OSHA investigating fatal accident at New Caney Wal-Mart distribution center

By Howard Roden
The Courier of Montgomery County
May 31, 2006                                                  [back to top]

NEW CANEY - The U.S. Occupational Safety and Health Administration has launched an investigation into the Memorial Day death of a Wal-Mart employee. Montgomery County Sheriff's Lt. Dan Norris said Carl Thomas Holt III, 28, of Kingwood, was crushed Monday afternoon by a stationary pallet elevator at the Wal-Mart food distribution center, located at 20131 Gene Campbell Road. Holt walked under the elevator to retrieve some merchandise that had fallen, Norris said.

"Apparently when he went into the area beneath the elevator, he did so in such a way it did not disable the elevator," Norris said.

According to the police report, the elevator was automatically loaded when it reached the top level and returned to the ground "at a high rate of speed, with some force," crushing the victim.

A co-worker saw the victim and immediately called for an in-house emergency response team, Norris said. After raising the elevator, the co-worker also called 9-1-1.

Holt was pronounced dead at the scene at 1:49 p.m. Monday. Precinct 4 Justice of the Peace James Oren Metts ordered an autopsy.

Personnel at the distribution center referred questions about the accident to Wal-Mart's corporate public relations department. A representative from the multibillion-dollar company did not issue a comment by press time Tuesday.

Vernonia Redden, an assistant director for OSHA in the Houston area, confirmed that an investigation into the fatal accident had begun. Meanwhile, Diana Pederson, of OSHA's public affairs office in Dallas, said the federal agency has up to six months to complete its investigation.

"That's not to say it will take six months, but it allows for a thorough and complete investigation," said Pedersen, adding that an OSHA investigator was already "on site."

If violations are found as a result of the investigation, OSHA could issue a citation. Citations are usually accompanied by a "monetary penalty," Pedersen said.

The 880,000-square-foot distribution center opened in 2003. Wal-Mart has at least 10 distribution centers and more than 300 discount stores, supercenters and neighborhood markets in Texas.

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'Where's my pay package?'

Investors address board on wage disparity

By Jennifer Waters,
MarketWatch
May 31, 2006                       [back to top]

(Corrects reference to the proportional relationship of top-executive salaries to store-worker pay.) CHICAGO (MarketWatch) -- Along with all the hoopla and grandstanding planned for Wal-Mart Stores Inc.'s marathon annual meeting Friday, there will be a shareholder proposal aimed at reining in the 1,000-to-1 difference in pay scales between executives and store associates. The proposal is one of five offered by investors that will go to the board during the four-hour meeting with nearly 16,000 shareholders at the Bud Walton Arena at the University of Arkansas. Annual meetings for the Bentonville, Ark.-based discount giant are known for their earsplitting corporate cheers and surprise appearances by some of the nation's top performers -- many of whom sell lots of CDs, apparel and other products through Wal-Mart. These gatherings also outshine the usually sober shareholder meetings of some other companies. But there is corporate business that has to be covered at Wal-Mart events, and they often include a number of very pointed proposals for the board. This year's proxy lists concerns ranging from humane treatment of animals to the compensation disparity -- probably the most controversial of all of them. At the top end of the wage scale is Chief Executive Lee Scott, whose estimated $17.54 million compensation package last year included his salary, health and pension benefits, bonuses, profit sharing and stock options, as well as other perks, according to the Interfaith Center on Corporate Responsibility. At the lowest rung is the average pay of the Wal-Mart associate, who makes just north of $17,617 a year, according to the ICCR's math. The organization used an hourly wage of $9.68 -- reported by Wal-Mart -- and multiplied that by 35 hours a week and then again by 52 weeks in the year. That disparity is much larger than the average difference between the chief executive's pay and that of the lowest-paid workers. According to a study completed last year by the Institute for Public Studies, the ratio of chief's pay to the average worker was 431 to 1 in 2004. That was an increase from 2003's 301 to 1 and a gigantic leap from 1990, when top executives made just 107 times that of their average production workers. "You would call that excessive," said Sister Patricia Wolf, ICCR's executive director, about Scott's pay. "And there's not a relationship here with executive compensation and performance." Though Wal-Mart's (WMTWal-Mart Stores, Inc. News , chart, profile, more

Delayed quote dataAdd to portfolio Analyst Create alertInsider Discuss Financials Sponsored by: WMT ) stock has bounced in recent sessions on concerns that higher prices for gas and utilities are stemming sales, the shares have mostly traded sideways in a fairly tight range since November, at an average of $46. In the past year, Wal-Mart's shares have dipped 14%. The proposal was filed by an order of nuns that belongs to ICCR, the Benedictine Sisters of Boeme, Texas, and it asks the board to review Wal-Mart's compensation policies for its senior executives and prepare a comparison with that of the lowest-paid U.S. workers from July 1995 to July 2005. In addition, the proposal calls for an analysis of the disparity "and the rationale justifying the trend," according to the proxy. Fraud suit "An example of why we believe that executive compensation at Wal-Mart is out of control: Wal-Mart's own lawsuit against its former vice chairman [Thomas Coughlin] for fraud against the company by misappropriating Wal-Mart's money was dismissed, because his $15 million retirement package contained a clause forbidding Wal-Mart to sue him for prior events," the proxy stated. Wolf said that the proposal is ICCR's last-ditch attempt to get Wal-Mart's attention. She and her members have worked with the company on a variety of issues for 13 years and are disappointed that there has been no action on this matter. "We aren't satisfied with their response," she added. 'There's not a relationship here with executive compensation and performance.' — Sister Patricia Wolf, ICCR The organization is also unsatisfied with a delay on a promised public-sustainability report that addresses strategies on economic, social and environmental issues. Chief among them: sweatshops. That proposal asks that the report be completed by December. Wal-Mart has made progress with supply-chain issues such as child labor, no forced labor, fair and safe working environments and credit for overtime workers in international countries, according to Wolf. "But there's still a great deal more to do with Wal-Mart in terms of transparency in its supply chain," she said. "The downside of not wanting to take some control of this is the potential of being branded a sweatshop," Wolf added. "It takes a long time to eliminate that kind of image." In the proxy, Wal-Mart said that it is working on the report. Wolf said that the company has told ICCR much the same, but it won't disclose what will be in the report. "For a company that we have worked with for so many years, they should be beyond that point. ... We have a developed a level of mutual respect with management and we did expect that they would be forthcoming," the sister asserted. Fighting over children Child labor is among the issues that WakeUpWalMart.com -- one of a handful of organized efforts devoted to taking on Wal-Mart -- is targeting in fliers that it seeks to hand out to shareholders and also to feature in local advertising. "It would be so easy for Wal-Mart to implement a zero-tolerance policy on child labor," said its spokesman, Chris Kofinas. "We don't understand why they won't do that." The proposal is supported by a number of shareholders, including the California Public Employees' Retirement fund. With more than 19.8 million shares, Calpers already has voted for the proposal and believes it "poses no long-term harm to the company," the pension fund said. Wal-Mart did not comment on any of the proposals. Also making its third appearance on the Wal-Mart proxy is a proposal asking the company's board to document, by race and gender, who received stock options and stock awards as a percentage of compensation. "We want Wal-Mart to look at the ways in which they disperse their options and their compensation," said Margaret Covert, shareholder-action coordinator for NorthStar Asset Management, "Other companies do it. Coca-Cola, for one, does it quite willingly and very nicely." While acknowledging that she doesn't know what the current breakdown is, Covert estimated 60% of the company's associates, or salespeople and store clerks, are women and nearly 30% are of color. "What we can surmise is that the disparity is fairly large," she said. "We know that the top five options receivers last year were all white men." Calpers supports that proposal too, as well as all the others. Wal-Mart opposes the proposal, saying that it has taken diversity into consideration for all of the company's officers. Accounting for money The International Brotherhood of Teamsters is behind a proposal to open the books on political contributions and so-called soft money. With support from the Center for Political Accountability, the proposal is seeking disclosure on where funds from Wal-Mart's political-action committee, Wal-PAC, is allocated, for example. "The problem is that much of Wal-Mart's political spending is not disclosed or easily discovered," said Louis Malizia, assistant director of the Teamster's capital strategies department. The Teamsters worry, for instance, that some funds could be earmarked toward trade associations and tax-exempt organizations that might support ideals that shareholders don't endorse. "Far be it from the Teamsters or any investors to say that Wal-Mart should not be active politically," added Malizia. "It's a powerful entity that has to seek the best advantages for its shareholders and the corporation through the political process. But shareholders need to gauge where [Wal-Mart] is spending and if it's in line with their interests." Wal-Mart opposes the measure, noting that federal and state laws mandate a number of disclosures. "The board has concluded that ample disclosure exists regarding Wal-Mart's political contributions to alleviate the concerns cited," according to the proxy.

Jennifer Waters is a reporter for MarketWatch based in Chicago.

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Wage Disparity On Wal-Mart Shareholder Agenda

Dow Jones Newswires
05-31-06                               [back to top]

CHICAGO (Dow Jones) -- Along with all the hoopla and grandstanding planned for Wal-Mart Stores Inc.'s marathon annual meeting Friday, there will be a shareholder proposal aimed at reining in the 1,000-to-1 difference in pay scales between executives and store associates.

The proposal is one of five offered by investors that will go to the board during the four-hour meeting with nearly 16,000 shareholders at the Bud Walton Arena at the University of Arkansas.

Annual meetings for the Bentonville, Ark.-based discount giant are known for their earsplitting corporate cheers and surprise appearances by some of the nation's top performers -- many of whom sell lots of CDs, apparel and other products through Wal-Mart. These gatherings also outshine the usually sober shareholder meetings of some other companies.

But there is corporate business that has to be covered at Wal-Mart events, and they often include a number of very pointed proposals for the board. This year's proxy lists concerns ranging from humane treatment of animals to the compensation disparity -- probably the most controversial of all of them.

At the top end of the wage scale is Chief Executive Lee Scott, whose estimated $17.54 million compensation package last year included his salary, health and pension benefits, bonuses, profit sharing and stock options, as well as other perks, according to the Interfaith Center on Corporate Responsibility.

At the lowest rung is the average pay of the Wal-Mart associate, who makes just north of $17,617 a year, according to the ICCR's math. The organization used an hourly wage of $9.68 -- reported by Wal-Mart -- and multiplied that by 35 hours a week and then again by 52 weeks in the year.

That disparity is much larger than the average difference between the chief executive's pay and that of the lowest-paid workers. According to a study completed last year by the Institute for Public Studies, the ratio of chief's pay to the average worker was 431 to 1 in 2004. That was an increase from 2003's 301 to 1 and a gigantic leap from 1990, when top executives made just 107 times that of their average production workers.

"You would call that excessive," said Sister Patricia Wolf, ICCR's executive director, about Scott's pay. "And there's not a relationship here with executive compensation and performance."

Though Wal-Mart's (WMT) stock has bounced in recent sessions on concerns that higher prices for gas and utilities are stemming sales, the shares have mostly traded sideways in a fairly tight range since November, at an average of $46. In the past year, Wal-Mart's shares have dipped 14%.

The proposal was filed by an order of nuns that belongs to ICCR, the Benedictine Sisters of Boeme, Texas, and it asks the board to review Wal-Mart's compensation policies for its senior executives and prepare a comparison with that of the lowest-paid U.S. workers from July 1995 to July 2005.

In addition, the proposal calls for an analysis of the disparity "and the rationale justifying the trend," according to the proxy.

"An example of why we believe that executive compensation at Wal-Mart is out of control: Wal-Mart's own lawsuit against its former vice chairman [Thomas Coughlin] for fraud against the company by misappropriating Wal-Mart's money was dismissed, because his $15 million retirement package contained a clause forbidding Wal-Mart to sue him for prior events," the proxy stated.

Wolf said that the proposal is ICCR's last-ditch attempt to get Wal-Mart's attention. She and her members have worked with the company on a variety of issues for 13 years and are disappointed that there has been no action on this matter. "We aren't satisfied with their response," she added.

The organization is also unsatisfied with a delay on a promised public- sustainability report that addresses strategies on economic, social and environmental issues. Chief among them: sweatshops.

That proposal asks that the report be completed by December.

Wal-Mart has made progress with supply-chain issues such as child labor, no forced labor, fair and safe working environments and credit for overtime workers in international countries, according to Wolf. "But there's still a great deal more to do with Wal-Mart in terms of transparency in its supply chain," she said.

"The downside of not wanting to take some control of this is the potential of being branded a sweatshop," Wolf added. "It takes a long time to eliminate that kind of image."

In the proxy, Wal-Mart said that it is working on the report. Wolf said that the company has told ICCR much the same, but it won't disclose what will be in the report.

"For a company that we have worked with for so many years, they should be beyond that point. ... We have a developed a level of mutual respect with management and we did expect that they would be forthcoming," the sister asserted.

Child labor is among the issues that WakeUpWalMart.com -- one of a handful of organized efforts devoted to taking on Wal-Mart -- is targeting in fliers that it seeks to hand out to shareholders and also to feature in local advertising.

"It would be so easy for Wal-Mart to implement a zero-tolerance policy on child labor," said its spokesman, Chris Kofinas. "We don't understand why they won't do that."

The proposal is supported by a number of shareholders, including the California Public Employees' Retirement fund. With more than 19.8 million shares, Calpers already has voted for the proposal and believes it "poses no long-term harm to the company," the pension fund said.

Wal-Mart did not comment on any of the proposals.

Also making its third appearance on the Wal-Mart proxy is a proposal asking the company's board to document, by race and gender, who received stock options and stock awards as a percentage of compensation.

"We want Wal-Mart to look at the ways in which they disperse their options and their compensation," said Margaret Covert, shareholder-action coordinator for NorthStar Asset Management, "Other companies do it. Coca-Cola, for one, does it quite willingly and very nicely."

While acknowledging that she doesn't know what the current breakdown is, Covert estimated 60% of the company's associates, or salespeople and store clerks, are women and nearly 30% are of color. "What we can surmise is that the disparity is fairly large," she said. "We know that the top five options receivers last year were all white men."

Calpers supports that proposal too, as well as all the others.

Wal-Mart opposes the proposal, saying that it has taken diversity into consideration for all of the company's officers.

The International Brotherhood of Teamsters is behind a proposal to open the books on political contributions and so-called soft money. With support from the Center for Political Accountability, the proposal is seeking disclosure on where funds from Wal-Mart's political-action committee, Wal-PAC, is allocated, for example.

"The problem is that much of Wal-Mart's political spending is not disclosed or easily discovered," said Louis Malizia, assistant director of the Teamster's capital strategies department.

The Teamsters worry, for instance, that some funds could be earmarked toward trade associations and tax-exempt organizations that might support ideals that shareholders don't endorse.

"Far be it from the Teamsters or any investors to say that Wal-Mart should not be active politically," added Malizia. "It's a powerful entity that has to seek the best advantages for its shareholders and the corporation through the political process. But shareholders need to gauge where [Wal-Mart] is spending and if it's in line with their interests."

Wal-Mart opposes the measure, noting that federal and state laws mandate a number of disclosures. "The board has concluded that ample disclosure exists regarding Wal-Mart's political contributions to alleviate the concerns cited," according to the proxy.

(c) 2006 Dow Jones & Company, Inc

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Wal-Mart takes cancer-causing children's clothes off shelves

Agence France Presse
31 May 2006                         [back to top]

BEIJING : US retail giant Wal-Mart said it had taken several brands of children's clothes off its shelves in China after they were found to contain a cancer-causing dye.

Wal-Mart stores in Guangdong province were selling nine Chinese brands of children's clothes that contained a dye that could decompose into toxic aromatic amine compounds, the Beijing News reported.

One of Wal-Mart's Beijing stores was also selling some of the brands, the Beijing Daily Messenger said.

Wal-Mart acknowledged Wednesday that children's clothes containing the harmful dye were sold at those shops and said the company had suspended selling them while an investigation took place.

"(This) is unacceptable. We are currently investigating... to prevent similar incidents from happening," Huang Jianling, manager of public relations of Walmart's China head office in south China's Shenzhen city, told AFP.

"We are actively cooperating with relevant government departments."

Guangdong's provincial trade and commerce bureau has issued an urgent order to suspend sales of the substandard children's clothes, the Beijing News said.

Huang declined to say whether those suspect clothes were currently sold in the Wal-Mart's US or other overseas branches.

Wal-Mart operates in 22 Chinese cities.

Copyright © 2006 Agence France Presse. All rights reserved.

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Stocks fall as Wal-Mart, Goldman decline

Tue May 30, 2006               [back to top]

NEW YORK (Reuters) - U.S. stocks fell on Tuesday after Wal-Mart Stores Inc. <WMT.N> said high energy prices held back May same-store sales and a brokerage downgraded shares of General Motors Corp. <GM.N>

Shares of Goldman Sachs <GS.N> fell 0.7 percent to $151.80 after Chief Executive and Chairman Henry Paulson was nominated to replace Treasury Secretary John Snow.

The Dow Jones industrial average <.DJI> was down 50.67 points, or 0.45 percent, at 11,227.94. The Standard & Poor's 500 Index <.SPX> was down 4.91 points, or 0.38 percent, at 1,275.25. The Nasdaq Composite Index <.IXIC> was down 11.17 points, or 0.51 percent, at 2,199.20.

© Reuters 2006. All rights reserved

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Wal-Mart, EP schools employ most of state's CHIP families

By Diana Washington Valdez
El Paso Times
May 29, 2006                                 [back to top]

Employers with the largest number of CHIP-enrolled families in Texas include El Paso's two largest school districts and the most successful retailer in the nation, according to state statistics. Wal-Mart had the single largest number of employees in Texas who turned to the government-subsidized program so their children could receive medical care. The retailer is also one of El Paso's top 10 private employers.

The data provided by the state at the request of the El Paso Times suggests that some major employers may not have affordable medical insurance plans, or that their employees don't make enough to be able to purchase an employer plan.

Dan Fogleman, spokesman for Wal-Mart's corporate office in Bentonville, Ark., said the retailer employs 146,255 Texans, and the state's figure is only a fraction of employees, whose status is difficult to verify.

"We offer quality, affordable and accessible health care insurance for our full-time and part-time associates, with some premiums as low as $11," he said. "We (recently) extended the eligibility for health care insurance to our part-time associates. And, our average hourly wage for full-time employees is $10.04 an hour."

The state-administered Children's Health Insurance Program, which is supported with tax dollars and premiums, is designed to provide health care insurance at a nominal fee to families that don't make enough to pay for private insurance and make too much to qualify for Medicaid, the so-called "working poor."

According to the Texas Health and Human Services Commission, the El Paso Independent School District had 280 families enrolled in CHIP in February 2005 (the most recent data available), and the Ysleta Independent School District had 235 CHIP families.

Gail Randall, spokeswoman for the commission in Austin, said the figures included full- and part-time employees. She also said the state did not have comparable data for Medicaid families.

Jerry Molinoski, the Ysleta school district human resources associate superintendent, said the district has about 9,000 full and part time employees.

"(Ysleta) is a competitive employer and offers salaries that are market driven," he said. "An affordable benefits package is (also) offered to all employees at a cost of $25 per month."

Statewide, school districts represented 12 of the top 20 sources of wages and salaries for CHIP families. Other El Paso CHIP families worked for the University of Texas System, Sears, Dillard's, Home Depot and McDonald's.

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The Number You Have Reached Is Wal-Mart

Sandra O’Loughlin
May 29, 2006                 [back to top]

NEW YORK -- As the world's No. 1 retailer, everyone wants to see and crunch Wal-Mart's sales figures. But that's hard to do as Wal-Mart rarely shares its sales register data.

However, a new report throws light onto Wal-Mart's deep, well-sealed fortress of valuable numbers. The Wal-Mart data is from Information Resources Inc., Chicago, based on "MarketInsight," a proprietary sales tracking service that includes Wal-Mart coverage; and its "Consumer Network," a nationally representative panel of 70,000 households that tracks purchases with handheld barcode scanners.

According to IRI, Wal-Mart garnered an increased share in 12 of the 15 fastest-growing CPG categories during the 52 weeks ending March 19. Some of these increases were fueled by Wal-Mart's expanding base of supercenters, which are bringing new shoppers to the fold. But more in-store spending among its existing customer base also played a significant role.

The sports drink category, for example, saw a 22.4% increase at food, drug and mass merchants—including Wal-Mart—during that period, while coffee went up 11.3%. Wal-Mart's dollar share increased 1.4 points in each of these two categories. However, Wal-Mart failed to keep pace in sales of bottled water, hand and body lotion, and eye cosmetics. These categories grew 17.5%, 14% and 5.6%, respectively, but Wal-Mart's dollar share decreased by 0.2, 0.1 and 1.7 points.

Wal-Mart also has seen sales declines in such non-food categories as kitchen storage (-4.6 share points during the 52-week period), weight control candy/tablets (-3.6) and tights and socks (-3.4). IRI attributes this to Wal-Mart's shift in emphasis from non-food to food categories and also reduced spending by Wal-Mart's lower-income consumers on discretionary purchases. Other categories experiencing declines at Wal-Mart include hair accessories (-2.7), pet supplies (-2.6), batteries (-2.3), facial tissue (-1.8) and footcare products (-1.8).

The IRI study also uncovered a catalyst behind some recent moves by Wal-Mart—including increasing natural and organic food SKUs, enhancing its Web site and testing higher-end retail locations—to attract consumers beyond its traditional nucleus. Some 80% of Wal-Mart's sales are derived from one-third of its shoppers. These heavy shoppers skew in the lower-middle income range, with the majority earning between $25,000-$64,900, and are younger to middle-age. IRI says this segment is vulnerable to "budget squeezing" due to rising gas and home heating fuel costs.

Where Wal-Mart can achieve consumer growth is among higher income and older consumers. Per the study, "Wal-Mart appears to be leveraging healthcare services as a cornerstone in efforts to step up appeal to 55+ consumers . . . Catering to [them] is an imperative for Wal-Mart."

IRI pinpoints CPG categories in which "Wal-Mart's share of heavy-shopper spending is significantly below average." These include soup, carbonated beverages, salad dressing, beer, milk and frozen pizza. "These categories represent strong upside potential for Wal-Mart," said analyst Sheila McCusker. "Manufacturers have an opportunity to partner with Wal-Mart in category development initiatives, including expanded assortment and incremental merchandising." Wal-Mart did not return a call for comment.

"Wal-Mart is transitioning aggressively from division one stores, its traditional format, to supercenters and adding consumables," said Ken Harris, managing director at Cannondale Associates, Evanston, Ill. "If you add packaged goods to hard goods and soft goods, its packaged goods business will go up. They're selling the stuff now, whereas before they didn't. For marketers of consumer packaged-goods, that means anyone in consumables that isn't outpacing Wal-Mart's organic growth isn't performing well. If Wal-Mart is growing at 5% . . . [and] you're not growing faster than that, you're not doing your job right."

© 2006 VNU eMedia Inc. All rights reserved.

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California town the latest to snub Wal-Mart

By Jim Christie
Sun May 28, 2006                    [back to top]

SAN FRANCISCO (Reuters) - The town of Hercules, California, has upscale aspirations and its vision of the good life rules out a Wal-Mart store.

Similarly, three Maine towns are considering a "box-free" zone to prevent Wal-Mart from opening in an area of coastal New England known for its colonial charm, an idea mirroring wealthy and quaint Nantucket's recent ban on chain stores.

The city council of the mixed-race bedroom community of 23,000 east of San Francisco voted this week to invoke eminent domain to block Wal-Mart Stores Inc. from building a 99,000 square foot (9,200 sq meter) store near the town's waterfront.

The area is the centerpiece of Hercules' redevelopment effort, which aims to create a destination on par with high-end Sausalito across the bay. That would complement Hercules' plan to market itself as an "anti-suburb" with new neighborhoods appealing to home buyers nostalgic for old-fashioned residential areas within cities.

The unusual move stunned California's big-box retailers, who usually benefit from eminent domain, which allows government to take private property for its use or for use by third parties if their projects would benefit the public.

"To use eminent domain is such an abuse of the process," said Rex Hime, president of the California Business Properties Association, which represents large retailers.

"We've seen cities come up with land restrictions, we've seen cities come up with environmental restrictions, we've seen cities do any number of things ... but never going so far as to using eminent domain," Hime said. "This is the beginning of a very slippery slope ... Next year those laws could apply to Target, Home Depot, Lowe's; it just keeps right on going."

LOW PRICES, LOW INCOME

Wal-Mart is no stranger to hostility. In a garden variety instance of opposition fueled by union activism, officials in Oakland, California, another San Francisco Bay area city, had tried to bar big-box retailers altogether because Wal-Mart aimed to enter their market.

Wal-Mart faces a different and more confounding source of anger in Hercules -- a "class war," according to Roger Pilon, a legal affairs specialist at the libertarian Cato Institute.

"The people in Hercules are coming across as looking down their noses on those who shop at Wal-Mart, as not wanting 'those people in our neighborhood,'" Pilon said.

Wal-Mart opponents in Hercules say its presence would blight their town, the first in California with planning codes guided by "New Urbanism," a school of urban design focused on pedestrian-oriented neighborhoods mixed with homes and shops and lacking big-box retailers.

"It's the quality of living in Hercules that we're dealing with," said Steve Kirby, a Hercules resident since 1988. "One thing that we don't want is a regional-type business in there that brings in a lot of traffic."

To some in Hercules, Wal-Mart's low prices raise the prospect of low-income visitors from neighboring towns to the north, which have median family income levels well below that of Hercules, and southern neighbor San Pablo, a gritty blue-collar town.

"Hercules is a high-income enclave in a larger lower-income trade area that is currently underserved by retail activity," noted a 2005 analysis done for the town planners by Strategic Economics and Main Street Property Services.

Hercules residents opposed to Wal-Mart say they will press their fight even if the retailer scales down its store plan. Compromise is unlikely, Kirby said: "Now, forget it."

Wal-Mart spokesman Kevin Loscotoff declined to comment on the company's troubles in Hercules, but said the retailer is planning a legal challenge to the city council's action.

© Reuters 2006. All rights reserved.

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Critics Say Wal-Mart Grows Part-Timers to Cut Benefits

By Amy Joyce
Washington Post
May 26, 2006                    [back to top]

Wal-Mart Stores Inc. is shifting a portion of its full-time employees to part-time status, company critics say, which they assert will have the effect of limiting health insurance, even though the company is expanding coverage for its part-time workers. Company spokesman Dan Fogelman said Wal-Mart is not necessarily forcing workers into part-time schedules but is "trying to ensure that our staffing matches our customer shopping patterns. But there is no specific target number in terms of how many associates will be full time versus part time." The majority of Wal-Mart jobs are currently full time, he said.

The criticism arose after WakeUp Wal-Mart obtained detailed copies of the new health plans, which the company confirmed yesterday. The company, which announced the changes in general terms in a press release this month, is offering open enrollment for part-time workers this week only if they also enroll their dependent children, who were not eligible for coverage before. Another open enrollment will be available to all employees in October.

The new benefit plan for "Peak-Time" workers -- Wal-Mart's name for part-timers -- also shortens the waiting period for part-time employees to obtain coverage to one year from two years.

But the plan will be unaffordable for workers who are moved from full-time wages to part-time, said Chris Kofinis, a spokesman with WakeUp Wal-Mart, a group funded by the United Food and Commercial Workers union.

Many plans are offered. The "value plan" has a $23 premium per month for individuals and $65 for families, with a deductible of $1,000 per person and a family maximum of $3,000. The most popular "network saver plan" ranges from $39 to $79 per month with deductibles of $350 to $1,000.

Those workers who are moved to part-time status can keep their current health plan until the end of the year, but they will lose other benefits such as dental and life insurance, and short- and long-term disability as soon as they move to part-time hours, according to the plan document.

Employees are told if they keep the plan they had as full-time employees after they move to part-time status, however, "your cost for this coverage will not change and you may be working fewer hours."

The company has promoted the plan in recent months, saying the coverage is more comprehensive than ever.

"Wal-Mart is one of the few retailers that offers benefits to part-time associates and premiums are as low as $11 per month," said Mona Williams, a company spokeswoman. "With this special open enrollment, we have expanded eligibility and made coverage available to the children of our associates who choose to work part-time."

Full-time Wal-Mart workers have been wary of the pending changes, an employee at a south Florida store said. She spoke on condition of anonymity, fearing she could lose her job for speaking to the press.

She said she discovered last week, after checking upcoming schedules, that her full-time hours in accounting will be cut in about three weeks. She was told last week the company was shrinking her department. She then interviewed for and took a job as a customer service manager.

Part-time status will make coverage difficult, she said. "It would be really hard to afford," she said. Her current plan covers herself, three children and her husband, who is retired. The part-time plan eliminates spouse coverage, and with fewer hours, she does not think she could afford the $3,000 deductible.

A J.P. Morgan Chase & Co. report in January said the company is planning to "right size" its full-time versus part-time mix to improve productivity and reduce store labor costs. According to the report, about 80 percent of employees are full time. The company is seeking to lower that rate to about 60 percent during the next 12 to 18 months, the report said.

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Are big-box stores truly a blessing?

www.chinaview.cn
2006-05-26                      [back to top]

BEIJING, May 26 (Xinhuanet) -- Is Wal-Mart a good thing?

As Wal-Mart and other huge stores are sprouting up in communities throughout the United States, more and more Americans are beginning to question the benefits these mammoth stores are bringing to their lives.

This is the question that many Chinese people, especially those living in major cities, may be asking in the not too distant future when their familiar neighbourhood stores are driven to extinction by the likes of Wal-Mart and Carrefour.

These "big-box" stores, as they are called in the United States, are the symbol of globalization. They derive their strength from the successful application of the global sourcing business model that is built on a highly efficient communication and logistics system.

Such a system has enabled these retail behemoths to source their merchandise from anywhere in the world that offers the best price. Wal-Mart, for instance, accounted for more than 10 per cent of China's total exports to the United States.

Cheap imports together with a tight-fisted management style have combined to boost the competitiveness of the big-box stores, enabling them to steam-roll small-scale retailers, including many mom-and-pop shops and neighbourhood stores, that cannot hope to compete on economies of scale. Consumers are reaping the benefits. They pay less, sometimes as much as 25 per cent for some goods, at the big-box stores than the traditional retail outlets.

The big-box stores are so efficient that together they accounted for an estimated 50 per cent of the consistently high productivity growth rate of the United States in recent years. Such a productivity gain, in turn, has helped keep inflation low despite rising consumer demand and a red-hot property boom.

"The US productivity miracle and the emergence of Wal-Mart-style retailing are virtually synonymous," wrote Kenneth Rogoff, professor of economics and public policy at Harvard University, and formerly chief economist at the International Monetary Fund.

Chinese consumers seem to have welcomed the Wal-Mart-style of retailing with open arms. Having saturated the market in big cities, some foreign retail giants are moving to smaller cities in the relatively more prosperous coastal provinces.

The success of these foreign retailers is serving as a model that has been closely studied and emulated by some of the largest domestic retail enterprises. This could help boost productivity in the service sector which has apparently lagged far behind manufacturing.

Indeed, large retail enterprises can take the lead in promoting China's service sector by adopting the operating models of Wal-Mart and other US big-box stores. The built-in efficiency of these models can bring increased benefits to consumers in the form of lower prices and greater convenience.

But as Professor Rogoff noted, the proliferation of big-box stores is not entirely a benign phenomenon. What concerned Rogoff and others is the effect on low-wage workers and smaller-scale retailers. "While completely legal, studies suggest that Wal-Mart's labour policies exploit regulatory loopholes that, for example, allow it to sidestep the burden of healthcare costs for many," Rogoff wrote. "And the entry of big-box stores into a community crushes long-established retailers," he noted.

Some people may wish to shrug off these concerns as a reasonable price to pay for progress. But there are those who believe that balanced growth must be preserved to ensure sustainability. It is a lot more desirable for Chinese retail enterprises to modify the American model in order to benefit consumers without having to sacrifice employees' welfare. The public will also have to decide whether it is worth preserving a bit of tradition in their communities by keeping small neighbourhood stores in business.

In some US cities, notably San Francisco, neighbourhood grocery stores are protected by strict zoning laws that limit the number and size of supermarkets within a certain area. This is not necessarily the best solution because such laws are usually too inflexible and cumbersome.

It's a matter of lifestyle and only the people can decide what's best for them.

(Source: China Daily)

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Former Wal-Mart exec faces fraud sentence Aug. 11

By MARCUS KABEL
AP Business                        [back to top]

(AP) - SPRINGFIELD, Missouri-A federal judge has set a sentencing hearing Aug. 11 for Thomas Coughlin, the former No. 2 executive at Wal-Mart Stores Inc., who pleaded guilty in January to fraud and tax charges for stealing money, gift cards and merchandise from the world's largest retailer.

Coughlin, 57, faces a maximum of 28 years in prison after pleading guilty to five counts of wire fraud and one count of filing a false tax return. He also could be fined $1.35 million (€1 million).

U.S. District Judge Robert Dawson, who accepted Coughlin's guilty plea in January, set the sentencing hearing for Aug. 11 in his courtroom in Fort Smith, Arkansas.

Prosecutors have recommended a sentence but Dawson sealed the plea agreement pending a presentencing report.

Wal-Mart referred Coughlin to federal prosecutors after discovering Coughlin allegedly had embezzled money from the company and used expense vouchers to buy products as varied as snakeskin boots, hunting trips and Bloody Mary cocktail mix. Wal-Mart estimated losses at up to $500,000. (€392,000).

Wal-Mart Chief Executive Lee Scott has called the ordeal "an embarrassment" for himself and for the company.

Coughlin was a protege of company founder Sam Walton. As vice chairman, he received a base salary of $1.03 million (€807,500) in his final year with the company. He received more than $3 million (€2.35 million) in bonuses and other income in the same period and held about $20 million (€15.7 million) in Wal-Mart stock, according to Securities and Exchange Commission filings.

In documents filed with the court, Coughlin specifically admitted defrauding the company to pay for the care of his hunting dogs, lease a private hunting area, upgrade his pickup truck, buy liquor and a cooler, and receive $3,100 (€2,430) in cash.

Coughlin retired as Wal-Mart vice chairman last year and gave up his spot on the company board in March after Wal-Mart referred him to prosecutors. The matter was taken up by a grand jury in Fort Smith.

In November, former Coughlin subordinate Robert E. Hey Jr. agreed to plead guilty to wire fraud and testify for the government in return for parole instead of prison time.

Besides giving the case to federal pro