with the prolonged recession, and little to do with its associates, who continue to work for modest wages with unpredictable hours. For example, Wal-Mart's average hourly 'associate' in its home state Arkansas makes $10.81 per hour. A 28 hour per week 'full-time' worker would gross $15,800 a year -- before taxes. That's not a wage to be thankful for. Of the total package of 'gifts' to its workers, Wal-Mart included "millions of dollars in merchandise discounts," which is nothing more than a gift back to itself. The annual employee bonuses are a political device that generate headlines for Wal-Mart, but generate no on-going expense to the company's bottom line, because bonuses are not built into the workers' base salaries.

Wal-Mart also chose to pay its shareholders $4.2 billion in dividends for fiscal year 2010. The company boasted that it has increased its shareholder dividend every year since it began declaring dividends in March of 1974. This dividend increase helped no one more generously than the Walton family, who own a controlling interest in the company.

Wal-Mart's focus on its workers was called a "shower of gratitude" by the media, but it was more valuable as a shower of attention in the headlines, at a time when the giant retailer is facing two major employer-related flashpoints: one in court, and one in Congress. While AIG could be crucified for paying bonuses, Wal-Mart could assume the role of Good Employer by paying its people a more-than-deserved bonus. If there is ever a time when Wal-Mart needs to be the Good Employer, it is now.

Two years ago today, Wal-Mart also passed out bonus checks to its workers, as part of "Associate Celebration Day." That bonus in 2007 totaled $529.8 million to 813,759 hourly workers. That pencils out to $651 in bonus pay per worker -- almost exactly what the company paid out this week. All Wal-Mart hourly full-time and part-time store associates are eligible for what the corporation calls its annual "My$hare" bonuses, which are allocated based on store performance. In 2007, Wal-Mart said its employee bonuses were part of its "Associates Out In Front" program, which aims to make Wal-Mart a better place to work by fostering communication with associates and focusing on new ways to reward performance and service.

But the company has a larger, "Wal-Mart Out in Front," program, and the 2009 employee bonuses were a key strategic distraction from the frenetic efforts of the corporation to 1. win the Congressional battle over the Employee Free Choice Act and 2. derail the enormous class action gender discrimination case known as Dukes v. Wal-Mart. Wal-Mart needs to stay out in front of both of these battles, or it will have little to be thankful for in the future.

On the litigation front, oral arguments begin this coming week in the Dukes case, in which a class of 1.6 million women workers at Wal-Mart have claimed that systematic gender discrimination ran rampant at the corporation. Wal-Mart has repeatedly warned its shareholders that if the Dukes class action case proceeds to trial, the outcome could have a "material" impact on the corporate bottom line. Inside the same week that Wal-Mart announced its bonuses, the Obama Administration announced it was filing a court brief, through the Equal Employment Opportunities Commission, opposing Wal-Mart's efforts to have the class action suit de-certified. If the class action suit dies, women workers would have to pursue their rights individually through the courts -- a financial Mission Impossible.

"If Wal-Mart's argument were accepted," the Obama EEOC wrote, "it could effectively preclude a claim for punitive damages in most, if not all, Title VII pattern-or-practice cases, including those brought by the Commission. It would be nonsensical to prevent victims of particularly egregious discrimination from proceeding collectively." The Bush Administration would never have suggested that Wal-Mart was an egregious discriminator.

The Equal Employment Opportunities Commission has been missing-in-action from this Dukes case since it was filed in June of 2001. The Bush Administration never lifted a finger to help these millions of current and former Wal-Mart workers. This has been described as "neutrality" towards the workers by the Bush Administration, but it could also be described as "hostility" towards their effort, since the outcome of this case directly affects the future role and success of the federal EEOC in protecting workers from discrimination.

Secondly, the Wal-Mart trumpeting of employee bonuses was most directly aimed at the growing crisis facing the retailer over the Employee Free Choice Act. A major media splash on worker bonuses clearly was designed to convince some U.S. Senators that Wal-Mart isn't such a Bad Employer after all, and that the company is willing to share some of its enormous wealth with the workers who make it all possible. For years, critics have charged that profits at Wal-Mart rise too quickly to the top, and that the company has built its empire on the sweat of its underpaid workers.

A 2006 study by the Economic Policy Institute concluded that "Wal-Mart could raise wages and benefits significantly without raising prices, yet still earn a healthy profit." The study found that in 2005, Wal-Mart could have maintained a profit margin almost 50% greater than Costco, while raising the wages and benefits of its 'associates' by more than $2,000 without raising prices a penny."

Wal-Mart's My$hare bonuses are not a substitute for a decent, living wage, and a quality health plan that does more than leave employees with enormous deductibles to pay. A $667 bonus is not likely to deflect the political impetus behind the Employee Free Choice Act. Wal-Mart will continue to spend millions to stop EFCA, and its year-end bonuses will not help it buy victory in Congress.

At Wal-Mart, "Associate Celebration Day" needs to happen all year round. When EFCA passes, and Wal-Mart workers win the Dukes case, there will be celebrating in every Wal-Mart aisle across America.

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I’d Rather Pay More than Shop at Walmart

Denver Post Blog
March 22nd, 2009                  [back to top]  

It’s spring here in Colorado, and I spent the weekend getting the lawn ready for a big time renovation. Today I needed a few parts to get the lawnmower running again, and not all of the shops that I needed were open on Sunday, leaving only a few options - one of which was Walmart.

I chose to just not get the project finished today. Why? First off, I avoid Walmart like I avoid RTD Light Rail on the day of a Broncos home game. Second, I understand Walmart has lower prices, but is it really worth it? Is it worth dealing with a gigantic parking lot that also serves as a RV park? And is it really worth dealing with BAD customer service? I’d rather just not have ANY customer service.

Most importantly, I’m not going to support a company that is systematically destroying Small Town, USA. This doesn’t affect Denver as much as it does Grand Junction, but the existence of “mom and pop” stores is still an extremely important part of the fabric of our culture and economy.

When it comes to making that next decision on where to buy some parts for your lawnmower, or anything else for that matter, I encourage you to stop and think about where to spend your money. Where you spend your money has just as much of an effect on the economy as how you spend your money.

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Retailer, workers meet after 9 years

By STEVE PAINTER,
Arkansas Democrat Gazette
March 21st, 2009                                  [back to top]  

Nine years after a handful of meat cutters at a Texas Wal-Mart store voted for union representation, the company and the union are at the bargaining table.

Rather than negotiating over pay and benefit issues, though, the two sides are discussing the effects on workers of Wal-Mart Stores Inc.'s subsequent decision to eliminate in-store meat cutters and move to prepackaged meats.

And the union, the United Food and Commercial Workers, hopes to make the nearly decade-long dispute with Wal-Mart a feature of the national debate over the proposed Employee Free Choice Act pending in Congress, which would make it easier for unions to form collective bargaining units.

"I think this ought to be the poster child for the Employee Free Choice Act. The system is broke and we ought to fix it," Johnny Rodriguez, United Food and Commercial Workers international vice president and spokesman for the union in the Jacksonville, Texas, case, said Thursday. He also serves as president of Local 540 in Dallas.

Arkansas is a hot spot in the national debate because its two U.S. senators, Democrats Blanche Lincoln and Mark Pryor, are considered swing votes and because Bentonville-based Wal-Mart, the nation's largest private employer, has successfully fended off union-organizing efforts in the United States throughout its history.

Lincoln and Pryor were cosponsors of the legislation in 2005, but have since expressed reservations about it.

In an e-mailed statement Thursday, Wal-Mart spokesman Daphne Moore said: "We remain opposed to card check because it would effectively eliminate freedom of choice and the right to a secret ballot election. We believe every associate should have the right to make a private and informed decision regarding union representation that is free of intimidation and coercion."

The Employee Free Choice Act, often referred to as cardcheck legislation, has been introduced in both houses of Congress.

The key change from current law would enable workers to automatically be recognized as union-represented if more than half sign union cards. Though that is an option under current law, companies faced with union-organizing efforts can and usually do insist on a secret-ballot election to affirm the workers' preference, as provided by current law.

Earlier this month, Deborah Weinswig, a retail analyst with Citigroup, downgraded the firm's recommendation on Wal-Mart's stock from buy to hold, citing the potential impact of the card-check legislation on the company, if passed. She said Wal-Mart would be the main target of union organizers.

"If the unions are successful, the company could have to concede higher wages for more seasoned employees and increase employee benefits significantly. It would also experience diminished work force flexibility," she wrote in a research note to clients.

Business groups say the secret ballot allows workers who may have been intimidated by union organizers to vote no. Labor groups contend that companies use the time between cardsigning and the secret-ballot election to intimidate workers with threats of layoffs or other consequences if they unionize.

Both sides are pouring money and other resources into campaigns to get their messages across.

And last year during the presidential campaign, The Wall Street Journal reported that Wal-Mart store managers and department supervisors attended mandatory meetings at which company officials warned of negative consequences for the company if Democrats controlled Congress and the White House and the bill became law.

A Wal-Mart spokesman confirmed at the time that the company discussed the potential impact of the legislation with employees, but said they were not told how they should vote.

The 12-member Jacksonville Wal-Mart meat-cutters unit voted 7-3 for union representation on Feb. 17, 2000. In September that year, Wal-Mart said the workers lost their right to union representation because the skilled meat-cutting jobs were replaced by the prepackaged meat program.

An administrative law judge with the National Labor Relations Board later ruled that Wal-Mart had no obligation to negotiate a contract with the workers, but said it must negotiate over effects of the new meat program on the workers.

The two sides finally met on that issue for the first time March 12, according to the union.

Asked for comment on the meeting, Wal-Mart's Moore said Friday: "We are complying with the order to meet with this union and listen to what they have to say."

Only one member of the original 12 remains at the store, Rodriguez said. One has since died and the others have moved on to different jobs, he said.

"Wal-Mart fought us very hard to keep us from going through this process," he said. "Nine years is a long time."

George Wiszynski, assistant general counsel for the union, said the Jacksonville case illustrates the need for passing the Employee Free Choice Act. "It shows how the process at the NLRB is inadequate to protect workers' rights to form a union," he said.

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Missoula protesters take on Wal-Mart

Montana's News Station
March 21st, 2009                             [back to top]  

Protesters gathered outside of Wal-Mart Saturday to voice their concerns about the recent lobbying efforts against Montana's working families.

They carried bright signs and chanted different cheers to traffic near Wal-Mart. The protesters said they aren't happy with the way Wal-Mart and other multi-million dollar corporations fight against Employee free choice and benefits for their employees.

"My concern would be with Wal-Mart, as much as any other corporation, that they have a tendency and a legacy of frustrating workers rights and workers organizations, not allowing unions or busting unions or pressuring them, when it's our legal right in this country to have them," said protestor Jay Bostrom.

Recent Walmart T-V ads say the super store is actually good for American consumers. This week, Wal-mart said it was countering the trends to curtail bonuses and merit raises for workers, saying it was awarding $2-billion to its U.S. hourly associates through bonuses, profit sharing and 401k contributions.

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Obama Administration Sides With Wal-Mart Workers

By Karen Gullo and
Margaret Cronin Fisk,
Bloomberg
March 19th, 2009                          [back to top]  

The Obama administration sided with women suing Wal-Mart Stores Inc. for discrimination, urging a federal appeals court to let the current and former workers sue as a group and proceed with the biggest sex-bias case in U.S. history.

The U.S. Equal Employment Opportunity Commission, weighing in on the lawsuit for the first time since it was filed in 2001, rejected Wal-Mart’s argument that as many as 2 million workers shouldn’t be allowed to seek back pay and punitive damages as a group because that would violate the company’s right to defend itself against each worker’s claims before a jury.

That position would prevent the government from ever seeking punitive damages from companies with a pattern of discrimination and interfere with the EEOC’s ability to obtain redress for violations of Title VII, the federal law that prohibits discrimination, said Barbara Sloan, an EEOC attorney, in a filing with a federal appeals court in San Francisco.

“If Wal-Mart’s arguments were accepted, it could effectively preclude a claim for punitive damages in most if not all Title VII pattern-or-practice cases including those brought by the Commission,” Sloan wrote. “It would be ‘nonsensical’ to prevent victims of particularly egregious discrimination from proceeding collectively.”

Wal-Mart, the largest U.S. private employer, is accused of paying women less than men and giving them fewer promotions. The 2001 lawsuit was originally filed in San Francisco by six women seeking to represent other employees.

Appeals Court

A federal appeals court on March 24 will hear arguments in Wal-Mart’s appeal of a judge’s ruling that allowed workers to sue as a group and seek back pay and punitive damages. Wal-Mart, based in Bentonville, Arkansas, denied discriminating and said it should be allowed to defend the women’s claims on a case-by- case basis.

“We believe the EEOC’s positions are fundamentally incorrect and look forward to presenting our argument to the court of appeals on Tuesday,” Theodore Boutrous, Wal-Mart’s attorney, said today in an e-mail message.

The EEOC’s support of the Wal-Mart class action “can’t simply be attributed to the change in administrations,” said attorney Joseph Sellers, who represents the women. “These are the views of the people who were the holdovers at the commission,” he said.

“Wal-Mart’s position, if adopted by the court, would lead to the elimination of employment class actions larger than a couple of hundred people,” he said.

The EEOC didn’t address the merits of the case. The agency said it was filing the brief because “this court’s resolution of issues relating to punitive damages and backpay in class cases may directly affect the commission’s enforcement of Title VII” of the 1964 Civil Rights Act, “particularly its systemic litigation.”

The U.S. Chamber of Commerce earlier filed an amicus brief supporting Wal-Mart’s efforts to reverse the class-action decision. “If the district court’s decision stands, it will have a potentially destructive effect on the Chamber’s members, who will likely face billions of dollars in new class-action claims,” the organization’s lawyers argued in a March 6 filing.

The EEOC’s support of class certification “would be given considerable weight” by the appeals court considering the decision, law professor Carl Tobias of the University of Richmond said today. “That’s the agency’s area of expertise.”

The case is Dukes v. Wal-Mart Stores Inc., 04-16688, U.S. Court of Appeals for the Ninth Circuit (San Francisco).

Wal-Mart unveils plans for own-label revamp

By Jonathan Birchall 
The Financial Times
March 17 2009                                 [back to top]  

Wal-Mart, the largest US grocer, unveiled marketing and packaging plans for its Great Value brand yesterday, intensifying the challenge to established US food and household goods brands from retailers' own-label products.

With more than 5,250 items across more than 100 categories, Great Value is already the largest American grocery brand by value of sales and by volume. But private label - or own label - accounts for only about 16 per cent of Wal-Mart's total grocery sales, compared with about 25 per cent at supermarket rivals such as Safeway and Kroger.

The brand relaunch, which has been a year in the planning, coincides with strong growth in sales of private label grocery goods as US consumers seek out lower prices.

Deborah Weinswig, a retail analyst at Citigroup, forecast that Wal-Mart's private-label sales could rise to as much as 40 per cent of total grocery sales during the next three years as the retailer begins actively promoting the brand for the first time. In some cases, Great Value products are half the price of national brand equivalents.

"The brands that are really being hard-balled are all of a sudden going to start to see their market share start to dwindle," she said.

Wal-Mart said it had reformulated 750 products, from breakfast cereal to laundry detergent, and was introducing new lines.

It has also simplified packaging and increased the profile of the Great Value name, which will be backed by a free information line.

Wal-Mart's private-label revamp follows the group's hiring last year of Jack Sinclair, a veteran UK grocer, to head its US food operations and increase the profitability of its existing stores.

Private-label sales at Kroger, the largest traditional supermarket chain in the US, accounted for 27 per cent of its sales in the fourth quarter of 2008. In Europe, private-label penetration is higher, making up more than 50 per cent of Tesco's UK sales.

David Dillon, Kroger chief executive, said last week that private label had gained ground as the recession "made customers a little more willing . . . to try products that they view as providing better value".

Wal-Mart thinks it can increase private-label sales without affecting the market share of leading national brands by expanding its overall market.

The group said it was committed to delivering national brands at low prices.

Charles Holley, the company's treasurer, told investors that Wal-Mart was not going to become "a store about private brands". "We will be a store with brands. But private brands will be in there also," he said.

Copyright The Financial Times Limited 2009

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Wal-Mart Rallies Voters To Fight Big Box Ordinance

KSBW-TV
March 17th, 2009                  [back to top]  

SALINAS, Calif. - Last week, Salinas City Council members passed the big box ordinance which limits any big box store from dedicating more than 5 percent of its floor space to non-taxable items like food.

The ordinance blocks a super Wal-Mart from moving into the empty Home Depot building at Harden Ranch Plaza.

Wal-Mart has now rallied a group of Salinas residents to fight for the super store.

The group is called Salinas Consumers for Choice and Wal-Mart has confirmed that it has started similar groups in other cities where its stores have been blocked from opening.

Consumers for Choice has spent the last few days collecting signatures for a petition in front of the Wal-Mart on North Davis all in an effort to put a referendum on the ballot and leave it up to residents to decide whether they want a super Wal-Mart.

"The city could benefit from it, not to mention this Wal-Mart is always busy. I come at this time of the day or later because there's no parking. It's always crowded. So it would be nice to have another option instead of just Target or K-Mart," said customer Lori Woods.

"I know agriculture is having some problems right now and they're not getting the prices they need so I don't think it would be fair to other supermarkets if Wal-Mart were to come in with extremely low prices and put them out of business so to speak," said shopper Veronica Cruz.

The Salinas Valley Chamber of Commerce said the council's vote is an example of business profiling and goes against the city's declared number one priority of economic growth and development.

The chamber of commerce it said typically it doesn't get involved.

But with potentially $900,000 in additional revenue, at least 50 new jobs and future businesses at stake, it has taken an official stance against the ban that now may be left up to the voters.

It's too late to go on the May ballot so if the vote on the big box ordinance comes, it will likely be in November.

The Salinas Valley Chamber of Commerce is now adding a column to its newsletter the Business Journal in response to last week's council vote.

It's called For the Record and it will publish each council member's voting record on business issues so residents can decide if their economic interests are being represented.

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Wal-Mart Adds Store Brands to Lure Bargain Hunters (Update1)

By Chris Burritt,
Bloomberg
March 16th, 2009                     [back to top]  

Wal-Mart Stores Inc. plans to start selling more than 80 new products, including strawberry yogurt and thin-crust pizza, under its store brand to attract U.S. shoppers seeking lower prices.

Thirty percent of consumers are buying more private-label items than a year ago, Wal-Mart said today in a statement that announced a revamping of its Great Value line of packaged food and household products. The company said it changed the formulas of 750 items, including cereal, cookies, laundry detergent and paper towels, to improve quality. It also redesigned packaging.

Wal-Mart, the largest seller of groceries in the U.S., started distributing the products to stores this month. As the recession has deepened, sales of less-expensive items have accelerated, said Andrea Thomas, senior vice president of private brands.

Wal-Mart customers “are looking at ways that they can still meet all the needs their families have,” Thomas, 44, said today in a telephone interview. She joined Wal-Mart in 2007 from Hershey Co., the largest U.S. chocolate maker, where she was vice president of global innovation.

The Great Value line has grown into the biggest U.S. food brand by sales since the Bentonville, Arkansas-based company introduced it in 1993. The new packaging will make it easier to spot Great Value items in stores, Wal-Mart said.

Brand Competition

The brand covers more than 100 categories. According to an estimate by Robert Drbul, a Barclays Capital analyst in New York, Great Value generates about 10 percent of the chain’s food sales with the remainder coming from manufacturers such as Kraft Foods Inc., Kellogg Co. and Campbell Soup Co.

“It is important for us to have all the choices our customers are looking for,” Thomas said. She wouldn’t disclose Wal-Mart’s percentage of sales from store brands.

Kroger Co., the biggest U.S. chain specializing in groceries, has seen a boom in store-brand sales. While total revenue was little changed at $17.3 billion last quarter, store brands accounted for a record 35 percent of unit sales.

Three out of 10 consumers in a new study by New York-based Gfk Custom Research North America are buying more store brands compared with a year ago, Wal-Mart said. Economic conditions are playing a “big role” in decisions to buy national or private- label brands, the retailer said.

Wal-Mart fell 39 cents to $48.80 at 4 p.m. in New York Stock Exchange composite trading. The shares have dropped 13 percent this year.

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Wal-Mart May Face Tough Going with Hispanic Concepts

By Mike Duff,
BNET Retail
March 16th, 2009                             [back to top]  

The growing range of formats Wal-Mart operates is gaining two additions both dedicated to Hispanic consumers, a group many mainstream retailers have had a hard time winning over.

The Financial Times first reported that Wal-Mart and Sam’s Club would develop their own Hispanic store variations. The Wal-Mart version will debut in converted Neighborhood Market locations, one in Houston and one in Phoenix, that will be renamed Supermercado de Walmart. The Sam’s, in Houston, will remain a warehouse club but with the name Mas Club and a retooled mix of products, the newspaper reported.

Wal-Mart hasn’t spent a lot of time developing brands dedicated to Latinos or establishing sub-departments specifically for Hispanic consumers, approaches that some supermarkets and general merchandise retailers including Kohl’s and Kmart have taken. Rather, Wal-Mart has been developing services that, while useful to many of its customers, are particularly valuable to Latino consumers, including wire transfers and, most recently, a lower cost prepaid Visa debit card.

Through the services it can offer customers and, in the Sam’s variation, services it can offer Hispanic businesses, Wal-Mart has the ability to address pressing concerns and integrate itself into the community. Of course, it will offer a range of products that have proven popular with Latino communities and shopping features that are preferred by the groups it wants to reach. Wal-Mart spokesperson Amy Wyatt-Moore was vague on just what will constitute Supermercado de Walmart, but she did say that the stores would “feature a new layout, signing and product assortment designed to make them even more relevant to local Hispanic customers.”

Sam’s provided a little more on Mas Club. Spokesperson Kristy Reed allowed that it will target both Hispanic families and businesses that serve them, will have a heavy emphasis on fresh food including an butcher shop where customers can confer with personnel, store-made tortillas, and a produce department that will be “running over with fruits and vegetables.” It also will feature a unique menu in a café that has both indoor and outdoor seating as well as a money center that includes wire transfer, debit card and phone card services, she said.

Services on top of Wal-Mart’s low prices and top executives with Latin American experience should stand the retailer in good stead as it tests its Hispanic formats. Yet, Wal-Mart’s approach to Hispanic consumers calls to mind Carnival Foods, a supermarket concept operated by Minyard Food Stores that the company revisited, retooled and tried to turn into a growth vehicle in it’s Dallas/Fort Worth operating area. Carnival not only offered an assortment of food and consumables for the local Hispanic community - including a fresh tortilla department - but expanded services to include health and even dental clinics staffed by Spanish speakers as it made its growth bid.

In the Minyard case, despite operating close to home and having history in the Hispanic community, the company decided to refocus on its mainstream supermarkets last year, selling Carnival to a group lead by the established Hispanic-oriented supermarket operator Fiesta Mart.

While that’s not to say Wal-Mart won’t succeed with its Hispanic formats, experience does demonstrate success may require a lot of time and effort.

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Wal-Mart revamps own label amid store brand boom

By SARAH SKIDMORE ,
Associated Press
03.16.09                                   [back to top]  

Wal-Mart is stepping up the competition to draw cost-conscious shoppers, promising that store-brand products from cereal to cookies will be tastier, smell better and look more attractive.

The world's largest retailer outlined plans Monday to reformulate hundreds of items in the Great Value store brand that it says is the country's biggest food brand by both sales and volume.

Wal-Mart (nyse: WMT - news - people ), responding to the increasing popularity of store-brand products among cash-strapped consumers, is also introducing nearly 100 new products like fat-free caramel swirl ice cream and thin-crust pizza as it tries to better compete with national brands.

"We don't feel we are messing with success, we are enhancing our success," said Andrea Thomas, Wal-Mart Stores Inc.'s senior vice president of private brands.

The company is also introducing a consistent design across the line to help shoppers better identify its products and added new elements like labels in both English and Spanish. It declined to disclose sales figures for the Great Value line, which also includes household products.

Wal-Mart's move underscores the importance of lower-priced store brand products and ups the ante in the already competitive grocery industry.

The company's launch of some of its in-house products more than a decade ago put pressure on traditional grocers, said Brian Sharoff, president of the Private Label Manufacturers Association. Grocers took notice and made their in-house brands - traditionally cheaper than national brands but once a blandly packaged and little-marketed product line - an integral part of their business.

Over the years, companies like Costco Wholesale Corp. (nasdaq: COST - news - people ) showed it could be done on a larger scale and Trader Joe's proved a national business could be centered on in-house brands.

But the popularity of store brands has soared recently as the economy tanked, with shoppers looking to stretch their dollars, especially as food prices have soared.

The Private Label Manufacturers Association said a basket of 40 average store-brand products runs about 30 percent to 35 percent less than a basket of comparable national brands.

"Interest is as high among the public as it has probably ever been before," said Matt Arnold, a consumer analyst at Edward Jones.

Stores are doing more to promote such items as well, moving them from discreet spots on shelves to a featured position at the end of aisles and increasing their marketing. While the margins on such items are lower than on name brands, they have helped drive sales at retailers and earn customer appreciation for their lower prices.

"They are basically the same thing," Kelsey McCurdy, a 21-year old shopper at Kroger (nyse: KR - news - people )-owned Fred Meyer in Portland, Ore., said of in-house brands, which she often buys.

"I think there is just something that has been programmed into most people's brains that this brand is better than another, we are just kind of brainwashed. ... I just try to find the best value for the best price."

Costco said private label sales hit record highs in its most recent quarter, but didn't break out specific sales figures. Kroger said 27 percent of its sales in its most recent quarter came from its own brands and fueled most of the company's overall grocery volume growth for the year - a trend it expects to continue.

Nearly every grocery chain across the country is pushing its in-house brand development.

Whole Foods Market Inc. (nasdaq: WFMI - news - people ), which already carried an expansive store-brand food line, expanded its range of personal care products earlier this month. And traditional grocers like Safeway (nyse: SWY - news - people ) and Kroger report they are going to keep focusing on developing private-label products.

Convenience store chain 7-Eleven Inc. is expected to announce soon that it will roll out more than 100 new and redesigned private label products during the next few months - roughly quadrupling its store brand offerings. The company is moving from Big Gulps and Slurpees to sandwich bags, cooking oil and private label jerky.

Experts say the most popular items for store brand sales are the most basic and often-used goods, like eggs, milk and paper products. But the latest growth in the industry seems to be in unique products that consumers might be more willing to try out, like a specialty coffee, after they've made the leap to a corporate brand with something more staid, like toilet paper.

"I think the price drives the trial and quality keeps them coming back," said Kevin Elliott, 7-Eleven's senior vice president for merchandising, marketing and logistics.

Analyst Arnold said in order to be competitive, companies need to focus on adding some value to their offerings.

"Innovation and driving the quality gap is everything," Arnold said. "It can come from innovation or perceived quality, which is just marketing."

Target (nyse: TGT - news - people )'s Archer Farms is a good example of that, he said, with unique products like fortified water or butter toffee popcorn in sleek packaging that move beyond necessities to discretionary items, but are priced much lower than a comparable national brand.

Arnold also pointed to companies like Whole Foods, which has had success with its line of in-house gourmet food items at lower prices and Costco, whose Kirkland Signature line has found its way into nearly every aisle of the club.

Wal-Mart's newest products reflect that trend. The company said it tested more than 5,000 of its products against national brands to nail down exactly what consumers want.

The company's new products move far beyond the basic paper towel or milk offerings, with items like organic cage-free eggs. Wal-Mart's Thomas also said the company it is going to sell flavors of some products that national brands may have discontinued but remain popular with its shoppers.

"That is where the challenge to other retailers will be," Sharoff said. "They don't have to limit themselves to one category. They can go into any category in the store and piggy back on their success."

Copyright 2009 Associated Press. All rights reserved. 

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Wal-Mart should take on Bank of America

By DAVID REILLY,
Seatle Post Intelligencer
March 15th, 2009                                [back to top]  

The economy is in an awful jam. Consumers and businesses need access to credit. Many banks, starved of capital, aren't up to the task. Nor is the shadow banking system, which offered an alternative source of credit from money-market, bond and hedge funds, but has now dried up.

One suggested out: Create new banks that wouldn't be saddled with the soured loans and toxic assets constraining other lenders.

That's easier said than done. Even with government funds, most start-ups couldn't muster the technology, infrastructure and management expertise to form the kind of big, national bank that could quickly have an impact.

Most, that is, except for Wal-Mart. The retailing giant could probably get a big bank up and running pretty easily. If, that is, its opponents put the economy's needs ahead of their own interests.

Two years ago next week, Wal-Mart withdrew its application to create an industrial loan company, a kind of banking operation, in the face of opposition from the Federal Deposit Insurance Corp., rival banks and the wider anti-Wal-Mart lobby.

Much of the protest was rooted in fears that Wal-Mart's application was a first step toward creating a real bank, as opposed to an entity meant to process payments from customers and suppliers. From there, opponents argued, Wal-Mart would soon crush competitors, especially community banks.

Times have changed. The economic crisis demands radical solutions. Giving Wal-Mart a banking license may be one.

A Wal-Mart bank would surely add to the sum of lending in the U.S. As a competitor of the big, established banks such as Bank of America Corp. or Wells Fargo & Co., it might also spur them to lend more and be the kind of private initiative that helps ease the smothering influence of government in the industry.

Wal-Mart has a ready base for bank branches, with more than 4,200 stores in the U.S. The retailer's technology probably could be adapted to banking since it already offers some limited financial services.

The company's management is widely acknowledged to be top notch, and it has garnered banking experience in Mexico, where it already has a banking license.

Not to mention that Wal-Mart, unlike most banks, is financially healthy and has a strong balance sheet. As of its latest fiscal year, ended Jan. 31, it had $7.2 billion in cash. Long-term debt was just 50 percent of shareholders' equity; banks rely on much larger amounts of borrowed money.

The cost to investors of insuring against a default by Wal-Mart on its debt, a sign of its perceived risk, is a fifth that of Citigroup Inc. and about 40 percent lower than that of JPMorgan Chase & Co.

Wal-Mart's reams of transaction data might also help it make safer loans. "If you serve primarily shoppers in the store, then you know something about their spending patterns and behavior," said Joseph Mason, a banking professor at Louisiana State University. "That incremental information can really add value. That's the new frontier of lending."

Of course, there would be resistance. As before, much of the fight would likely come from community banks and the FDIC, worried by the competitive threat.

There is also a deep-rooted concern that commercial enterprises with banking powers will use their financing arms to subsidize their other businesses or coerce suppliers and customers into giving better terms.

This apprehension may really be rooted in a desire to insulate banks "from competition by potentially more nimble" rivals, Columbia Law School Professor Ronald Mann wrote in a 2008 paper.

Protection of the status quo is a problem. When Wal-Mart's plans were scuttled two years ago, groups such as the National Association of Realtors and the United Food & Commercial Workers Union cheered. The UFCW called on Congress to "prevent retailers like Wal-Mart from entering the banking business and jeopardizing the nation's economy."

Yes, keeping everything in the bank industry's hands has worked out real well.

Banking needs a shake up. What better way than by introducing real competition? Wal-Mart might even counter the dominance of the four huge, government-supported banks, ultimately benefiting smaller lenders.

Plus, the country can no longer afford to coddle banks.

Of course, Wal-Mart might not want to go back into the banking battle. Wal-Mart spokeswoman Deisha Galberth told me that the retailer doesn't "have a banking strategy today" and feels "strongly that we are able to provide the services we need without being a bank."

Still, if the opportunity arose, this could be too good for Wal-Mart to pass up.

For a new entrant not saddled with old, rotten loans, banking would be attractive. Banks' cost of capital, for example, is low compared with what they can charge for loans, leading to higher profit margins.

The chance for profit is so great that legendary investor Warren Buffett declared in a television interview this week, "This is a great time to be in banking."

It's time to let Wal-Mart get in on it, too.

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Bank of America's Stimulus For Wal-Mart & Target

By Al Norman,
The Huffington Post
March 14th, 2009                        [back to top]   

The head of the embattled Bank of America told members of the Boston College Chief Executive Officers Club this week that his company is now making money.

"Bank of America should generate more than $100 billion in revenue this year," said CEO Ken Lewis, "and close to $50 billion in pre-tax, pre-provision earnings. That kind of cash flow can solve a lot of problems, given time and an improving U.S. economy." Lewis added that his company won't need more money from the U.S. taxpayers than the $45 billion it has already received from the Treasury's bank recapitalization program (a.k.a. Troubled Asset Relief Program). "While some banks may need more public support in the future," Lewis promised, "I don't believe we will."

Bank of America used around $20 billion of loan money to acquire Merrill Lynch. But the bank has made its first dividend payment on its TARP loan back to taxpayers. "Bank of America already made our first payment of $400 million on February 17," Lewis told the CEOs gathered at Boston College. "Our goal is to pay back the TARP funds as soon as we possibly can."

Indeed, the bank appears to be so confident in its future that it is giving some money back directly to its customers. Branch offices of the Bank of America are distributing fliers announcing the corporation's new "Add It Up" program, which gives cash back to customers who shop at select big box stores like Wal-Mart, Target and Home Depot. The giant bank is not only planning to pay back Uncle Sam as soon as possible, but it will also give cash back to people who buy Chinese imports at Wal-Mart. The Bank's stock may have been rolled back more than 80% over the past year, but customers can still make a deal if they shop at chain stores like Dick's, Sears, Staples and Sam's Club.

According to Bank of America, the Add It Up program "maximizes your purchasing power by giving you cash back awards when you make purchases at participating retailers using your registered Bank of America credit or check card." Once a customer signs up for the program, they receive an email notification to start shopping either online or in-store at over "250 leading retailers." You have to use your Bank of America card, of course, when you make the purchase, but if a $250 camera is being sold at a retailer's discount price of $200, and the retailer and the Bank have agreed to a 4% cash back---you get $8 back. Cash back earnings are then credited to your checking or credit card account.

You can only be linked to retailer sites through the Bank of America Add It Up website. Online purchases made at participating Retailers by going directly to the retailer's website, rather than going through the Add It Up website, will not earn any Add It Up cash. If you shop online at Walmart.com you earn 2% cash back per dollar spent. If you shop at Target's website, you earn 4% cash back per dollar spent. If a customer enrolls by July 12, 2009, Bank of America will match 100% of the cash back rebate for 45 days after the date of enrollment. The maximum total match that may be accrued during the double cash back rebate period is $250 per customer for all enrolled cards.

This somewhat clunky, bureaucratic Add It Up rebate program really adds up to little more than a promotion of Bank of America credit cards, and shopping at big box or national logo stores. It's not surprising that America's largest bank can only set up deals with America's largest merchants. The program includes Apple, Barnes & Noble, Best Buy, Bloomingdales, Borders, Dell, Gap, Home Depot, Kmart, Kohl's, Lord & Taylor, Macys, Office Depot, Staples, Target, Saks, Sam's Club, Sears, Wal-Mart, and other giant retail chains. The Add It Up program is just one more inducement for shoppers to skip over their local merchants, who are not big enough for Bank of America to bother with.

But this blackout of local businesses is exactly the reason why Add It Up does not compute on Main Street. After taxpayers gave Bank of America a gigantic stimulus payment, the corporation turned around and created a stimulus program for many of the companies who already have the advantage of scale over the smaller retailers. There are probably many logistical reasons why Bank of America is unable to interface with local merchants, or help out the independent business owner who feels forgotten by the Big Bank. But in the end, Add It Up ignores almost all of the businesses that make up the backbone of Small Town, U.S.A. Add It Up displays one of the weaknesses of the megabank---it's inability to participate in the life of grassroots America.

Wal-Mart does not need the help of Bank of America, but many of the small towns that host a Bank of America branch, do. Instead of helping big boxes get bigger, Bank of America should come up with a Main Street Program that provides low-cost capital or bridge loans to the little businesses or retail start ups--like the $20,000 loan Sam Walton used to buy his first Ben Franklin store in Newport, Arkansas.

Ken Lewis is right: Bank of America can solve lots of problems. But subsidizing Wal-Mart isn't one of them.

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2 Wal-Mart stores get Hispanic theme

North West Arkansas News
March 14th, 2009                                     [back to top]  

Wal-Mart Stores Inc. plans to convert one store each in Phoenix and Houston to a new format under a new name, Supermercado de Walmart, spokesman Amy Wyatt-Moore said Friday.

Each of the stores will replace Neighborhood Markets, Wal-Mart's supermarket format. The stores are in communities with heavy Hispanic populations, Wyatt-Moore said.

She said the stores will feature a new layout, signs and product assortment "designed to make them even more relevant to local Hispanic customers."

The makeover is part of Wal-Mart's store-of-the-community program, which aims to tailor the product mix and signs in each store to the population that lives in the vicinity.

In October, Wal-Mart opened the first four of its new, smallformat Marketside stores in the Phoenix area. At about 15,000 square feet each, the stores are designed for quick shopping trips and offer what the company calls "complete meal solutions."

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Wal-Mart vs. Target: No Contest in the Recession

By Sean Gregory,
Time Magazine
March 14th, 2009                     [back to top]  

When times are tough and consumers are "trading down" to buy more inexpensive goods, you'd think that a discount retailer like Target would flourish. After all, it's the place you go for quality clothes at affordable prices — cheap-chic designer Isaac Mizrahi offers a line — low-cost home accessories and perhaps a grocery item or two.

Alas, therein lies Target's problem. Things are so bad, even cheap clothes are a luxury now. Why pull a new shirt off the store rack when you can snatch one out of the closet for free? Food, however, is not discretionary. Everyone has to eat, and more consumers want to dine at home to shave expenses. And there's a certain merchandising mammoth fulfilling that crucial grocer's role for consumers much better than Target.

While Wal-Mart, the largest company in the world, has always dwarfed rival Target ($406 billion in annual revenues vs. Target's $65 billion), until recently Target had been decisively winning the growth game. From 2003 to 2007, Target's annual same-store sales growth averaged 4.6%, while Wal-Mart's clocked in at 2.9%. Over the same period, Target's annual profit growth averaged 16%, while Wal-Mart lagged behind at 10.3%. "Target was frying Wal-Mart's brains out," says Howard Davidowitz, chairman of Davidowitz & Associates, a national retail investment-banking and consulting firm.

At the onset of the recession, however, Target and Wal-Mart saw their fortunes flip. Target's same-store sales have fallen for eight straight months; Wal-Mart's have risen for 22 straight months. Target's 2008 same-store sales fell 2.6%, while Wal-Mart's rose 3.3%. More recently, Target's February sales dropped 4.1%, while Wal-Mart enjoyed a 5.1% jump. (See the best business deals of 2008.)

More important, Target's profits last year dropped a stunning 22.3%, to $2.2 billion. That figure includes a 40.7% earnings collapse in the fourth quarter. Wal-Mart's 2008 bottom line rose 5.9%, to $13.5 billion. Now Target is getting trounced.

Davidowitz notes that a "double whammy" is driving Target down. First, the retailer's product mix is not ideal in this economy. According to Davidowitz, Target devotes some 40% of its shelf space to home and apparel items, which are struggling, while setting aside less than 20% for consumables like food, health items and beauty products. Wal-Mart sets aside 45% of its space for consumables. "Wal-Mart sells what you need to have," says Davidowitz, "as opposed to what you want to have." Not only does Wal-Mart sell more of the grocery items you need — the company is the world's largest food retailer — it sells them at better prices. Britt Beemer, founder of America's Research Group (ARG), says customers have fled Target because they think of the company as an apparel retailer and believe that the groceries it does sell are overpriced. (See Real Simple's saving and budgeting tips.)

The second whammy on Target's performance is its credit business. Target is one of the last major retailers to own a part of its credit-card portfolio. When consumers are drowning in mortgage and other credit-card debt, they often ignore retail-card obligations. Rising defaults and delinquencies have dragged earnings. In 2008 credit-card profits dropped 80.5%, to $155 million, and the company incurred a $135 million pre-tax loss on its credit segment in the fourth quarter. "The company did great with its credit business when the economy was up, but now that it's down, carrying your own credit is devastating," says Davidowitz. At least Target can be grateful it made one smart move: in May, the company sold 47% of its receivables to JPMorgan Chase for $3.6 billion. Without that move, the devastation would be much worse.

So how is Target responding to the malaise? The credit distress is hard to control, but the company has promised to tighten lending standards and increase collections. On the product side, the company knows it must offer more essentials. "We continue to invest in our food offering in recognition of its importance in driving greater frequency, increasing guest loyalty and making Target a preferred shopping destination," CEO Gregg Steinhafel said during Target's fourth-quarter earnings call. For example, last year the company opened its first distribution center for perishable goods like fruits, vegetables and meats in Lake City, Fla. Target is slated to open another distribution center this year, in Cedar Falls, Iowa. "That's a major step," says Davidowitz. "Controlling your own distribution can improve food freshness on the shelves, and it allows you to hold on to more of the margins."

Steinhafel also said that Target would sell perishables in most new and remodeled general-merchandise stores; the retailer plans to open 75 new locations this year. The company already sells meat and produce in its 245 "SuperTarget" locations (Target has 1,700 stores nationwide). Target has already enhanced its food investment in two general-merchandise stores in the Minneapolis area. Davidowitz, for one, is impressed. "When I checked the perishables, they are very fresh, very well presented, very appetizing, and people were buying them," he says. (See the top 10 food trends of 2008.)

Despite these efforts, Target's transformation won't guarantee success. It's hard for a retailer to shake its reputation as a clothing outlet, while at the same time quickly mastering the management of perishable grocery items. "You can't just flip the switch and change the store overnight," says David Heupel, a senior equity portfolio manager at Thirvent Financial in Minneapolis. Plus, if Target drops grocery prices below Wal-Mart's levels, the big boy will quickly respond. "There's no reason to put a stick in the bear's eye," says Ed Weller, a retail analyst at ThinkEquity Partners.

What's more, Wal-Mart isn't just some massive outlet that peddles cheap wares; it has focused on food for a long time, and is really hitting a stride during the recession. "Wal-Mart works hard to build a strategy around groceries," says ARG's Beemer. "They look at groceries as a way to get people in the store for the first time. Target sees it as an add-on sale." In a research note titled "It's Wal-Mart's Time & Investors' Opportunity," Deutsche Bank analyst Bill Dreher Jr. wrote, "Bottom line, Wal-Mart is executing flawlessly."

Can Target reach Wal-Mart's level of excellence? It may have to rethink its mission. Issac Mizrahi is nice. But now shoppers want to see meat and potatoes.

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Why Was Citi's Deborah Weinswig the Only Analyst to Downgrade Wal-Mart on Employee Free Choice?

By Jane Hamsher,
The Huffington Post
March 13th, 2009             [back to top]   

Citigroup analyst Deborah Weinswig was euphoric on February 19 about the future of Wal-Mart, appearing on CNBC to say that the stock was "on fire" and the perfect play in this economy. And indeed, she may be right. Sales for all stores that had been open for a year doubled analysts' estimates and rose 5.1% in February. The company responded by raising its annual dividend by 15%.

So why did she downgrade Wal-Mart from a "buy" to a "hold" on Tuesday of this week? Because, she says, the Employee Free Choice Act (EFCA) -- a bill that Majority Leader Harry Reid says will not come before the Senate until late summer -- might pass. It "could be a significant drag on earnings," she concluded.

Yesterday Wal-Mart Treasurer Chales Holly said that the company believed the bill would be defeated.

There are 21 analysts who cover Wal-Mart. Of that twenty-one, not one has followed Weinswig's suit and downgraded the stockt. The only other one to publicly address the bill was Credit Suisse grocery analyst Ed Kelly, who concurred with Holly:

Because of all the derision surrounding the bill, Credit Suisse doesn't believe the bill will pass in its current form and instead a compromise will be debated over the next several months.

Four days later, Deborah Weinswig is out there all by herself.

Citi held a private conference call on Wednesday, hosted by a lobbyist for the US Chamber of Commerce, to "build opposition to the Employee Free Choice Act" according to the Huffington Post's Sam Stein. During the call, Weinswig cited dubious research funded by an astro-turf front group for the Chamber to make the claim that the bill's passage would increase the following year's unemployment rate by 1%. (In 2006 the OCED did an exhaustive analysis and concluded that there was no correlation between unionization and unemployment rates.)

I spoke with Mark Miller, Wal-Mart analyst at William Blair & Co. who currently rates Wal-Mart as an "outperform." He doesn't seem to believe that a response is necessary at this time, and that the impact of the bill's passage may already be factored into the price of the stock.

"It seems early in the process -- it seems premature to make a stock call on this issue. It could go both ways," he said.

"If the measure would be delayed, it could be a positive for Wal-Mart stock, because it's something that has been discussed for a while. There is some risk that is being discounted in the shares -- in other words, if there was no consideration of this, if there was no risk, I think the shares would be higher than they are."

Last night in an appearance on the Rachel Maddow show, Sam Stein noted that if the Employee Free Choice Act had a negative impact on Wal-Mart stock, it could also benefit a company like Safeway which is already unionized. Although he does not cover Safeway, Miller said "I think it's fair to say that it could be a relative benefit."

Deborah Weinswig also covers Safeway for Citigroup. She did not upgrade the stock based on the assumption that the Employee Free Choice Act would pass.

I spoke to a lawyer who follows the industry, and asked him if he thought Weinswig's Wal-Mart downgrade, and her subsequent participation in a conference call with an overt political agenda, was in any way suspect.

He pointed out that Citigroup had been in trouble before, when CEO Sandy Weill asked analyst Jack Grubman to "take a fresh look" at AT&T's stock rating -- and subsequently helped Grubman's kids to get into an elite preschool. Citigroup ultimately paid $2.65 billion in a settlement with investors who filed suit claiming that Grubman manipulated the analysis he used to justify a "buy" rating on WorldCom.

"If you're an analyst, you need to show that your analysis is independent, and that you're not beholden in anyone," he said. "Is that a valid assessment? She's one of 21 analysts of Wal-Mart -- and if she's the only one doing something, the marketplace is going to recognize it."

"Her reputation on the line," he said.

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Lawyers in $11 billion Wal-Mart case counting on embezzler's testimony 

By Steve Korris
Friday, March 13, 2009            [back to top]  

SAN FRANCISCO - Retailer Wal-Mart stands strong while other businesses fall, but class action lawyers aim to knock it down with an $11 billion lawsuit.

Their star witness, former Wal-Mart executive vice president Thomas Coughlin, earned their respect by embezzling $411,218 from his employers.

Coughlin spent 27 months in home confinement and remains on probation.

Lawyers at the nonprofit Impact Fund in Berkeley and associates around the nation count on Coughlin to swear that Wal-Mart discriminated against female workers.

Their suit in federal court at San Francisco seeks back pay and punitive damages for at least a million women who have worked for Wal-Mart since 1998.

The suit also seeks court oversight of future hiring and promotion.

U.S. District Judge Martin Jenkins of San Francisco certified a class action in 2004, and the Ninth Circuit appeals court in San Francisco affirmed him in 2007.

Jenkins left the federal bench last year, however, and last month Ninth Circuit judges erased the order that affirmed his decision.

On Feb. 13 the Ninth Circuit granted "en banc" rehearing, meaning that all judges would hear the appeal instead of the customary panel of three.

The Impact Fund's Web site stated on March 10 that the judges would hear it on March 24, but the Ninth Circuit website stated on March 11 that it was not calendared.

Impact Fund lawyers solicit contributions on their Web site.

They sued Wal-Mart in 2001 for Betty Dukes, claiming racial discrimination.

They turned it into a gender discrimination claim 11 days later, with more plaintiffs.

They proposed a class action, arguing that corporate policies and practices harmed every woman at every Wal-Mart.

In 2003 the lawyers deposed Coughlin, who worked 35 years for Wal-Mart and held a seat on its board of directors.

They regarded him as an adversary, unaware that he constantly stole from Wal-Mart.

In 2004 Jenkins certified the class, excluding women with no interest in promotion.

The Ninth Circuit granted Wal-Mart an appeal.

Wal-Mart asked Jenkins to stay discovery pending appeal, and Jenkins granted a stay.

In 2005 Coughlin resigned from Wal-Mart.

In 2006 he pleaded guilty in federal court at Fort Smith, Ark., to charges that he stole from Wal-Mart and dodged income taxes on the proceeds.

Coughlin told prosecutors he paid cash for information about union activities.

He told them he couldn't request reimbursement so he created fake invoices.

He paid $411,218 in restitution.

He agreed that he faced three to five years in prison, but U.S. District Judge Robert Dawson stunned prosecutors by sentencing him to home confinement.

Dawson ruled that in view of Coughlin's poor health, prison would kill him.

Prosecutors appealed, to no avail.

Back in San Francisco, on Feb. 6, 2007, Ninth Circuit judges Harry Pregerson and Michael Hawkins affirmed Jenkins in certifying a class action.

Judge Andrew Kleinfeld dissented.

Wal-Mart moved for en banc rehearing, preserving the stay in district court.

Impact Fund lawyers rushed to Jenkins anyway, asking to modify the stay so they could depose Coughlin before he died.

Jenkins held a hearing a week after the Ninth Circuit affirmed him, and granted the motion two weeks later.

"Should Mr. Coughlin pass away, any testimony relating to his two year tenure as executive vice president of Wal-Mart will be lost," he wrote.

"Thus, the Court finds that the allowance of a second deposition is proper," he wrote.

He wrote that Wal-Mart didn't identify any other person who was a director and an active employee.

Jenkins followed plaintiff lawyers on a line of logic concluding that a manager who steals from Wal-Mart achieves greater credibility than other managers.

"Plaintiffs further argue that Mr. Coughlin's current status as a former employee of Wal-Mart may afford him an opportunity to testify with greater candor than current management employees whom Wal-Mart may offer instead," Jenkins wrote.

At the Ninth District, Wal-Mart's bid for en banc rehearing took a strange turn when the same panel of three judges affirmed Jenkins again for different reasons.

Last January, Wal-Mart again asked for "en banc" rehearing.

Last February, California Gov. Arnold Schwarzenegger appointed Jenkins to a state appellate court.

At federal court, Chief Judge Vaughn Walker assigned himself to the class action.

Wal-Mart lawyer Jaime Byrnes of San Francisco sent Walker a status report in July, advising him that both sides awaited Ninth Circuit action.

Ninth Circuit Chief Judge Alex Kozinski delivered action on Feb. 13, after a majority of active judges voted in favor of en banc rehearing.

"The three-judge panel opinion shall not be cited as precedent by or to any court of the Ninth Circuit," Kozinski wrote.

Kozinski, born in Romania in 1950, has served 24 years at the Ninth Circuit.

He clerked for former Chief Justice Warren Burger of the U.S. Supreme Court.

President Ronald Reagan nominated him for the Ninth Circuit in 1985.

Reagan also nominated Diarnu O'Scannlain, one of 14 judges under Kozinski.

Among the other 13, President Bill Clinton nominated eight.

Clinton nominated Hawkins, who affirmed Jenkins in 2007.

President Jimmy Carter nominated three including Pregerson, who affirmed Jenkins.

President George H. W. Bush nominated two including Kleinfeld, who dissented.

Judge Margaret McKeown, a Clinton nominee, did not participate in the decision to grant en banc rehearing and likely won't join the deliberations.

Neither court records nor a Google search suggests that Coughlin has died.

Online encyclopedia Wikipedia estimates membership in the Dukes class at 1.6 million and values their claims at $11 billion.

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Citigroup Enters Union Fray With Anti-EFCA Call

By Sam Stein,
The Huffington Post
March 12th, 2009                   [back to top]  

Embattled financial giant Citigroup Inc., which has received at least $50 billion in federal bailout funds, hosted a private conference call on Wednesday to build opposition to the Employee Free Choice Act.

The call, which came just one day after the labor-backed legislation was introduced in Congress, suggests a growing effort on Citi's behalf to spur concerns about the bill, which would make it easier for employees to organize. On Tuesday, the bank downgraded Wal-Mart's rating over fears that the Employee Free Choice Act could pass.

Wednesday's conference call was led by Glenn Spencer, a senior executive at the U.S. Chamber of Commerce and an ardent EFCA opponent. It was promoted as "An Update on the Employee Free Choice Act," but much of the content was focused on demonizing the legislation. EFCA will "inhibit flexibility," "hamper companies from competing effectively," and prove "cumbersome" for business, declared Spencer. "From the Chamber's perspective, and I would say probably from the whole business communities perspective, there are really no amendments you could make to this bill that would make it acceptable."

The lines of attack from the Chamber official were familiar. But Citigroup's participation, led by retail analyst Deborah Weinswig, raised some eyebrows. The bank has received ample taxpayer-funded aid through the TARP program, leading some to question whether rallying support for an anti-union effort was the best use of its time or that money.

"Everyone should recognize that when we are talking about Citigroup here, the emperor has no clothes," said Dan Pedrotty, director of the Office of Investment at the AFL-CIO. "You have a company surviving on taxpayer largess weighing in against workers who want to improve their lives."

And with Citigroup lowering Wal-Mart's rating one day before the call, some were left wondering whether the bank was deliberating trying to frame EFCA as so calamitous for business that Congress would recoil from touching it. Indeed, as pointed out by one Democratic observer, Weinswig was high on Wal-Mart just a few weeks ago, giving the company a 9.5 rating out of 10.

"Citigroup and the Chamber of Commerce have no shame," said Stephen Lerner, director of the Private Equity Project at SEIU. "One day, Citi issues a report claiming it would hurt the stock of the Billionaire Walton family if free choice passes and workers win decent wages. Then they follow it up with a conference call where the Chamber of Commerce claims paying workers a living wage is bad for the economy."

Asked for comment about the bank's role in the EFCA debate, Citi spokesman Duncan Smith said that the company had a responsibility to advise clients on pertinent legislative matters. "The role of Citi analysts is to make stock recommendations to investing clients, and in doing so they examine a broad range of factors that may affect a company's market position," he said.

After the story was published, Smith sent another statement emphasizing that the firm "has taken no position" on EFCA. "Citi Retail Analyst Deborah Weinswig provides independent investment research to clients. In doing so she may examine a broad range of factors - including the impact of legislation - solely in the context of her coverage of a company or the industry. Her views are always independent and do not represent the views of Citi's management," he wrote.

Citi held a conversation with union officials on EFCA some time ago, according to another source, though not along the lines of a conference call to drum up support. Asked whether the firm would host a separate call with analysts favorable to the legislation's passage, Smith replied: "Weinswig may host further calls on EFCA for clients in the future. No further comment."

Other bailout recipients have also hosted calls designed to stir up opposition to the Employee Free Choice Act. As reported by the Huffington Post, Bank of America hosted an even more vehemently anti-EFCA forum just three days after receiving $25 billion in federal bailout funds. Good government groups responded by urging an investigation into the whether the call's hosts were trying to solicit political donations. Rep. Keith Ellison, meanwhile, questioned the bank's CEO over whether he was using taxpayer dollars to dissuade unionization.

During Wednesday's call with Citigroup, Spencer offered some insight into the forthcoming EFCA debate. With the legislation introduced on Tuesday, he declared that the prospects of passage were up in the air. Democrats in the Senate did not have the 60 votes needed for cloture, he predicted, as elected officials were "looking at the economy and thinking is this really the right time to put a bill like this into place."

At one point, Weinswig herself engaged the discussion (after mostly moderating questions) by highlighting some anti-EFCA academic material. Citing a study from a Canadian professor, she said that "for every two percentage points gained in union membership through card check and mandatory arbitration, the following year's unemployment rate is expected to increase by one percentage point, and job creation is predicted to fall by about 1.5 million jobs."

Union officials scoffed at these projections, arguing that increased union membership would result in more money for working class families to spend. That, in turn, would spur economic growth and job creation.

"Let's remember, these are the same business 'experts' who brought us the housing crisis, record unemployment and the stock market collapse," said Lerner. "Now they're trying to tell us that raising wages, growing the middle class and putting more money in workers' pockets is somehow bad for the economy. American workers' patience for economic theory from wealthy corporate interests wore thin about two bailouts ago."

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Aflac loses Wal-Mart bid

Atlanta Business Chronicle
March 12th, 2009                           [back to top]  

Aflac Inc. failed in its bid to provide Wal-Mart Stores Inc. employees insurance through payroll deduction, according to a filing Thursday with the Securities and Exchange Commission.

The Columbus, Ga.-based insurance company said it was not selected in a completed bid process to provide its products to Wal-Mart employees starting in benefit plan year 2010.

Aflac's current contract with Bentonville, Ark.-based Wal-Mart (NYSE: WMT) will end on Dec. 31, 2009. Wal-Mart employees will have the option to keep their current Aflac insurance policies, which are individual guaranteed-renewable products, on a direct-bill basis.

Wal-Mart accounted for 0.6 percent of total consolidated (2 percent of total U.S.) annualized premiums for Aflac at the end of 2008. Wal-Mart also represented 1.1 percent of consolidated (1.8 percent of U.S.) new annualized premium sales last year.

Aflac (NYSE: AFL) has a total of more than 427,700 U.S. payroll accounts

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Wal-Mart confident of defeat of pro-union bill

By Nicole Maestri,
Reuters
March 12th, 2009                           [back to top]  

NEW YORK, March 12 (Reuters) - Wal-Mart Stores Inc's (WMT.N) treasurer said on Thursday that he is "confident" Congress will defeat proposed legislation that would make it easier for employees to form a union.

On Tuesday, the Employee Free Choice Act was introduced in both houses of Congress. The bill, also referred to as card check legislation, would let employees form a union if a majority of them in a workplace sign authorization cards.

That would change the present practice in which workers usually vote in elections on unionizing, although the bill would leave elections as an option for employees to choose.

Earlier this week, Citigroup downgraded Wal-Mart shares to "hold" from "buy," saying the proposed card check legislation would increase labor costs and could be a significant drag to earnings for the world's largest retailer.

Speaking at the Bank of America Securities-Merrill Lynch consumer conference, which was broadcast over the Internet, Wal-Mart Treasurer Charles Holley said the retailer is "very opposed to the bill" and it is "very anti-competitive."

"We're confident that Congress will get it right, they'll figure this thing out, and this bill will be defeated," he said.

Holley also said that Wal-Mart, which has been gaining market share amid the U.S. recession, intends to remain the low price leader as shoppers across the board seek out what Wal-Mart calls its "Every day low prices," or EDLP.

"The customers not only need the EDLP, they really are starting to really rely on it on all levels," he said.

"If you look at the consumers that you consider a little higher income, those maybe making over $65,000 versus those making under $65,000, you would see that we're gaining market share equally in both at the same rate. It's not split," he said. "I think everybody now is really focused on saving money."

Wal-Mart shares rose 2.3 percent to $48.56 in recent morning trading.

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Wal-Mart looks to Hispanic market

By Jonathan Birchall
The Financial Times
Published: March 12 2009                     [back to top]  

Wal-Mart plans to open its first Hispanic-focused supermarkets this summer in Arizona and Texas as the largest US retailer continues its drive to expand its dominance of the US grocery business.

The pilot stores, named Supermercado de Walmart, will open in Phoenix and Houston in remodelled 39,000 sq ft locations occupied previously by two of Wal-Mart’s Neighborhood Market stores.

The retailer said that the stores were in “strongly Hispanic neighbourhoods” and would feature a “new lay-out, signing and product assortment designed to make them even more relevant to local Hispanic customers”. The staff will also be bilingual.

Wal-Mart’s Sam’s Club warehouse store also plans to open a 143,000 sq ft Hispanic-focused store called Más Club in Houston this year.

Several leading regional US supermarket chains already operate Hispanic store brands, including Publix in Florida, which operates three Publix Sabor markets, and HEB in Texas, which opened a Mi Tienda store in Houston in 2006.

The markets include elements such as cafés serving Latino pastries and coffee, and full service meat and fish counters.

Leading retailers are also pursuing Hispanic consumers online, with Best Buy and Home Depot having launched Spanish-language versions of their e-commerce sites in recent months.

Eduardo Castro-Wright, the head of Wal-Mart’s US stores since 2005, has also been an advocate of testing new smaller, more focused formats, and raised the idea of turning the Neighbourhood Market into a Hispanic-style bodega concept several years ago.

He has also developed Wal-Mart’s efforts to customise its larger Supercenter stores, which have been grouped according to differing community profiles, such as urban, suburban, Hispanic and African-American, with customised merchandise.

A 195,000 sq ft Supercenter that opened in Texas last year included a tortilleria bakery, Hispanic foods and a larger selection of Spanish-language music and DVDs.

Mr Castro-Wright was previously head of Wal-Mart’s Mexican subsidiary, whose store network ranges from large US-style Supercenters to small local bodegas, an upmarket supermarket chain and two restaurant chains.

Last year, Wal-Mart also began testing four new 10,000 sq ft Marketside convenience grocery stores in the Phoenix area – its first new format in a decade. Tesco, the UK retailer, also has more than 25 of its small Fresh & Easy markets in the Phoenix area.

Copyright The Financial Times Limited 2009

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Wal-Mart says it is widening competitive gap

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

Wal-Mart Stores Inc. says it is pulling even further ahead of its rivals as it racks up solid sales gains and steals customers away from retailers across the globe.

"We have widened the competitive moat," Charles Holley Jr., the company's executive vice president of finance, told investors Thursday during the Bank of America consumer conference on Thursday. "It puts us in a very good position. ... The momentum is very strong."

Holley pledged that the world's largest retailer will remain "the low-price leader" and will take advantage of new business opportunities over the next few months, though it declined to comment on specific plans. He did cite the retailer's recent move to acquire a majority stake in Chile's largest food retailer as an example. Crises, he says, produces opportunities.

Wal-Mart announced in January that it had acquired a majority stake in Chile's largest food retailer, Distribucion y Servicio D&S S.A., which helps it expand there.

Still, Holley acknowledged that "the economy is extremely tough. Our customers are being impacted all over the world." And according to the retailer's recent monthly surveys with its customers, job security - which didn't appear on the radar five months ago - is now the third-largest concern, following finances and a weakening economy.

Holley also told investors that while he believes the government's stimulus program will help the company's business, "it's too early to tell" how much.

Wal-Mart, which only two years ago was trailing key competitors like Target Corp., is reveling in its success compared with the overall retail industry. The company reported last week that same-store sales, for February rose a better-than-expected 5.1 percent, excluding fuel sales. Target's same-store sales fell 4.1 percent last month. Same-store sales are sales at stores opened at least a year and are considered a key indicator of a retailer's health.

The same-store sales tally by the International Council of Shopping Centers and Goldman Sachs was down 0.1 percent for February; excluding Wal-Mart, it fell 4.3 percent.

Holley noted that at Wal-Mart's U.S. stores, customer traffic has been up and they are gaining market share from households that make over and below $65,000 in income. He noted that last month Wal-Mart saw higher same-store sales in home furnishings, which had been a weak area. And while its clothing sales are down a little, Wal-Mart is still faring better than key competitors.

Wal-Mart plans to keep pushing low-price products, Holley said, adding that it has 40 percent more discounts than a year ago. The company is also relaunching this month a store-brand food line called Great Value, which will have better packaging and products.

Internationally, Holley said that while Japan's economy is struggling, Wal-Mart's customer count is up and same-store sales are positive. He added that the price gap between Wal-Mart and its competitors is increasing.

As for its Asda Group Ltd. business in Britain, Wal-Mart said it finished its fiscal year strong and is gaining market share in the first quarter. In particular, the company's George clothing collection and appliances and electronics are resonating well.

Copyright 2009 Associated Press. All rights reserved.

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City Council Blocks Super Wal-Mart In Salinas Council Voted For Big-Box Ban Last Week

KSBW.com
March 11, 2009                              [back to top]  

SALINAS, Calif. -- The proposed super Wal-Mart set to take over the empty Home Depot building at the Harden Ranch Plaza has been blocked.

The Salinas City Council voted for its second and final time Tuesday to pass the ordinance that bans big-box stores from also having a grocery store.

Under the ban, any big-box stores with more than 90,000 square feet in retail space cannot dedicate more than 5 percent of its floor space to selling non-taxable items -- mostly food.

A large crowd showed up at City Hall to discuss putting a new Wal-Mart superstore in at the former Home Depot building.

A big-box ordinance passed last week that bans stores that combine a large retail operation with groceries is currently preventing Wal-Mart from putting in a superstore.

The council voted 5 to 2 -- with Mayor Dennis Donohue and councilwoman Janet Barnes opposed -- for the ordinance at last week's meeting.

Backers of the ordinance argued the new Wal-Mart would hurt smaller businesses and provide only low-wage jobs.

Opponents said the ordinance gave the impression that the town is not business-friendly and that consumers should be free to shop where they want.

Those opposed to the ordinance include Salinas Valley produce growers.

Copyright 2009 by KSBW.com. The Associated Press contributed to this report. All rights reserved.

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City Council bans big-box stores

Supporters, opponents speak out on ordinance at City Council meeting

BY MARIA INES ZAMUDIO
thecalifornian.com
March 11, 2009                               [back to top]  

After listening to supporters and opponents of a proposal to ban big-box superstores, the Salinas City Council approved the ordinance Tuesday night.

Scores of residents, business owners and union members gathered at the City Hall Rotunda - while others filled overflow rooms inside City Hall and watched the proceedings via cable - and spoke passionately for and against the ordinance.

After more than two hours of public comment, including the councilmembers' responses, they approved the ordinance with a 5-2 vote.

As they did in the first vote on the ban last week, Mayor Dennis Donohue and Councilwoman Janet Barnes were opposed.

Under the ban, which now includes two major revisions, so-called big-box stores with more than 90,000 square feet in retail floor space are prohibited from devoting more than 5 percent of that space to the sale of non-taxable items, such as groceries.

The two revisions include the exclusion of membership stores, such as Costco. The other provision requires any combined retail stores over 90,000 square feet to submit a financial-impact report evaluating the potential physical and economical impacts on existing businesses.

Emotions ran high during the meeting.

"Sometimes it is difficult to make the right decision," said Tony Alexander, political director for the United Food and Commercial Workers Union. "This is about having good jobs."

Others argued that the ordinance gave the impression Salinas was not business-friendly and that customers should be able to shop where ever they want.

"People should have the freedom to choose where they want to shop," said Bob Perkins, a Salinas resident. "We should welcome all business with open arms and without discrimination."

"I support business coming to Salinas," said Councilman Steve Villegas. "But you can't spend money if you don't have a job."

Villegas read one of the 102 e-mails he had received from constituents. Villegas read one from a single mother who works at Safeway. She said she was afraid she would lose her job if a super Walmart opened in north Salinas.

"I don't want her blood on my hands," Villegas said. "I don't want to be responsible

for a mother and her child losing their home."

Aaron Rios, a Walmart spokesman, assured the council a Super Walmart in Salinas would create much needed jobs.

"Unemployment in Monterey County is 16 percent," Rios said, adding the store would create jobs and help economic development. "Salinas has bigger issues to worry about [rather than the ordinance] ... such as crime and the impact on the city."

Prior to Tuesday night's meeting, Walmart and Harden Ranch Plaza Shopping Center each spent thousands of dollars for full-page ads that ran this week in The Salinas Californian.

Several unions responded by bringing a throng of union workers to the meeting, said Cesar Lara, of the Monterey Bay Central Labor Council.

"We don't have that kind of money," Lara said.

During the meeting, supporters of the ordinance talked about the ads and their apparent influence.

Donohue, who is also the president of the Grower-Shipper Association, which endorsed one of the ads, said the ads did not reflect how he conducts business.

Additional Facts AT A GLANCE

The Salinas City Council voted on an ordinance to ban so-called big-box stores with more than 90,000 square feet in retail floor space. Stores that size are prohibited from devoting more than 5 percent of that space to the sale of non-taxable items such as groceries.

http://abclocal.go.com/kabc/story?section=news/state&id=6703895

California NewsPlans for new Salinas Wal-Mart thwarted Wednesday, March 11, 2009

(AP) SALINAS, Calif. -- Plans for a new Wal-Mart Supercenter in Salinas have been thwarted by a new ordinance banning so-called big-box stores from selling much food. The ordinance that limits stores with more than 90,000 square feet in retail floor space from devoting more than 5 percent of that space to non-taxable items, such as groceries, passed by a five-two vote Tuesday. It was seen as an attempt to head off Wal-Mart Stores Inc.'s plan to open a second Salinas store. Backers of the ordinance argued the new Wal-Mart would hurt smaller businesses and provide only low-wage jobs. Story continues belowAdvertisement Opponents said the ordinance gave the impression that the town is not business-friendly and that consumers should be free to shop where they want.

http://www.montereyherald.com/ci_11885690

Salinas vote blunts Wal-Mart plans Ordinance limits retail stores 90K square feet or larger to 5K square feet or less of nontaxable goods By JIM JOHNSON Herald Salinas Bureau Posted: 03/11/2009 01:32:31 AM PDT

Click photo to enlargeThe "old" Home Depot site in the Harden Ranch shopping center in North... (VERN FISHER/Herald File)«1»Super-heated debate over a proposed Super Wal-Mart raged at the Salinas City Council meeting Tuesday. But scores of opponents and supporters who packed the council chambers to weigh in on an ordinance aimed at restricting combined retailers, such as the controversial Arkansas chain, had little effect on the council's decision.

By a 5-2 vote, the council approved the ordinance it offered preliminary support to a week earlier in a move that set off a firestorm of disagreement throughout the community.

Mayor Dennis Donohue and Councilwoman Janet Barnes were the lone dissenters on the proposal, which was backed by Councilwoman Jyl Lutes.

The ordinance was designed to limit retail stores 90,000 square feet or larger to 5,000 square feet or less of nontaxable merchandise, essentially groceries. It is generally considered to be an attempt to head off Wal-Mart's plans to open a second Salinas store, this one in the former Home Depot at the Harden Ranch Plaza shopping center.

Wal-Mart, which has a store in the Westridge shopping center off Davis Road, bought the Home Depot building last fall. City officials said company representatives indicated they wanted to devote as much as 30,000 square feet of the 100,000-plus-square-foot building to nontaxable items.

Lutes said Tuesday the ordinance wasn't "specifically aimed at Wal-Mart," drawing catcalls from the audience, and said the giant retailer could still open a new store at the Home Depot site.

"It simply prevents an urban supercenter from opening up," Lutes said, arguing that such a store would create a negative "ripple effect" on the rest of the city's businesses by dominating the market and exacerbating traffic congestion. But Barnes ripped the ordinance as "bias targeting one particular business," and argued that it sent the wrong message to other businesses.

Donohue reiterated his concerns that the ordinance was unnecessary and the city's concerns about combined retailers such as Wal-Mart could have been resolved differently.

Donohue suggested that Wal-Mart officials hadn't handled the issue well and underestimated the council's independence.

"This city is not a dot on anyone's map," he said. "No matter how big you are or how small we are."

After the council offered its initial support for the new retail restrictions last week, council members reported being inundated by calls and e-mails from opponents and supporters of the ordinance.

Councilman Steve Villegas said he received more than 100 e-mails on his City Hall account. He received a call from well-known commercial property owners Al and Tony Sammut expressing concerns that Wal-Mart might pull out of its Westridge site if the ordinance passed. Company spokesman Aaron Rios denied suggesting that would occur.

Other council members indicated they were pressured to oppose the ordinance. The Grower-Shipper Association ran a full page advertisement in the Salinas Californian opposing the ordinance. Top agri-businessmen Jim Bogard, Rick Antle and Steve Taylor showed up at Tuesday's meeting to argue against the ordinance.

In the end, the council majority sided with groups such as LandWatch Monterey County, California Healthy Communities and the UFCW Local 5 union, which argued that Wal-Mart's allegedly predatory business practices and low-wage jobs would subtract more than it added in additional tax revenue. In an emotional attack on the retailer, Councilman Sergio Sanchez ripped Wal-Mart officials' "arrogance" and called the company "unscrupulous," "greedy" and a "terrible employer."

Rios said Wal-Mart would "consider its options" in the wake of the ordinance.

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Wal-Mart Plans to Market Digital Health Records System

By STEVE LOHR,
The New York Times
March 10th, 2009                           [back to top]  

Wal-Mart Stores is striding into the market for electronic health records, seeking to bring the technology into the mainstream for physicians in small offices, where most of America’s doctors practice medicine.

Wal-Mart’s move comes as the Obama administration is trying to jump-start the adoption of digital medical records with $19 billion of incentives in the economic stimulus package.

The company plans to team its Sam’s Club division with Dell for computers and eClinicalWorks, a fast-growing private company, for software. Wal-Mart says its package deal of hardware, software, installation, maintenance and training will make the technology more accessible and affordable, undercutting rival health information technology suppliers by as much as half.

“We’re a high-volume, low-cost company,” said Marcus Osborne, senior director for health care business development at Wal-Mart. “And I would argue that mentality is sorely lacking in the health care industry.”

The Sam’s Club offering, to be made available this spring, will be under $25,000 for the first physician in a practice, and about $10,000 for each additional doctor. After the installation and training, continuing annual costs for maintenance and support will be $4,000 to $6,500 a year, the company estimates.

Wal-Mart says it had explored the opportunity in health information technology long before the presidential election. About 200,000 health care providers, mostly doctors, are among Sam Club’s 47 million members. And the company’s research showed the technology was becoming less costly and interest was rising among small physician practices, according to Todd Matherly, vice president for health and wellness at Sam’s Club.

The financial incentives in the administration plan — more than $40,000 per physician over a few years, to install and use electronic health records — could accelerate adoption. When used properly, most health experts agree, digital records can curb costs and improve care.

But many, especially physicians in small offices, doubt the wisdom of switching to electronic health records, given their cost and complexity.

Only about 17 percent of the nation’s physicians are using computerized patient records, according to a government-sponsored survey published last year in The New England Journal of Medicine. The use of electronic health records is widespread in large physician groups, but three-fourths of the nation’s doctors work in small practices of 10 physicians or fewer.

Wal-Mart, however, has the potential to bring not only lower costs but also an efficient distribution channel to cater to small physician groups. Traditional health technology suppliers, experts say, have tended to shun the small physician offices because it has been costly to sell to them. Taken together, they make up a large market, but they are scattered.

“If Wal-Mart is successful, this could be a game-changer,” observed Dr. David J. Brailer, former national coordinator for health information technology in the Bush administration.

In the package, Dell is offering either a desktop or a tablet personal computer. Many physicians prefer tablet PCs because they more closely resemble their familiar paper notepads and make for easier communication with the patient, since the doctor is not behind a desktop screen.

EClinicalWorks, which is used by 25,000 physicians, mostly in small practices, will provide the electronic record and practice management software, for billing and patient registration, as a service over the Internet. This “software as a service” model can trim costs considerably and make technical support and maintenance less complicated, because less software resides on the personal computer in a doctor’s office.

Dell will be responsible for installation of the computers, while eClinicalWorks will handle software installation, training and maintenance. Wal-Mart is using its buying power for discounts on both the hardware and software.

Wal-Mart’s role, according to Mr. Osborne, is to put the bundle of technology into an affordable and accessible offering. “We’re the systems integrator, an aggregator,” he said.

The company’s test bed for the technology it will soon offer physicians has been its own health care clinics, staffed by third-party physicians and nurses. Started in September 2006, 30 such clinics are now in stores in eight states. The clinics use the technology Wal-Mart will offer to physicians.

“That’s where the learning came from, and they were the kernel of this idea,” Mr. Osborne said.

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Walmart Sets Massive Public-Relations Review

By Michael Bush,
AdAge.com
March 10th, 2009                    [back to top]  

NEW YORK (AdAge.com) -- Walmart has begun a massive public-relations review to tap a roster of about three agencies to handle its consumer business.

A spokeswoman for the retailer, Tara Raddohl, told Advertising Age that "Walmart is currently talking to a number of public relations agencies to support consumer communications for Walmart U.S. Candidate agencies that may join the roster have already been identified and vetted. The incumbent agency, Edelman, Chicago, is participating in the search." Edelman, which has handled public affairs and environmental work for Walmart for more than three years, referred calls to the marketer.

According to the request for proposals obtained by Advertising Age, the retail giant said its PR and brand reputation team "requires a re-examination of its needs to be met by outside PR counsel" as it takes steps to bring together "power category marketing and PR." The document went on to say that Walmart is in need of an agency roster that has "proven category and channel specialists, and innovative account teams."

Deliver robust ROI In the RFP, Walmart said it wants to assemble a roster of agencies that can provide "fresh, emotional PR programming and deliver robust ROI" in categories including: food/grocery and health/nutrition; apparel and home (softlines and furniture); hardlines (lawn and garden, hardware, automotive, etc.); entertainment (electronics, movies, music, toys, sports, etc.); seasonal events; financial services; and Walmart.com.

More specifically with regards to capabilities, the RFP states that the company is looking for agencies with "excellent capabilities in the areas of new media, online, media relations, crisis communications and multicultural outreach." It's also seeking shops that are proficient in the areas of event management, product placement and media pitching, and have "excellent writing across all mediums." Walmart, moreover, is requiring knowledge of the online retail and online competitive landscape, and satellite media tour vendors, according to the RFP.

Account scope significant People close to the situation said 12 to 13 agencies were initially invited to pitch the business and that a cut was made to about five or six agencies. The second round of the review will get under way soon. Ms. Raddohl said she was "not able to comment on specifics" of the progress or who remains in in the review. The retailer hasn't divulged budget figures as of yet but the scope of the account is said to be "significant."

Select Resources International is handling the review.

Interpublic Group of Cos.' Martin Agency is Walmart's lead creative shop and Publicis Groupe's Mediavest handles media duties for the retailer. Walmart has been busy on the agency front recently, expanding its agency roster to include West Coast shop Publicis & Hal Riney to handle work on its Great Value brand, and is said to be nearing an end to its review for its more than $40 million digital-advertising account, in which Interpublic agencies R/GA and MRM are the finalists.

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Citigroup cuts Wal-Mart to hold on card check concerns

By Neha Singh,
Reuters
March 10th, 2009                     [back to top]  

Citigroup downgraded Wal-Mart Stores Inc (WMT.N) to "hold" from "buy" saying the proposed card check legislation would increase laborcosts and could be a significant drag to earnings for the world's largest retailer.

"We believe that WMT would be the primary target if EFCA/card check were to be passed," analyst Deborah Weinswig wrote in a note to clients.

If theunions are successful, the company would have to concede higher wages formore seasoned employees, increase employee benefits significantly, and would experience diminished workforce flexibility, the analyst said.

She cut her price target on the stock to $48 from $53.

The legislation will be introduced on Tuesday in the U.S. Congress and if passed, it will make it easier for workers to unionize.

Known as "card check" or Employee Free Choice Act (EFCA), the legislation would let employees form a union if a majority of them in a workplace sign authorization cards. [nN09482486]

Wal-Mart shares closed at $47.51 Monday on the New York Stock Exchange.

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Ahead of the Bell: Citi downgrades Wal-Mart Stores

Associated Press,
03.10.09                                   [back to top]  

A Citi Investment Research analyst downgraded shares of Wal-Mart Stores Inc. early Tuesday, arguing that potential legislation to simplify the process of forming unions may boost the retail giant's labor costs.

In a note to investors, Citi (nyse: C - news - people ) analyst Deborah Weinswig noted Congressman George Miller, a Democrat from California, is expected to introduce a bill as early as Tuesday.

The legislation would make it easier for workers to form unions by eliminating the need for secret ballot elections. It would also increase penalties for employers who improperly interfere with union formation.

Weinswig, who lowered her rating to "Hold" from "Buy," predicted that Bentonville, Ark.-based Wal-Mart (nyse: WMT - news - people ) will be the "first target" for unions if the bill passes.

"If the unions are successful, the company could have to concede higher wages for more seasoned employees and increase employee benefits significantly," Weinswig said. "It would also experience diminished work force flexibility."

The analyst also lowered her share price target to $48 from $53.

Shares of Wal-Mart finished Monday's trading at $47.51.

Copyright 2009 Associated Press. All rights reserved.

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Wal-Mart Kidnapping a Hoax

By Frank Heinz,
MSNBC
March 9th, 2009                               [back to top]  

Police in Plano said a kidnapping caught on surveillance video was a hoax and that the individual "taken" is safe.

The fake kidnapping took place at the entrance to the Wal-Mart on the 1700 block of Dallas Parkway Sunday afternoon.

The video shows two people jumping out of a white mini-van, grabbing a person standing in front of the store and then forcing that person into the van.

Customers walking in and out of the store paid no attention to the supposed abduction and did nothing to stop it.

Investigators said the participants in the hoax have been identified and told police that they filmed the event for their own enjoyment and didn't intend to alarm the public or police.

Police said possible charges are pending as detectives continue to investigate the incident.

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Grocery prices showing signs of retreating as foodmakers feel pressure

By Greg Burns,
The Chicago Tribune
March 9th, 2009                                 [back to top]  

As the recession forces Americans to cut back, how can a box of cookies cost $3.49, a gallon of milk $3.79, a loaf of bread $3.89 and a pound of strip steak, on sale, at $11.98?

Will hard times ever show up in the grocery store?

Take heart, shoppers. Prices on the shelf finally are feeling the squeeze.

Consumers are trading down to private-label brands. They're shopping for discounts at Wal-Mart and hunting for promotional bargains at their supermarkets.

That spells trouble for foodmakers, who jacked up prices last year after commodities spiked. They desperately want to hold the line, even as sticker shock in the grocery aisles threatens sales and profits—and raises the odds of an eventual price war.

So it goes in one of the investment world's supposed "safe" havens.

Sectors such as health care, utilities and food traditionally occupy a special niche: People need them no matter what, the theory goes, so they're usually good bets in a bad market.

These days, however, that aura of invincibility is pretty much gone, said Paul Larson, editor of Morningstar Inc.'s StockInvestor newsletter.

These one-time investment bomb shelters might be safe relative to the rest of the market, which includes failing banks and domestic automakers, after all. But they're not even close to widows-and-orphans safe, he said.

"Not so much," he said. "It's really scary."

No question, some companies have more to fear than others.

Struggling with what Larson describes as weak brands and "nil" pricing power, Downers Grove-based Sara Lee Corp. will have trouble reviving a stock that stands at its lowest levels since the early 1990s.

Meanwhile, powerhouse brands such as Coke and Pepsi will hold their own and then some, he said.

Swiss foodmaker Nestle must be doing something right too. Visiting Indiana last week to open a big, new factory, Chief Executive Paul Bulcke said he will be banking on his brands.

The Anderson, Ind., plant makes Nesquik flavored milk and Coffee-Mate creamer, which command big retail premiums compared with their commodity costs.

That's just the way Nestle likes it, said Bulcke, who describes his employer of the past 30 years as a "value-added, nutrition, health and wellness company." Crunch bars never sounded so good.

Bulcke admits to playing the commodity market a little better than rivals. Nestle was early to spot the rise and fall of raw materials last year. Astute hedging helped it limit price hikes to "only a little more than normal," he said.

Nielsen data show a growing backlash against higher grocery prices.

In recent weeks, many foodmakers have been giving up market share for the sake of margins: Kraft cheese, for instance, lost 4.4 share points to private labels in February on 5.5 percent higher pricing, according to analyst Robert Moskow at Credit Suisse.

But now pricing is "decelerating," Moskow said.

"Rising unemployment and the rising savings rate will cause a long-lasting shift to austerity in consumer spending, even in the grocery store," he said.

Prices would be easier to manage if commodity markets were less fickle. Bulcke said he expects gradually rising raw-material costs, with plenty of ups and downs over time. "We're going to have to learn to live with a little more volatility."

The same goes for shoppers, too, especially those still in the market for commodity products at $11.98 per pound.

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Woman Suffers Black Eyes, 60 Stitches; Alleged Wal-Mart Shoplifter Not Arrested

ThePittsburghChannel.Com
March 6th, 2009                                          [back to top]  

Veronica Brown's two black eyes and 60 stitches above her lip are the painful result of her catching an alleged thief at the Wal-Mart store at the Waterworks Mall, but even more hurtful is that the suspect wasn't arrested.

Watch Bob Mayo's Report

Brown, a security guard, was allegedly thrown aside and pushed into a door Saturday by suspected shoplifter Dom Costa, who shares no relation to the current state representative and former Pittsburgh police chief with the same name.

"The district attorney has not signed the papers to arrest this guy," Brown said. "I haven't heard anything from the DA, a detective, the police, no one."

District Attorney Stephen Zappala's office said Brown's injuries do not qualify as aggravated assault and Costa will not be arrested. Instead, he will receive a summons in the mail, charging him with simple assault.

"When people spit on the sidewalk, police take them to jail," said Brown.

Brown remains upset that officers let Costa go with no immediate arrest at the scene and no citation.

When asked what officers should have done, Pittsburgh Police Chief Nate Harper replied, "On the spot, they should have made a physical arrest."

When questioned if officers may have backed off because of Costa's last name, Harper said it wasn't a factor.

"No, that had no effect on it. It was just a judgment made in error on the officers who responded to the call," Harper said. "The delay was because the officers that handled the incident did not -- as I stated, they made an error of judgment in not making their arrest where there should have been an arrest made."

"He could be the pope, he could be the president of the United States, you don't treat people the way I was treated and get away with it," said Brown.

Mike Manko, a spokesman for District Attorney Stephen Zappala, told Channel 4 Action News that this is not a matter of police being overruled.

People at the warrant office routinely go over cases filed by police officers every day and determine what charges are appropriate, Manko said. In this case, he said the language of the law didn't give them any choice other than to proceed how they did.

While Brown doesn't hold a grudge against the police officers, she doesn't think Costa should go free.

"I'm security and I'm the same side as those guys, and I don't think that this guy should walk," she said.

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Wal-Mart raises annual dividend 14 cents

Associated Press,
03.05.09                                  [back to top]  

Wal-Mart Stores is increasing its annual dividend 15 percent to $1.09.

For the fiscal year ending Jan. 31, 2009, the world's largest retailer will raise its annual dividend 14 cents from the 95 cents it paid out last year.

The first quarterly dividend payment of about 27 cents will be paid on April 6 to shareholders of record as of March 13.

Wal-Mart (nyse: WMT - news - people ) has raised its dividend every year since 1974.

The news came as Wal-Mart said February same-store sales rose 5.1 percent, ahead of expectations.

Copyright 2008 Associated Press. All rights reserved.

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Wal-Mart February US same-store sales up 5.1 pct

By Nicole Maestri,
Reuters
March 5th, 2009                              [back to top] 

Wal-Mart Stores Inc reported a higher-than-expected 5.1 percent rise in February sales at U.S. stores open at least a year, saying lower gas prices meant shoppers had more money to spend in its discount stores.

Analysts on average were expecting the company's same-store sales to increase 2.4 percent, according to Thomson Reuters Estimates.

'We believe falling gas prices significantly boosted household disposable income in February and therefore allowed for both more trips and more spending towards discretionary categories,' Vice Chairman Eduardo Castro-Wright said in a statement on Thursday.

The world's biggest retailer said net sales in the month ended on Feb. 27 rose 2.8 percent to $30.02 billion.

Last month, Wal-Mart (nyse: WMT - news - people ) said that it would no longer provide monthly sales forecasts. Instead, it said it would give forecasts on a 13-week basis, four times a year.

For the period from Jan. 31 through May 1, Wal-Mart said it expected U.S. comparable sales, excluding fuel, to increase between 1 percent and 3 percent.

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Wal-Mart May Roll Back to Manhattan

By Caitlin Millat,
NBCNewYork.com
March 5th, 2009                                  [back to top] 

Penny-pinching Manhattanites, rejoice -- discount juggernaut Wal-Mart could soon be muscling its way into the city.

The retail giant and soccer-mom center is reportedly shopping for space in Union Square and on Sixth Avenue in Chelsea, the New York Post reports.

Wal-Mart execs recently passed on a space in Union Square that's being evacuated by Virgin Megastore this year and are eyeing a space at 620 Sixth Ave. that would be ideal for the big-box brand.

The company is very interested in opening a Manhattan store to target city consumers, Wal-Mart rep Steven Restivo told the Post.

Wal-Mart's same-store sales rose a staggering 5.1 percent last year as more customers turned to the one-stop-shop to get their goods on the cheap. The store's foray into Manhattan could undermine the integrity of mom-and-pop shops that are already struggling thanks to the recession, union workers said.

"We don't need Wal-Mart to take advantage of an economic crisis to sneak into New York and drive down standards and wages," said Stuart Appelbaum, president of the Retail, Wholesale and Department Store Union.

Some New Yorkers said they'd rather pay big-time prices than shop at the holy grail of the Midwest markdowns mecca.

"It's like an A&P, a K-Mart, the $1 section of Target and diabetes in store form mashed together into one obese conglomerate," one disgusted commenter wrote on nymag.com, who reported on the chain's potential Union Square interest in February.

"Really, Walmart?? Because Manhattan needs a purveyor of economy size bags of cheese puffs and plastic lawn furniture?" another frenzied Manhattanite wrote on the site.

Wal-Mart already has stores throughout the tri-state area. The closest franchise to Manhattan is in Secaucus, N.J.

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Wal-Mart Increases Annual Dividend 15 Percent

PRNewswire-FirstCall
March 5th, 2009                            [back to top] 

BENTONVILLE, Ark., March 5 -- The Board of Directors of Wal-Mart Stores, Inc. (NYSE: WMT) has approved an increase in the annual dividend to $1.09 per share, a 15-percent increase from the $0.95 per share paid during fiscal year 2009. For this current fiscal year ending Jan. 31, 2010, the annual dividend of $1.09 per share will be paid in four quarterly installments of $0.2725 per share, according to the following record and payable dates:

Record Date            Payable Date
-----------                 ------------

March 13, 2009        April 6, 2009
May 15, 2009           June 1, 2009
August 14, 2009       September 8, 2009
December 11, 2009   January 4, 2010

"The strength of our operations and the resulting strong financial position allow us to increase our dividend payout to shareholders again this year," said Mike Duke, Wal-Mart Stores, Inc. president and chief executive officer. "Our free cash flow remains strong enough to fund Wal-Mart's growth around the world, make strategic acquisitions and fund returns to shareholders through dividends and share repurchases."

Based upon this announced increase, the company plans to return more than $4.2 billion to its shareholders in the form of dividends in fiscal year 2010. Wal-Mart has increased its dividend every year since its first declared dividend of $0.05 per share in March 1974.

Wal-Mart Stores, Inc. operates Walmart discount stores, supercenters, Neighborhood Markets and Sam's Club locations in the United States. The company also operates in Argentina, Brazil, Canada, Chile, China, Costa Rica, El Salvador, Guatemala, Honduras, India, Japan, Mexico, Nicaragua, Puerto Rico and the United Kingdom. The company's common stock is listed on the New York Stock Exchange under the symbol WMT. More information about Wal-Mart can be found by visiting www.walmartstores.com. Online merchandise sales are available at www.walmart.com and www.samsclub.com.

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Salinas Spars Over Wal-Mart Proposal Big-Box Ordinance Proposed

KSBW.com
March 4, 2009                                         [back to top] 

SALINAS, Calif. -- The Salinas City Council voted Tuesday evening to approve a big-box ordinance that will ban stores that combine a large retail operation with groceries.

The council voted 5 to 2 -- with Mayor Dennis Donohue and councilwoman Janet Barnes opposed -- for the ordinance after the community spent hours in public debate over having a Super Wal-Mart come to town.

Backers of the ordinance said the stipulation protects other grocery stores in Salinas, but opponents said a supercenter would give consumers more choices.

"We've done these studies that if we start allowing these big boxes to be 30 to 40 percent non-taxable food they're going to start putting out of business all the 14 supermarkets in this town," said Jyl Lutes, who proposed the big-box ordinance.

Wal-Mart was looking to put in a supercenter at the former Home Depot building in the Harden Ranch Plaza. The store was asking to dedicate 30 percent of its space to selling groceries.

Some at Tuesday's meeting said the ordinance does not allow for competition.

"Competition is good and consumers win when there are competitors," said Wal-Mart spokesman Aaron Rios. "This is evidenced by the existing 14 stores." Wal-Mart said a study done in December 2008 found that on average 30 small businesses open up after a Wal-Mart is added to a particular area.

Ron Lind, who is part of the UFCW5 Local Food Store Workers Union, wasn't buying it.

"Sales tax revenues isn't just generated from thin air. It's stolen from small-and-medium sized existing businesses many of whom have made a long-term commitment to communities like Salinas," Lind said.

Copyright 2009 by KSBW.com. All rights reserved.

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Man claims he found 10 human teeth in new wallet

The Associated Press
March 4th, 2009                                      [back to top] 

A customer shopping at a Walmart told store workers he found 10 human teeth in a wallet he was about to purchase. Police said the man found the teeth Saturday when he unzipped a compartment in the wallet. One tooth had a filling. The customer turned the wallet and the teeth over to employees but left the store without giving his name.

Police investigating the incident told The Cape Cod Times that the teeth belong to an adult, but since there was no blood or gum tissue on the teeth, they would be unable to perform DNA tests.

A Walmart spokeswoman said the company believes it was an "isolated incident," but will investigate.

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No big box in Leslieville after all: City prevails at OMB

By Allison Hanes
and Peter Kuitenbrouwer ,
The National Post
March 4th, 2009                                       [back to top]

In a stunning and long-awaited ruling, the Ontario Municipal Board today rejected a developer’s plan to build big-box shopping plaza in Leslieville.

The decision said the Smart!Centres project had some “attributes,� but accepted that allowing one big box project would spread retail “contagion� and undermine the city’s intended goal of attracting strategic job-creating industries to its designated employment lands.

‘‘We’re thrilled. We also know there probably will be appeals, but at this moment we’re pretty excited,� said Kelly Carmichael, chair of the East Toronto Community Coalition, which ran a sophisticated campaign against the development.

Smart!Centres seemed to raise the white flag in its bid to transform the former film studios site on Eastern Avenue into a retail complex, likely including a Wal-Mart, saying in a statement: “All the voices have been heard, and we lost. While disappointed, we respect the process and the decision of the Board.� It added that it has “no immediate plans for other development or use of the property and will assess all available options to us.�

Interestingly, the OMB, while agreeing large-surface retail would “destabilize� the neighbourhood, also slammed the city’s land-use planning as “knee-jerk� rather than “reasoned.�

“This board is not in the business of rescuing what it finds is deficient planning by giving its benediction to other planning it finds even more wanting,� the decision stated.

Nevertheless Councillor Paula Fletcher (Toronto Danforth), who represents the ward, said the decision will help preserve a vibrant future of the neighbourhood.

“I was pretty excited, but just extremely happy, just for the long-term employment lands, because I think they’ve been under incursion and attack for a long time in the city,� she said. “There’s a lot of pressure, whenever there’s a plot of land that you can put something on. So these are lands that are set aside for job-related function and the fact that the OMB upheld that I think is exciting for everybody in Toronto.�

The land at 629 Eastern Avenue originally housed the Toronto Ironworks foundry. When the foundry closed, Sam Reisman of the Rose Corporation bought the facility and transformed it into Toronto Film Studios, which became a favourite of many directors, including David Cronenberg, who filmed his History of Violence in the complex.

The influx of film business helped transform Leslieville from a blue-collar neighbourhood of dirty industrial jobs into a destination, filled with nice restaurants and cafés. Locals in Leslieville became accustomed to the well-paid, clean film industry jobs.

But in 2006, when Rose Corp. began building its new Filmport studios on city land in the Toronto Port, it sold half of the 19.5-acre site at 629 Eastern to Smart!Centres, Canada’s largest shopping centre developer, for $14-million.

Smart!Centres announced plans to build a 700,000 square-foot retail complex at the site with parking for 2,000 cars. Smart!Centres normally brings in Wal-Mart as its anchor tenant. The neighbourhood rose up in protest, warning of heavy traffic as cars flooded into the area to shop, and protesting the minimum-wage, part-time jobs that the big-box centre would bring.

The city turned down the Smart!Centres rezoning application, so the company appealed to the Ontario Municipal Board. Locals flooded the OMB hearing room when it began last May.

Smart!Centres argued that it would bring in 2,000 jobs, each paying about $20,000 a year.

Toronto Film Studios locked its gates on Dec. 31. One film industry insider had a good idea for 629 Eastern: turn it back into a film studio.

“The town is booming with film business right now. They’re all really tight for space,� the film industry source said. “629 Eastern Avenue is the largest collection of low-cost converted studio space in Canada, and the gates are padlocked.�

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Gunman Shoots Manager At Florida City Walmart

By Peter D'Oench,
CBS4
March 4th, 2009                      [back to top]

A gunman opened fire on the manager of the toy department at a busy Walmart store, frightening customers and sending the victim to the hospital with 3 bullet wounds, according to her family.

And it could have been worse. Witnesses told us they heard 6 shots being fired. It happened just before 10 a.m. on Wednesday. The victim was identified by family members as 36-year-old Shenel Gibbs, who had been working at the Walmart store at 335th St. and South Dixie Highway ever since it opened nine years ago. Her family says she started as a cashier and advanced to manager of the toy department. She's a single mother of four children.

"I heard a noise and the victim screaming, no-no-no," said Latisha Ellison, who was inside the store and near the incident. "Then I heard six shots."

"I was in the aisle right next to it," said Marisol Martinez. "She was screaming in a very high pitch. It's hard because I was right there."

"I was in the electronics department when I heard what was gunfire. Boom, boom, boom. And then I saw an employee running with fear in her face," said Ron Teke, who was in the store with his wife Tanya. "I heard boom, boom, boom and gunshots and I saw people take off and start running."

Family members say they were told the gunman was George Sheppard, a former boyfriend who was upset she had recently broken up with him. After the shooting, Gibbs was airlifted to Jackson Memorial Hospital, where she is in serious but stable condition.

Miami-Dade Police did not release any names, but they said the gunman fled to a home at 10971 S.W. 222nd Terrace where he shot himself. He was also airlifted to Jackson Memorial Hospital, where he died.

By Wednesday night, Walmart had reopened, and customers like Brian Hardy who stopped in to pick up camping supplies had no idea a manager here was shot inside the store earlier in the day.

"My God. Nobody was speaking about that inside to my knowledge," said Hardy.

At the home, we tried to speak with Sheppard's relatives. "We don't want to talk right now," said one unidentified relative as she walked away. Sheppard's father also came to the home and left with his head down. "All they've told is that he was shot inside the home," said Sheppard's father.

We also spoke to the family of another man who Gibbs used to date, Troy Butler. Butler's niece, Regina Mosley, told us, "She (Gibbs) had a relationship with Troy Butler for 15 years. That relationship went sour. Then she started dating George. Then she wanted to break it off. It was not what he wanted. He came to her job. And he shot at her several times."

Sheppard is listed on the FDLE web site as being a sexual predator after being convicted of lewd and lascivious assault on a child under the age of 18. "He was not normal," said Mosley. "He was very aggressive."

At Jackson Memorial Hospital, we spoke to one of Gibbs's daughters and nieces.

"She's my Mom," said Yoyo Gibbs. "When they described the gunman to me, I knew who he was. What I know is that they knew each other for a couple of months."

"No one deserves this," said Chantay Gibbs, a niece. "She just went to work to pay her bills and this happened. We feel bad, but she is strong. We believe in God and this will work out."

Family members told us Gibbs was shot twice in the legs and once in the back.

"She's a nice lady," said another niece, Peaches Gibbs. "I can't believe this happened to my auntie."

"I don't understand how this happened in this store," said Chantay Gibbs. "There should be more security."

Gibbs came out of surgery late Wednesday night. Her daughter's boyfriend Travis Hemingway said she is recovering.

"She is talking, she's good, they moved her out of surgery, stopped the bleeding," said Hemmingway. "They say she was shot in the stomach, in the arm, and the leg and one main artery in the leg and she'll be alright."

A spokesman for Walmart said managers were cooperating with police, and Miami-Dade police say their investigators will be trying to find out if there is any store surveillance videotape that will help in the investigation.

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Man Angry At Wal-Mart Snaps

By Reece Murphy,
Dunn Daily Record
March 3rd, 2009                            [back to top]

A Linden man is under arrest after he climbed up into the rafters at Wal-Mart in Dunn and allegedly caused a public disturbance.

William Arthur Palmer, 46, of McBryde Street was charged with injury to real property and disorderly conduct.

"He was climbing around in the rafters cutting down Wal-Mart signs, and shouting profanities at the officers and people who worked there," Dunn Police Chief B.P. Jones said.

According to the arrest report, police were called to the store about 11 p.m. Saturday where they found an "extremely irritated" Mr. Palmer in the rafters over the paint area of the store, cursing officers at the scene, Wal-Mart employees and the "entity Wal-Mart." The store was reportedly evacuated in the name of public safety.

The report said police witnessed Mr. Palmer cut down at least two signs above that department and store employees said he had already cut down several signs in the Garden Center. Damage to six of the store's signs was estimated at $3,000.

To accomplish the task, Mr. Palmer apparently used a pair of cutting pliers and snips he removed from packaging at the store before beginning his climb.

"William Palmer advised that it was humorous in his opinion to use Wal-Mart's tools to cut down Wal-Mart signs," Dunn Police Officer James Brannan wrote in the report.

Mr. Palmer said he was upset with the store because they had refused to remove hanging signs after a similar sign fell on his wife in the grocery section of the store in August 2005, landing squarely on her head and back.

Since then, Mr. Palmer said, his wife has been in near constant pain and was diagnosed with myofascial pain syndrome and fibromyalgia, chronic pain syndromes associated with muscle, tendon and ligament trauma.

"She was hurting really bad Friday and Saturday and it just got to the point where I just flipped," Mr. Palmer said. "It just made me feel better. It was like therapy."

Mr. Palmer said he and his wife filed a lawsuit against Wal-Mart last year. The case is currently awaiting arbitration, he said.

"The safety of our customers is always a top priority, and that includes making sure signs in our stores are properly secured," Wal-Mart Media Relations Manager Michelle Bradford said. "We're cooperating fully with the Dunn, N.C., Police Department in their investigation of what happened Saturday night. We're grateful that no one was hurt."

According to the arrest report, Mr. Palmer finally climbed down from the rafters after about 45 minutes at the request of Erwin Police Officer Bill Morris.

Mr. Palmer said even though he "flipped," his primary thought during his actions was to act in the public interest.

"I think they should at least let people know they need to wear hard hats in there, or post a sign that says, "Watch out for falling objects. Enter at your own risk,'" Mr. Palmer said. "I just felt like I was doing the community a service by taking them (the signs) down."

Mr. Palmer was released on a $1,000 bond with a court date set in Dunn District Court for March 11.

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1 dead, 1 wounded in Ariz. Wal-Mart shooting

The Associated Press
March 2nd, 2009                                 [back to top]

A shooting outside a Wal-Mart in eastern Arizona has left an elderly woman dead and an elderly man wounded.

Show Low police supervisor Randy Harris says the victims, likely a couple, were in the parking lot Monday morning when the shooting happened. Show Low is about 125 miles northeast of Phoenix.

The male victim is still undergoing surgery at a hospital.

Harris says police are following up with witnesses about a potential suspect.

Some of the victims' personal items were missing. But Harris says authorities are not sure that robbery was the motive.

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Wal-Mart Accused of Selling Ammo Past 11 PM

By JAMIE ROSS,
Courthouse News Service
March 2nd, 2009                                     [back to top] 

Wal-Mart sold ammunition to a man who gunned down two female college students in Tempe early the next morning, in violation of the company's policy not to sell ammo past 11 p.m., the parents of the slain women claim in Superior Court. They say the retailer then destroyed the surveillance video showing the man buying ammunition. Joshua Mendel shot and killed Carol Schiffman, a sophomore at the University of Maryland, and Nicole Kestenbaum, a sophomore at Arizona State University, on Feb. 18, 2007 at the Lakeview at the Bay Apartments where Kestenbaum lived. Mendel then killed himself. According to the lawsuit, Mendel told his roommate that he was going to a Wal-Mart in Tempe around 1:30 a.m. His roommate did not see him return home until 3:30 a.m. Mendel was seen on surveillance entering and leaving Wal-Mart between 2:13 a.m. and 2:35 a.m. and was "under the influence of drugs and alcohol and carrying a back pack," the suit claims. Mendel was allegedly able to buy ammunition from Wal-Mart despite its policy that ammunition is not to be sold after 11 p.m. Wal-Mart was directed by the Tempe Police Department to keep its interior store surveillance video, but destroyed it, the complaint states. Police allegedly found an empty bullet box in Mendel's bedroom and determined it was a brand sold at Wal-Mart. Schiffman and Kestenbaum attended John F. Kennedy High School in Bellmore, N.Y. and were best friends. The plaintiffs are represented by Robert Lewis and Christopher Treadway of Allen & Lewis and Johnny Sorenson and James Nolan of The Sorenson Law Firm.

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Did Wal-Mart Dupe the L.A. Times?

By Al Norman,
The Huffington Post
March 1st, 2009                               [back to top]

Did Wal-Mart put one over on the L.A. Times?

On February 27th, the Los Angeles Times ran a 1,342 word story about a resident of the Florence-Firestone neighborhood near Watts, in Los Angeles, California, who is circulating a petition in support of a Wal-Mart superstore.

The piece focused on a 51 year old man named Eddie Caire, who is going door- to-door petitioning for a Wal-Mart in a city that thus far has not been friendly to the world's largest retailer. The story makes it appear that Eddie Caire woke up one day and decided to lobby for a Wal-Mart. It fails to mention Wal-Mart is spending money, in California and elsewhere, to create people like Eddie Caire.

Caire says that more than 3,000 people have signed his petition. The LA Times describes Caire as a former Marine, former union organizer, and small business man who cleans up after construction sites. The newspaper depicts Caire as a "civic activist of sorts" who "decided late last year" that a Wal-Mart supercenter in Florence "would amount to Florence's salvation." Caire reached this epiphany after realizing that there were few grocery stores in his neighborhood.

"The people who have the least are expected to pay the most," he told the LA Times. Caire insists his main motivation is jobs. "I'm not so foolish as to think that we wouldn't put some people out of business," he admitted to the newspaper. "But this is a no-brainer." That statement was challenged in the story by Los Angeles County's senior deputy for economic development.

The reporter for the LA Times said that "Wal-Mart itself, predictably, is quite pleased" with Caire's efforts. That's because Wal-Mart is spending big bucks in California trying to find people like Eddie Caire to carry its water. Wal-Mart has set up a "Customer Action Network" (go to: www.wal-martcan.com) designed to allow the company to work behind the screen of an 'astro-roots' group of 'customers' that the giant retailer gets to push for new stores.

The Wal-Mart CAN is based in Van Nuys, California, and is targeted to the California region. (There is also a CAN effort underway in New England). By setting up local residents to 'petition' for a store, Wal-Mart creates the impression that there is a groundswell of support for more superstores. Wal-Mart has been imitating grassroots organizing groups for years, but in the past year or so has paid its PR consultants to create a "Customer Action Network" to counter opponents on a city-by-city basis. The ruse sometimes works with the media.

It is not clear if the LA Times asked Caire if he was recruited by the Wal-Mart Customer Action Network--or even if he is being paid. Wal-Mart's CAN is a proactive way to fend off strong anti-Wal-Mart organizing---especially in California---which led to the company's defeat in Inglewood, and many other communities up and down the state. Wal-Mart promises that people who join their Customer Action Network will learn "how you can make a difference." The company says CAN "is a program to keep customers informed about government issues that affect Wal-Mart and its ability to provide good value for your shopping dollar."

Wal-Mart is orchestrating CAN activities 280 miles north of Los Angeles in the city of Patterson, California, where the retailer launched a website to attract people like Eddie Caire. When members join the CAN, they are asked to indicate if they are willing to write to newspapers, host a forum or organize an event, do surrogate speaking, contact elected officials, and attend city council functions. In short---to do exactly what Eddie Caire is doing for Wal-Mart in Los Angeles.

Eddie Caire is right about one thing: the Wal-Mart jobs issue is a "no brainer." There are few net new jobs when a superstore opens. There is a reason why cities from Los Angeles, to Chicago, to New York City have fought back to keep Wal-Mart out. Inviting Wal-Mart to your neighborhood is like inviting the cannibals to dinner. Yet the LA Times claims that Wal-Mart "will bring jobs and low prices" to Florence. Even Eddie Caire admits that Wal-Mart will put some people out of business. During the Ingleside, California battle, the 'voodoo economics' of Wal-Mart, and their exploitative relationship with their workers, were key issues that tipped the balance against the superstore.

Eddie Caire most likely has not read the 2003 Retail Forward study that shows 2 grocery stores will close for every Wal-Mart supercenter that opens. Caire no doubt missed the research by David Neumark, Professor of Economics at U. Cal in Irvine in 2005, which found that "total payrolls per person decline, by about 5% in the aggregate, implying that residents of local labor markets earn less following the opening of Wal-Mart stores." Neumark's research found that in the southern states in America, "Wal-Mart reduces retail employment, total employment, and total payrolls per person."

But Eddie Caire will also find out that land use decisions are not based on petitions. Caire said he was surprised that local merchants who compete with Wal-Mart would sign his petition---but the fact is, most businesses and residents will sign petitions for almost anything to make the petition-bearer go away, which is why petitions alone are a very blunt instrument when it comes to growth policy.

Membership in Wal-Mart's CAN is open to anyone. To join in California, call toll-free 1-800-630-9226, or email CAN at: www.wal-martcan.com/join.html. When the retailer emails you with instructions, pass the word on to your friends to do just the opposite of whatever CAN wants. The more Wal-Mart opponents who join CAN, the more useless it becomes as an organizing tool--including in Los Angeles.

And if Eddie Caire is not a formal member of Wal-Mart's Customer Action Network, he ought to join up soon. It's a no brainer.

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VIDEOS

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Fighting Wal-Martization 25min. (2005)

A new video by The Labor Video Project 25 min. (2005)

Wal-Mart is now the largest private employer in the United States and has the same impact that General Motors had nearly 50 years ago. This 26-minute video shows why working people and trade unionists are fighting back and what Wal-Mart has in store for the communities it is seeking to build stores in. "Fighting Wal-Martization" is a hard hitting documentary that looks at how the constant price cutting not only drives local small businesses out of the community but how this ends up driving down the living conditions of the very people who shop at Wal-Mart. The video also looks at the healthcare crisis and how Wal-Mart increases its profits by sending it¹s employees to public hospitals to get treatment thereby shifting costs back onto the taxpayer. This video can be used at union meetings, community meetings and on cable TV to get the message out about the Wal-Martization of America and what it means to every working person.

Please mail your check of $20.00 and order form to

Labor Video Project
P. O. Box 720027,
San Francisco, CA 94172

For more info: lvpsf@labornet.org, (415) 282-1908

Wal-Mart: The High Cost of Low Prices (www.walmartmovie.com)

Independent America: The Two Lane Search for Mom & Pop (www.independentamerica.net)

Big Box Mart (www.jibjab.com)

Garth Brooks Parody (www.walmartworkersrights.org)

"Is Wal-Mart Good for America?" Frontline, PBS Video, (www.pbs.org)
 

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BOOKS

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NON-FICTION

The Case Against Wal-Mart By Al Norman Raphel Marketing ruth@raphael.com

Wal-Mart: The Face Of Twenty-First Century Capitalism Edited By Nelson Lichtenstein The New Press www.thenewpress.com

The Great Risk Shift: The Assault on American Jobs, Families, Health Care and Retirement By Jacob S. Hacker Oxford University Press www.oup.com

War On The Middle Class: How the Government, Big Business, and Special Interest Groups Are Waging War on the American Dream and How to Fight Back By Lou Dobbs Viking, a member of Penguin Group www.penguin.com

Momentum: Igniting Social Change in the Connected Age By Allison H. Fine Jossey-Bass www.joseybass.com

Big-Box Swindle: The True Cost of Mega-Retailers and the Fight for America's Independent Businesses, By Stacy Mitchell, www.beacon.org www.newrules.org

Wal-Mart: The Face Of the Twenty-First-Century Capitalism, Edited by Nelson Lichtenstein, Published by The New Press www.thenewpress.com

 The Bully Of Bentonville - How the high cost of Wal-Mart's Everyday Low Prices is Hurting America, By Anthony Bianco, Published by Doubleday
Email: specialmarkets@randomhouse.com

 How Wal-Mart is Destroying America (and the world), By Bill Quinn, Published By Ten Speed Press, Box 7123, Berkeley, CA 94707, www.tenspeed.com (pp. 163)

Slam Dunking Wal-Mart, By Al Norman, Published By Raphel Marketing, 12 S. Virginia Avenue, Atlantic City, New Jersey 08410, www.sprawl-busters.com (pp. 237)

The Great American JobsScam, By Greg LeRoy, Published By Barrett-Koehler Publishers, Inc., 235 Montgomery Street, Suite 650, San Francisco, CA 94104-2916, www.bkconnection.com (pp. 257)

Nickel and Dimed, By Barbara Ehrenreich, Published By Henry Holt and Company, LLC, 115 West 18^th Street, New York, NY 10011, www.henryholt.com (pp.221)

United States of Wal-Mart, By John Dicker, Published By Jeremy P. Tarcher (Penguin Group usa), www.us.penguingroup.com (pp.257)

The Wal-Mart Effect, By Charles Fishman www.penguin.com

Megamall On The Hudson, By David Porter and Chester L. Mirsky www.trafford.com

FICTION

Death By Discount, By Mary Vermillion, Published By Alyson Publications, P.O. Box 4371, Los Angeles, CA 90078-4371, www.maryvermillion.com (pp. 275)