Wal-Mart Same-Store Sales Fall First Time in 10 Years

By Heather Cannon

By CHUCK BARTELS
The Associated Press                        [back to top]

LITTLE ROCK, Ark. — A union-backed group is to launch two television ads Thursday that feature Wal-Mart workers calling on their employer to improve working conditions and make company health insurance more affordable.

Funded by the United Food and Commercial Workers International Union, the 30-second ads by WakeUpWalMart.com include three workers who list their complaints, which include low wages, being locked in stores and not being able to leave without penalty to care for a sick child.

"This holiday season, tell Wal-Mart to do the right thing, put America’s families first," the three workers say in one ad, sharing segments of the dialogue.

To coincide with the start of the ads, WakeUpWalMart.com is having supporters hand out leaflets at 300 Wal-Mart stores today, spokesman Chris Kofinis said.

"It’s our first ad campaign of the holiday season and the first where we use actual Wal-Mart workers," Kofinis said.

Wal-Mart Stores Inc. spokesman David Tovar said the claims in the ads break no new ground and that Wal-Mart’s customers understand the company.

"Our customers see these attacks as a part of a tired and failing campaign. Americans know that Wal-Mart creates jobs, reduces the cost of health care through our US$4 generic drug program and protects the environment through our sustainability efforts," Tovar said.

"People see that Wal-Mart gets good things done. Our customers know their holidays will be brighter when they shop at Wal-Mart. We remain focused on serving our customers and providing value to them," he said.

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Wal-Mart Trips as It Changes a Bit Too Fast

By Michael Barbaro
New York Times
November 30, 2006                               [back to top]

The most wonderful time of the year? Tell that to Wal-Mart. The world’s largest retailer has long dominated the holiday shopping season, with eye-popping discounts that drew throngs of customers and made life miserable for competitors.

After fresh price cuts this month, few doubted they would own this season, too. But this heartwarming storyline for Wal-Mart has turned into heartburn for the company.

Today, the retailer is expected to announce, based on its own estimates, that sales for November fell for the first time in a decade.

“In a season of what has been pretty healthy numbers from retailers, Wal-Mart has been lackluster, to say the least,” said Adrianne Shapira, an analyst at Goldman Sachs. “Houston, there is a problem.”

But what exactly is the problem?

At first glance, the stumbles seem to resurrect the perennial question: is Wal-Mart too big for its own good, making it impossible to achieve the gravity-defying growth that Wall Street has counted on for four decades.

Yet, what is happening now appears to be more complicated than Wal-Mart hitting a wall. It may simply be changing too fast, acting more like a start-up than a company with 6,000 stores, 1.3 million employees and sales of $312 billion.

And that may not be such a bad thing in the long run.

In the last year, Wal-Mart has introduced a dizzying number of new strategies: it started a line of urban fashion, began renovating 1,800 stores, overhauled its advertising to focus less on price and more on style, rolled out $4 generic drugs, ended its layaway program and imposed wage caps on its workers, to name just a few.

Given its size, even the slightest misstep is magnified. And this season, Wal-Mart has made several, alienating shoppers with designer-inspired clothing and disruptive store remodeling.

And when these miscues occur at the same time, as they have recently, they spook not just investors in Wal-Mart — its shares are down 5 percent this month — but the broader stock market as well.

Wal-Mart has little choice but to change, analysts said. The company’s formula since 1962 — pile cheap merchandise high and watch it fly — is no longer enough. Competitors like Target and Best Buy have stolen shoppers with smarter fashions and sleeker electronics, leaving Wal-Mart to sell Americans mostly everyday products like laundry detergent and socks.

And the company’s strategy of growing through relentless store openings — about 300 a year for the last decade — has begun to hurt the retailer as much as help it by siphoning away sales from other Wal-Marts nearby.

The problem shows up in a crucial yardstick of its performance: sales at stores open at least a year, like the November figure that rattled investors.

Since the beginning of 2006, Wal-Mart’s monthly sales have risen 2.4 percent, half as fast as Target, which posted a 4.8 increase.

Wall Street has been urging the company to find a solution to the slide.

“They need to take some risks,” said Christine K. Augustine, an analyst at Bear Stearns, who expressed alarm at the company’s November performance. “I do not fault them for trying new things.”

But the turnaround effort — which the company has dubbed “Wal-Mart Out In Front” — is taking longer than investors had hoped. And there is a growing consensus that the rapid pace of change may be one reason why.

Individually, the strategies can be viewed as healthy fixes to longstanding problems at Wal-Mart. Trendier (and pricier) clothing, for example, will theoretically persuade consumers to spend more at Wal-Mart, rather than, say, Kohl’s. Ending layaway plans and capping wages will save the company money.

Collectively, however, these measures have created the retail equivalent of cacophony in the stores, temporarily disorienting consumers and employees at a crucial time of year.

For example, at the same time that Wal-Mart introduced fur-trimmed jeans in the clothing department and 42-inch flat-screen televisions in the electronics section this year, it also began renovating hundreds of stores, “making it difficult to find all that enticing new stuff,” Ms. Augustine said.

“They are working at cross purposes over a short period,” she said.

Wal-Mart executives have conceded that the company’s efforts to reinvent itself have hit a few snags.

Several weeks ago, H. Lee Scott Jr., the chief executive of Wal-Mart, told analysts that he was “surprised that the disruption that occurred during the remodels was as extensive as it has been.”

The new clothing at Wal-Mart created problems, too. After early success with a designer women’s clothing line called Metro7 in 600 mostly urban area stores, the company rolled out the fashions across the chain.

It did not work. The average Wal-Mart shopper lives in the suburbs, is roughly 5-foot-2 and wears a size 14 — making them poor candidates for the skinny jeans that were a popular, tight-fitting fashion in urban markets.

Consumers like Shirley Shepherd, who lives outside Salt Lake City, Utah, balked at the unfamiliar clothes.

“I would never buy dress clothes here,” said Ms. Shepherd, who shops at the Wal-Mart in Midvale, Utah, twice a week for staples like toothpaste, batteries, underwear and socks.

It’s not just a simple matter of new fashions not selling well. The new clothes took up space where Wal-Mart stocked reliable sellers like basic blouses and sensible skirts. So the entire apparel department suffered, contributing to the November sales drop.

Mr. Scott said the company moved “too far, too fast” with the Metro7 clothing line and will now sell it only in its urban stores.

By ending layaway plans, which allowed low-income shoppers to make purchases in installments, the chain freed up the store space and employees.

But it also upset shoppers like Michele Kahindi, a 30-year-old mother of three who lives in Portland, Ore.

Eliminating the program “hinders a mom’s ability to hide stuff from the kids,” she said. “I don’t get it. Now Kmart is going to get my layaway business.”

Some of the changes at Wal-Mart have worked.

Higher-priced electronics have been a hit. By offering products like flat-panel televisions, cellphones and MP3 players at several prices — including a $3,000 plasma-screen TV — Wal-Mart has tripled sales in some stores, proving that consumers will buy upscale products at the chain.

The way the company manages its work force has also helped its bottom line. For example, it is relying on more part-time workers and asking them to be available at night and on weekends when checkout lines are longest.

Sprucing up stores, while temporarily frustrating to shoppers, has improved sales, the company said.

But the company’s hope for a turnaround in store sales could take at least a year, if not longer, for several reasons.

It is too late to cancel the latest orders for Metro7, meaning hundreds of stores will be saddled with the slow-selling fashions for months. Renovations, on hold for the rest of the holiday season to make shopping easier, will start up again in January.

And Wal-Mart said it is still grappling with the aftermath of Hurricane Katrina, which the company has said is skewing its sales figures.

Bigger spending by victims of the storm, who received federal funding to rebuild, increased sales at the chain last year, making it harder for the company to improve on last year’s performance. (In November 2005, for example, Wal-Mart’s monthly sales rose 4.3 percent.)

Analysts also noted that a separate Wal-Mart strategy should improve the company’s fortunes. In October, it said it would begin to apply the brakes on new store growth in part to focus more on improving the performance of its existing outlets.

In a small but symbolically important adjustment that will result in enormous cost savings, the company will expand its square footage at a rate of 7.5 percent in 2007, down from 8 percent in the last several years,

For now, Wal-Mart’s message to investors and customers appears to be the same as the one on the signs in its renovated stores: please excuse our appearance — and performance — while we are under construction.

“The size of the undertaking,” said Ms. Shapira of Goldman Sachs, “should not be overlooked.”

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Wal-Mart's Warning Unsettles Retailers

By ANNE D'INNOCENZIO,
AP Business 
Thursday, November 30, 2006                        [back to top]

Wal-Mart Stores Inc. unsettled the retail industry Thursday, reporting a sales decline for the first time in 10 years and warning that its holiday sales would be disappointing. The discounter's news, coupled with a jump in unemployment benefit claims, raised concerns about the strength of the retailing sector at a critical time of the year.

Wal-Mart's confirmation of weak November sales and its announcement that its December same-store sales gain would be no better than 1 percent came as the nation's retailers reported an overall mixed performance for the month. Same-store sales reflect business at stores open at least a year and are the industry standard for measuring a company's strength.

Wal-Mart's disappointment was a sharp contrast with results from discount rival Target Corp., which beat Wall Street forecasts, and Federated Department Stores Inc., which far exceeded expectations. Other retailers had mixed sales; J.C. Penney Co. and Costco Wholesale Corp. both fell short of Wall Street projections.

Industry analysts generally believed the world's largest retailer is struggling with its own internal problems, not an industry-wide malaise. Still, the discounter's woes raised the possibility that it would incite increasingly aggressive price wars this season that would slice into retail profits. And a Labor Department report Thursday that showed a surprising increase in claims for jobless benefits last week added uncertainty to the outlook for holiday sales.

The timing of Wal-Mart's news couldn't have been worse, coming just after most consumers started holiday shopping. While many retailers had a strong Thanksgiving weekend, Wal-Mart warned Saturday that its November sales would be weaker than expected.

Wal-Mart's 0.1 percent dip in same-store sales for the month is in line with the reduced forecast from analysts surveyed by Thomson Financial, which forecast unchanged growth.

Including a drop in gasoline revenues from its Sam's Club division, which Wal-Mart did not include in its calculation, same store-sales fell 0.3 percent.

Wal-Mart has struggled in recent months with a mix of problems, including the fact that its lower-income customers were hurt by soaring gas prices. But the company's lackluster sales have persisted even as the cost of gas eased, an indication that there are other factors that are dragging down Wal-Mart's results.

"This is pretty discouraging," said Ken Perkins, president of RetailMetrics LLC, a research company in Swampscott, Mass. But he added that Wal-Mart's weak sales "will not be a harbinger of a broad-based weakness across the retail sector."

But he added, "I think it will be a promotional Christmas. Stores will slash prices to drive consumers. And Wal-Mart is going to be first and foremost."

Wal-Mart's discount stores suffered a 0.5 percent decline, while Sam's Clubs had a 2.0 percent increase.

One of Wal-Mart's main problems is that its strategy to broaden its appeal to higher-income shoppers with upscale merchandise was poorly executed. It filled its fall clothing racks with too many trendy items like skinny jeans that shoppers just didn't want.

Wal-Mart's weakness dragged down the International Council of Shopping Centers-UBS same-store sales tally for November to 2.1 percent, below the original 3 percent growth forecast. Excluding Wal-Mart, the tally rose 4.0 percent.

Based on overall disappointing November results, ICSC pared down its growth forecast for the November-December period combined, forecasting a range of 2.5 percent to 3 percent, down from 3 percent.

While retailers have hopes for a decent season, there are concerns about how confident consumers are. The latest measure of confidence by the Conference Board fell during November, and reports of job cuts and buyouts could make consumers even more uneasy.

Thursday's Labor Department report also raised questions about consumers' comfort level.The department said 357,000 claims were filed last week, up 34,000 from the previous week. Economists said it was too soon to tell whether the unexpected increase indicated a weakening in the job market.

October figures on consumer income and spending issued Thursday showed that consumers had reason to be upbeat, at least during that month. The Commerce Department said incomes rose a healthy 0.4 percent, while spending rose 0.2 percent after a decline in September. The data was encouraging but does not guarantee that consumers shopping for the holidays will feel like spending freely — something that was clear the day after Thanksgiving, when shoppers focused on getting the best bargain, gravitating toward early bird specials and then leaving stores when the deals disappeared.

"This tells me that the customers is ever savvy about shopping for markdowns," said John Morris, a managing director at Wachovia Securities "The next couple of weeks will be really telling."

Target's 5.9 percent same-store sales increase topped forecasts of a 5.7 percent gain. But Costco reported a 5 percent gain in same-store sales, below the 5.7 percent estimate.

Among department stores, Federated, which acquired May Department Stores Co. last year, reported a robust 8.5 percent same-store sales gain, beating the 4.8 percent estimate. Same-store sales include only Macy's and Bloomingdale's stores that existed before the deal closed. Federated also raised its December forecast.

Saks Inc.'s 7.2 percent gain in same-store sales beat the 7 percent estimate.

But results from Kohl's Corp. and Penney were disappointing. Penney said same-store sales at its department stores rose 1.4 percent, falling short of the 3.7 percent forecast from Wall Street. Kohl's had a 3.7 percent gain in same-store sales, below the 4.8 percent prediction.

Gap Inc., which is still struggling to find the right fashion formula, suffered an 8 percent drop in same-store sales, worse than the 5.4 percent forecast.

Teen retailers generally did well. Wet Seal Inc.'s 5.5 percent same-store gain beat the 4 percent estimate.

©2006 Associated Press

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Wal-Mart's November Not So Jolly

World's Largest Retailer's Disappointing Sales Results; Other Chains Fare Better

By DAN ARNALL
Nov. 30, 2006                                        [back to top]

If you're the world's largest retailer, the holiday buying season should be one of the most wonderful times of the year as shoppers open their wallets in search of a little cheer.

But sometimes a grinch and a little trouble in the clothing aisle can increase the number of empty shopping carts at your stores.

Wal-Mart, the world's largest retailer, posted a 0.1 percent decline in same-store sales during November.

This is the first time the company has posted a down month in more than a decade and it comes at a crucial time that has some investors worried that Wal-Mart has lost its touch with customers.

"I do think they've lost their way on some parts of the store," said Christine Augustine, a retail analyst with Bear Stearns. "And I think they'll get it back, but it's going to take time."

In it's monthly sales report to investors, the company pointed out some of its problem areas: apparel and home furnishings. Wal-Mart decided it could grab some of the more fashion-conscious customers from competitor Target by offering more than basics in both of these areas. But sales in both have yet to gain traction.

One Wal-Mart shopper talked with ABC's Betsy Stark today. "What do you think about the fashion at Wal-Mart?" asked Stark. The customer responded: "The fashion? I don't go there."

Add to that a difficult comparison from a year ago, when residents along the Gulf Coast were spending billions to replace home goods and basics lost to the hurricanes, and it makes for a tough month to post growth.

According to data from the International Council of Shopping Centers, Wal-Mart's down month zapped almost half the November growth in the retail sector. According to the group's figures, sales were up 2.1 percent during November at chain stores open at least one year. Last year, the ICSC's retail growth index came in at 3.8 percent during November.

Wal-Mart says it will increase advertising during December and cut prices on holiday and gift items to drive traffic up. They are predicting that the final month of the year will be flat or slightly up when compared to last year.

But customers are saying they are less likely to drop by a discount store this holiday season, turning instead to traditional department stores or online merchants.

Research firm RetailForward's most recent "ShopperScape" survey shows about 55 percent of people plan to go to discount stores for holiday shopping this year, six percent below the level from a year ago.

Analysts say the retailer needs to take risks to gain traction. "This is a battleship that is in the process of turning and it's going to take some time for those changes to be made," said Bill Dreher, retail analyst at Deutsche Bank.

But Wal-Mart's fate was not shared by all retail chains; some big-name vendors posted impressive sales gains during November.

Department stores saw sales grow by 4.6 during the month, helped by an 8.5 percent surge at Federated, operator of the newly national Macy's chain. A massive $100 million national ad campaign and holiday-related sales helped draw people into their stores last month.

Analysts also point to the luxury store sector, which saw a 9.6 percent increase in sales. Clients of these stores tend to be wealthier, thus more likely to be enjoying the benefits of the recent run-up in the stock market.

Limited Brands, owner of Victoria's Secret and Bath & Body Works stores, saw sales jump by 12 percent, but reminded investors that a good November does not necessarily insure a glittering holiday season. On their investor call, they noted that November sales represent just a fifth of the total holiday sales for their stores, even with the Black Friday boom.

Copyright © 2006 ABC News Internet Ventures

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Wal-Mart to Offer AT&T High-Speed Services

By BetaNews 
November 29, 2006                              [back to top]

AT&T said Wednesday that it had reached a deal with Wal-Mart to offer its high speed Internet service in 570 stores across 13 states. Consumers would be able to learn about and purchase services from Wal-Mart's "Connection Center" kiosks. AT&T pointed to the potential reach of up to 150 million customers who shop in the nation's largest retailer each week as a reason for working with Wal-Mart.

AT&T will also offer Wal-Mart gift cards of $25 for ordering the company's Express service, and $75 cards for ordering Pro and Elite Service. Service fees would begin at $14.99 per month, with no term commitment. "We offer the fastest Internet speeds in the market for the price, which fits perfectly with the Wal-Mart everyday-low-price model," AT&T Consumer chief marketing officer Rick Welday said.

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San Diego to Ban Wal-Mart Supercenters

By ELLIOT SPAGAT
Associated Press
11.29.06                                      [back to top]

The City Council here voted late Tuesday to ban certain giant retail stores, dealing a blow to Wal-Mart Stores Inc.'s potential to expand in the nation's eighth-largest city.

The measure, approved on a 5-3 vote, prohibits stores of more than 90,000 square feet that use 10 percent of space to sell groceries and other merchandise that is not subject to sales tax. It takes aim at Wal-Mart (nyse: WMT - news - people ) Supercenter stores, which average 185,000 square feet and sell groceries.

Mayor Jerry Sanders will veto the ban if the Council reaffirms it on a second vote, which will likely happen in January, said mayoral spokesman Fred Sainz. The Council can override his veto with five votes.

"What the Council did tonight was social engineering, not good public policy," Sainz said.

Supporters of the ban argued that Wal-Mart puts smaller competitors out of business, pays workers poorly, and contributes to traffic congestion and pollution. Opponents said the mega-retailer provides jobs and low prices and that a ban would limit consumer choice.

"Quite simply, I do not think it is the role of the San Diego City Council to dictate where families should buy their groceries," said Councilman Kevin Faulconer, who opposed the ban.

Councilman Tony Young, who joined the 5-3 majority, countered, "I have a vision for San Diego and that vision is about walkable, livable communities, not big, mega-structures that inhibit people's lives."

Wal-Mart spokesman Kevin McCall said the Bentonville, Ark.-based company may consider a legal challenge or voter referendum if the measure becomes law.

"Certainly we're disappointed but there's still a number of steps left in this process," he said. "We need to look at what our options are."

The ban is modeled on a law in Turlock, a city of 70,000 people 85 miles southeast of San Francisco. Turlock prohibited big-box stores over 100,000 square feet that devote at least 5 percent of their space to groceries.

Wal-Mart recently dropped its challenge to the Turlock ordinance, which prevented it from building a planned 225,000-square-foot Supercenter store. In July, a federal judge in Fresno said Turlock's zoning law did not infringe on the company's constitutional rights. The state Supreme Court refused to hear the case.

Wal-Mart has about 2,000 Supercenter stores, including 21 in California, but none in the San Diego area. The retailer has 18 regular Wal-Mart stores in the San Diego area, including four within limits of the city of 1.3 million people.

Wal-Mart has not disclosed plans for a Supercenter store in San Diego area. Sainz, the mayoral spokesman, said the retailer probably wants to expand.

"It's complete and total guesswork but I'm inclined they would," Sainz said. "Everything I've seen and heard from them makes me think they would."

San Diego's move comes two months after the Chicago City Council failed to override Mayor Richard Daley's veto of a so-called "living-wage" ordinance that would have required giant retailers to pay their workers higher wages.

Copyright 2006 Associated Press. All rights reserved.

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What's With Wal-Mart's Sales Woes?

Is it the discount feel? The try for trendy? The bad union rep? On Nov. 30 the No. 1 retailer may explain its first key sales dip in a decade

by Pallavi Gogoi
Business Week
November 29, 2006                            [back to top]

All eyes are on Wal-Mart Stores (WMT) and what explanation the world's largest retailer will provide for its slipups on Thursday, Nov. 30, when it reports its final monthly sales numbers.

And with good reason. The whole stock market took a hit on Nov. 27 after the Bentonville (Ark.) company warned that its November same-store sales will drop 0.1%, the first such decline in 10 years. A key retail metric, same-store—or comparable—sales, are those of units open at least one year. As the largest retailer, Wal-Mart is viewed as a bellwether for consumer spending, which makes up two-thirds of all economic activity. But Wal-Mart's problems may well be the product of its own business strategies. One of these was launching a line of trendy apparel in its Metro 7 line, which backfired and scared away core customers (see BusinessWeek.com, 11/14/06, "Wal-Mart Back to the Basics").

Goldman Sachs (GS) analyst Adrienne Shapira notes that Wal-Mart had been remodeling its stores through mid-November, which might have had a negative impact. Still, Wal-Mart rolled out some of its deepest discounts in recent years on toys, electronics, and home appliances in the hopes of appealing to its core customers, who look for value. Yet shoppers spurned the discounter. As Shapira notes in her report: "A negative handle is never a good way to kick off the season."

Fending Off Critics One question on the minds of some retail experts: Is Wal-Mart's reputation hurting sales? After all, last year consulting firm McKinsey & Co. found that 2% to 8% of the company's customers have stopped shopping there "because of negative press they have heard." And that was before the negative publicity campaigns by two of its most vociferous opponents—union-funded groups Wal-Mart Watch and WakeUpWalmart.com. This year both groups have ramped up their attacks on Wal-Mart, calling on the company to provide a "living wage and affordable health care" for employees (see BusinessWeek.com, 10/31/06, "Wal-Mart: A Reputation Crisis").

Wal-Mart didn't comment for this article. In the past, company officials have responded to critics by saying that its workers are paid more than the minimum wage and that it offers inexpensive health plans, in some cases for as little as $11 a month. The retailer also says it acts as an ally of the middle class and poor by providing a broad array of goods at affordable prices. "We continue to create jobs, advance careers, and enhance communities across this country," said Chief Executive Lee Scott in the third-quarter earnings call on Nov. 14.

Still, Wal-Mart has struggled to keep negative headlines out of the news. Last month, Senator Barack Obama (D-Ill.) and former Democratic Vice-Presidential candidate Senator John Edwards teamed up with WakeUpWalmart.com to call on the retailer to become a better employer. Those calls officially launched a six-week campaign titled "Hope for the Holidays," in which the watchdog group plans to build public pressure on Wal-Mart to change what the group calls the discounter's "anti-family business practices with its strict attendance policies and its salary caps" (see BusinessWeek.com, 11/16/06, "See Can Barack Wake Up Wal-Mart?").

It's the Ambience, Stupid Today, some say that the negative sales for November might be the first sign of public backlash. "Wal-Mart's brand has become very fragile," says James Gregory, chief executive of CoreBrand, a global brand-management consultancy in Stamford, Conn. Gregory says that Wal-Mart hasn't managed its brand as well as other discounters and cites Target (TGT), which gives the impression of being chic. "The Target store experience is that you don't feel like it's a discount store, but Wal-Mart stores actually feel that way," says Gregory.

Indeed, this year customers seem to be going more for pleasant ambience than discounts. Tricia Ehrlich, a Setauket (N.Y.) mother of three who owns an online boutique, says that she doesn't go to Wal-Mart because it doesn't have an acceptable shopping environment. "Wal-Mart is schlocky. It's like you're in a big flea market," says Ehrlich, whose home is on Long Island. Clearly, the toy discounts at Wal-Mart didn't reel her in. Target, on the other hand, seems to be doing quite well. Like Wal-Mart and other retailers, Target will release its monthly sales figures on Nov. 30, but Goldman's Shapira expects a 7% increase in Target's same-store sales, according to a preliminary traffic report the analyst compiled.

Gogoi is a reporter for BusinessWeek Online in New York.

Copyright 2000-2006 by The McGraw-Hill Companies Inc. All rights reserved.

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Attack of the Wal-Martyrs

They spin, leak and cajole. The politicos behind Wake Up Wal-Mart aim to make the holidays hell for the folks in Bentonville.

By Barney Gimbel
Fortune Magazine
November 28, 2006                                  

(Fortune Magazine) -- It's the week before Thanksgiving, and Chris Kofinis, the never-at-a-loss-for-words communications director for Wake Up Wal-Mart, is going through his organization's secret holiday campaign plan. We're in his drab, windowless office in downtown Washington, D.C., surrounded by handmade posters, press clippings and assorted flip charts full of ideas and scheduling details. "You know, I probably shouldn't be doing this," he says as his cell phone rings. "If this got out, it would screw everything up. Wal-Mart would know too much."

The PowerPoint presentation entitled "Hope for the Holidays" details how the 1 1/2-year-old union-backed group plans to rattle Wal-Mart's carefully crafted image precisely when Americans are frequenting the mega-retailer most. It includes a ten-part timeline for attacking the company from mid-October through the end of the year.

The week before Christmas, for example, the group plans a mini-campaign titled "America, Pray for Wal-Mart to Change." It calls for reaching out to religious leaders and groups, targeted media buys and candlelight vigils in front of the stores, with families and children asking for health care. It's topped off by a national day of prayer.

"When you frame it as a family values and faith issue, almost all of Wal-Mart's core customers pay attention," Kofinis says. Another week the group plans to frame its campaign as a women's issue. "That's the whole idea behind what we do: We try to come up with innovative and creative ways to reach out to as many different demographic groups as possible."

Generate headlines, spin the news, trash your opponent. If this sounds like a presidential campaign, you're not too far off. Oh, and just as in The Boys on the Bus, these political junkies take few vacations, get little weekend rest and dating - well, that's for civilians.

In many ways, not much has changed since they were with the Howard Dean, Wesley Clark and John Kerry presidential campaigns. Only this time they think they're backing a winner. Even better, their candidate doesn't have to win - Wal-Mart (Charts) just has to lose. "If we want to talk about what kind of America we want for our children," says Kofinis, "we've got to talk about what is the responsibility of companies like Wal-Mart."

David vs. Goliath

Plenty of companies complain they get bad press. But Kofinis and Paul Blank, the group's campaign director, are part of what is quite possibly the most relentless public relations assault ever launched against a company.

Simply put, Wal-Mart cannot do anything right in the eyes of these groups. When Wal-Mart lowers prescription drug costs, it "needlessly exaggerated" the scope of the plan. New environmental policies? "A publicity stunt." Even CEO Lee Scott's vacation raised "serious questions."

Wake Up Wal-Mart and another union-backed group, Wal-Mart Watch, spend just a few million dollars a year in contrast to Wal-Mart's $1.6 billion advertising budget. But thanks to the explosion of news outlets and modern Internet campaigning, the opportunities to point out the retailer's misdeeds - often through internally leaked documents - are limitless. (Imagine if Standard Oil muckraker Ida Tarbell had had a blog.)

Kofinis and Blank are liberals - but say they aren't radicals out to destroy Wal-Mart. Kofinis, 37, who grew up outside Toronto and recently became an American citizen, was a political science professor at Cal State Northridge before he was drafted to help run General Clark's campaign.

And Blank, a New Jersey native who began his political career at 12 as a volunteer for Senator Bill Bradley, graduated from Exeter and Duke, then went to work in politics, most recently as the political director for Howard Dean's campaign.

It's difficult to gauge what effect their efforts have had on Wal-Mart's bottom line. "Our customers see these attacks as part of a tired and failing campaign," says Wal-Mart spokeswoman Sarah Clark. "We have 127 million customers who visit our stores each week. We think that in itself tells the whole story."

That's true - and those customers have saved billions. Still, Wal-Mart's stock is down 30 percent since 2000. Same-store sales growth has slowed to 1.5 percent in the third quarter, compared with 4.6 percent at Target (Charts). And opposition to stores in urban areas is as high as ever. With all that going on, the PR offensive, which was spurred by a 2004 grocery workers strike in California that the unions blamed on Wal-Mart, certainly can't be helping.

The demands

But what does Wake Up Wal-Mart want, exactly? It depends on whom you ask. Kofinis and Blank say their aim is to drum up enough public awareness about the company's practices, so it's forced to treat workers better, which will in turn make smaller companies follow suit. (Target is much smaller than Wal-Mart and doesn't sell nearly as many groceries, which explains why they aren't, well & a target.)

Wal-Mart "made $11.2 billion in profits last year," says Kofinis. "If they took even a few billion of that and used it to pay better wages and provide more affordable health care, they could change their public image overnight. They would be a model employer."

But ask the union leaders - the people who pay the bills - the same question, and additional motives emerge. "Success would be if Wal-Mart would bring their working standards up to what we consider decent," says Joseph Hansen, president of the United Food and Commercial Workers International Union, who founded Wake Up Wal-Mart. "We just don't think they are going to do that without a union."

"The average Wal-Mart worker will have to work 1,000 years to make what Lee Scott made last year," Kofinis bellows in front of 27 people holding small mechanical dials. It's a rainy Sunday evening in Bedford, N.H., and Kofinis is "live-dialing" a focus group to pinpoint the messages that resonate most with voters. He's got a winner - the focus group attendees are twisting their knobs furiously, registering an 80 percent approval rating for his message, something most politicians would kill for.

Then Republican strategist Frank Luntz (famous for helping Newt Gingrich forge his Contract With America) takes a turn. He's been brought in to analyze the focus group, and when he tests classic Wal-Mart rebuttals, including how much the company saves consumers, he bombs, scoring a Dukakis-like 30 percent.

Labor issues

The guys are elated: they'll use this research to help convince politicians on both sides of the aisle to make Wal-Mart an issue on the campaign trail. Luntz's takeaway: "Everyone in that room thinks Wal-Mart is a legitimate issue in '08."

That's the whole idea, says the UFCW's Hansen, a former meat cutter who took over the union in 2004. That year the UFCW barely survived the crippling grocery strike in California, which came about after Wal-Mart announced it was moving its grocery-carrying "Supercenters" into the state. Traditional chains used that threat to play hardball with their unions, slashing benefits and precipitating the strike.

The UFCW had already spent more than a decade trying to unionize Wal-Mart with no success. (When they signed up meat cutters in Texas, for example, the company centralized all meatpacking for that region; when they organized one Canadian store, Wal-Mart simply shut it down.) Now it was war.

In January 2005, Hansen approached Howard Dean's former political director, the then 29-year-old Blank. The question was simple: Could he replicate the populist groundswell that the Dean campaign embodied against a single corporation? "I thought about it for a little while," Blank says. "Then it hit me: This was a once-in-a-lifetime opportunity to change America through one company."

Around the same time, Andy Stern, the chief of the Service Employees International Union, hatched a similar plan. He called it Wal-Mart Watch and designed it more as a watchdog research organization than a take-it-to-the-streets campaign. Run by Democratic operative Andrew Grossman, its $4.6 million budget comes primarily from Stern's union, with help from groups like the Sierra Club.

Grassroots campaigning

Blank's group, which receives all its money from the UFCW, modeled itself after the Dean and Clark campaigns. One of the first things it did was to set up a snappy Web site where supporters could enter their zip code to find nearby Wal-Marts and then get involved in pickets, informational house parties or letter-writing blitzes.

With campaigns like "Love Mom, Not Wal-Mart," and "All I Want for Christmas Is Health Care for Mommy," the group says it has signed up more than 287,000 supporters.

Last summer they took their message on the road. With an old bus painted red, white and blue, they held rallies, press conferences and town hall meetings in 35 cities in 35 days. The eight staffers slept on the bus; there were few showers and far too many meals at Denny's. "By the middle of the tour, the bus wasn't smelling so good," says Kofinis.

Not that their office is deluxe either. The quarters are cramped, the carpet is green, and workdays can go as late as midnight working the phones, lobbying Capitol Hill and talking with Wal-Mart employees.

Staffers have become experts at leaking Wal-Mart documents to the press. Recently they exposed an unpublicized salary cap that was part of a much-publicized Wal-Mart pay raise.

Rival Wal-Mart Watch found the single most embarrassing document: a leaked memo from Wal-Mart's VP of benefits that recommended, among other things, discouraging unhealthy people from working at Wal-Mart.

Political pressures

Lately several A-list politicians have spoken out for the cause. Wake-Up Wal-Mart's holiday-campaign kickoff conference call featured Senators John Edwards and Barack Obama. "Wal-Mart is making enormous profits, and yet it has chosen to go with low wages and diminished benefits," Obama told listeners.

Wal-Mart isn't the first American company to face such withering attacks. Standard Oil's dominance provoked widespread public outcry around the turn of the 20th century. Henry Ford's labor practices came under intense criticism in the late 1930s. In recent years Nike (Charts) and Gap (Charts) faced scrutiny for what critics said were sweatshop conditions at its overseas factories.

Each company eventually yielded, says Nelson Lichtenstein, a labor historian at University of California at Santa Barbara and editor of "Wal-Mart: The Face of 21st-Century Capitalism." Standard Oil fell to new antitrust laws. Ford (Charts) unionized, and Nike and Gap opened their factories to inspection. "If history is any guide, Wal-Mart will eventually have to do the same," he says. "No company can withstand this kind of criticism forever."

Clark, Wal-Mart's spokeswoman, says that although the company recently changed its environmental policies with the help of various activist groups, it doesn't plan to meet with any union-backed groups.

"Wal-Mart creates tens of thousands of jobs every year, we offer associates health plans for as little as $23 a month, and we're good stewards of the environment," says Clark. "Americans view Wal-Mart as a good neighbor, a good place to work, and a good place to shop."

Still, a confidential 2004 report prepared by McKinsey & Co. for Wal-Mart, and made public by Wal-Mart Watch, found that 2 to 8 percent of Wal-Mart consumers surveyed have ceased shopping at the chain because of "negative press they have heard."

And Wal-Mart hasn't taken the attacks lying down. Last year the company, which has historically had a tiny PR department, hired Edelman, one of the world's largest public relations firms. After setting up a "war room" in Bentonville, one of Edelman's first projects was to help organize a pro-Wal-Mart grass-roots organization called Working Families for Wal-Mart. But its leader, Andrew Young, the first African-American U.S. ambassador to the UN, was quickly forced to resign after making anti-Semitic and anti-Korean comments.

Then, in October, Wal-Mart Watch exposed another independent-looking site, Wal-Marting Across America, a travelogue by "Jim and Laura," as being company-funded. (Edelman referred all questions to Wal-Mart.)

With both sides locked in a standoff, will the activists ever get the retailer to make concessions? Live to see Wal-Mart workers unionized? Nobody knows. But the longer Wal-Mart stonewalls, the more time the unions have to influence public opinion. "I can't let it end until somehow Lee Scott and Joe Hansen figure out a way to end it," says the UFCW's Hansen. "I don't see that happening anytime soon."

Kofinis agrees. "Wal-Mart could easily change. They just don't want to," he says. "That's what gives this campaign power." It's also what keeps Kofinis's phone ringing off the hook. Back in his office, feet up on his desk, he's taking call after call, his voice becoming louder with each successive point.

It's CNN: "Don't think I can do it today unless you send a camera crew over." The Associated Press: "Did those workers I sent you pan out?" But he has the best response for the Wall Street Journal, which wants a comment on Wal-Mart's new high-powered head of corporate affairs and government relations, Leslie Dach: "Last time I checked, he wouldn't have a job if it weren't for our campaign."

He stops, turns my way, and chuckles: "That's pretty good, right?"

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Wal-Mart under fire, modifies pro-gay stance

ReligionAndSpirituality.com
November 28, 2006                               [back to top]

Wal-Mart Stores Inc. is modifying its pro-homosexual position in response to Christian criticism of the largest U.S. discounter. The Arkansas company says it will "not make corporate contributions to support or oppose highly controversial issues unless they directly relate to our ability to serve our customers," Baptist Press said Tuesday The American Family Association, which had called for a boycott of Wal-Mart during the important shopping days following Thanksgiving, called off the boycott. Even so, on Nov. 27 Wal-Mart posted its first loss in November sales in 10 years. Same-store sales, which the company expected would be flat, were down 1 percent. Controversy erupted when Wal-Mart sent a $25,000 donation to the National Gay and Lesbian Chamber of Commerce (NGLCC) in August, a move the chamber's president said the retailer initiated. The contribution, according to a Los Angeles Times report, was to fund events and initiatives that will, with Wal-Mart's participation, teach homosexual business owners how to become suppliers for the worldwide retail outlet. The American Family Association had said the move showed preferential treatment to homosexuals and condoned "same-sex marriage." Wal-Mart had contended that the partnership with the NGLCC was in line with the company's efforts to expand beyond their rural southern roots into urban areas where shoppers are more diverse. A company spokesman also reported that Wal-Mart had partnered with other homosexual activist groups such as the Human Rights Campaign. Wal-Mart also recently made a $60,000 donation to "Out and Equal," a homosexual advocacy group that supports workplace equality for homosexuals, and the company supports The Point Foundation, which provides scholarships to students "marginalized due to sexual orientation, gender expression or gender identity." Although the AFA said it was "pleased with the announcement" and encouraged its supporters to send thank you letters to the company, Mona Williams, vice president for communications with Wal-Mart, told Baptist Press the company will continue to donate to "specific projects," though it would "no longer give donations across the board." "As with the chamber [National Gay and Lesbian Chamber of Commerce], we would not give them a blanket donation. But if they had a project or an initiative, such as hate crimes education or one about workplace equality, we would support that," Williams said. "The statement we issued was the result of us listening to both our associates — our employees — and our customers. A lot of them had concerns. We wanted to take a more thoughtful approach. We wanted to listen to both sides and our statement is a result of that." Asked if Wal-Mart's policies toward homosexual groups were a departure from their traditional, family oriented values, Williams said, "Our values are constant, our values have not changed." She also said recent protests by the AFA and other pro-family groups were not the reason for the retailer's dip in sales in November. As noted in its Nov. 21 statement, Wal-Mart did not indicate that it would cease all partnerships with the NGLCC or other homosexual-oriented groups. Instead, it said partnerships into which the company enters will reflect the makeup of communities where stores are located. "We are working hard to make our corporate contributions reflect the values of our customers, communities, and associates. As Sam Walton said, 'Each Wal-Mart store should reflect the values of its customers and support the vision they hold for their community,'" the company's statement said. "Wal-Mart does not have a position on same sex marriage and we do not give preference to gay or lesbian suppliers. Wal-Mart does have a strong commitment to diversity among our associates and against discrimination everywhere." In recent weeks, several Baptist state conventions adopted resolutions challenging Wal-Mart. Alabama Baptists said in a resolution that Baptists should inform the retailer at the local and national level of their disagreement with the company's stances on homosexuality and ask that Wal-Mart reconsider the affiliation with the National Gay and Lesbian Chamber of Commerce. The resolution also called for Baptists in that state to pray for the retail chain's key leaders. Messengers to the Missouri Baptist Convention urged Baptists in that state to exercise moral stewardship regarding the businesses they patronize, keeping in mind that Wal-Mart in August asked and received permission to join the NGLCC in an effort to promote "diversity." The Southern Baptists of Texas Convention adopted a resolution stating that the company's once-virtuous policies had "contributed to a generation of Texans have come to expect and demand high levels of moral and virtuous leadership from Wal-Mart stores." Today, however, the company's corporate offices "have made it appear that the promotion of homosexuality is more important than their historic commitment to traditional family values." Randy Sharp, director of special projects with AFA, told Baptist Press that AFA would continue to monitor Wal-Mart's contributions to homosexual causes. He also said that the decision to call off the boycott of the retailer after Thanksgiving was a "good faith effort toward Wal-Mart." "They realized they made a mistake and they are taking steps to correct it," Sharp said. "They want to remain neutral in the culture war and we are confident they will do so. "With the statement we can be assured that Wal-Mart will not be giving cash donations to the general budget of those organizations that promote the advocacy of the homosexual agenda. There may be programs about AIDS research and workplace equality, and so forth, that they will support. Although we won't always agree with Wal-Mart's policies, we are pleased with this recent decision," Sharp said. But Peter Sprigg, vice president for policy with the Family Research Council (FRC), said supporting specific projects directed by homosexual groups may "not be much of an improvement over giving unrestricted grants to homosexual groups." "For example, if they are going to fund projects which promote hate crimes legislation, we would vehemently oppose that because of the belief of homosexual activists that any kind of opposition to homosexuality is a crime," Sprigg told Baptist Press. "We never said when all of this started back in August that Wal-Mart should treat any employee, customer or supplier differently, but when homosexuals are viewed as a special class there will inevitably be problems." Sprigg said the FRC will take a "wait and see approach" to Wal-Mart's future charitable contributions. "We don't call for boycotts, but we do call for consumer awareness. Some customers are still wary of Wal-Mart for reasons like this," he said. Wal-Mart's statement Nov. 21 pleased the National Gay and Lesbian Chamber of Commerce, which regarded the announcement as a reaffirmation of Wal-Mart's policy of non-discrimination of homosexuals. A joint statement from NGLCC President Justin Nelson and CEO Chance Mitchell said the retailer had refused to pander to "groups on the fringe" that have had a "sustained campaign of misinformation about our relationship with Wal-Mart and our supplier program." "The initiative is about equal access, not preferential treatment and those on the far right know that," the NGLCC statement said. "Unfortunately, these groups believe that distorting the truth would be a better option for furthering their cause than the truth — that this is about equality and ensuring a mix of suppliers that reflect the diverse customer and employee base of Wal-Mart. We look forward to our continued work with Wal-Mart and the many other corporations that look to LGBT suppliers as an additional pool of world class suppliers that are ready, willing and able to deliver quality products and services at competitive prices." The National Gay and Lesbian Chamber of Commerce, founded in 2002, boasts the support of several large companies. Founding members of the chamber include IBM, Wells Fargo, Motorola, JP Morgan-Chase, Intel, American Airlines, Ernst & Young, American Express and Wyndham Hotels. Wal-Mart and Sam's Club are listed as "corporate visionaries" on the chamber's website. Cisco Systems and Avis also are listed. The Human Rights Campaign, which advocates equality for the "gay, lesbian, bisexual and transgender" community, has noted Wal-Mart's recent moves toward homosexual equality in the workplace. The group gave the company a rating of 14 out of 100 in 2002, but by 2006, HRC had raised the rating to 65. The group said in its September 2006 "Corporate Equality Index" that the improved rating was the result of homosexual-friendly policies at Wal-Mart, including a recent change in the company's code of ethics that broadened the definition of family to include same-sex partners. Wal-Mart said the move was an effort to step in line with policies in same states that had adopted laws regarding civil unions. Wal-Mart gave more than $245 million to various charities last year. The company was named by the Chronicle of Philanthropy as the largest corporate donor in the country. Wal-Mart employs more than 1.3 million people in the United States.

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Wal-Mart faces must-win December after weak November

By Emily Kaiser
Reuters
November 27, 2006                     [back to top]

CHICAGO (Reuters) - Wal-Mart Stores Inc.'s (WMT.N) shares dipped 1 percent early on Monday as Wall Street tried to determine what caused surprisingly weak November sales and looked ahead nervously to a make-or-break December. The world's biggest retailer, which estimated on Saturday that November sales fell 0.1 percent at its U.S. stores open at least a year, gave little detail into sales trends and said nothing about Black Friday, the day after Thanksgiving that marks the traditional start to the holiday shopping season.

Wal-Mart will issue a final November report on Thursday. If the preliminary estimate stands, it would be Wal-Mart's first monthly same-store sales decline since April 1996.

"The bottom line is that now more is resting on December's shoulders," Goldman Sachs analyst Adrianne Shapira wrote in a research note.

To make its fourth-quarter same-store sales forecast for 1 percent to 2 percent growth, Wal-Mart will need at least a 2 percent gain in December, she noted.

In theory, December should be an easier month for Wal-Mart. Last year, December same-store sales rose just 2.2 percent, well below November 2005's 4.3 percent increase.

Wal-Mart has blamed recent sales weakness on a myriad of factors including disruption from remodeling projects at hundreds of its stores, tough comparisons against last year's hurricane-inflated sales, and mixed response to its trendy Metro 7 women's clothing line.

The retailer is taking a holiday-season break from store remodeling, so that should help December.

But J.P. Morgan analyst Charles Grom said he was beginning to wonder whether Wal-Mart's problems ran deeper.

"While the (November sales) results were more or less in line with expectations, we continue to scratch our heads as to why sales are not improving provided the precipitous drop in gas prices and stable consumer confidence levels," he wrote in a note to clients.

Grom questioned why Wal-Mart was not seeing a bigger lift in sales from its much-discussed $4 generic drugs program, which was rolled out to all of its U.S. pharmacies on Monday, and said the retailer could be losing market share to major food retailers.

MORE TALK THAN ACTION?

Analysts said Wal-Mart got off to a strong start on Black Friday, with customers lining up before dawn to grab bargain-priced electronics.

Demand seemed to peter out, however, and analysts worried that customers cherry-picked heavily discounted items and skipped over higher-margin goods in other parts of the store.

Wal-Mart hogged the headlines with early price discounts in October and November aimed at convincing shoppers that its stores offered the best value, but many analysts have said the markdowns were no deeper than last year's, and the biggest change was that Wal-Mart was savvier at promoting them.

Wal-Mart's stock, which was up nearly 10 percent over the past three months, fell 62 cents, or 1.3 percent, to $47.25 in early New York Stock Exchange trading. Target Corp. (TGT.N), which had gained some 23 percent over the three-month period, edged up 13 cents to $57.84 on the NYSE.

"Now, more than ever, Wal-Mart is a 'show-me' stock," Oppenheimer & Co. analyst Bernard Sosnick wrote in a research note. "We steadfastly believe Wal-Mart is improving but expect pressure on Wal-Mart shares until the company proves it has turned the corner."

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Attention, Wal-Mart Shoppers

The real problem isn’t the global megaretailer’s rapacious image. It's the company's flagging business fortunes.

By James J. Cramer
New York Magazine
November 27, 2006                         [back to top]

As investors, at least, maybe we should stop worrying about the consequences of a Wal-Mart opening near us and start worrying about Wal-Mart itself. Never mind that Wal-Mart-haters think the company represents a vast global conspiracy of greedy capitalists run amok (and they may be right). Just as the demonizing of the world’s largest retailer hits its peak, Wal-Mart, as a company, may be falling apart. As its tentacles reach every state and almost every municipality in the nation, Wal-Mart has become public enemy No. 1 for politicians, small-business champions, unionists, and journalists. You name it, Wal-Mart’s been beaten up for it: low wages, shoddy benefits, predatory pricing versus mom-and-pop outfits, and an anti-union stance that makes Henry Ford look like a shop steward for the United Auto Workers. How hated is this company? Here in New York, the company announced in December 2004 that it planned to open a store on Queens Boulevard in 2008, but the strategy quickly drew fire from residents, unions, small-business owners, and local politicians. By February 2005, Vornado Realty Trust told city officials that Wal-Mart would not be part of its plans to develop a retail center on the Rego Park site. Word that the retailer was also looking at sites in Staten Island drew similarly swift opposition. In California, meanwhile, there’s a bill making its way through the State Legislature that would force Wal-Mart and similar big-box retailers to pay the legal fees of any municipality that prevails in a lawsuit to block such companies from building a store. That’s class warfare of a kind that we haven’t seen in this country in 70 years. Can expropriation be that far behind?

To listen to the despondent Wal-Mart critics, you would have to wonder whether the Lilliputian consumers can ever defeat this retailing Gulliver. Don’t be fooled. Wal-Mart’s more of a Goliath than a Gulliver. And Davids are popping up everywhere. Wal-Mart, the once-venerated king of American retailing, has in the past year become Wal-Mart the pitiful helpless giant reduced by a collection of third-rate retail powers, if I may be so bold as to borrow language from our nuttiest president ever. For more than a year now, Wal-Mart’s been reporting horrible numbers, just awful, while the rest of retail is in ascendancy. One hundred million people may still shop there every week, but from the looks of the numbers, they aren’t buying much of what they see.

Despite the dismal financial performance, which has produced a horridly underperforming stock that has flatlined for seven years now, Wal-Mart’s management is in total denial. Almost every month, CEO Lee Scott starts afresh with an optimistic prediction of how the next five weeks will go. Then routinely, at the end of almost every month, the company misses its projections. The worst part is, no one seems the least embarrassed by this performance, least of all Scott himself. Going into October, Wal-Mart predicted 2 to 4 percent sales growth. Then, in early October, the company lowered its projection to 1.3 percent. When it finished the month, Wal-Mart turned out to have gained only half of one percent. This at a moment when almost every other major retailer was meeting or exceeding its higher targets. There was a time when such an overpromise-and-underdeliver phenomenon at this once-smartest of all retailers would have been unthinkable. Now it’s a given. That’s why, for the first time since Sam Walton could visit all of his stores in his beat-up old pickup, it’s worth asking if we are not seeing the twilight, not of the consumer-as so many media pundits speculate because of the incredibly low single-digit growth from Wal-Mart-but of the largest American retailer itself.

What’s ailing Wal-Mart? People don’t mind shopping at a down-market, politically incorrect store, if the prices are low enough. That was always Wal-Mart’s game. But now the other guys have figured it out. A number of Wal-Mart’s competitors now offer similarly low prices and a better shopping experience. Take Target. Wal-Mart’s sloppy aisles, dowdy clothing, and junky presentation have all the charm of GUM, the grim old monopolistic chain of the former Soviet Union. Target, meanwhile, is a joy. And its in-house merchandise, the key to its bountiful profit margins, rivals the stuff you can find in much more expensive stores-at price points that still make you feel like you’re getting the deal of the century. We live in an era when consumers, more than ever, want to feel rich. Wal-Mart may still be competitive on the price front, but it’s losing the quality game. In the most recent quarter, same-store sales for Target grew 4.6 percent, compared with 1.5 percent for Wal-Mart.

JC Penney’s got a different but equally killer strategy aimed at Wal-Mart. The store is divided into lower-, middle-, and upper-class price points (at the entry level, you’ll find private-label brands like Arizona jeans; at the mid-level, brands like Levi’s and Dockers; and on the high end, JC Penney recently signed a deal with Liz Claiborne). And the strategy’s working: JC Penney has been the most consistently profitable broad-line retailer in America for several years now, and the gains have largely come at Wal-Mart’s expense, as many lower- and middle-class shoppers have been gravitating toward the store’s higher levels (with their higher profit margins) over time.

It’s not just apparel and soft goods that Wal-Mart’s losing at. Best Buy, the giant electronic big-box retailer, has figured out a way to beat Wal-Mart, too: offer superior customer service on big-ticket items like T Vs? and computers. Best Buy has trained its salespeople to be genuinely knowledgeable about what they sell. I don’t know if I would trust a Wal-Mart clerk to know the differences between an LCD TV and its plasma competition. A Best Buy representative would know the differences in his sleep. Best Buy has its “Geek Squad” to fix computers, Wal-Mart just has geeks.

You want sporting goods? If you’d like better selection at prices similar to Wal-Mart’s, go to Dick’s, which is opening supercenters to compete-and win-against Wal-Mart’s sports repertoire. Costco’s winning the bulk-purchase war against Wal-Mart’s warehouse stores. Costco’s another fun place to shop: I am a proud Gold Star member-love the birthday cakes and king-crab legs, and the barbecue’s not bad either! There’s no pride in belonging to Sam’s Club, the Wal-Mart counterpart, and since the stores’ prices are comparable, there’s no real reason to shop there.

Wal-Mart’s attempts to fight back have been pathetic, to say the least. It initially tried to go “hip,” of all things, by offering more-fashionable clothes, but that effort fell flat on its face rather quickly, and the store’s apparel sales, meager as they were, nose-dived.

Now Wal-Mart seems to have settled on a new strategy-issuing press releases about how it’s going to refocus on discounting merchandise. First it issued releases saying it’s offering pharmaceuticals below the prices of the big drugstores, places like Walgreens and CVS, that have been eating its lunch for years. It’s phony altruism, if you ask me, done mainly to buff the store’s image. The discounted pharmaceutical offerings aren’t that competitive and cover only a small percentage of the vast array of prescriptions purchased at drugstores. Next, the company told the press-clearly because its sales have been weak going into Christmas-that it will discount all of its electronics, including big-screen T Vs?, underneath its competitors. That’s another canard: The research department at Prudential has surveyed the Wal-Mart TV line and found no serious price cuts versus Best Buy’s. In other words, Wal-Mart’s new discounting push is really just another bogus series of moves by the store to attempt to stem its customer defections.

How can Wal-Mart turn things around? First, it has to acknowledge that the wheels have fallen off the Bentonville Bus. Then it has to bring in some savvy merchants from the outside and give them a real chance to improve the quality of the stores-the atmosphere, the merchandise, the service, everything-without raising prices. (And it wouldn’t hurt if Wal-Mart would create, if not a Starbucks pro-labor feel, at least something that makes shoppers feel that it’s not a global retailing bully and its workers aren’t all desperate retired folks.)

We are nowhere near that now. Wal-Mart’s still thinking that all is well, and that only Wall Street doesn’t understand the greatness of the chain. Funny, Wall Street actually respects Wal-Mart more than it should-it’s Main Street that’s deserting the place in droves. And while Wal-Mart might have just given us a “good” earnings report, the reality is that the numbers only looked good given how low Wal-Mart had set the bar. Until Wal-Mart gets new management, I don’t see its fortunes improving. To me, the company’s stock is a sell, at least until it gets down to the sort of rock-bottom price that Wal-Mart prides itself on offering.

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Bharti, Wal-Mart ink MoU for retail JV

By ANI
Monday November 27                  [back to top]

New Delhi, Nov 27 (ANI): Bharti Enterprises and US-based world's biggest retail store Wal-Mart today announced that they have signed a Memorandum of Understanding under which they will jointly explore retail business opportunities in India. This will allow the two companies to study and evaluate the retail market in India and identify business opportunities together within the existing guidelines. Bharti, with its deep knowledge of India's fast growing consumer market and Wal-Mart, with its extensive global retail experience, share the same commitment to building relationships with producers in order to provide great quality at reasonable prices to consumers everyday. The two companies had been in talks for sometime. In fact, Bharti was also in discussions with British retailer Tesco and Carrefour of France, but negotiations with them did not fructify. After the signing of the MoU, Rajan Mittal, Joint MD of the Bharti Airtel, said: "We will keep the Indian consumer in mind for the format when we roll out the retail stores. The venture will be under Bharti Enterprises and will be pan-India." Bharti Enterprises is one of India's leading business groups with interests in telecom, agri business and insurance. (ANI)

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Wal-Mart plans to open hundreds of stores in India

By Anand Giridharadas
and Saritha Rai
International Herald Tribune                            [back to top]

Wal-Mart Stores moved closer Monday to cracking open one of the last and potentially most lucrative frontiers for giant Western retailers, announcing a joint venture with an Indian partner.

Wal-Mart, the world's biggest retailer, plans to open "hundreds" of Wal-Mart- branded superstores across India in five years starting in 2007, working with Bharti Enterprises, a company that runs the leading Indian cellphone operator, said the Bharti chairman, Sunil Mittal.

The deal would be the first large- scale entry into the booming Indian market by a foreign multibrand retailer. Companies like Wal-Mart and Carrefour, the French retailer, have long been stymied by Indian government rules that critics feel are protectionist.

"It is the last and a very big frontier," Mittal said during an interview at the World Economic Forum conference in New Delhi. "Brazil is done. China is done. This is the last Shangri-La of retail. Where will Tesco or Wal-Mart get their growth? Here." Tesco ended talks last week with Bharti on a similar deal.

Mittal, who is not related to the Mittal family of steel-making fame, said that the companies would invest "whatever it takes." He did not give specific figures. The first would open Aug. 15, 2007, India Independence Day, he said.

The deal sets the stage for a tough battle between the traditions of the 12 million family-run shops in India and big Western retailers, which are eager to tap India's growing middle classes.

"It is a defining moment for India's retail industry," said Kishore Biyani, chief executive of the leading Indian retail company, Future Group. Biyani, whose group runs more than 200 stores, said he and his colleagues were closely watching the strategy of the new venture.

Wal-Mart has stumbled recently in some of its overseas markets, in part by misjudging local tastes. It said this year that it would pull out of South Korea and Germany. Bharti has no experience in supermarkets, but it is well known in India as a market leader in cellphone service through Bharti Airtel.

"Bharti and Wal-Mart make a formidable combination," said Arvind Singhal, chairman of KSA Technopak, a retail consultancy based in New Delhi.

The Indian retail industry remains largely closed to foreign capital, owing to fear that Western retailers will cost mom-and-pop shops their livelihoods.

But Wal-Mart found two loopholes: Foreign retailers can operate via franchisees and they can invest their own capital in wholesale shops, like the German retailer Metro has done. Mittal said that Wal-Mart would open franchise stores owned by Bharti while investing its own money in wholesale outlets.

Wal-Mart, with backing from Washington, has lobbied aggressively to pry open a market where just 3 percent of consumers shop in large-format, Western-style stores. That compares with 20 percent in China, 30 percent in Indonesia and 40 percent in Thailand, according to KSA Technopak.

Foes of Wal-Mart's large-scale operations decried its entry and said that the ranks of the jobless would rise and that pollution would increase as shoppers drive to stores instead of receiving home-delivered produce.

"The entry of Wal-Mart will be like an economic tsunami in terms of its destructive impact," said Vandana Shiva, an environmental campaigner who runs an organic food business. "Because of the nature of what Wal-Mart does, it will affect the people who grow food, the people who eat it and the people who sell it."

Small retailers have resisted government-led attempts to organize the sector and make way for chains. Recently, a court-ordered shutdown of more than 30,000 illegal shops in New Delhi neighborhoods met with violent protests.

Yet steps are being made toward change. In January, the government allowed international companies to set up single-brand retail chains and hold up to a 51 percent stake in them.

Last month, the largest private-sector Indian company, the petrochemicals giant Reliance Industries, opened the first of 5,500 planned retail stores, in the southern Indian city of Hyderabad.

The Indian retail industry is expected to grow by 2015 to $637 billion from $300 billion now. The share of large- format retail is expected to grow in five years to 18 percent from 3 percent.

Based on those numbers, industry experts argue that the leading players in Indian retail could each count on $10 billion to $50 billion in annual revenue within a decade. Such numbers are beginning to draw even big-league players like Wal-Mart, which reported $315 billion in revenue last year.

Wal-Mart already has a sourcing operation in India, but it long has argued to Indian officials that, were it allowed to sell in the country as well as buy, it would use its inventory and logistics expertise to help spread prosperity by creating new markets for farmers.

Saritha Rai reported from Bangalore.

Copyright © 2006 The International Herald Tribune

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Wal-Mart Teams Up to Open Stores in India

NEW DELHI — India may soon have stores displaying the Wal-Mart (WMT) brand despite government rules that prevent foreign companies from operating multi-product retail chains here.

The world's largest retailer has teamed up with India's Bharti Enterprises Ltd. — a business conglomerate focused mostly on telecommunications — to set up hundreds of stores across the country, Sunil Bharti Mittal, chairman and CEO of the Indian company, said Monday.

"We have signed an MoU (memorandum of understanding) for a joint venture and a franchise agreement," Mittal told reporters on the sidelines of an international business summit in New Delhi.

He declined to divulge the financial terms of the deal, but said it "will be a partnership of equals."

It wasn't immediately clear if Wal-Mart Stores Inc. had given up on plans to set up its own stores in India, where resistance from political groups and domestic businesses has prevented the government from allowing foreign companies to operate multi-product retail chains.

"Wal-Mart was keen to get into India. I think they have chosen the right partner," said Mittal, whose group company Bharti Airtel Ltd. is the country's largest cellular phone service provider.

"It is going to be a large investment ... We are going to be a big player in this market."

The deal marks Bharti Enterprises' first foray into the broader retail market and signals its desire to diversify. Bharti already is a popular brand in India, offering mobile phone services to more than 30 million users. It also has interests in agribusiness and insurance.

Mittal said his group hopes to learn from Wal-Mart how to operate in the retail market.

It would take several months before the first of the stores opens its doors.

"My own wish is August next year," Mittal said. Eventually there will be "several hundred stores across the country (that) will probably carry both brand names."

India's booming retail market, estimated at more than $200 billion, is currently dominated by more than 12 million mom-and-pop shops. Large air-conditioned stores remain a rarity. Sales through company-owned network stores currently total about $8 billion, or less than 5 percent of the market.

Rising middle class incomes and an increase in demand for branded products, however, make India a compelling destination for global retail companies.

In recent years, several large Indian companies have diversified into retail business.

Reliance Industries Ltd., one of India's top business groups, has already lined up billion of dollars to invest in a retail chain that would also showcase large superstores like Wal-Mart. The company opened its first retail outlet in the southern Indian city of Hyderabad earlier this month.

Reliance Chairman Mukesh Ambani, who also was attending the business summit in New Delhi, welcomed the deal between Bharti and Wal-Mart, saying it will strengthen competition in the market.

"There is (enough space) for six to eight large players in this market," Ambani told reporters.

Bharti's Mittal said the deal complies with existing government rules.

Although India does not allow foreign companies to open multi-product retail stores, they can still make wholesale purchases to support their global supply chains.

Wal-Mart already operates a procurement center in the southern Indian city of Bangalore. The company is expected to source products worth nearly $2 billion from India for Wal-Mart stores worldwide this year. However, the figure is small compared with the $18 billion worth of goods the company exports from China.

Mittal said the alliance will help the U.S. company scale up its procurement from India.

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Wal-Mart Same-Store Sales Fall First Time in 10 Years

By Lauren Coleman-Lochner
and Dan Hart - Bloomberg
November 25, 2006                                    [back to top]

Nov. 25 (Bloomberg) -- Wal-Mart Stores Inc., the world's largest retailer, said November sales at U.S. stores open at least a year fell 0.1 percent, the worst performance in more than a decade as the holiday selling season got under way. Wal-Mart marked down toys, electronics, appliances and groceries while cutting prices on generic drugs in 38 U.S. states. Chief Executive Officer H. Lee Scott told analysts in October he expected sales to improve as holiday merchandise went on sale and gasoline prices fell. Wal-Mart had forecast unchanged same-store sales for November.

Wal-Mart's sales are slumping as retailers enter a quarter that accounts for almost one-third of annual profits. Sales on the day after Thanksgiving rose 6 percent from a year ago to $8.96 billion, ShopperTrak RCT said today. Bentonville, Arkansas-based Wal-Mart's attempt to spur holiday demand with lower prices may be risky, said money manager Walter Todd.

``That could really be disastrous for them, because if the sales don't come through, they're really going to get creamed,'' said Todd, who helps manage $850 million at Greenwood Capital in Greenwood, South Carolina. He sold his Wal-Mart holdings earlier this year on concern over slowing sales.

Wal-Mart said earlier this month that disappointing clothing sales and disarray from store renovations hurt results in October, when comparable sales rose 0.5 percent. The retailer began its holiday promotions Oct. 18 by cutting prices on 100 toys. The company will give final sales figures Nov. 30, when most U.S. retailers report November results.

`Taking the Lead'

Retailers kicked off the holiday shopping season yesterday with early openings and reduced prices. J.C. Penney Co., the third-biggest U.S. department store chain, said today it had ``brisk traffic'' at its stores, with home entertainment and sports apparel sales well.

Wal-Mart is ``definitely taking the lead'' with price cuts, said Patrick McKeever, an Atlanta-based retail analyst for Avondale Partners LLC. He estimated that the recent markdowns lowered Wal-Mart's ``already-low'' prices by 20 percent to 30 percent, with some items yesterday morning reduced by as much as half.

Last year's November sales rose 4.3 percent, buoyed by shoppers restocking after hurricanes.

U.S. retailers expect a same-store sales gain of 5 percent this holiday season, according to the National Retail Federation. Wal-Mart said comparable sales in the three months through January may rise 1 percent to 2 percent.

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Black Friday cage match: Wal-Mart vs. everyone

Wal-Mart fired up its discount engine early; many malls are kicking off midnight sales. Will shortages of hot products put shoppers in a bad mood?

By Parija B. Kavilanz,
CNNMoney.com 
November 23 2006                    [back to top]

NEW YORK (CNNMoney.com) -- Holiday shoppers will see a clearly defined battle line this Black Friday: Wal-Mart on one side, everybody else on the other.

Amid the clash shoppers are likely to find offbeat discount deals, new shopping hours and a looming lack of popular products ... like T.M.X. Elmo at Toys'R'Us stores.

The day after Thanksgiving is dubbed "Black Friday" because it's when retailers are said to finally move out of the red, representing losses, and into the black, indicating profits.

It also marks the start of the four-week gift-buying shopping blitz leading up to Christmas.

For retailers, November and December sales are critical because the two months together account for as much as 50 percent of their profits and sales.

Eager to capture early holiday sales momentum, merchants battle each other on Black Friday by offering steep discounts on the season's hottest products in a bid to lure bargain-hungry shoppers and lock in critical holiday dollars.

What's the outlook for this year? Good but not great.

Despite concerns that a cooling housing market has made homeowners feel less wealthy and less inclined to shop, overall retail sales have increased so far this year.

According to some retail analysts, consistent income growth combined with the recent gas price retreat helped to offset the negative housing effect and should continue to be a spending catalyst in the coming weeks. (Full story)

Nevertheless, the National Retail Federation (NRF), the industry's largest trade group, estimates holiday sales will grow 5 percent to $457.4 billion, slower than last year's 6.1 percent increase.

Wal-Mart: All business behind the smiley face Wal-Mart (Charts), the world largest retailer, unveiled its big holiday deals weeks ahead of Black Friday, slashing prices on popular merchandise such as toys, electronics (including a 42-inch Plasma HDTV for $988) and a variety of home appliances. (Full story).

Wal-Mart then announced a slew of further discounts at midnight on Thanksgiving morning, including an XBOX 360 for $399 and a KitchenAid Classic Stand Mixer for $149.

The retailer appeared to have learned its lesson from two holidays ago when it didn't discount heavily and lost crucial sales to its competitors. Moreover, Wal-Mart is yet to see a solid upswing in sales at its stores this year.

"Wal-Mart never again will replicate what [the company] did two years ago," said Marshal Cohen, chief industry analyst with market research firm NPD Group.

For budget-conscious consumers, the good news is that Wal-Mart has set the stage for a serious holiday price war with discount rivals Target (Charts) and Costco (Charts), value-price department stores like J.C. Penney (Charts), Sears and Kmart and specialty sellers like Best Buy (Charts) and Circuit City (Charts).

"Wal-Mart's certainly taken the lead in the holiday sales race," said Cohen. "By setting the early price cuts, Wal-Mart may have convinced not just low-income shoppers but also mid-income customers who would've gone to these department stores for the doorbuster deals to first consider its deals especially in toys and electronics."

Black Thursday for some merchants? Spooked by Wal-Mart's aggressive strategy some retailers, including Kmart, Big Lots, BJ's Wholesale Club and CompUSA ,are trying to get a head start by opening their stores on Thanksgiving Day.

Gail Lavielle, spokeswoman for Sears Holding (Charts), parent of Kmart and Sears, said all of Kmart's more than 1,000 U.S. stores will be open from 7:00 a.m. to 9:00 p.m. on Thanksgiving Day. Kmart is giving Thursday shoppers so-called doorbuster deals on board games, cameras, holiday decorations and some Martha Stewart-branded products

Some malls around the country are also gearing up to ignite the shopping frenzy at the stroke of midnight as Thanksgiving becomes Black Friday. (Full story)

Outlet mall developer Tanger Outlet Centers will run its "Moonlight Madness" midnight event at eight of its 35 centers.

Said NPD's Cohen, "I'm no longer calling it Black Friday but 'red-eye Thursday'," adding that the Thursday openings could alter the sales and traffic dynamics on Black Friday and over the weekend.

"We're going from a typical three-day shopping blitz to a four-day period," Cohen said. "This will spread out the crowds so it won't be as chaotic on Saturday and Sunday but it could also take away from the weekend sales momentum for Kmart and BJ's."

Or maybe not. "I think the Thursday openings will give retailers an even bigger Black Friday," said Candace Corlette, retail analyst with WSL Strategic Retail.

The NRF expects about 137 million shoppers will hit stores over the three-day Thanksgiving weekend.

No T.M.X. Elmo at Toys 'R' Us on Black Friday Shoppers are getting stung as stores already post 'out of stock' signs on some of the hottest holiday items like T.M.X. Elmo, PlayStation 3, Wii and some plasma TVs.(Full Story)

Toys 'R' Us told CNNMoney.com that the retailer will not have T.M.X. Elmo in any of its stores on Black Friday.

(Subsequent to the initial publication of this story, Toys 'R' Us informed CNNMoney.com that the company was notified by its supplier late Wednesday that there "was a high probability" the retailer will have T.M.X. Elmo in its stores over Black Friday and the weekend.)

Even though retailers say they'll restock on these must-have gifts through the season, given that demand for these item is clearly outstripping supply, there's no guarantee that you'll find any of these products in time for Christmas.

Cohen warns that many consumers will be extremely frustrated and may decide to shun some retailers.

"This is a very risky move by Toys 'R' Us especially when the company needs all the sales it can get against Wal-Mart's lower prices on many of the same products," said Corlette

But the 10th-anniversary version of the furry red doll is available on eBay if you don't mind paying double or triple its original price of $39.99.

E-tailers are already projected to have a stellar season this year, but industry watchers expect in-store shortages could also help pump up traffic and sales at many Web sites.

ComScore Networks estimates online retail sales over the Thanksgiving weekend are forecast to reach $1.15 billion, up 24 percent from the same period last year, while total holiday-related buying on the Internet is forecast to jump 24 percent to more than $24 billion.

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Calling for changes at Wal-Mart

By Sid Cassese
Newsday
November 22, 2006                                [back to top]

Protesters yesterday came near to calling for a boycott of Wal-Mart, the nation's largest employer, until it ends what they called its discriminatory practices against women and minorities, pays a living wage and gives affordable health insurance to 750,000 U.S. employees who lack it. "Think about these things before you decide to shop here for the holidays," Alexandra Scholl said to a crowd outside the Wal-Mart off Jerusalem Avenue in Uniondale.

Wal-Mart officials did not return calls for comment.

Scholl was among two dozen people representing a variety of organizations, including the Long Island Federation of Labor, where she is a researcher, and Nassau Legis. Kevan Abrahams (D-Hempstead), who were protesting in front of the store.

"Put families first," they shouted, charging that Wal-Mart regulations - such as demanding its employees work flexible schedules - hurt families.

"Our future is being mortgaged so Wal-Mart can make better profits," said David Mertz, an assistant to the president of the Retail, Wholesale and Department Store Union, based in Manhattan.

All Wal-Mart employees are nonunion.

Kate Keller, of Middle Falls, N.J., regional coordinator of WakeupWal-Mart, noted that the chain faces the largest gender-based suit in history. The federal case, Dukes vs. Wal-Mart, is also the largest class-action suit ever filed and includes more than 2 million current and former female employees.

WakeupWal-Mart is a coalition of individuals, unions, community organizations, religious leaders and political activists, more than 300,000 nationally, according to Keller.

Mertz said: "We're asking people to take into consideration what kind of employer we're supporting when we shop at Wal-Mart, to make a choice between being a consumer and being a member of the community."

Jim McAsey, director of Farmingdale-based Jobs With Justice, said Wal-Mart "continues to push an anti-family agenda, including salary caps, poverty-level wages, unaffordable health care and a restrictive attendance policy."

The demonstration was part of a simultaneous protest that also took place in Baltimore, Philadelphia, St. Louis, Seattle and Springfield, Mass.

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Local coalition wants to improve Wal-Mart workers' pay

By Monica Soto Ouchi
Seattle Times
November 22, 2006                             [back to top]

A couple of days before Thanksgiving, a dozen civil-rights, community and religious leaders gathered at Garfield Community Center in Seattle to throw their support behind WakeUpWalMart.com. The timing was purposeful. The group, funded by the United Food and Commercial Workers union, had sought to spotlight the employment practices of the nation's largest private employer during the all-critical holiday season.

On Tuesday, WakeUpWalMart.com held news conferences in 10 cities from Baltimore to Seattle.

At the local news conference, Verlene Jones of the A. Philip Randolph Institute called on Wal-Mart to provide living wages to its employees.

"No worker should be required to work an eight-hour job and still be below the poverty line," she said.

Although the message wasn't new — Wal-Mart Chief Executive Lee Scott conceded to analysts in September 2004 that the company was being pounded by critics — the location was a bit curious for this nationwide campaign.

Wal-Mart operates just four discount stores in King County — in Renton, Federal Way, Covington and Auburn — and no discount stores and supercenters in Seattle. By comparison, Albuquerque, N.M., a city with 100,000 less residents than Seattle, has nine stores within its city limits.

So why here?

Ed Fox, a retail professor at the Southern Methodist University Cox School of Business, said it's practical to presume Wal-Mart would expand in Washington state because it grows "market by market, not store by store."

"You don't want to have a distribution center that supplies one or two stores," Fox said. "You want to have a distribution center that works close to capacity."

In Washington state, Wal-Mart runs 21 supercenters; 20 discount stores; three Sam's Clubs, including one in North Seattle; and two distribution centers. The company is homing in on urban areas, where the market isn't saturated with big-box stores.

As of this month, the company has 16,656 employees in Washington state, not including Sam's Club. The average wage for those full-time hourly employees was $10.61, or slightly more than $22,000 a year.

On a more symbolic note, Seattle is home to warehouse-club retailer Costco, which competes with Sam's Club.

"Costco is a very strong foil," WakeUpWalMart.com spokesman Chris Kofinis conceded. "Here you have an employer that is a very responsible employer, pays a living wage and has a great public image because of that."

The local coalition said they hoped to put Wal-Mart on notice as the company looks to expand in the area.

It wasn't clear how the group planned to pressure Wal-Mart locally, although it announced an unspecified news conference and event in December.

"They're the largest retail chain in the country," Jones said. "They should do better."

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Wal-Mart discounts food up to 20 percent

UPI                                 [back to top]

BENTONVILLE, Ark., Nov. 22 (UPI) -- Wal-Mart Stores Inc. said Wednesday it was rolling back many food prices, the first time it has discounted such merchandise.

For example, 6 ounces of Louis Rich Chicken Breast Strips, which were as much as $3.27, are now $2.50, and a box of General Mills Chex Cereal has gone from $2.78 per box to three boxes for $7.

"This is the fifth set in a series of price cuts on thousands of key holiday entertaining and gift items and a continuation of Wal-Mart's commitment to offering holiday solutions at the best prices," the big discounter said in a news release.

© Copyright 2006 United Press International, Inc. All Rights Reserved.

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Wal-Mart Mexico to open bank in 2007

By Cyntia Barrera Diaz                       [back to top]

MEXICO CITY, Nov 22 (Reuters) - Mexico's top retailer Wal- Mart de Mexico said its new bank will kick-off operations in the second half of 2007, the first such venture by Wal-Mart anywhere in the world.

Wal-Mart de Mexico got final authorization on Wednesday to operate a bank that will offer basic saving and loan services to low-income earners with limited access to credit.

Wal-Mart de Mexico, controlled by Wal-Mart Stores Inc. <WMT.N>, is one of five new consumer banks that will launch operations soon, as the government expands lending beyond traditional institutions, which are often criticized for charging high transaction fees and interest rates.

In the United States, Wal-Mart has sought to set up a similar banking-retail venture, but has faced tough congressional opposition.

Analysts believe that, given Wal-Mart de Mexico's broad reach -- it boasts 872 outlets from supermarkets to restaurants

-- and deep pockets, it will force the Mexican banking industry to lower charges and prevent clients from switching to new, no- frills banks.

"A high percentage of our clients are in sectors with no access to banking," the company said in a statement to the stock exchange.

The retailer, which appointed banking executive Julio Gomez as head of the bank, was not immediately available to give further details.

Banks run by retailers have become attractive to investors in Mexico since Elektra <ELEKTRA.MX>, which sells everything from stereos to plasma screens, launched Banco Azteca in 2002.

Normally, no more than a booth at the back of Elektra outlets, Banco Azteca turns healthy and growing profits by lending money to working class consumers who would not qualify for credit at traditional big banks.

One of Elektra's most successful and fastest-growing bank services is opening accounts for waiters or people who get tips for looking after cars parked on the streets.

Famsa <GFAMSAA.MX>, another low-price retailer, has also jumped on the bandwagon and received its bank license mid- year.

While a boom in credit has fueled consumer spending, ranging from mortgages to auto purchases, Mexico's credit market remains largely untapped, making it an attractive opportunity for corporate giants such as Wal-Mart.

Wal-Mart de Mexico's <WALMEXV.MX> shares closed up 0.53 percent to 39.49 pesos on Wednesday. Its stock is up 38 percent so far this year, in line with the broader market's gain.

The company has used aggressive expansion and low prices to dominate Mexico's retail market.

© Reuters 2006. All rights reserved.

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Wal-Mart: Looking for a catalyst

Generic drugs could help revive growth for the world's largest retail chain.

By Michael Sivy,
Money Magazine
November 22 2006                            [back to top]

NEW YORK (Money) -- In chemistry, a catalyst is a substance that speeds up a reaction - or may be crucial to having it take place at all.

Stocks sometimes need catalysts, too. A company may have all the pieces in place for a major rebound, but need some trigger to attract investors' attention.

Wal-Mart is in just such a situation. Shares of the world's largest retailer are just a few dollars above their five-year lows - and down more than 25 percent from their all-time highs.

In fact, it seems as though Wal-Mart (Charts) should merit a higher price. While the stock has languished, sales are up more than 50 percent over the past four years. And earnings per share are up more than 80 percent.

So why has Wal-Mart's stock declined since 2002 when all the results were rising? The answer: Growth has slowed. Although sales for the first three quarters of this year have risen 12 percent from a year earlier, earnings per share are up only 6 percent.

This profit slowdown is the result of a number of factors - fears of a falloff in consumer spending, high gasoline prices that discouraged trips to the mall, and price competition with rival chain Target (Charts). In addition, Wal-Mart has had some trouble fine-tuning its product mix to attract more affluent shoppers.

The good news in this temporary funk is that Wal-Mart shares are attractively priced. The average stock in the S&P 500 trades at more than 17 times earnings for the current year. Wal-Mart, which has historically sold at a premium, now goes for less than 16 times earnings.

And it looks as though the earnings slowdown won't last long. First of all, Wal-Mart's international business is doing great. Operating income from continuing international operations was up more than 16 percent over the past nine months and more than 18 percent in the most recent quarter.

The key issue is reviving profitability in Wal-Mart's domestic stores. A certain amount of sales growth is baked in the cake. In the coming year, Wal-Mart plans to open more than 600 new outlets worldwide, including a 7 percent increase in domestic floor space. It wouldn't take much of an increase in same-store sales to turn that into double-digit revenue growth.

Generics could do the trick At some point, investors will recognize that the stock is poised for a rebound. What's needed to speed up that process is a catalyst. And sales of generic drugs may give Wal-Mart just the boost it needs.

The Food and Drug Administration estimates that consumers could save at least $25 billion a year by using generic drugs. Such drugs, which have lost their patent protection, typically sell for only a fraction of the price of newer brand-name drugs.

For many people, the older drugs work just as well as the newer ones. And there is a tremendous potential market for large-scale retail chains that can move volume at very low prices.

This business is made for Wal-Mart (and its rival Target). Both companies offer a growing list of major generic drugs for as little as $4 a prescription. Wal-Mart aims to make such drugs available in all 50 states by early next year.

Not only will generics represent a new profit center, they could also bring consumers into Wal-Mart outlets who have not previously shopped there.

Moreover, a growing list of prescription drugs with sales of more than a billion dollars annually will lose patent protection over the next few years and become available as generics. And government attempts to slow the rate of rising health-care costs will encourage the sale of such products.

Whichever discount retailers take the lead in that business should recover their growth-stock reputation. If Wal-Mart succeeds, its own shares could turn out to be the company's biggest bargain.

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Conservative plan to protest Wal-Mart

By David Crary
Associated Press
November 21, 2006                          [back to top]

NEW YORK — Long under fire from the left, Wal-Mart is now a target of Christian conservatives urging shoppers to boycott the huge retailer's post-Thanksgiving sales because of its low-key outreach to some gay-rights organizations. One group, the American Family Association, is asking supporters to stay away from Wal-Mart on Friday and Saturday _ two of the busiest shopping days of the year. Another group, Operation Save America, plans prayer-and-preaching rallies outside many Wal-Mart stores on Friday.

The corporate actions that triggered the protests were little different from those taken by scores of major companies in recent years _ Wal-Mart paid $25,000 this summer to become a member of the National Gay and Lesbian Chamber of Commerce and donated $60,000 to Out and Equal, which promotes gay-rights advances in the workplace.

Conservative leaders viewed these actions as a betrayal of Wal-Mart's traditions, which have included efforts to weed out magazines with racy covers and CDs with explicit lyrics.

"This has been Christian families' favorite store _ and now they're giving in, sliding down the slippery slope so many other corporations have gone down," said the Rev. Flip Benham of Operation Save America. "They're all being extorted by the radical homosexual agenda."

Wal-Mart Stores, Inc. spokesman David Tovar said the company's outreach to the gay-rights groups was part of a broader effort to best serve its diverse customer base.

"We take pride that we treat every customer, every supplier, every member of our communities fairly and equally," Tovar said Tuesday. "We do not have a position on same-sex marriage. ... What we do have is a strong commitment to diversity. We're against discrimination everywhere."

Chance Mitchell, president of the Gay and Lesbian Chamber of Commerce, said conservative activists had misrepresented his business-oriented group as a leading advocate of gay marriage in order to tarnish Wal-Mart.

"Their campaign has not been to educate, but to mislead," he said.

Wal-Mart ranks in the middle among companies rated by the Human Rights Campaign, a major gay-rights group, for workplace policies toward gays. Scores of companies now have a perfect 100 rating, while Wal-Mart's rating has risen from 14 in 2002 to 65 this year as it added sexual orientation to its nondiscrimination code and offered some domestic-partner benefits.

Human Rights Campaign president Joe Solmonese said he spoke with a Wal-Mart executive Tuesday and came away confident the company would continue efforts to promote workplace equality for gays.

Tim Wildmon, the American Family Association's president, said he and his allies had not ruled out extending the boycott against Wal-Mart, depending on how the company responded to the weekend protests.

"They are so gigantic, it's hard to make a dent," he said. "We're just trying to see if there's some measurable effect this weekend, see if we can get their attention."

Wildmon said Wal-Mart had been responsive to conservative pressure on a different issue, approving use of the word "Christmas" in advertising and employee greetings this season after shifting to a "happy holidays" phrasing last year.

That campaign was one of the first times Wal-Mart came under sustained criticism from the right. Far more often, it has been a target of left-of-center groups, such as WakeUpWalMart.com, complaining that the company pays low wages, skimps on employee benefits and outsources too many jobs.

The company has responded by adding low-cost health care plans, launching environmental programs and increasing diversity among employees and suppliers.

Paul Blank, campaign director for WakeUpWalMart.com, sent a letter Tuesday to Wal-Mart CEO Lee Scott urging the company not to cede to the boycott.

"We not only look forward to Wal-Mart remaining steadfast in its support for equal rights, but to the coming day when Wal-Mart will do what is truly right _ become a better employer," Blank wrote.

Gary Chaison, an industrial relations professor at Clark University in Worcester, Mass., said the conflicting pressures on Wal-Mart are "the price of being big and having many constituencies."

"Everyone expects Wal-Mart, because it has so many stores, to set the moral tone for America," he said. "The company has been trying to find a middle road, and it's had a great deal of difficulty doing that."

Another major corporation, Ford Motor Co., already is the target of an American Family Association boycott because it advertises in gay publications and supports gay-rights groups.

The Tupelo, Miss.-based AFA says 550,000 people have signed a pledge to boycott Ford and it takes partial credit for the company's financial problems. Ford spokesman Oscar Suris declined comment; an industry analyst, University of Detroit professor Michael Bernacchi, was doubtful the boycott was having much impact.

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Christian Conservative Groups Urging Shoppers to Boycott Wal-Mart Holiday Sales

Associated Press
Tuesday , November 21, 2006                           [back to top]

NEW YORK — Long under fire from the left, Wal-Mart is now a target of Christian conservatives urging shoppers to boycott the huge retailer's post-Thanksgiving sales because of its low-key outreach to some gay-rights organizations.

One group, the American Family Association, is asking supporters to stay away from Wal-Mart on Friday and Saturday — two of the busiest shopping days of the year. Another group, Operation Save America, plans prayer-and-preaching rallies outside many Wal-Mart stores on Friday.

The corporate actions that triggered the protests were little different from those taken by scores of major companies in recent years — Wal-Mart paid $25,000 this summer to become a member of the National Gay and Lesbian Chamber of Commerce and donated $60,000 to Out and Equal, which promotes gay-rights advances in the workplace.

Conservative leaders viewed these actions as a betrayal of Wal-Mart's traditions, which have included efforts to weed out magazines with racy covers and CDs with explicit lyrics.

"This has been Christian families' favorite store — and now they're giving in, sliding down the slippery slope so many other corporations have gone down," said the Rev. Flip Benham of Operation Save America. "They're all being extorted by the radical homosexual agenda."

Wal-Mart Stores, Inc. (WMT) spokesman David Tovar said the company's outreach to the gay-rights groups was part of a broader effort to best serve its diverse customer base.

"We take pride that we treat every customer, every supplier, every member of our communities fairly and equally," Tovar said Tuesday. "We do not have a position on same-sex marriage. ... What we do have is a strong commitment to diversity. We're against discrimination everywhere."

Justin Nelson, president of the Gay and Lesbian Chamber of Commerce, said conservative activists had misrepresented his business-oriented group as a leading advocate of gay marriage in order to tarnish Wal-Mart.

"Their campaign has not been to educate, but to mislead," he said.

Wal-Mart ranks in the middle among companies rated by the Human Rights Campaign, a major gay-rights group, for workplace policies toward gays. Scores of companies now have a perfect 100 rating, while Wal-Mart's rating has risen from 14 in 2002 to 65 this year as it added sexual orientation to its nondiscrimination code and offered some domestic-partner benefits.

Human Rights Campaign president Joe Solmonese said he spoke with a Wal-Mart executive Tuesday and came away confident the company would continue efforts to promote workplace equality for gays.

Tim Wildmon, the American Family Association's president, said he and his allies had not ruled out extending the boycott against Wal-Mart, depending on how the company responded to the weekend protests.

"They are so gigantic, it's hard to make a dent," he said. "We're just trying to see if there's some measurable effect this weekend, see if we can get their attention."

Wildmon said Wal-Mart had been responsive to conservative pressure on a different issue, approving use of the word "Christmas" in advertising and employee greetings this season after shifting to a "happy holidays" phrasing last year.

That campaign was one of the first times Wal-Mart came under sustained criticism from the right. Far more often, it has been a target of left-of-center groups, such as WakeUpWalMart.com, complaining that the company pays low wages, skimps on employee benefits and outsources too many jobs.

The company has responded by adding low-cost health care plans, launching environmental programs and increasing diversity among employees and suppliers.

Paul Blank, campaign director for WakeUpWalMart.com, sent a letter Tuesday to Wal-Mart CEO Lee Scott urging the company not to cede to the boycott.

"We not only look forward to Wal-Mart remaining steadfast in its support for equal rights, but to the coming day when Wal-Mart will do what is truly right — become a better employer," Blank wrote.

Gary Chaison, an industrial relations professor at Clark University in Worcester, Mass., said the conflicting pressures on Wal-Mart are "the price of being big and having many constituencies."

"Everyone expects Wal-Mart, because it has so many stores, to set the moral tone for America," he said. "The company has been trying to find a middle road, and it's had a great deal of difficulty doing that."

Another major corporation, Ford Motor Co., already is the target of an American Family Association boycott because it advertises in gay publications and supports gay-rights groups.

The Tupelo, Miss.-based AFA says 550,000 people have signed a pledge to boycott Ford and it takes partial credit for the company's financial problems. Ford spokesman Oscar Suris declined comment; an industry analyst, University of Detroit professor Michael Bernacchi, was doubtful the boycott was having much impact.

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Wal-Mart Slashes Food Prices, Targets Grocers Ahead of Thanksgiving

FoxNews
Tuesday , November 21, 2006                          [back to top]

CHICAGO — Two days before Thanksgiving, Wal-Mart (WMT) slashed prices on hundreds of grocery items, a welcome break for consumers but the first shot in what is sure to be a price war between mainstream grocers and the largest seller of food in the United States.

Wal-Mart, also the world's largest retailer, has already cut prices on toys, appliances, electronics and apparel to attract more holiday shoppers. The retailer also recently initiated a $4 generic prescription drug program that threatens pharmacy chains.

Now, it is trimming prices on hundreds of fresh and dry food items.

The retailer said that the price of many food items would be lowered by as much as 20 percent. Some items were discounted more heavily.

The prices of some items for Thanksgiving dinners are being slashed. A six-ounce box of Stove Top stuffing sells for 88 cents, down from $1.44 to $1.74 per box. A can of Ocean Spray cranberry sauce is now 88 cents, down from $1.14 to $1.36.

Among the other rollbacks, a 26.4-ounce pack of boneless skinless chicken breasts from Pilgrim's Pride Corp. (PLG), Tyson Foods Inc. (TSN) or Perdue will now sell for $4.74, or $2.87 per pound, down from $5.35, or $3.24 per pound.

The retailer, which is based in Bentonville, Arkansas, said the lower prices, or rollbacks, would be in effect throughout the season.

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Wal-Mart finds a frosty reception

By Adam Fifield
Inquirer
Tue, Nov. 21, 2006                        [back to top]

While knocking on more than 2,000 doors during his campaign for Berlin Borough Council this fall, Stephen Clyde encountered one question over and over.

It wasn't about property taxes or immigration or gay marriage.

Voters wanted to know: What was his position on Wal-Mart?

"Wal-Mart acted as a catalyst to ignite people's passion," said Clyde, a Democrat who ousted a Republican incumbent.

He attributes his victory, in part, to his vocal stance against the company's plan to put a 217,062-square-foot supercenter in the Camden County borough.

"It had a major impact," Clyde said.

Vehement community opposition to Wal-Mart's proposed Berlin store at the intersection of Berlin Cross-Keys and Watsontown-New Freedom Roads comes as the mammoth retailer faces growing national criticism from an increasingly well-organized opposition.

WakeUpWalMart.com, one of two national union-backed groups founded last year, last week enlisted two Democratic heavyweights, Sen. Barack Obama (D., Ill.) and former Sen. John Edwards (D., N.C.), to help launch its "Hope for the Holidays" campaign - one of the group's many initiatives to target the nonunion company, which it accuses of exploiting workers, transferring health-care costs onto taxpayers and crushing small businesses.

Wal-Mart, which employs the Edelman public-relations firm to run a "war room" to defend its image, dismisses such a characterization as calculated misinformation.

"The opponents have had some success getting that accusation out there," Wal-Mart spokesman John Simley said. "The fact is, the reality is different."

Simley said the retailer provided tens of thousands of coveted jobs every year, offered health-care plans that start at $11 per month and, in some cases, actually helped smaller businesses with additional customer traffic. He said Wal-Mart's low prices allowed customers to buy items they otherwise wouldn't be able to afford.

"We can provide the same and better products at a lower price and the customer has the freedom to make that purchasing decision," Simley said. "And their decision is to shop with Wal-Mart."

But in South Jersey, anti-Wal-Mart groups "seem to be sprouting up all over the place," said Stuart Platt, solicitor for the Berlin Borough Planning Board. "Wal-Mart seems to be a dirty word in the land-use business."

Berlin Cross-Keys Residents Against Wal-Mart, a community group of 150 members that was formed in August, is one of 11 citizens organizations that comprise the New Jersey Stop Wal-Mart Coalition.

Organized by the United Food and Commercial Workers Local 1360, the coalition aims to "stop Wal-Mart from using its corporate power to unilaterally change our business culture and society," according to its Web site.

"We're getting better at fighting these things, and people are noticing that," said Local 1360's Wal-Mart coordinator, Jim Chambers.

In Philadelphia and its suburbs, the United Food and Commercial Workers Local 1776 is focusing its anti-Wal-Mart efforts on political lobbying to thwart new stores before they are proposed, said the local's president, Wendell Young IV.

Young said the local had spent $7 million fighting Wal-Mart expansion between 1992 and 2002.

There are now at least 37 Wal-Mart stores in the Philadelphia region, according to the company.

A recent Wal-Mart poll of Philadelphia residents found that 59 percent would welcome the company in the city, said public-affairs manager Rhoda Washington.

Although Wal-Mart has no plans now for new stores in the city, "we're looking to accommodate that growth and that pattern of acceptance and invitation," Washington said.

The nation's largest private employer, with $312 billion in sales last year and 1.3 million U.S. employees, has experienced a raft of recent bad press. Last month, a Philadelphia jury awarded $78.5 million to current and former Wal-Mart employees in Pennsylvania for time they worked without pay and for missed breaks.

The company has long faced local resistance. But within the last few years, anti-Wal-Mart community groups - which are often supported by unions - have become more sophisticated, said Patrick Fox, president of the Saint Consulting Group in Hingham, Mass.

"They're ending up being the most cohesive and aggressive political organizations in their communities," he said.

According to a 2006 Saint Consulting land-use survey of 1,000 Americans, 68 percent said they would oppose a Wal-Mart in their community - up from 63 percent last year.

More than 200 residents turned out for a Berlin Borough Planning Board meeting last week to hear testimony on the proposed store. Heckling and shouts of "No Wal-Mart!" punctuated the proceeding, and residents and board members raised concerns about increased traffic and crime.

Two board members noted that there is already a Wal-Mart in nearby Berlin Township.

"I can't imagine Wal-Mart would keep two stores open within one mile of each other," board member Jim Bilella said as brisk applause erupted from the audience.

Earlier, Wal-Mart's Washington had said, "There are Wal-Marts that coexist beautifully side-by-side."

Borough resident Kenneth Heuftle walked over to a microphone and told Wal-Mart's Washington: "If you did your homework, you'd know we don't want you here."

Stephen Samost, an owner of the site upon which the Wal-Mart would be built, told the board that he was "attempting to carry out the wishes of the community."

He added that he was "surprised by the extent that there is opposition."

The hearing was continued until Nov. 29.

In an interview, Wal-Mart's Washington said she believed that the company's opponents represented a vocal minority.

Sales figures from the nearby existing operation indicate there is demand for an additional store in the area, she said.

"There's a very strong, solid majority of people that like us and welcome us," she said.

Samost disputed claims made by neighbors that the store would be too close to residential neighborhoods and could drive down property values.

"It's on a major county thoroughfare," he said in an interview. Residents "will only be directly impacted while they are on the highway going to where they're going."

But for some nearby businesses, anxiety about the retailer's ripples is acute.

"I'm fearful of the image of being located across the street from a Wal-Mart," said Richard Campbell, of Venice Plaza, a catering business that sits directly opposite where the shopping center would go.

Dan Benevento said he was not opposed to a store being built in the open grassy field adjacent to his Agway store on Berlin Cross-Keys Road.

"I just wish it was another store, other than Wal-Mart," he added. "They want to gobble up the little guy."

Not all Berlin businesses and residents fear the mega-store.

"It would help my business," said Wynne Naylor, who predicted increased traffic flow could deposit additional customers at her liquor store on Berlin Cross-Keys Road.

"I'm for it," resident George Johnson said. "It's reasonable, it's convenient. You can do a whole bunch of shopping there."

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Wal-Mart has strong strategy for India

Shaili Chopra Aroor
Monday, November 20, 2006               [back to top]

Wal-Mart is working on the final touches for its entry into India. However, it's been a long tough journey for the world's largest super market chain to crack this billion-population market.

Wal-Mart's proposed stores in India would be aimed at India's middle class appetite for life-style and convenience shopping.

However, the company will use India as a base to build exports, mainly fresh and packaged foods.

India is Wal-Mart's fastest growing sourcing market with a target of $1.5 billion worth of export merchandise.

India has a $250 billion retail market, growing at 7.2 per cent a year, which is why the format Wal-Mart may play with.

However, for starters, one could see Sam's Club wholesale stores coming in India and may consider big sale for business clientele and then follow up with selling for individual consumers.

So all this anxiety over FDI in retail could well be overstated. Wal-Mart's previous investment battles show that it initially faced anti-FDI sentiment in Mexico but despite that, it has set up 780 stores.

Wal-Mart used the JV route for China and today has 46 ventures there. For now, it is here and Indian supermarket scene could get ready for a serious rejig.

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Handy or harassing? Wal-Mart's Toyland website earns praise, criticism

CBC News
Monday, November 20, 2006                     [back to top]

CBC News A new website from Wal-Mart that markets toys to kids is drawing both praise for its innovation and criticism for its commercial tactics.

On the company's Toyland website, animated elves deliver a kid-centred marketing pitch on about 99 different toys. If the child likes a toy, it is placed in a rocket ship but if a child dislikes a toy, it's relegated to dump truck.

At the end of the session, the company offers to send an email to the child's parents with the wish list attached.

Some families under the holiday shopping crunch welcome the convenience of the site while critics say it instils an unnecessary urge to shop at an early age.

Parent Arlene Cook said the website is handy but said she'll still shop around for the best price.

"I think it can be a great tool for parents who are time-starved," Cook said.

Other retailers, including Mattel and Disney have begun marketing directly to children.

But, a parent advocacy group in the United States says the Wal-Mart website in particular teaches children to "ruthlessly" nag their parents. The Campaign for a Commercial-Free Childhood has started a letter-writing campaign urging parents to voice their displeasure with the Toyland website.

"Families have a hard enough time navigating holiday commercialism without the world's largest retailer bypassing parents entirely and urging children to nag. Please tell Wal-Mart to close the doors to Toyland," a statement on their website reads.

Karen Duncan, head of family and social sciences at the University of Manitoba, said the site does push children psychologically.

"I think there's pressure on children to put things on the list, to want things, to think that they need them, to request them," Duncan said. "I don't know if that makes things easier for parents."

Wal-Mart Canada defends the site, which is operated by its American parent company, saying it offers a new take on the tradition of writing out Christmas wish lists.

Stan Sutter, associate publisher for Marketing Magazine, agreed, saying the idea of list-making and holiday commercialism is an age-old custom.

"The idea of getting kids whipped up about product at Christmastime is not something Wal-Mart invented two weeks ago," he said.

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India's Bharti still in talks, media crowns Wal-Mart

Reuters
Mon Nov 20, 2006                                [back to top]

MUMBAI, Nov 20 (Reuters) - India's Bharti Enterprises Ltd. said on Monday it is still negotiating a partnership with major international retailers, amid media speculation that U.S. retailer Wal-Mart Stores Inc. <WMT.N> may have secured the deal.

Weekend media reports said a deal had been finalised with Wal-Mart, but a spokesman for the Bharti group, which controls India's biggest mobile services provider, Bharti Airtel Ltd. <BRTI.BO>, told Reuters that no deal had been finalised.

Bharti Chairman Sunil Mittal told Reuters last month that a deal was likely by the end of November. He said then that Bharti was in talks with Wal-Mart, the UK's Tesco Plc <TSCO.L> and France's Carrefour <CARR.PA>.

"Despite media reports that we have reached a deal, we continue to be in talks with all the global majors," the Bharti spokesman said on Monday, declining to specify when a deal may be done. "Any deal takes time."

Indian media have reported that the decision appears to be between Wal-Mart and Tesco. The Financial Express said at the weekend that Bharti and Wal-Mart had finalised a master franchise agreement that would include hypermarkets, supermarkets and grocery stores.

The two would initially invest $100 million, going up to $1.46 billion, the paper said, quoting industry sources.

Foreign retailers are keen to enter India's rapidly growing market, but multiple-brand retailers are only allowed to operate through franchises and licencees, or a cash-and-carry wholesale model, like Metro AG <MEOG.DE> and Shoprite <SHPJ.J> have chosen.

Single-brand retailers are allowed to own a majority stake in a joint venture with a local partner, and the expectation is that India would ease rules on foreign investment.

"Bharti can't lose with either (Wal-Mart or Tesco): both have the size and the branding and a proven track-record in non-home markets," said a retail consultant who declined to be named.

"Ultimately, it would come down to who can deliver the better value and a cultural fit between the two companies," he said.

TILLS RINGING

The Indian retail industry is estimated at about $300 billion, and is forecast to grow to $427 billion in 2010 and $637 billion in 2015, according to consultancy Technopak Advisors.

Organised, or branded, retail makes up only 3 percent of the market, compared to China's 20 percent and Thailand's 40 percent.

But that share is set to rise to 15-18 percent by 2011/12, with the entry of large Indian firms including Bharti, Reliance Industries <RELI.BO>, the Tata group and the Aditya Birla Group.

Reliance Industries, the top petrochemical company, recently opened its first grocery stores and is investing $5.6 billion in formats ranging from convenience stores to hypermarkets. It expects revenue of $22 billion from retail operations by 2010/11.

Cigarette maker ITC Ltd. <ITC.BO> has also opened its first grocery stores and plans to add outlets quickly.

Bharti has a joint venture with the El Rothschild group for FieldFresh, which supplies fresh produce to overseas retailers. Wal-Mart has a liaison office in India and expects to step up its sourcing of items such as apparel, textiles and shoes from India, which totalled more than $1.6 billion this year. Tesco also sources food and non-food items from India.

© Reuters 2006. All rights reserved.

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MEXICO: Activists Oppose Wal-Mart Expansion

KAMCITY                           [back to top]

US and Mexican activists attended a two-day meeting called the ‘First Binational U.S.-Mexico Meeting Against Wal-Mart’, in order to fight the expansion of Wal-Mart stores in Mexico. The activists, who represented several US groups and 10 Mexican labour, community and commercial organizations, said small stores and Mexican culture are under threat from the retailer.

Wal-Mart opened four more discount outlets, a Sam's Club, two restaurants and a clothing store in Mexico recently, bringing its total number of stores in the country to 870. Company officials did not immediately to respond to claims that the chain's stores are a blight on the landscape and are changing Mexicans' work, shopping and eating habits.

Ruben Garcia of activist group Global Exchange said, “We think Mexico should mount a defense of its cultural and historical legacy. They (Wal-Mart) want to open stores in Comitan, Juchitan, in Oaxaca, in Patzcuaro, in many places we consider historic. Other groups attending the meeting included ACORN (Association of Community Organizations for Reform Now) and the International Labor Rights Fund.

Juan Salazar, the outreach secretary of Mexico's Democratic Association of Public Markets, called on Mexicans to reject Wal-Mart and instead shop at the country's public marketplaces, where small vendors sell meat, produce and other goods. Garcia said Wal-Mart benefits from grocery vouchers, which the government gives to low-income families and public employees, which are largely redeemable only in supermarkets. The activists called on officials to allow shoppers to use them at public markets.

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Wal-Mart Clarifies Its Attendance Policy

AP
November, 17 2006                               [back to top]

Wal-Mart Stores Inc. has softened its stance on its attendance policy only weeks after the nation's largest private employer implemented changes that made hourly workers more accountable for excessive unexcused absences. Union-backed WakeUpWalMart.com, which had been blasting Wal-Mart's moves as "antifamily" immediately took credit for the changes, which appear to restore some flexibility to store managers and expand the list of authorized absences. But it said the changes fall short.

"Clearly this is in response to our campaign and to us working with Wal-Mart workers," said Chris Kofinis, a spokesman at WakeUpWalMart.com, which released internal documents detailing the revisions and held a conference call with reporters Friday. "But it still doesn't go far enough."

John Simley, a Wal-Mart spokesman, downplayed the revisions, saying that Wal-Mart was simply clarifying some terms and said emphatically that the move was not in response to attacks by such critics as WakeUpWalMart.com, which has been on a campaign to change the world's largest retailer.

"We made enhancements to an existing policy and the effect of the policy has not changed," Simley said. "We are taking the opportunity to clarify some terms."

According to the latest document, Wal-Mart created a new category called "extraordinary circumstances," which range from terrorist threats in the community to a fellow co-workers' funeral. It will also start disciplinary action after four unauthorized absences, instead of three. Wal-Mart also will no longer require associates to sign an acknowledgment form, something it required when it altered its policy in early September.

Still, Kofinis said that Wal-Mart fell short of addressing one of what he believes is one of the thorniest issues: allowing store associates to leave early to pick up a sick child or other family member without getting a demerit. Wal-Mart officials have maintained that such an excuse was always unauthorized.

Wal-Mart also didn't make any changes to its tardiness policy under fire from critics and some employees, where associates under the new policy would have a strike against them if they were 10 minutes late. Simley had maintained that it was actually more flexible. The old policy provided no leeway for lateness, while the new policy provides 10 minutes before being counted as tardy, he said.

Under the altered policy, implemented in September, employees are now required to call an 800 number to report all absences and tardiness by an hour before the scheduled time. In the past, employees got permission directly from their store managers.

Dana Rezaie, a Wal-Mart worker who was on the WakeUpWalMart.com conference call said she was "disgusted" with the new attendance policy. Still, while the latest steps to improve the policy were "small," it shows that "we can make changes that will make us all happy."

In response, Wal-Mart supplied an hourly worker, Cheryl Edwards, a personnel manager at Wal-Mart store in Austin, Tex. to defend the attendance policy.

Edwards called the revised policy, implemented in September, a "good move," and said she had no problems with it. "I think it makes it easier for managers to be fair and consistent

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Toxic apparel discovered at Wal-Mart, other retailers

China Daily                                     [back to top]

Investigators are looking into how clothing containing cancer-causing agents found its way onto shelves at Wal-Mart, Carrefour and several local leading chain stores, according to a report posted yesterday on the website of the Beijing Administration For Industry and Commerce (BAIC).

Certain apparel made by 28 clothing brands sold in these stores failed quality inspections earlier this month because they contained unsafe materials, the administration found.

The BAIC ordered the substandard apparel off all shelves in all stores in Beijing. Both the sellers and producers of the clothing may face prosecution, while the producers have been ordered out of the Beijing market.

Of the 28 brands listed, certain apparel made by four companies was found to contain excessive levels of chemicals like aromatic ammine or formaldehyde, which are both carcinogenic substances.

Many countries have banned the use of the former as a dye, while the latter is generally not allowed in consumer products.

Apparel from the four unsafe brands were: Ming-Langdike skirts (size 11), made by the Guangzhou Disheng company; Pusheng blouses (155/80A), made by Shanghai Pusheng; Jeanberger trousers (170/80A), made by Shenzhen Zhonghang; and Hafulu trousers (size 23), made by the Guangdong Hafulu.

The BAIC inspectors also found that apparel made by four brands exceeded the allowable pH values for clothing. The use of materials with excessive acidity or alkalinity could irritate people's skin.

The other brands on the list either failed to correctly list the materials used in the production of their apparel or were found to change shape and colour after washing.

The full list of substandard items has been published on the BAIC's website, www.hd315.gov.cn.

BAIC officials said there would be penalties for the involved parties.

"They could face fines worth up to three times the revenue they got from selling the goods and will be forced to exit the market," Wang Xiaojing, of the administration's information department, told China Daily.

"Buyers may return substandard goods if they have kept the receipt. They should first make sure their purchases are included on the list published on our website," Wang added.

In addition to Wal-Mart and Carrefour, substandard clothing was found on shelves at nine other chains, including Lotus Liuliqiao, Wangfujing Women's Collection and a Beijing Hualian Group branch.

An official at Wal-Mart said the retailer no longer carried the offending brands.

"The problematic trousers are no longer sold in our stores," a Wal-Mart representative told Xinhua, adding that he was unaware of the investigation.

This is at least the second report of unsafe clothes being sold in the capital city's leading chain stores to appear in the second half of this year.

Earlier in September, Beijing's municipal government suspended the sale of 79 children's products deemed substandard by officials. The products included clothing, stationery, eyeglasses, shoes, toothbrushes and toys.

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Ping An Insurance in JV to build malls for Wal-Mart

Reuters
Thu Nov 16, 2006                          [back to top]

HONG KONG, Nov 16 (Reuters) - China's Ping An Insurance Group <2318.HK> has entered a 1 billion yuan ($127.1 million) property joint venture to develop Chinese shopping centres to be anchored by U.S. retail giant Wal-Mart Stores Inc. <WMT.N>.

The Hong Kong-listed insurer said in a statement on Thursday that its subsidiary, China Ping An Trust & Investment Co. Ltd., was teaming up with Pan-China Commercial Property Development (Shenzhen) Co. Ltd. -- a unit of Pan-China Construction Group.

The joint venture will build its first malls in Beijing, Nanning, Yuxi and Jingzhou.

Wal-Mart, with 66 stores in 34 cities across China, is keen to employ several developers so that it can continue to expand quickly.

For example, Singapore developer CapitaLand Ltd. <CATL.SI> signed a deal in 2005 with China's state-owned Shenzhen International Trust & Investment Co. Ltd. to build shopping centres to house the U.S. retailer.

CapitaLand is now spinning off seven of its Chinese shopping centres into a real estate investment trust (REIT), which hopes to raise up to US$140.2 million in a Singapore IPO being marketed this week and next week.

CapitaRetail China Trust will allow CapitaLand to raise money for more building and should be a willing buyer of its future developments in China.

© Reuters 2006. All rights reserved.

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Can Barack Wake Up Wal-Mart?

Democrats Obama and Edwards kick off the Wal-Mart watchdog's holiday campaign to pressure the mega-retailer for better wages

by Pallavi Gogoi
BusinessWeek Online
November 16, 2006                         [back to top]

In a much-publicized and carefully executed event on Nov. 15, Senator Barack Obama (D-Ill.) and former Senator John Edwards (D.-N.C.) lent their voices and their political clout to the effort to pressure Wal-Mart Stores (WMT), the world's largest retailer, to change its workplace practices. The two participated in evening conference calls with Wal-Mart workers, organized by the union-funded group WakeUpWalMart.com. The conference calls officially launched a six-week campaign titled "Hope for the Holidays," during which the watchdog group plans to push for changes at Wal-Mart.

Obama, a possible Democratic presidential candidate for 2008, was the first to weigh in, in a call that started at 7 p.m. EST. "Unlike the manufacturers who are under enormous competitive pressure from global low-cost producers, Wal-Mart is making enormous profits and yet it has chosen to go with low wages and diminished benefits," he said. "The battle to engage Wal-Mart and force them to examine their corporate values and policies is absolutely vital to America today."

A Living Wage Obama spoke for less than 10 minutes, and much of the call was taken up by members of WakeUpWalMart.com. The group was set up by the United Food & Commercial Workers International Union, which has tried to organize the company's workers—without success. The Hope for the Holidays campaign is designed to change what the group calls Wal-Mart's "anti-family business practices" and persuade the company to provide a "living wage and affordable health care" to employees. "With great wealth comes great responsibility," says Chris Kofinis, spokesman for WakeUpWalMart.com. "As one of the world's most powerful economic forces and one of the most profitable companies, Wal-Mart has the responsibility to improve the lives of its workers."

Wal-Mart, which has seen numerous attacks by politicians in the past, was restrained in its response to the event. "We are disappointed that Senators Obama and Edwards have chosen to participate in a politically motivated event," says David Tovar, spokesman at Wal-Mart. "Wal-Mart creates jobs for Americans, reduces costs of health care with its $4 generic drugs, and is a leader on environmental sustainability." The company says it is on the side of working Americans, providing more than 1 million with jobs and offering more products at affordable prices than any other retailer.

The calls come just as the holiday shopping season is kicking into high gear. Wal-Mart has vowed to lead its industry in cutting prices as it tries to boost sales. On Nov. 14, the company reported third-quarter sales that were shy of analysts' expectations, although profits were at the high end of Wall Street forecasts (see BusinessWeek.com, 11/14/06, "Wal-Mart: Back to Basics for the Holidays").

Democrats Appeal to Workers The Obama-Edwards conference calls are a clear sign that, with the ascendancy of Democrats in Washington, political pressure on Wal-Mart is on the rise. Other Democrats have appeared in rallies that call for Wal-Mart to change. And in a column in The Wall Street Journal on Nov. 15, Democratic Senator-elect Jim Webb (D-Va.) laments that tax codes protect the rich and American corporations. "The average CEO of a sizeable corporation makes more than $10 million a year, while the minimum wage for workers amounts to about $10,000 a year, and has not been raised in nearly a decade," Webb wrote.

Labor unions, of course, have long been allied with Democrats, and they now believe that their voices will be heard by politicians with power. However, the Democrats appear to be appealing to a broader audience of workers, not just those in unions. They're appealing to the many employees who feel like they're being pinched between low pay and escalating costs for things like health care.

"Folks on Wall Street, and people in the top 1% of the income bracket are getting more and more of the productive resources," said Obama, "while ordinary folks are finding themselves systematically in jobs where they don't find adequate wages, no health-care benefits, and no significant form of retirement security. It's not like the economy took a hit. We are grappling with this trend even as the U.S. economy has been going gangbusters and corporate profits have gone up astronomically."

Not Playing Favorites Though it has historically been closer to Republicans, Wal-Mart has been trying to court politicians from both parties. While it has donated 69% of its federal political contributions to Republicans and 31% to Democrats, it recently hired Leslie Dach, a Democratic operative and former political adviser to Al Gore, as head of its government relations and corporate communications. It has also stepped up its political contributions to politicians of both parties at the state and local levels (see BusinessWeek.com, 9/28/06, "Wal-Mart Doesn't Discount Politicians").

The current campaign against Wal-Mart particularly targets the company's new round of workplace restrictions—wage caps, cutting the number of hours with a corresponding cut in wages, compelling part-time workers to be available for shifts around the clock, and a stringent attendance policy. Along with these changes, Wal-Mart is looking to transform its workforce from 20% part-time to 40% part-time. Some employees say that the company wants to push out full-time and unhealthy employees because they are too expensive for the company to retain (see BusinessWeek.com, 10/17/06, "Wal-Mart Workers Walk Out").

The politicians are offering Wal-Mart advice, along with their criticism. Obama pointed to Wal-Mart's rival Costco (COST), where the average pay is 60% higher and health-care benefits are provided to more than 80% of its employees, compared to less than half at Wal-Mart. Obama said Wal-Mart workers and supporters should work together to change its policies: "We have a history in this country of ordinary people doing extraordinary things when they work together."

Gogoi is a reporter for BusinessWeek Online in New York.

Copyright 2000-2006 by The McGraw-Hill Companies Inc. All rights reserved.

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Wal-Mart to sell $4 generics in 11 more states

Reuters
Thu Nov 16, 2006                 [back to top]

CHICAGO (Reuters) - Wal-Mart Stores Inc. <WMT.N> on Thursday said it would begin selling certain generic prescription drugs for $4 in 11 new states, including Massachusetts, bringing the total to 38 states.

The world's biggest retailer, which launched the $4 generic drug program in Florida in September, said the program would be available in Washington, Idaho, Kentucky, Maine, Massachusetts, Nebraska, Oklahoma, Rhode Island, South Carolina, Utah and West Virginia as of Thursday.

© Reuters 2006. All rights reserved

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Mexican Government Backs Creation of Wal-Mart Bank

Reuters
Thu Nov 16, 2006                                    [back to top]

MEXICO CITY (Reuters) - Mexico's government said on Wednesday it supported a request by dominant retailer Wal-Mart de Mexico to open a consumer bank and expects to give formal authorization within two weeks.

The application by Wal-Mart de Mexico, controlled by Wal-Mart Stores Inc. <WMT.N>, was one of five the the finance ministry said it planned to approve.

The finance ministry also said it expected to approve applications for Banco Facil, Banco Comercial Del Noreste, Prudential Bank and Bancoppel, to be run by retailer Coppel.

Banks run by retailers have become attractive to investors in Mexico since Elektra <ELEKTRA.MX>, which sells stereos, washing machines and cellphones, launched Banco Azteca in 2002.

Normally no more than a booth at the back of Elektra outlets, Banco Azteca turns healthy and growing profits by lending money to working class consumers who would not qualify for credit at traditional big banks.

"The entry of new participants (in the sector) is one way to create a more competitive financial system that offers more opportunities, in terms of quality and price, to financial services customers," the ministry said in a statement.

Wal-Mart de Mexico's bank will likely concentrate on in-store credit and, to a lesser extent, personal loans, say analysts, who had expected the government to approve the applications before the end of the year.

Following a business model used by Wal-Mart around the world, the company's Mexican operation has used aggressive expansion and cut-rate pricing to become by far the country's largest retailer.

In the United States, Wal-Mart is one of several companies seeking permission to operate a consumer-oriented bank known as an industrial loan corporation.

The company has said it wants to process credit card transactions, but opponents and some politicians worry the already-powerful retail powerhouse has bigger banking ambitions.

Walmex's stock dipped 1.35 percent to 38.83 pesos prior the finance ministry's announcement.

© Reuters 2006. All rights reserved.

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Wal-Mart Sued Over Food Labels

By Ylan Q. Mui
Washington Post
November 15, 2006                        [back to top]

An activist group representing small farmers has filed a complaint with the U.S. Department of Agriculture, alleging that Wal-Mart Stores Inc. incorrectly labeled several products as organic. The retailer recently began expanding its assortment of organic foods as part of an effort to attract wealthier, more urban customers. In a statement yesterday, Wal-Mart defended its program and questioned the intentions of the group, called the Cornucopia Institute.

In an e-mail, Wal-Mart spokeswoman Karen A. Burk wrote "it's hard to take their claims seriously" and said one of the group's founders, Mark Kastel, had worked for a Wal-Mart rival. Kastel was a consultant for Organic Valley, a national farming cooperative that competes with several of Wal-Mart's suppliers. Kastel said he has severed professional ties with the co-op, though he declined to comment on whether it donated money to Cornucopia.

In its letter to the National Organic Program, an arm of the USDA, Cornucopia said that at several stores, Wal-Mart had incorrectly labeled Stonyfield Farm all-natural yogurt as organic. It also said several stores had included non-organic products such as tofu, egg-roll wrappers and juice in a cooler designated for organic produce.

"We were actually surprised to find these labeling errors and surprised to find them across the board," Kastel said.

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Wal-Mart supercentre not likely in Campbell River plans

By Grant Warkentin
The Mirror
Nov 15 2006                               [back to top]

Although Wal-Mart is planning to open 14 supercentres across B.C. next year, Campbell River is probably not one of them.

"In terms of Campbell River, our plan has been to build a traditional store," said Kevin Groh, spokesperson for Wal-Mart Canada. "That would include grocery but the plan has not been to include fresh produce. It would be a modern store but the plans have not been for a supercentre."

Wal-Mart supercentres are stores about 30 per cent larger than typical Wal-Marts. They are larger so they can include fresh produce and more groceries in the aisles.

Most Wal-Marts offer some canned and dry goods in their grocery sections and even some frozen and refrigerated food, but few offer a fully-stocked grocery section.

Last week Wal-Mart announced it plans to open 14 supercentres next year. four stores in Ontario. Groh said it hasn't yet been announced where the rest of the stores will go but Campbell River probably won't be one of them.

Groh said Wal-Mart has been working for a long time trying to bring a store to Campbell River. Last June, in three nights of public hearings, hundreds of people expressed their opposition to the city's plans to allow a store in Campbellton near the Quinsam Hotel.

Based on public opposition, council voted against legislation which would have allowed the store to be built.

Wal-Mart and the Campbell River Indian Band are now working to build a store almost across the street from the rejected site, on Indian Reserve land. The proposed site is between 16th Avenue and the old Island Highway, beside Shop-Rite.

Groh said Wal-Mart and the band are still working out the details.

"We've been in the works in Campbell River for some time," he said. "We're still working on a lease and that's a work in progress."

© Copyright 2006 Campbell River Mirror

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La. man wins right to protest in front of Wal-Mart

By The Associated Press
11.14.06                                                 [back to top]

NATCHITOCHES, La. — A court order issued yesterday allows a man to protest in front of a Wal-Mart store here, the American Civil Liberties Union of Louisiana said.

Edwin Crayton was chased away by a Natchitoches police officer from a public sidewalk in front of the Wal-Mart store in early October. Crayton had been trying to protest what he believes is the company’s stand on gays, according to the ACLU, which filed a lawsuit on his behalf.

The ACLU said the police officer told Crayton that he needed a permit to protest, but that requirement was squashed by yesterday’s court order.

Katie Schwartzmann, an ACLU staff attorney, praised the city of Natchitoches for agreeing to lift restraints on Crayton’s “right to speak.”

“The right to speak one’s conscience on matters of religious and political import is integral to a free and democratic society,” Schwartzmann said.

Natchitoches officials could not be reached for comment.

The lawsuit contested not only Crayton’s need for a permit, but also asked the court declare the permit requirements themselves unconstitutional. A court hearing on the city’s ordinance requiring permits is set for Jan. 26, the ACLU said.

The ACLU successfully challenged a similar New Iberia ordinance in 2002. In that case, a lone protester carried a sign in front of a store to protest its gun sale policies and was threatened with arrest by a police officer.

When Crayton protested he held a sign that read, “Christians: Wal-Mart Supports Gay Lifestyles And Marriage. Don’t Shop There.” He sought to discourage Christians from shopping at Wal-Mart.

Last year, Wal-Mart disclosed that it was expanding the definition of “immediate family” in its ethics policy to include an employee’s same-sex partner. Efforts to increase diversity in the company work force include new groups of minority, female and gay employees that have started meeting at Wal-Mart headquarters in Bentonville, Ark., to advise the company on marketing and internal promotion.

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Retailers warily eye Wal-Mart's holiday discounts

Reuters
Tue Nov 14, 2006                                [back to top]

NEW YORK, Nov 14 (Reuters) - Wal-Mart Stores Inc. <WMT.N> and Target Corp. <TGT.N> posted better-than-expected quarterly earnings on Tuesday, but the world's biggest retailer promised deep holiday discounts for consumers who are still feeling pinched -- which could spell trouble for other retailers.

Wal-Mart, whose shares rose 2 percent in morning trading, said it would implement its "most aggressive pricing strategy ever" for the key holiday shopping season.

The retailer said it expects fourth-quarter sales at stores open at least a year to be up 1 percent to 2 percent and that price cuts on items like toys and electronics were already drawing shoppers.

While Wal-Mart's plans could generate sharply higher traffic, other retailers' shares suffered on Tuesday as the prospect of having to compete against deep discounts from the leading retailer spread little cheer throughout the sector.

For example, consumer electronics retailers, who stand to lose sales of hot items such as flat-panel televisions to Wal-Mart, saw their shares fall.

Circuit City stock fell 4.4 percent to $23.79 on the New York Stock Exchange while shares of Best Buy Co. Inc. <BBY.N> and RadioShack Corp. <RSH.N> each slipped less than 1 percent to $52.21 and $17.22, respectively.

Tom Schoewe, Wal-Mart's chief financial officer, said consumers were still concerned about energy prices, even though gasoline costs have come down from a late-summer peak, and a sluggish housing market.

"At the end of the day, our customer is looking for value," he said. "That's what is going to make or break our fourth quarter."

Joseph Beaulieu, an analyst with Morningstar, said Wal-Mart's focus on cutting prices was a positive.

"Wal-Mart is ... getting back to what's made them work in the past," he said. "The way they're toning down the talk about fashion and talking more about discounting, that's the kind of thing that makes that store tick."

He said Target, whose profit beat Wall Street estimates due to strong performances from its Target and Target Visa credit cards, was somewhat sheltered from the need to match Wal-Mart's discounts because their stores cater to wealthier shoppers and are concentrated in the northern United States rather than the South.

"I think Target can do well in a quarter that Wal-Mart does well," he said. "In a quarter when Wal-Mart and Target both do really well, other retailers could get hurt."

Wal-Mart shares, which are roughly flat year-to-date, rose 96 cents to $47.28 while Target rose nearly 1 percent to $58.09. (Additional reporting by Emily Kaiser in Chicago and Nicole Maestri in New York)

© Reuters 2006. All rights reserved.

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Protesters Storm Wal-Mart in Mexico City

By Kathleen Miller
Associated Press
November 14, 2006                      [back to top] 

Demonstrators stormed a Wal-Mart on the outskirts of Mexico City on Tuesday, accusing the U.S.-based retailer of selling low-cost goods at the expense of workers, farmers and public markets. About 250 protesters chanted "Out! Out!" in front of Wal-Mart's corporate headquarters before entering the adjacent store, where they blocked aisles for about 30 minutes before leaving. There were no immediate reports of arrests, injuries or damage.

Ruben Garcia, a Mexican citizen who works with San Francisco-based activist group Global Exchange, said the discount chain's low prices take business away from the country's traditional public markets and depress wages for workers and farmers.

"If a cantaloupe costs 20 cents at a Wal-Mart, imagine how much the rural farmers are getting for this cantaloupe," Garcia said. "There is a high cost for the low prices."

The company denied the accusations.

"Wal-Mart of Mexico generates very positive benefits for the country," it said in a statement. With more than 140,000 workers, Wal-Mart is the largest private sector employer in Mexico.

Some protesters carried signs bearing pictures of Andres Manuel Lopez Obrador, the leftist presidential candidate who claims he was robbed of victory in July elections and plans to be inaugurated as the "legitimate president" of an alternative government on Monday.

Lopez Obrador aides have accused Wal-Mart of supporting his conservative rival and the current president-elect, Felipe Calderon. The company denies the allegation.

The Arkansas-based company has been targeted by Mexican protesters before.

In 2004, a Wal-Mart-owned discount store opened less than a mile from the ancient temples of Teotihuacan, just north of Mexico City, despite months of protests by some residents who claimed the sprawling complex was an insult to Mexican culture.

Last month, Wal-Mart won preliminary approval over opposition from some residents to build a store in Cabo San Lucas, in Baja California Sur - the only one of Mexico's 31 states where it currently does not have an outlet.

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Obama, Edwards Court Wal-Mart Critics

By Marcus Kabel
Associated Press
November 14, 2006                         [back to top]

Sen. Barack Obama and another potential Democratic 2008 presidential contender, former North Carolina Sen. John Edwards, will speak to activists from one of Wal-Mart's most vociferous union-backed critics Wednesday as debate over the world's largest retailer becomes increasingly political. Washington-based WakeUpWalMart.com, created by the United Food and Commercial Workers union, said Obama and Edwards will address the group's supporters on two national conference calls that will launch a six-week campaign targeting Wal-Mart Stores Inc.

Wal-Mart urged Obama and Edwards to get to know the company and its employees before making up their minds about the retailer.

"We've found that most of the politicians who are most critical of Wal-Mart are the ones that know us the least," Wal-Mart spokesman David Tovar said.

Obama's office said the Illinois senator "is participating in this call because he believes all workers in America, no matter who they work for, deserve to be paid a living wage and have access to comprehensive health care their families can afford."

The battle between Wal-Mart and its critics has taken on an increasingly political tone since WakeUpWalMart and another union-backed group, Wal-Mart Watch, were formed last year to pressure the retailer for changes including higher wages and better benefits.

Both sides use political campaign-style tactics, including polling, ads, blogs, direct mail, grass-roots organizing and strategic "war rooms."

Chief Executive Lee Scott took time during a company earnings conference call Tuesday to comment on the Democrats' new majority in Congress, stressing that Wal-Mart is a "bipartisan company" that can work with both parties on issues like health care.

WakeUpWalMart enlisted several potential Democratic presidential candidates other than Obama and Edwards for a series of rallies in Iowa this summer.

Wal-Mart replied with a letter to its 18,000 Iowa workers warning them that the politicians were wrongly attacking their company. In August, Wal-Mart hired former Democratic operative Leslie Dach as its head of communications and government relations.

The company also funded a survey in June that claimed that most voters would reject a Democratic candidate who attacks Wal-Mart. Separately, a Pew Research poll in August found a split among Democratic supporters, with 53 percent of liberal Democrats disliking Wal-Mart while 70 percent of conservative and moderate Democrats viewed the company favorably.

WakeUpWalMart said Obama and Edwards "will be speaking out and calling on Wal-Mart to put families first and become an employer that reflects the best of American values" during two conference calls Wednesday for the group's activists.

The call will inform the group's membership, which it puts at more than 285,000, about plans for rallies and other holiday events aimed at putting public pressure on Wal-Mart to change business practices that the critics say are antifamily, such as work scheduling changes and pay caps introduced this year.

"As two of the brightest stars in American politics who have fought to put families first their entire lives, we couldn't be prouder that Senator Obama and Senator Edwards are joining with us to change Wal-Mart and change America for the better," WakeUpWalMart spokesman Chris Kofinis said.

Wal-Mart has rejected criticism of the pay caps and scheduling changes, saying they are standard for the retail industry. Wal-Mart argues the pay caps encourage employees, which it calls associates, to move up through the ranks and that it still takes account of worker preferences in setting schedules.

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Wal-Mart: We'll Lead on Price

The giant retailer reported mixed results for the third quarter and vowed to show "leadership on price and value"

by Pallavi Gogoi
BusinessWeek Online                              [back to top]

Expect the price cutting to continue at Wal-Mart Stores (WMT), the world’s largest retailer, at least through Dec. 24 this year. Already on one of its deepest price-cutting sprees in years, Wal-Mart’s CEO Lee Scott said in a recorded earnings call on Nov. 14: "This season, no one will doubt Wal-Mart's leadership on price and value."

The pronouncement came as the giant retailer reported results for the third quarter. Revenue increased 12% to $83.54 billion, while net income rose 11.5% to $2.65 billion. That put profits at the high end of Wall Street expectations, but sales fell short of forecasts, for $84.48 billion. Wal-Mart’s stock rose about 2% in midday NYSE trading Nov. 14, to more than $47. The shares have retreated from their 52-week high of $52.15 reached in October.

Sales gains at stores open at least a year, a common yardstick for retail performance, were disappointing. Same-store sales rose just 1.5%, missing Wal-Mart’s own original forecast for a 2% to 4% gain. The company said that its recent store-remodeling efforts were disrupting business, and the apparel fashions were too trendy for its core customers.

The Bentonville (Ark.) retailer isn’t expecting sales to grow in November, but is clearly determined to lure in customers for the rest of the shopping season. "We are implementing our most aggressive price strategy in our stores for the holiday season," CEO Scott says. Already, Wal-Mart was the first out of the gate, slashing prices on key categories such as toys, electronics and home appliances. More hot deals can be expected on Black Friday, or the day after Thanksgiving, which marks the "unofficial" start of holiday sales (see BusinessWeek.com, 11/14/06, " Holiday Hysteria").

These sales should drive consumer spending overall. Such spending could help lift the U.S. economy too, given that consumer expenditures account for about two-thirds of the economy. Economic numbers released by the U.S. Commerce Department showed that overall retail sales fell a less than expected 0.2% in October. Sales excluding gasoline rose a surprising 0.4% as consumers spent on food, cars, health and clothing.

Gogoi is a reporter for BusinessWeek Online in New York.

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Wal-Mart, Target Start Holiday Price War

November 14                                   [back to top]

NEW YORK (AP) - Wal-Mart and rival Target are brewing up a price war for toys, electronics and other things consumers may want for Christmas that could spell savings for shoppers, but profit woes for retailers in the critical holiday quarter.

Wal-Mart Stores Inc., the world's largest retailer, on Tuesday promised "its most aggressive pricing strategy ever" to fuel year-end business, but warned the move could also make it miss Wall Street's expectations for fourth-quarter earnings.

That announcement came as Wal-Mart posted an 11.5 percent profit increase in the third quarter when improved merchandise mix and stricter cost controls offset weak growth in U.S. sales.

Its adversary, Target reported a 16 percent gain in third-quarter profit, beating analyst expectations as its sales rose 11 percent. Target President Gregg Steinhafel told investors during a conference call Tuesday that the retailer would compete on long-running discounts, noting that it has often matched those before Wal-Mart advertises them in its circulars.

"(Profits) is going to be a big issue for the big box retailers," said Ken Perkins, president of RetailMetrics LLC, a research firm in Swampscott, Mass. He noted that Target is going to be able to make up some ground lost in digital cameras and flat-screen TVs with its trendier apparel, which carries fatter profit margins. But he said, "It's going to put pressure on everyone."

Perkins pointed out that Wal-Mart can't rely on price cutting alone; it needs to have customers buy merchandise other than electronics and toys. "Customers need to leave with a handful of merchandise," Perkins added.

Wal-Mart's assertive discounting is expected to put pressure on other retailers to match the cuts, a move that would erode profit margins, though it would save customers money. The most vulnerable are toy retailers and electronic chains, but moderate-price apparel chains could be affected as well, Perkins said.

Wal-Mart started holiday discounting in mid-October by cutting toy prices, then followed this month with electronics and small appliances, with a promise of more to come. The company vowed generous discounts, or what the company calls rollbacks, on basic apparel like cargo pants and flannel shirts.

"We are implementing our most aggressive pricing strategy ever across core categories, such as toys and electronics," said Lee Scott, president and CEO of Wal-Mart, in a prerecorded phone message.

As if to emphasize its stance, Wal-Mart on Tuesday announced it slashed prices on more toys. It was the fourth time since mid-October that Wal-Mart rolled back prices on some products, moves that retailers normally reserve for after Thanksgiving.

John Menzer, head of Wal-Mart U.S. stores, told investors there were "huge sales increases" among the discounted toys and in some electronics.

"We're seeing a big growth in our new categories such as flat panel TV's, MP3 players, laptops and cell phones. But this is tempered with declines in our more mature categories such as music, DVD players and telephones," Menzer said on the recorded message

Scott told analysts last month that Wal-Mart would focus more on discounts after an overemphasis on selling trendier clothing backfired, contributing to a sharp slowdown in sales.

Wal-Mart posted posted net income of $2.65 billion, or 63 cents per share, for the period ended Oct. 31, compared with $2.37 billion, or 57 cents per share, a year earlier.

Net sales totaled $83.5 billion, an increase of 12 percent from $74.6 billion.

Excluding income from operations in Germany and South Korea that it has sold, Wal-Mart's profit amounted to 62 cents a share. Wall Street expected a profit from continuing operations of 59 cents per share, the average estimate of 21 analysts surveyed by Thomson Financial, on projected sales of $84.48 billion.

Wal-Mart said it expects earnings per share from continuing operations for the fourth quarter to be between 88 cents and 92 cents, resulting in a full-year forecast for earnings per share of $2.85 to $2.89.

In August, Wal-Mart had forecast full-year earnings per share between $2.88 and $2.95.

Analysts polled by Thomson Financial expect 92 cents per share in the fourth quarter and $2.87 in the full year.

For the third quarter, same-store sales, or sales at stores opened at least a year, were up 1.5 percent. Wal-Mart has also forecast a flat November, the first month in a decade with no growth in same-store sales.

Scott said the slowdown was due to factors including overemphasis on its new, trendier Metro 7 women's apparel and comparisons with heavy shopping last year before and after hurricanes Katrina and Rita.

Wal-Mart expects same-store sales to be up between 1 and 2 percent in the fourth quarter, Chief Financial Officer Tom Schoewe said.

Shares of Wal-Mart rose $1.34, or 2.89 percent, to close at $47.66 on the New York Stock Exchange.

Meanwhile, Target said it earned $506 million, or 59 cents per share, up from $435 million, or 49 cents per share, during the same period last year.

Revenue rose to $13.57 billion from $12.21 billion during the same period last year. Target attributed the growth to new stores, a 4.6 percent sales rise at stores open at least a year, and credit card revenue.

Analysts surveyed by Thomson Financial were expecting 55 cents per share on revenue of $13.59 billion.

Net charge card revenue jumped 20.7 percent to $414 million. Target cards contributed $176 million in pre-tax earnings for the quarter, up $68 million, or almost 63 percent, from the same period last year.

Chief financial officer Doug Scovanner said on a conference call that Target's same-store sales have risen 4.8 percent for the year so far, and predicted its fourth-quarter same-store sales would be about the same. He said Target expects to earn $3.17 per share for the full year. Analysts are expecting $3.13 per share.

Target shares rose $1.40, or 2.42 percent, to finish at $59.16 on the NYSE.

AP Writer Marcus Kabel in Springfield, Mo. and Josh Freed in Minneapolis contributed to this report.

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Wal-Mart Holiday Price Reductions Fail to Lift Profit Forecast

By Lauren Coleman-Lochner
Bloomberg
November 13, 2006                                     [back to top]

Nov. 13 (Bloomberg) -- Wal-Mart Stores Inc. Chief Executive Officer H. Lee Scott called sales ``unacceptable'' last month and ordered a return to the principles that had built the world's largest retailer: Less fashion, more price rollbacks. Same-store sales at Wal-Mart gained 0.5 percent in October. The Bentonville, Arkansas-based company had predicted an increase of as much as 4 percent. Then on Nov. 2 Wal-Mart said this month's sales would be unchanged, the worst showing in more than 10 years.

Investors may have had enough. At least a dozen analysts reduced their earnings estimates after the sales projections, and Wal-Mart shares are down 9.4 percent since Scott announced the back-to-basics move. They have dropped 28 percent since he took over in January 2000. Target Corp., the second-largest U.S. discounter, has climbed 68 percent in that time.

``I wouldn't be happy if I was in five years ago,'' said David Abella, an analyst at Rochdale Investment Management in New York, with $1.4 billion in assets including Wal-Mart shares. ``Investors certainly are expecting more.'' Abella said he bought Wal-Mart shares about two years ago and is holding for the long term.

Wal-Mart will probably report tomorrow that net income rose 3.9 percent to $2.47 billion, or 59 cents a share, in the third quarter ended Oct. 31, said Deborah Weinswig of Citigroup Inc., Institutional Investor's top-ranked retailing analyst. That's less than a third of its 12 percent average profit growth during the past four years.

Six-Year Low

Sales at stores open at least a year increased about 1.4 percent in the quarter, Weinswig estimated. That would be the lowest rise in at least six years. Total sales may have risen 15 percent to $86.8 billion, she said.

The average earnings estimate in a Thomson Financial survey of 21 analysts is 60 cents. Ed Weller, an analyst at ThinkEquity Partners in San Francisco with an ``accumulate'' rating on its shares, cut his third-quarter estimate by 2 cents to 59 cents on Nov. 7. Wal-Mart is ``running out of rationales for weak sales,'' wrote Weller.

Target's third-quarter comparable-store sales rose 4.6 percent, the Minneapolis-based retailer said last week. Its same- store sales have outpaced Wal-Mart's in 11 of the 14 previous quarters.

Wal-Mart shares rose 8 cents to $46.47 on Nov. 10. They've dropped 0.7 percent this year, compared with a 5.4 percent gain by Target and an 11 percent rise by the Standard & Poor's 500 index. Wal-Mart operates 3,900 U.S. stores, including more than 580 Sam's Clubs.

$500 Off

Scott has responded to the slow sales growth by cutting prices heading into the holiday shopping season. The retailer trimmed prices on toys in mid-October and on 50 small appliances and almost 100 electronics items earlier this month, including a $500 reduction on a 42-inch Panasonic plasma television to $1,294.

Wal-Mart also introduced a $4 generic-drug plan to 27 states and plans to add more. The company's online pharmacy experienced ``triple-digit growth'' from the previous year as a result of the drug offerings, Walmart.com chief executive officer Carter Cast said in an interview Nov. 8.

Scott, 57, said on Oct. 24 the company would concentrate on selling basic items after putting too much emphasis on higher- priced fashionable clothes. ``That's not who we are, that's not where the money is going to be made,'' he said at an analysts' conference.

Wal-Mart has begun to ``back off on their push toward higher-end consumers,'' said Rick Rubin, an analyst at Mercantile Bankshares Corp. in Baltimore who helps manage $22 billion in assets including Wal-Mart shares. ``We're hearing them lean on the low-price message once again.''

Gas Prices

Scott declined to be interviewed for this story, spokeswoman Mona Williams said.

Wal-Mart also has blamed high gasoline prices and disruptions caused by store remodeling for the disappointing sales. Yet the company didn't get the boost it should have from falling gasoline prices, said Abella.

The average price of a gallon of unleaded gasoline for the week ended Nov. 6 was $2.20, 26 percent lower than in July.

Wal-Mart's net income rose 9.4 percent and sales gained 9.5 percent for the year ended January 2006, the smallest increase for both in four years. Scott earned $15.7 million in salary, stock options and bonus last year. The company said Scott also was awarded restricted shares tied to revenue growth.

Wal-Mart shares may fall further in the next few months before rallying, said Bernard Sosnick, an analyst at Oppenheimer & Co.

The New York-based Sosnick, who rates the shares a ``buy,'' wrote in a Nov. 7 report that he ``believes strongly'' that store and merchandise improvement will benefit the company in coming years. In the meantime, ``we expect heavy clearance to continue for several months,'' he said.

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Wal-Mart Policies Continue Alienating Workers, Pro-Family Shoppers

By Ed Thomas
AgapePress
November 13, 2006                             [back to top]

(AgapePress) - The union-backed movement "Wake-Up Wal-Mart" recently made public certain documents outlining the stores' new attendance policy, which reportedly considers employees absent for a whole day for typical scenarios like clocking in more than ten minutes late or leaving work early. Such practices have led to accusations that the retail giant is no longer employee-friendly and is trying to drive out longtime workers.

According to Associated Press, Wal-Mart spokesman John Smiley denies trying to push out workers and says the chain is only enforcing already existing policy for consistency's sake, pursuant to a better work and shopping environment. However, this move comes at a time when the corporation has changed to a higher-deductible health insurance plan and capped pay on its hourly pay grades.

Janet Baird is a former employee who has been protesting outside her local Wal-Mart stores because of the corporation's affiliation with a homosexual chamber of commerce group. She says she is not surprised at this latest flap concerning the attendance policy, and that the corporate officials are "really making it almost impossible" for many workers to keep their jobs.

Baird says store officials at one time told her and other employees that "if you had certain availability ... it had to be open availability -- you had to be able to work whatever they wanted you to work." Although this inconvenienced many workers, she says management was fairly inflexible.

"So they got rid of a lot of people that way," the former Wal-Mart employee adds. "And they are trying to get rid of the elderly people," she says.

The publicity over the attendance policy only adds to the image and business problems Wal-Mart is facing as it tries to reverse overall sales figures that Bloomberg News reports as the company's worst in ten years. Meanwhile, conservative Christian organizations are contacting supporters to urge them to boycott the chain over Thanksgiving weekend in protest of Wal-Mart's offer to pay a commission to a small, non-profit homosexual organization for sending buyers the retailer's way.

American Family Association (AFA) chairman Don Wildmon is applauding Wal-Mart's recent decision to "put Christmas back into the holidays" but, at the same time, he is alerting the company that its decision to continue supporting the homosexual agenda will prove costly. Wal-Mart has come under fire for its promotion of the homosexual activist agenda, especially after the company became a member of the National Gay and Lesbian Chamber of Commerce.

Wildmon says AFA has sent out three million e-mails urging its pro-family supporters to avoid the retail giant during the biggest retail weekend of the year. Operation Rescue, a Kansas-based pro-life and pro-family group, has also called for a Thanksgiving boycott of the chain.

"Wal-Mart should remember that the majority of people in this country do not support things like same-sex 'marriage' and don't want the company giving money to groups that do support it," Wildmon asserts. "Shopping at retailers other than Wal-Mart might remind the company of that," he says.

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Wal-Mart Evaluates Experimental Stores' Progress After One Year of Operation

Innovative Technologies Reveal the Retailer's Progress Toward Its Environmental Goals

PRNewswire-FirstCall                                   [back to top]

BENTONVILLE, Ark., Nov. 13 -- Wal-Mart Stores Inc. reviewed early results of various projects at its experimental stores located in McKinney, Texas, and Aurora, Colorado, after one year of operation and is applying new learnings to other Wal-Mart stores and Sam's Clubs. Along with offering a full line of products and services, these two stores operate with innovative green technologies designed to reduce operational and construction waste, use recycled and renewable materials, and conserve water and electricity.

"When we conceptualized these two experimental stores, we thought about our environmental opportunities which led our thoughts to our current goals: to be supplied by 100 percent renewable energy, to create zero waste, and to sell products that sustain our resources and environment," said Charles Zimmerman, vice president of prototype and new format development. "We see these stores as moving in the right direction for a more sustainable future for Wal-Mart. We will continue to lead the way in developing sustainable building and business practices."

The stores are being evaluated over a three-year period by two government- sponsored laboratories. The National Renewable Energy Laboratory will provide monitoring services for the Aurora, Colorado, store and the Oak Ridge National Laboratory will monitor the McKinney, Texas, store.

"Wal-Mart's experimental stores should radically change the way retail stores are designed, constructed and managed in relation to the environment," said Michael Deru of the National Renewable Energy Laboratory. "These stores contain technologies that will help Wal-Mart minimize their impact on the environment."

Already, some of the experimental technologies are proving to be successful. LED lights installed in exterior signs and grocery-, freezer-, and jewelry-cases use less electricity, contribute less heat and have a longer lifespan. Wal-Mart has been using LED lights for all building-mounted exterior lit signs for the last two years and now after 16 months of testing in the experimental stores, Wal-Mart has decided to integrate these lights into freezer cases in new Wal-Mart and Sam's Club stores nationwide beginning in January 2007. Other energy efficient lighting opportunities continue to be monitored at the experimental stores.

A portion of the heating for the experimental stores uses recovered cooking and motor oil-burned via a waste oil boiler-to heat water used in a variety of systems throughout the building. Heat recovered from the refrigeration racks also heats water used in the system. One of the systems utilizing waste heat is radiant floor heating in select areas of the building. This system helps keep associates and customers warm even in the freezer section.

Water conservation and waste reduction are also occurring at the experimental stores. Wal-Mart is very pleased with the results of the xeriscape that integrates native, drought-tolerant plants and drip irrigation for the landscaping. These landscaping changes are visually pleasing and have significantly reduced the amount of water needed for irrigation.

Fly-ash, a by-product from coal-generated electricity, and slag, a by- product of steel manufacturing, have been mixed with traditional concrete, either individually or combined to reduce the amount of raw materials needed for the construction of the facility. These concretes are holding up well at the experimental stores. They have been approved for exterior and building uses. In addition, waste building materials were recycled during the construction of these two stores, reducing the amount of waste sent to landfills.

"We still consider these stores to be experiments," said Don Moseley, special projects engineer. "While a number of the experiments have already proven successful, we will continue to monitor and learn from these stores for the full three-year evaluation period. Rather than waiting for the full evaluation period to lapse, we have already determined a need to accelerate implementation of some technologies for new stores."

One sustainable objective that still needs additional time and evaluation is renewable power generation, such as wind turbines. Mechanical problems have interfered with consistent and continuous power generation from the wind turbines this year. Wal-Mart hopes to experience improvement in this area soon and will continue with the plan to provide these and eventually other stores with renewable power.

"We are taking the experiences and learnings from this first year of the experimental stores and fine-tuning some of these technologies," said Moseley. "A number of these technologies are already being implemented in new stores and it is our intention and hope that other technologies will find their way into future business plans. By continuing to study, evaluate, and monitor these stores over the next two years, we will learn even more about sustainable technologies. Wal-Mart is very proud to be on the leading-edge of sustainable building and design."

Wal-Mart is confident these stores will continue to provide a wealth of knowledge on sustainable building practices. In the true spirit of sustainability, Wal-Mart will maintain its commitment to share experiences and lessons learned resulting from these experimental stores.

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Bharti retail delayed, may join Wal Mart

NDTV
Monday, November 13, 2006 (New Delhi):                  [back to top] 

Wal Mart, the world largest retail chain is coming to tap India's market but will that force Bharti to ditch Tesco and go with it?

A delay in the Bharti Tesco combine announcing retail plans has triggered Chinese whispers across retail sector.

Though Sunil Mittal has said that he's talking to many players and that’s why Wal Mart may want to join Bharti.

Wal Mart strategy

Traditionally, Wal Mart has set up its own stores, avoids acquisitions unless necessary but exceptions include Germany. However, its India strategy is to include a joint venture.

The company plans stores in small cities and the metros. It will open 12 - 18 stores in the first 18 months and the size will not exceed more than 140,000 sq ft.

The company sources around $1.2 billion worth from Indian and has been growing at 30 per cent.

For Bharti, any joint venture on the retail front could have an initial investment of about $100 million, rising to about $1 billion.

Bharti's retail plans

Bharti is currently toying with both Tesco and Wal Mart and while the Tesco deal was close to signing, the Wal Mart wildcard may have been too tempting for the Mittals to keep away. At the moment, its busy building its supply chain.

Bharti has 5700 acres in Punjab and will package and export to EU, Southeast Asia, the Gulf and Central Asia within the next few months.

For Wal Mart, India may be its wildcard because it has withdrawn from South Korea and now left with presence only in one other Asian country that's China

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Wal-Mart tries to improve image with new fashion trends

Associated Press
Sunday, November 12, 2006                              [back to top]

NEW YORK -- This holiday season, a big challenge at Wal-Mart is convincing shoppers like Portia Goodman and Karen Wade to buy fashion instead of just basics.

"I buy more at Target than I do here," said Goodman, a 31-year-old graduate student from Riverside, Ill., who was recently shopping for candy at a local Wal-Mart with her son. "I think they should be more like Target." At Target, known for its cheap chic offerings, Goodman is attracted to apparel by designer Isaac Mizrahi and favors athletic gear by Champion.

As for Wade, a 47-year-old from LaGrange, Ill., she shops at Wal-Mart for "shirts and jeans because the price is good."

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Such reluctance from these consumers comes more than a year and a half after Wal-Mart Stores Inc. has worked hard to improve its image with new fashion brands, a trendspotting office in Manhattan, and fashion shows during New York's Fashion Week. The company's fashion faux pas, such as stocking up on too many trendy items like skinny jeans, was a big factor behind disappointing sales for September and October, and is expected to weigh down business in the critical fourth quarter, the company acknowledged late last month.

The upgrading of its fashion is part of the company's larger campaign to expand into better quality, trendier merchandise to revitalize anemic sales and sluggish profit growth, a strategy that has gotten mixed grades from its customers so far.

Wal-Mart, which has built its reputation on selling basics like socks and detergent, made a push into $2,000 flat-screen TVs and other trendy electronics, 600-thread count sheets and organic foods. The goal is to pry more money from the hands of its wealthier customers, diversifying beyond its core-low income shoppers who are more vulnerable to economic downturns.

But while the company's electronics business is "making progress," organic foods and home furnishings have gotten mixed reactions, according to company's CEO and president Lee Scott in a recent address to investors.

Fashion appears to be the most challenging. In fact, in a sign that Wal-Mart's upscale strategy has fallen flat, the company dumped its two long-time ad agencies and hired Draft FCB late last month. Draft, a division of Interpublic Group of Cos. Inc., will develop future advertising to better attract both low-price fans and higher-income shoppers.

The company, which played down its low prices over the past year, is reemphasizing its rollback, or discount strategy this holiday season, with deep price cuts on toys and electronics. On Friday it extended the price cuts to home appliances. Wal-Mart's "Be Bright" holiday campaign, produced by lame duck ad agency Bernstein-Rein Advertising Inc., focuses on value fashion.

Wal-Mart needs to win in apparel for several reasons. Shoppers are facing more fashion choices this holiday season from low to mid-price stores like Target Stores Inc. and from mid-price department stores like J.C. Penney Co. and Kohl's Corp., both of which have developed more exclusive brands.

Apparel also offers fatter profit margins compared to electronics and food, according to Howard Davidowitz, chairman of Davidowitz & Associates, a New York-based retail consulting and investment banking firm.

But more importantly, fashion sets the tone for the entire store, said Robert Buchanan, retail analyst at A.G. Edwards & Sons

"Fashion tends to drive the train," he said.

Wal-Mart has blamed its flawed fashion strategy on execution, such as overexpanding Metro 7, an apparel brand aimed at fashionistas. Metro 7 successfully launched in 500 stores in the fall of 2005, then stalled when it expanded to 1,500 stores this past spring. The company now says Metro 7's distribution shouldn't be in more than 900 stores.

Scott told investors that the company needs to better heed to a pyramid, where the bottom is basics such as underwear and socks, the middle is fashion basics and the top is trendy fashions like skinny jeans.

"We need to remember who we are and be able to fill that center part of this pyramid and then have a little bit up there at the top, just so our customers know that we have a sense of what's happening out there in the world," Scott said.

Meanwhile, one of the company's top apparel labels George, which is offered in men's, women's and children's assortments has had "significant growth," according to Linda Blakley, a Wal-Mart spokeswoman. Wal-Mart also unveiled a hip-hop inspired men's clothing brand earlier this fall called Exsto, which is now in 600 stores. Blakley declined to comment on Exsto's performance, saying with any launch, "you listen as you roll it out."

Other big apparel brands include Faded Glory and No Boundaries, aimed at teens.

Buchanan noted that men's fashions needs to be improved, and home furnishings is another area that could be further sharpened.

Investors will probably have to wait until after the holidays for any significant improvement in apparel sales. That's when Wal-Mart will expand its strategy to give stores a more customized mix of goods and layout for six key groups of customers: Hispanics, African-Americans, empty-nesters/boomers, affluent, suburban and rural shoppers. The plan, which is currently being tested in a couple dozen stores, is to retool over 3,000 U.S. stores over the next two years.

Wal-Mart said such segmentation, welcomed by Wall Street analysts, was the missing element in the company's merchandising strategy. Scott told investors that it helps explain what happened with Metro 7 and plays a critical role in better serving its customers.

Still, a big problem with Wal-Mart is that it needs to do a better job in marketing and displaying its brands. Candace Corlett, principal of WSL Strategic Retail, noted she has spotted wrinkled clothes on the racks.

"The merchandise is more exciting than the display," observed Corlett. "Specialty clothing stores have the window advantage. They use the window to display the tempting outfits. What is Wal-Mart's window for the fashion statements? What is the style guide for their floors?"

© Associated Press 2006

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U.S., Mexico Activists Fight Wal-Mart

By MARK STEVENSON
11.12.06                                            [back to top]

U.S. and local activists formed a common front on Sunday to fight the expansion of Wal-Mart stores in Mexico, saying small stores and the national culture are under threat from what is already the world's biggest retailer.

Activists from several U.S. groups and 10 Mexican labor, community and commercial organizations wrapped up a two-day meeting dubbed the First Binational U.S.-Mexico Meeting Against Wal-Mart (nyse: WMT - news - people ).

In a statement Sunday, Wal-Mart Stores Inc. said that it had opened four more discount outlets, a Sam's Club, two restaurants and a clothing store in Mexico in recent days, bringing the chain's total number of stores under various nameplates in the country to 870.

But company officials were not immediately available to respond to the activists' claims that the chain's boxy stores are a blight on the landscape and are changing Mexicans' work, shopping and eating habits.

"We think Mexico should mount a defense of its cultural and historical legacy," said Ruben Garcia of Global Exchange, an activist group based in San Francisco, Calif.

"They (Wal-Mart) want to open stores in Comitan, Juchitan, in Oaxaca, in Patzcuaro, in many places we consider historic," Garcia said, referring to several picturesque, largely Indian cities in southern Mexico.

"If Wal-Mart could open a store in the Zocalo (Mexico City's historic main plaza), they would," said Garcia, who was accompanied at the meeting and subsequent news conference by activists from U.S.-based groups like ACORN (Association of Community Organizations for Reform Now) and the International Labor Rights Fund.

In October Wal-Mart won preliminary approval to build a store in Cabo San Lucas, in Baja California Sur - the only one of Mexico's 31 states where it currently does not have an outlet.

Responding to fears expressed by small business owners there, Antonio Ocarranza, a spokesman for Wal-Mart de Mexico, said at the time that the company would contribute positively to the community.

"We not only generate benefits for our customers, but also for businesses, who benefit from the traffic generated by our firm," he said.

Juan Salazar, the outreach secretary of Mexico's Democratic Association of Public Markets, called on Mexicans to shop instead at the country's many public marketplaces, where small vendors sell meat, produce and other goods.

"Our country's culture is precisely that of the public market, because it is the bastion of nutrition for our people," Salazar said. "That's where we should go, and buy products from our own producers."

Garcia said Wal-Mart benefits from the business brought in by grocery vouchers - which the government hands out to low-income families and public employees - that are for the most part only redeemable in supermarkets. The activists called on officials to allow shoppers to use them at public markets.

Copyright 2006 Associated Press. All rights reserved.

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Opponents Try to Lock Up the Bronx Before Wal-Mart Knocks on the Door

By Manny Fernandez
New York Times
November 10, 2006                                   [back to top]

Last year, opponents of Wal-Mart — including neighborhood, labor and small-business groups — helped persuade a real estate developer to drop one of the company’s stores from a planned mall in Queens. In August, opponents again helped thwart plans for a Wal-Mart at the southern tip of Staten Island. Now, the Bronx has emerged as the latest battleground over attempts by Wal-Mart to open its first store in New York City. Leaders of the anti-Wal-Mart campaign have been forming alliances with Bronx community groups and politicians as well as holding town hall meetings to plan their attack and energize their ranks.

At Our Lady of Refuge Roman Catholic Church in the Bedford Park section of the Bronx, where for decades parishioners have rallied to denounce neighborhood drug dealers, people gathered last summer to demonstrate against an enemy that deals in digital cameras, toasters, shower curtains and thousands of other products.

But for the most part, they are fighting a ghost: Wal-Mart has not officially announced any intentions to build in the Bronx, and no one is certain where, when and even if it will try to open a store in the borough.

“The effort here is to head them off at the pass,” said Richard Lipsky, director of the Neighborhood Retail Alliance, an advocacy group representing more than 10,000 city supermarkets, bodegas, greengrocers and restaurants that helped lead the recent fights against Wal-Mart on Staten Island and in Rego Park, Queens.

Just the possibility of Wal-Mart moving in has already galvanized opponents, who began meeting in the Bronx in June and who say they need to be well organized to take on the nation’s biggest retailer.

One of the challenges for Wal-Mart critics, though, has been maintaining a sense of urgency against a perceived threat is, for now, but a rumor.

“What’s harder in any of these situations is organizing folks around a theory,” Mr. Lipsky said. “What made it easier to organize in Staten Island is people knew the store was being planted over there.”

Adding to the uncertainty, a local newspaper, The Bronx Press-Review, reported in September that Wal-Mart was planning to locate a store in one of the biggest commercial spaces in the borough, the Bay Plaza shopping center near Co-op City.

But Wal-Mart remained vague about its plans. Philip H. Serghini, a senior public affairs manager for Wal-Mart Stores, said in a statement that Wal-Mart was reviewing potential sites throughout the city. Asked specifically about the Bay Plaza site, Mr. Serghini responded: “Wal-Mart continues to consider its options in all five boroughs.”

The coalition forming in the Bronx includes members of Local 1500 of the United Food and Commercial Workers union and community groups like the Northwest Bronx Community and Clergy Coalition. The coalition’s work is sometimes serious (lobbying members of the City Council from the Bronx) and sometimes not (performing for audiences as the Reverend Billy and the Stop Shopping Gospel Choir).

The coalition’s members believe that Wal-Mart represents capitalism run amok, reaping billions of dollars in profits while snuffing out smaller family-owned businesses and offering workers low-wage nonunion jobs.

“The Bronx needs jobs,” said Patrick Purcell, director of organizing for Local 1500 and coordinator of Wal-Mart Free NYC, which was formed in response to Wal-Mart’s attempts to open a store in Rego Park. “Just because the Bronx is trying to develop itself economically does not mean that it needs any job. It needs good jobs. It needs responsible employers.”

Even as the Bronx undergoes an economic revitalization, it continues to struggle with high rates of poverty, unemployment and crime. Opponents of Wal-Mart have had a hard time convincing some in the Bronx that a borough with the state’s highest unemployment rate and the nation’s poorest Congressional district would be better off without a Wal-Mart. The average wage for full-time Wal-Mart workers in the state is $10.17 an hour, the company said. The minimum wage in the state is $6.75.

In a Quinnipiac University poll taken in January, 64 percent of Bronx residents said they supported the opening of Wal-Mart stores in the city, and 27 percent opposed it.

The borough president, Adolfo Carrión Jr., has said that though he is not trying to woo Wal-Mart, he is not interested in turning it or any other company away, either.

“Anyone who’s interested in doing business in the Bronx I will listen to and hear their pitch,” Mr. Carrión has said.

Other elected officials, like City Councilman Joel Rivera, have also staked out a neutral stance.

“I’m of the belief that we have to spur economic development, but at the same time it has to be responsible economic development,” said Mr. Rivera. Wal-Mart officials would need to be willing to negotiate on wages, health care benefits and other labor issues before he could welcome the store, he said.

Other Bronx elected officials remain firmly opposed, citing Wal-Mart’s labor practices and impact on small businesses.

Activists are emboldened by two behind-the-scenes victories in the Bronx. Earlier this year, the developer turning the old Bronx Terminal Market into a shopping mall specifically agreed not to lease space to Wal-Mart.

And the request for proposals for the redevelopment of the giant Kingsbridge Armory, issued in September by the city’s Economic Development Corporation, discourages suburban-style big-box stores.

As the campaign against it continues in the Bronx, Wal-Mart has tried to build a higher profile in the borough, subtly and not so subtly.

Last year, Wal-Mart paid for large ads in several Bronx newspapers. “In the Bronx,” the ad read, “you can watch the Yankees beat Boston, spend the day at the Botanical Garden, visit the Bronx Zoo, and do just about anything. The only thing missing is every day low prices.”

The company was also a sponsor of the Latin Grammy Awards, held at Madison Square Garden on Nov. 2, and the banners promoting the show that hung in the South Bronx featured Wal-Mart prominently.

Wal-Mart officials say a new store would create about 300 jobs and generate about $5 million in tax revenue for the city. Last year, New York City residents spent about $128 million at Wal-Mart stores in New Jersey and Connecticut, and in Westchester County and on Long Island in New York, the company said.

“We don’t think a small group of special interests should be able to stifle consumer choice and force the residents of the borough — 72 percent of whom want Wal-Mart in their neighborhood — to shop somewhere else,” Mr. Serghini of Wal-Mart said.

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Another week, another price cut: Wal-Mart rolls back prices on small appliances

Reuters
11/10/2006                                 [back to top]

CHICAGO (Reuters) — Wal-Mart Stores (WMT) cut prices on small appliances including microwaves and coffee makers Friday, the latest in a series of markdowns aimed at luring customers during the vital holiday shopping period. The world's biggest retailer, which had previously lowered prices on key toys and electronics, said the discounts were on almost 50 small appliances from brands including GE, Hoover and Sharp.

The moves come as Wal-Mart looks for ways to reinvigorate growth after back-to-back months of disappointing sales. Remodeling projects disrupted hundreds of its U.S. stores, and a new line of trendier clothing sold poorly.

Wal-Mart executives told analysts last month that they were not satisfied with the recent sales performance, but remained confident that aggressive price cuts would revive growth during the November-December holiday season, the biggest shopping period of the year.

The latest markdowns include a Mr. Coffee 12-cup programmable coffee maker for $37.88, down from $42.48, and a Sharp .08 cubic foot microwave reduced to $49.88 from $54.88.

Wal-Mart had previously lowered prices on products ranging from plasma televisions to board games, raising concerns of a price war and pressuring shares of rival retailers.

The retailer said it would continue to roll back prices this holiday season, and listed toys, electronics and apparel as the key categories.

Copyright 2006 Reuters Limited.

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Wal-Mart gets busy: More holiday price cuts

No. 1 retailer starts a third round of discounts, this time on name-brand home appliances.

By Parija B. Kavilanz,
CNNMoney.com
November 10 2006                                   [back to top]

NEW YORK (CNNMoney.com) -- Wal-Mart's holiday discounts are coming fast and furious. The world's largest retailer on Friday announced it is rolling back prices on about 50 name-brand home appliances.

Describing it as "the largest rollback for small home appliances in the company's history," the new price cuts come on things like stainless steel microwaves and programmable coffee makers from makers including GE, Hoover and Sharp.

Specifically, Wal-Mart (Charts) said it's offering a Hoover vacuum cleaner for $98, down from its original price of $112, merchandise, a Mr. Coffee 12-cup programmable coffee maker for $37.88 (down from $42.48), a Black & Decker Quick 'N Easy 8-cup food processor for $24.88 ($29.72) and a GE (Charts) limited edition microwave for $84 (from $98).

This is the third set of price cuts on thousands of holiday items. Wal-Mart's already cuts prices on more than 80 of the year's most popular toys and electronic gear.

Some analysts speculate that Wal-Mart's eagerness to be first out of the block to cut prices could be a sign that Wal-Mart merchants are nervous about hitting their holiday sales targets.

Wal-Mart, Target (Charts) and Costco (Charts) are among some of the big retail chains that posted weaker-than-expected sales gains in October.

Industry experts are betting these retailers will do whatever they have to to lure shoppers in November and December - two months that can account for as much as 50 percent of a retailer's annual sales and profits.

Marshal Cohen, chief retail industry analyst with market research firm NPD Group, thinks Wal-Mart quick price cuts aren't necessarily a sign of desperation, but part of its year-end strategy.

"Wal-Mart has learned its lesson from two holidays ago when they didn't discount heavily and lost crucial sales to the competition," Cohen said. "There's no way that Wal-Mart can afford to be in that position again and let others take the momentum."

Wal-Mart's getting very aggressive very early, he noted, adding it seems the company would rather be criticized for being too quick than being too slow.

"Wal-Mart can always change the pace later on.," he said. "Right now they're chasing sale volume over profits."

For budget-conscious consumers, the good news is that Wal-Mart has set the stage for a serious price war among discounters. Cohen expects low and mid-priced sellers like Target, J.C. Penney (Charts) and Sears (Charts) will offer some of the season's best deals.

"Everyone is planning to be very aggressive for Black Friday. After this weekend, retailers are going to take stock of their sales schedule and Wal-Mart's actions and determine the next step," Cohen said.

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Linda isn't Wal-Mart's only faux pas

By Konrad Yakabuski
Globe and Mail
November 9, 2006                                [back to top]

MONTREAL — So Wal-Mart has created a prototype of its target Canadian customer it calls Linda. It would almost be cute if it didn't raise the rather scary prospect of cart-wielding cyborgs in every aisle, a sort of Jaime Sommers of the shopping set. Gentlemen, we have the technology. Luckily, for now, Linda's just a rudimentary cardboard cutout that Wal-Mart Canada executives haul around to meetings to remind them -- as if anyone should need reminding -- not to put the Playtex beside the PlayStations. And judging by Wal-Mart's depiction of her as a stressed-out soccer mom in sensible shoes, she's not exactly a dead ringer for her namesake Evangelista.

This is precisely what's wrong with the Wal-Mart model and why its stores, at least its 4,000 U.S. outlets, are being increasingly bypassed by consumers who don't think you need to swallow vanity for value. Blah and boring doesn't even work for banks any more; how can you expect it to boost sales in the most ego-driven business of them all? After all, unless you live in abject poverty, you almost never buy things just because you need them.

Wal-Mart's October results were miserable, with U.S. sales at stores open at least a year rising a sickly 0.5 per cent, compared with 3.9 per cent at Target, 8.1 per cent at J.C. Penney and 7.7 per cent at Federated Department Stores. Wal-Mart blamed the slump partly on clothes that were too trendy for its customers. But instead of trying to woo the kind of shoppers who buy skinny jeans, it simply got rid of the skinny jeans -- giving them another reason to go to Target.

It's not just shoppers who are bailing; shareholders are, too. In fact, Wal-Mart's stock has been a dog for years and is down one-quarter since 2001.

Wal-Mart is now predicting zero same-store sales growth for November, which would be its worst performance in a decade. To avert a truly catastrophic Christmas season, it has slashed prices on 100 toys and 100 electronic items, hoping these promotions spur traffic into other departments, too.

Relying on this kind of logic to boost the bottom line forces Wal-Mart to resort to almost any tactic to reduce costs, from (knowingly or not) sourcing clothes made by children in a Bangladesh sweatshop (as a Radio-Canada investigation revealed this year) to letting "pricey" workers know they need not apply.

Beginning in January, new Wal-Mart employees in the United States will be offered a health-insurance plan with low premiums but a whopping $1,000 (U.S) deductible. Critics allege the plan, which would become the standard Wal-Mart insurance given high employee turnover, is meant to discourage any job applicant apt to actually need regular health care. The Wal-Mart move inevitably puts pressure on other retailers to follow suit.

Wal-Mart has discovered other tactics to root out costly employees, according to internal company memos obtained by Wake Up Wal-Mart, a group sponsored by the United Food and Commercial Workers (UFCW) union. The Beast of Bentonville -- as Arkansas-based Wal-Mart is known -- is implementing pay caps and demanding that all existing employees, regardless of seniority, make themselves available to work night shifts. (Almost half of Wal-Mart's U.S. stores are open 24 hours.) Many workers who have refused have found their overall hours slashed. The shift to using more part-timers -- Wal-Mart reportedly aims to increase their numbers to 40 per cent of its 1.3 million U.S. workers from 25 per cent -- also lowers health insurance costs.

"Given the impact of tenure on wages and benefits, the cost of an associate with seven years of tenure is almost 55 per cent more than the cost of an associate with one year of tenure, yet there is no difference in his or her productivity," Wal-Mart senior executive Susan Chambers last year told the company's directors in a memo obtained by Wake Up Wal-Mart. ". . . The shift to more part-time associates will lower Wal-Mart's health care enrolment."

Unionization, of course, would constitute a cog in Wal-Mart's cost-cutting wheel. This may explain why the world's second-biggest corporation, with annual sales that surpass the gross domestic product of Quebec, has still not signed a collective agreement with the workers at its Saint-Hyacinthe store east of Montreal almost two years after their union was accredited by the province's Commission des relations du travail.

Wal-Mart finally seems to have exhausted every legal recourse it could come up with to prevent the union from taking hold, its latest bid to challenge the definition of the store's bargaining unit having been rejected by Quebec's Superior Court. So the parties are headed to arbitration and the Quebec wing of the UFCW suggests a contract is imminent. Could we really live to see a Wal-Mart store in North America successfully unionize?

The last time the UFCW got anywhere near this far -- in Jonquière, Que., in early 2005 -- Wal-Mart closed the store, arguing it was a money-loser even without a union. Resorting to the same tactic if an arbitrator imposes a contact in Saint-Hyacinthe would, to say the least, be a bit too transparent and amount to strangling all the warm fuzzies Wal-Mart has nurtured in the province with a slick "Buy Quebec" advertising campaign.

Still, unless Wal-Mart starts realizing that Linda sometimes wants to feel like Raquel, the squeeze on costs is only going to get more intense. And guess who'll pay for that?

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Wal-Mart Challenged on Trademark Bid

Chain Store Age
Thursday, November 9, 2006                       [back to top]

SuperValu Inc. and the National Grocers Association are fighting efforts by Wal-Mart Stores Inc. to trademark "EDLP," an acronym for its "Every Day Low Prices" strategy, according to the Minneapolis-St. Paul, Minn. Star Tribune. They asked the U.S. Patent and Trademark Office last week to reject Wal-Mart's application and argued the acronym is a marketing tool used by nationwide businesses and that no one has the right to use it exclusively. Under federal law, generic terms can't be trademarked, despite how known the term might be. It is not unusual, however, for chains to trademark works or phrases that are less common. SuperValu said it has used the wording "Every Day Low Price" since 1984. For its trademark application to be approved, Wal-Mart must prove that the EDLP acronym is associated with Wal-Mart and is not one commonly used by other marketers.

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Wal-Mart eats into food biz

3 new Canadian 'supercentres' beef up grocery departments to offer true one-stop shopping

By MARYANNA LEWYCKYJ,
SUN MEDIA
November 9, 2006                             [back to top]

Wal-Mart Canada president Mario Pilozzi (holding apples) and staff celebrate the opening of a new Wal-Mart Supercentre in Stouffville. The store is one of three new Wal-Mart supercentres in Canada, which feature a full line of groceries. STOUFFVILLE -- Hordes of bargain hunters descended on the new Wal-Mart Supercentre in Stouffville, overflowing the massive parking lot in a bid to be among the first Canadians to try the new retail format.

The Stouffville store, along with stores in Ancaster and London, yesterday became the first Wal-Mart Supercentres to open in Canada.

The super-sized stores -- which range from 160,000 to 200,000 sq. ft. -- carry both groceries and a wide range of merchandise. While a standard Wal-Mart carries about 80,000 items, the Supercentres stock about 120,000.

BAKERIES, DELIS

Up to 14 more supercentres could open in 2007, although Wal-Mart will not release details of all locations. Four stores will open in Scarborough, Sarnia, Brampton and Vaughan in early 2007.

The grocery sections of the new superstores will range from 30,000 to 45,000 sq. ft. The stores will have bakeries and delis and feature both regular and organic produce, dairy products, meats, frozen and snack foods.

Norma DeStefano, 40, of Markham, drove to the Stouffville store to pick up some Christmas presents for her two kids.

"I thought I might be able to find more of a variety than in my local Wal-Mart," said DeStefano. "It's one-stop shopping."

Her score was a LeapPad learning toy selling for $29. But by the time she arrived, the Cabbage Patch dolls and Elmo toys were sold out.

Opening-day specials ranged from a 32-inch RCA LCD TV for $799 to grapes for 97c a pound.

Betty Brooks, 70, of Richmond Hill, rushed out to the store with her sister after seeing the grand opening on TV.

"She called me up and told to be ready in five minutes," said her sister, Phyllis Greenfield, 71, of Richmond Hill.

Brooks finds the prices in her local Dominion and Loblaw stores too high.

"We'll be back," said Brooks, as she left the Wal-Mart with $41 of groceries.

Meanwhile, business at a local A&P in Stouffville was slower than usual for a Wednesday.

NOVELTY FACTOR

An employee who didn't wish to be named hoped the novelty would wear off and customers will return to A&P for fast, personal service.

"People want to get in and out in a hurry," said the employee. "And who needs 200 feet of pasta?"

Steve Baldson, 47, owner of the No Frills store in Stouffville, believes the outlet will weather the onslaught.

He says a grocery lineup of No Name and Presidents Choice products, Canadian ownership, convenient service and loyal seniors will help the store battle the world's biggest retailer.

"I think we're well-positioned to compete against them," said Steve Balsdon, 47.

Mimi Slater, 82, of Stouffville, says she has no intention of visiting the new Wal-Mart.

"I could take an express train to Toronto and back in the time it would take me to get in and out of Wal-Mart," said Slater.

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Wal-Mart: We're not afraid to say Merry Christmas

No. 1 retailer has decided to abandon its generic 'Happy Holidays' greeting in favor of 'Merry Christmas.'

CNNMoney
November 9 2006                               [back to top]

NEW YORK (CNNMoney) -- Wal-Mart has told its employees that it's OK to once again greet shoppers by saying "Merry Christmas" this holiday season instead of the generic "Happy Holidays."

CNN confirmed that Wal-Mart will announce Thursday that it plans to use the phrase "Merry Christmas" in products and around its stores this holiday season.

The announcement comes a year after religious groups such as The American Family Association and The Catholic League boycotted retailers including Wal-Mart last holiday season for excluding the word "Christmas" from products sold in stores.

"We, quite frankly, have learned a lesson from last year," Wal-Mart spokeswoman Linda Blakley told USA Today in a separate report. "We're not afraid to use the term 'Merry Christmas.' We'll use it early, and we'll use it often."

Besides resurrecting its Christmas pitch, the retailer is also determined to be the leader in this year's holiday price wars.

The November-December holiday shopping period is a critical time for merchants since it can account for as much as 50 percent of their profits and sales.

To that end, Wal-Mart was the first out of the gate to chop prices on toys and electronics much ahead of its competitors like Target (Charts), Toys 'R Us, Costco (Charts) and others.

To support its Christmas deals, the report said Wal-Mart will launch TV ads next week that trumpet "Christmas." It's changing the name of its seasonal decorations department to "The Christmas Shop" from "The Holiday Shop."

Moreover, Wal-Mart stores will play Christmas carols throughout the holiday period and about 60 percent more merchandise will be labeled as "Christmas" rather than "holiday" items, the paper said

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Wal-Mart drug program boosts Internet sales, executive says

By Heather Burke and
Lauren Coleman-Lochner
Bloomberg News
November 8, 2006                                              [back to top]

Wal-Mart's Drug Program Boosts Internet Sales, Executive Says

Wal-Mart Stores Inc.'s price reductions on generic prescription drugs have prompted a surge in orders to the company's Web site, said Walmart.com.'s chief executive officer.

The program, in which a month's supply of 314 generic drugs sells for $4, has been introduced in 27 U.S. states beginning in September. The company's online pharmacy has had ``triple-digit growth,'' the strongest increase in the Web site's history, as customers place drug orders and refills for pick-up in stores, said Walmart.com CEO Carter Cast.

More shoppers are going to Wal-Mart's Web site to buy prescription drugs, electronics and toys as store traffic and sales slow. Wal-Mart, the world's largest retailer, is using the Web site to lure customers into stores to buy higher-priced items such as flat-screen televisions and cashmere sweaters.

The Web site helps ``change the perception that Wal-Mart is not just about low prices, it's about quality,'' Cast, 43, said today in an interview in New York. ``I think we're a good indicator of where we think the stores are going.''

The Walmart.com visitor is more affluent than the store shopper, Cast said. The typical store and Web site customer is a 40-year-old woman, he said. The average household income of Walmart.com shoppers is about $60,000, up to $20,000 more than at the company's stores, Cast said. Online shoppers also tend to be more educated and urban, he said.

Wal-Mart's Web site may post sales of $1 billion to $2 billion this year, the most since the Web site went up in 1996. It's the third-most-visited electronic-commerce Web site after Amazon.com Inc. and EBay Inc., and the largest with physical stores, Cast said.

Walmart.com, which is based in Brisbane, California, may have 275 million visitors from November to January, up 40 percent from a year earlier, Cast said.

Wal-Mart said last week that sales at U.S. stores open at least a year will be unchanged in November, the worst performance in more than 10 years. In October the Bentonville, Arkansas-based retailer had its worst monthly sales in more than two years.

Weak demand for clothing and disruption from store remodeling hurt October results, executives told analysts at meetings in New York and New Jersey last week. Clothing is one of the top-selling categories on the Web site, with sales up 70 percent year-to-date, Cast said.

Wal-Mart executives look at what Internet customers are buying and then introduce top-selling items into the stores, Cast said. The Web site serves as a test site and as an outlet for selling big-ticket items, he said. Holiday gifts available on the Web site include an $8,000 two-carat diamond ring and a 50-inch (127-centimeter) plasma high-definition television.

``We sell $2,000 hot tubs online every week,'' Cast said.

Wal-Mart Chief Executive Officer H. Lee Scott has predicted a pick-up in sales during the holiday season. Smaller rivals Kohl's Corp. and Target Corp. also reported lower-than-forecast October results, raising concerns holiday sales will slow.

Wal-Mart has cut prices on electronics, toys and baby food to bring more shoppers into stores. The prices for those items are also available on the Web, Cast said. The Web site will have a pricing ``blitz'' from Nov. 27 to Dec. 2, with prices on 20 to 30 featured items reduced, said Cast.

``We sell for less,'' Cast said. ``We're going to be very aggressive about pricing.''

Walmart.com expects its toy sales to grow faster than those of competing online retailers such as Toys ``R'' Us Inc., allowing it to capture a greater share of the market, Cast said. The company's Toyland Web site lets children send a holiday wish list to friends and family. Wal-Mart is the largest toy seller in the U.S.

Photography services have grown 50 percent from last year and more than 100 million prints will be uploaded to the Web site for store pick-up this holiday season, said Cast. Toys, electronics, holiday gift-baskets, baby cribs and apparel are also selling well, he said.

Shares of Wal-Mart fell 62 cents, or 1.3 percent, to $47.03 as of 4:28 p.m. in New York Stock Exchange composite trading. The stock has risen less than 1 percent this year.

Copyright © 2006, Chicago Tribune

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Wal-Mart sues city over land grab

HERCULES: Redevelopment agency's eminent domain authority was illegal, retailer's lawsuit claims

Tom Lochner
Contra Costa Times,
November 9, 2006                               [back to top]

Nov. 9--In what could be the first of a series of legal challenges, Wal-Mart has sued Hercules over the city's decision to invoke eminent domain to strip the retail giant of a central Hercules lot near the waterfront.

The suit, filed in Contra Costa Superior Court in Martinez on Tuesday, argues that the City Council's May action authorizing the taking was illegal because of a technicality. It challenges the Hercules Redevelopment agency's authority to invoke eminent domain at all, against any owner on any grounds, contending that authority lapsed in 1995, 12 years after the approval of the original redevelopment plan for the so-called Dynamite Project Area in December 1983.

But in September, the Hercules City Council, by ordinance, extended the redevelopment agency's eminent domain authority by 12 years. Wal-Mart wants a judge to declare the ordinance invalid.

"Defendants' after-the-fact attempt to resurrect the agency's power of eminent domain is factually unsupported and legally improper," Wal-Mart's attorneys argue in the suit.

"Once it's expired, it can't be resurrected -- that's their argument," Hercules City Attorney Mick Cabral said. "Our argument is, that's absurd."

"We can extend or revive the eminent domain authority at any time before the redevelopment plan itself terminates."

That will not happen before about 2031, Cabral estimated.

Wal-Mart owns the future Bayside Marketplace, a 171/4-acre lot off John Muir Parkway roughly midway between San Pablo Avenue and San Pablo Bay. A 2003 development agreement with the Lewis Group, which owned the property until it sold it to Wal-Mart late last year, sets a store size limit of 64,000 square feet, the city contends.

Wal-Mart has said the 64,000-square-foot figure is merely a guideline and that its project, which calls for other stores on the parcel, would fall within the total store space limit of 168,000 square feet for the entire parcel.

Earlier this year, Wal-Mart filed its latest, scaled-down application for a 99,000-square-foot big-box store and other smaller structures.

"Wal-Mart does not want to submit a plan that conforms with the development agreement we signed with Lewis," Cabral said. "They want to do it Wal-Mart style."

Wal-Mart also challenges the city's contention that its property is in a condition of "blight," a legal requirement for a decision to invoke eminent domain.

Cabral said the property is as blighted now as it was in 1983 at the time the redevelopment plan was approved.

Blight can be physical or economic in nature under state redevelopment law. The city contends Wal-Mart's property is economically blighted, in essence for lack of any economic activity.

"This is the first of what I believe will be many legal actions Wal-Mart will take in order to force its way into Hercules," Cabral said.

No court date has been set for the suit.

Steve Kirby of Friends of Hercules, a good-government advocacy group that opposed the Wal-Mart proposal, said he is not surprised at all that Wal-Mart sued.

"I think the city pretty much knew Wal-Mart was going to do this," Kirby said. "It's part of Wal-Mart's modus operandi. They'll argue a technicality. They'll spend millions of dollars. They'll drag it on. That's what Wal-Mart does."

Wal-Mart spokesman Kevin Loscotoff rejected the notion that Wal-Mart is unwanted in Hercules, except by "a vocal minority that's opposed."

"Hercules residents drive to our stores in Martinez, Vallejo and Fairfield every day," Loscotoff said. "They appreciate the savings that Wal-Mart brings to working families. We continue to be bolstered by those residents that want low prices, new jobs and sales tax revenues."

Commenting on the lawsuit, Loscotoff said, "It's unlawful to pass an ordinance to retroactively extend their authority to use eminent domain to seize our land."

Copyright (c) 2006, Contra Costa Times, Walnut Creek, Calif.

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Wal-Mart, consultant end relations over ad

chron.com                                           [back to top]

WASHINGTON — Wal-Mart Stores announced Friday night it no longer is doing business with a political consultant responsible for an attack ad widely condemned as racist.

The consultant, Terry Nelson, had been working for Wal-Mart as a "voter participation expert." He also heads the Republican National Committee unit responsible for the ad attacking Harold Ford Jr., the Democratic candidate for U.S. Senate in Tennessee.

The ad targeted Ford in a way that critics — including the NAACP — called racist sexual innuendo about a black man and white woman. The TV ad features a bare-shouldered white blonde who claims to have met Ford at a Playboy party. With a wink, she says: "Harold, call me."

Ford, now serving in the House, is seeking election as the South's first black senator since Reconstruction.

Wal-Mart spokesman David Tovar issued a statement saying Nelson's company had "sent a letter to Wal-Mart ending its working relationship with our company."

Nelson did not return a call for comment. But in an interview with the Associated Press, he said, "There was no intention to offend anybody, and it's unfortunate if people took offense."

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Stocks fall as vote hits Wal-Mart, drug makers

Reuters
Wed Nov 8, 2006                                      [back to top]

NEW YORK (Reuters) - U.S. stocks fell on Wednesday after Democrats swept Republicans from power in the U.S. House of Representatives and an undecided Senate race fueled investor caution.

Shares of retailer Wal-Mart Stores Inc. <WMT.N> and drug companies Pfizer Inc. <PFE.N> and Merck & Co. <MRK.N> slid as investors worried Democrats would not be as friendly to those companies as a Republican-controlled Congress.

The Dow Jones industrial average <.DJI> was down 43.30 points, or 0.36 percent, at 12,113.47. The Standard & Poor's 500 Index <.SPX> was down 5.44 points, or 0.39 percent, at 1,377.40. The Nasdaq Composite Index <.IXIC> was down 15.07 points, or 0.63 percent, at 2,360.81.

© Reuters 2006. All rights reserved.

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Federated, Wal-Mart fall

Reuters
Wed Nov 8, 2006                      [back to top]

NEW YORK (Reuters) - Shares of Federated Department Stores <FD.N> fell 3.3 percent in trading before the market opened on Wednesday after the company reported quarterly results that missed analysts' estimates.

Shares of Wal-Mart Stores <WMT.N> fell 1.3 percent to $47.05, down from their $47.65 close on the New York Stock Exchange, after the Democrats won control of the U.S. House of Representatives.

The Democrats have said they want to raise the minimum wage in a move that could increase employment costs for Wal-Mart. A wage hike would also put more money in the pockets of Wal-Mart's core lower-income shoppers. Wal-Mart CEO Lee Scott last year called on Congress to consider raising the minimum.

A Democratic house will likely stall other matters important to Wal-Mart, such as its bid to own a bank -- an area the retailer considers a big growth opportunity.

Federated shares fell to $38.98, down from their $40.34 close on the NYSE.

© Reuters 2006. All rights reserved.

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Super Wal-Marts open in Canada

By CP
November 8, 2006                                  [back to top]

TORONTO -- Discount giant Wal-Mart Canada is preparing to carve out a bigger slice of the grocery trade with the opening of its first Canadian supercentres.

The company announced an "aggressive" growth plan that could include up to 14 more stores in 2007.

Each new Canadian su-percentre represents an investment of $15 million to $20 million and up to 500 new jobs, president and CEO Mario Pilozzi said yesterday.

He declined to specify the locations of future supercentres, combining full-line grocery supermarkets with Wal-Mart's signature general-merchandise and packaged-food barns, because the retailer is still awaiting municipal approvals.

The Canadian division of the world's largest retailer has previously indicated it was targeting the Ontario communities of Sarnia, Brampton and Vaughan and the Toronto suburb of Scarborough.

The first three locations open today in Ancaster, London and Stouffville.

The new Wal-Mart supercentres will stock about 120,000 products, compared with 80,000 in a traditional store.

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Holiday price wars: Round 1 to Wal-Mart

But analysts caution that retailers with the best merchandise, and not simply the lowest prices, will win the overall battle.

By Parija B. Kavilanz,
CNNMoney.com 
November 7 2006                                      [back to top] 

NEW YORK (CNNMoney.com) -- Wal-Mart is determined to ignite a fierce price war this holiday season. But some industry experts are betting that other merchants - if they're clever - won't take the bait.

That's because analysts expect retailers' fate during this year's holiday shopping season will be determined both by price and merchandise, and not price alone.

The November-December period is a critical time for retailers, accounting for as much as 50 percent of their profits and sales. This year, the National Retail Federation forecasts holiday sales will grow 5 percent, or slower than last year's 6 percent increase.

Wal-Mart on the offensive Wal-Mart, (Charts) the world's largest retailer, admitted that it already flubbed its merchandise assortment, especially in apparel. This makes Wal-Mart particularly vulnerable given that clothing tends to be among the most-bought seasonal gift items.

Wal-Mart: 'Cheap' better than 'chic'? Moreover, Wal-Mart's been plagued by weak monthly sales growth at its stores open at least a year, also known as same-store sales. This is a key retail performance measure tracked by Wall Street. It's October same-store sales rose a dismal 0.5 percent.

Given these setbacks, Wal-Mart's decision to be the first out of the gate to chop prices on toys and electronics seems less surprising.

"When retailers do badly, like Wal-Mart did in October, they have to try harder," said Stephen Hoch, marketing professor and director of Wharton's Jay H. Baker Retailing Initiative. "Wal-Mart's trying to get the early momentum, go after its core customer group of young families and boost traffic to its stores."

These moves threaten its immediate competitors like Target (Charts), which caters to the same low-income demographic as Wal-Mart.

"Target's going to have to respond to Wal-Mart," said Hoch. But he suspects other retailers will adopt a wait-and see approach.

"Retailers know that it's impossible to win the price war with Wal-Mart. If they do, they get their brains kicked in. Going head-to-head with Wal-Mart on prices will hurt them more in the long run than it will Wal-Mart," Hoch said.

Not playing Wal-Mart's game To Hoch's point, retailers' advertised discounts for this week don't appear to signal any panic price slashing in response to Wal-Mart.

Department store chain J.C.Penney (Charts) is giving shoppers 20 to 60 percent off on toys, furniture, jewelry, shoes and home furnishings. At mid-price chain Kohl's (Charts), customers can get between 40 to 60 percent off the regular price on clothing and shoes.

Macy's, a unit of Federated Department Stores (Charts), is cutting jewelry prices between 20 to 50 percent.

Analysts said the promotional activity, with the exception of Wal-Mart, appears to be benign.

In the specialty electronics space, Best Buy (Charts) and Circuit City (Charts), the No. 1 and No. 2 retailers, also haven't resorted to a quid pro quo response, as yet.

In a note to clients on Monday, Goldman Sachs analyst Matthew Fassler wrote that while "Wal-Mart's recent price cuts on consumer electronics caused investor concern, this action is no different than past holiday seasons."

"Furthermore, mass merchants do not yet carry the assortments or offer the services to pose a serious threat to Best Buy and Circuit City in key product categories, most notably [high-definition] televisions," Fassler said.

Britt Beemer, retail analysts and chairman of America's Research Group, said Wal-Mart succeeded in surprising many by announcing its "rollbacks" on electronics on a Friday.

"It was a brilliant strategy. Wal-Mart won the weekend sales battle," Beemer said. "The problem for other retailers is that they've already printed their seasonal circulars weeks in advance. So they couldn't respond quickly even if they wanted to."

Even so, Beemer expects retailers won't attempt to copy Wal-Mart's move as the season progresses. "I think retailers will focus on the big sales item and not blanket discounts. In other words, they'll take some big items and feature blow-out sales on those," he said.

Burt Flickinger, a consultant with the Strategic Resources Group, agreed.

The holiday season is always a sales versus profit gamble, he said. Retailers, on average, have kept inventory lean this year. If they engage in an aggressive price war, they may not have the inventory to match the demand it generates.

However, if retailers' set moderate discounts and have the must-have items in stock, they could see a nice pop in profits and sales.

Wal-Mart is clearly gambling on sales because its struggling to reverse course on its sluggish same-store sales growth.

"In the next 50 days, its price cuts will give Wal-Mart a short-term volume boost but perhaps a long-term profit problem," he said.

The sales stimulus is critical for Wal-Mart to to achieve it's financial objectives for this year, said Flickinger.

"But when its new fiscal year starts in February, it's be tough for the company to once again fight through its old problems," he said.

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What would Linda buy? Wal-Mart needs to know

MARINA STRAUSS
The Globe and Mail
Tuesday, November 07, 2006                   [back to top] 

At the new Wal-Mart Supercentre, it's all about Linda.

She's the prototypical Canadian customer for whom the massive stores are being designed, right down to where the bras are displayed.

“Linda” is 30 to 45 years old, has two or three children, a husband and a career. She's a soccer mom who multitasks, and she's time-starved.

So when she heads to Wal-Mart for the family shopping, she'd like to pick up some cosmetics for herself, a prescription for her son, diapers for the baby and dog food for the pet. All in that order. Then she'd like to get some grocery shopping done at the same time.

She might even have noticed a parka or a pair of pants at the nearby fashion section. Or spotted a cellphone across the way that looked appealing.

But at her regular Wal-Mart, she's not completely comfortable in the lingerie section. It's next to a busy aisle, and across from electronics. Men often frequent that department, and that may mean that she spends less time there than she otherwise would.

Wal-Mart Canada Corp.'s research on “Linda,” who represents its core customer, has played a big role in the planning of its new Supercentres, which open today.

The object is to get customers in and out of the stores as quickly as possible, while ensuring that they buy as much as possible.

“When we put together a new service or product, we say, ‘Let's check with Linda,'” Wal-Mart Canada chief executive officer Mario Pilozzi said in an interview as he toured the new Supercentre in Stouffville, Ont., which opens Wednesday. “She's very real.... Our whole organization has to understand that customer. So we give the customer an identity.”

The identity is a quintessentially Canadian one. “Linda” is a home-grown creation, initiated a couple of years ago at Wal-Mart Canada in Mississauga, said Jim Thompson, senior vice-president of merchandising. She is the personification of the company's target customer, and she's the focus of what most of its Supercentre work has been built around.

Her picture is a familiar one at head office. She generally wears jeans and a smart sweater, and there are even cardboard cutouts of her that executives take to meetings when they talk strategy.

Wal-Mart is launching the new Supercentre concept in Canada starting with three in Ontario, with plans for about 14 more next year and what analysts expect to be dozens across the country. The new Supercentres are roughly the size of four football fields, and 30 per cent bigger than existing Wal-Marts. They include a full supermarket along with more fashions, home goods and electronics than the traditional stores. They stock about 120,000 products, compared with 80,000 at the standard outlets. That's a bigger selection under one roof than in any other store in Canada, company officials say.

In the Supercentre in Stouffville, north of Toronto, the retailer has placed cosmetics at the front, and to the right, on the supermarket side of the store (rather than by the general merchandise entrance). Shoppers tend to automatically turn to the right when they enter a store, research has found.

Cosmetics sales also provide Wal-Mart with higher profit margins than many of its other products.

The cosmetics is part of a big pharmacy section which has been moved from the right side of a standard Wal-Mart, to the front near the grocery entrance. That makes it convenient for to get prescriptions and then move on to the infant and toddler section, and then to the pet department, Mr. Thompson said. At traditional Wal-Marts, the pet department is at the other end of the store.

As for the bras, they've been moved away from the electronics, to a quieter aisle next to the shoes. The placement is strategic and could prompt women to buy more shoes, he said. That's because while lingerie is often a have-to purchase, shoes tend to be bought on impulse. When they're looking at the bras and underpants, they may just notice a pair of high heels that catches their fancy.

There have been other subtle adjustments in a bid to cater to the core customer. She is looking for healthier foods, so a nutritional honey almond crisp cereal has been placed next to the bananas — with the thinking that cereal and bananas are a natural fit.

Jams and juices have been added to the cereal aisles so that shoppers' breakfast needs are all in one place. And for a quick, simple Sunday morning family breakfast, the frozen sausages — which are typically carried in the meat department — are displayed by the frozen pancakes and other breakfast items. It's also an attempt to make it easier to find everything in the same aisle.

In the home section, bed, bath and kitchen wares have been organized in sections of contemporary, traditional and ultra-traditional styles, so that the customer can differentiate them quickly. And taking a page from IKEA and other home furnishing retailers, the Supercentres have set up small “vignettes,” such a fully made-up bed and fully set dining table, to show how products look together.

Toys have been moved next to electronics, because so many toys now have a technological twist and are becoming electronic gadgets.

“Linda” has a hectic life, and anything that Wal-Mart can do to make it easier is a feather in its cap. “Linda is like the CEO and the CFO [chief financial officer] of the family,” Mr. Thompson said. “We've got a lot of respect for this lady. She is balancing her kids, her husband, her career ... We look after her and we become her one-stop shop, her destination for all her needs. Linda wins, we win and our shareholders win.

© The Globe and Mail

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Wal-Mart’s new voter-drive initiative could backfire

By Amy Showalter
The Hill
November 7, 2006                                  [back to top] 

After shunning politics for years, Wal-Mart, the nation’s largest private employer, recently launched a voter registration and education campaign targeted at its 1.3 million employees. Labor-funded groups have long targeted Wal-Mart, but until very recently the mega-store has taken pains to stay out of the political fray. Political and business analysts have likened the world’s largest retailer to a gladiator striding into the political arena, ready to fight back by getting its employees to the polls to vote in the company’s interests.

Empowering employees is a positive step, but it would be a mistake to assume the voter drive will help Republicans at the ballot box. It could just as easily backfire and result in a new crop of registered voters who may not have the company’s best interests at heart.

Wal-Mart’s initiative is not without precedent. A growing number of corporations, including Nationwide, ExxonMobil and DaimlerChrysler, have organized in-house voter registration efforts, making it easy for workers to download voter-registration forms and apply for absentee ballots.

But it takes more than handing out a few forms to get people to the polls. Companies thinking that with a little help their employees will vote for candidates who support the corporation’s goals are being unrealistic. Creating an emotional allegiance to your issues so that employees know whom to vote for without being told whom to vote for is an entirely different and long-term endeavor. Company officials have to take the time to teach employees about the political process and the industry issues that affect them.

This is especially important in Wal-Mart’s case because it is counterintuitive to think most of its employees are going to vote for pro-business candidates. If Wal-Mart’s employees formed a massive voting bloc, it would have better-than-average representation in categories traditionally dominated by Democrats: women and minorities. Of Wal-Mart’s U.S. employees, 60.5 percent are female and nearly 32 percent minority. Nearly 17 percent of Wal-Mart’s employees are 55 or older.

Wal-Mart says its voter registration efforts are non-partisan, and that its efforts to engage employees have been simply to correct the misinformation spread by its detractors.

Last summer the retailer took a first step and sent a letter to its 18,000 Iowa employees to refute statements made by Democratic candidates during a “WakeUpWalMart” bus tour organized by Wal-Mart opponents. Meanwhile, the corporation has increased its spending on lobbying to more than $1.6 million last year from nearly $1.2 million in 2004, according to the nonpartisan Center for Responsive Politics. This is laudable and necessary.

But the real work of creating a culture of civic engagement takes time and effort. I directed the efforts of employee volunteers to register their colleagues to vote for nine years as manager of a Fortune 500 corporate employee grassroots program. In that time, our nonpartisan voter registration efforts resulted in more than 10,000 new voters.

We know that when they voted, they took into consideration a candidate’s position on our company’s issues. In fact, more than 65 percent of the members of the employee grassroots program said they took the candidate’s position on our issues into account when they entered the voting booth. Why? Because we created a culture of civic engagement that encouraged employees to contact their elected officials on issues that affected the industry and their paychecks. It was imbedded in the company culture. Voter registration was simply one of many company-endorsed activities we offered to increase their civic engagement.

It would be useful to survey the employees of corporations that have enthusiastically embraced voter registration to find out how many actually considered a candidate’s position on their company’s issues when casting their vote. I’ll bet the answer is very few. Companies have to earn their employees’ allegiance.

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Wal-Mart unveils plans to open up to 14 supercentres in 2007

CBC News
Tuesday, November 7, 2006                        [back to top] 

 Discount department store Wal-Mart said Tuesday it plans to open as many as 14 more supercentres in Canada in 2007, adding to the three scheduled to open this week.

Mario Pilozzi, president and chief executive officer of Wal-Mart Canada, said the company will invest between $15 and $20 million in each store. Pilozzi declined to say where the stores will be located, since municipal approvals are still being considered.

Wal-Mart will officially open its first three Ontario supercentres in Ancaster, London and Stouffville on Wednesday. The supercentres, which are about 30 per cent larger than a normal Wal-Mart, will carry traditional home and family merchandise along with an extensive line of groceries including natural and organic products.

"Groceries are a golden opportunity for Wal-Mart to put money back in our customers' pockets," Pilozzi said in a release.

The new stores will stock about 120,000 products compared to the 80,000 carried in traditional Wal-Marts.

Canadian grocers have been diversifying their product lines in anticipation of the launch of the Wal-Mart supercentres but retail analysts have been making grim forecasts.

"How much of a bloodbath Loblaws, Sobeys … can afford nobody knows," retail analyst Richard Talbot told CBC News last month.

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Wal-Mart May Open 10 Supercenters Next Year in Canada (Update1)

Kevin Bell
Bloomberg
Nov. 7                              [back to top] 

Wal-Mart Stores Inc., the world's biggest retailer, plans to open five to 10 supercenters next year in Canada that will sell fresh produce for the first time to compete with Loblaw Cos., the country's biggest grocer.

The expansion adds to the three supercenters that Wal-Mart is opening this week in Ontario, Mario Pilozzi, chief executive officer of Wal-Mart's Canadian unit, told reporters today in Stouffville, Ontario, near Toronto.

``We will take expansion step by step,'' Pilozzi said.

Wal-Mart, based in Bentonville, Arkansas, is challenging Loblaw, which has been expanding its grocery stores in Ontario to add general merchandise such as clothing and bedding. Wal- Mart already sells packaged goods in its 275 stores across Canada.

New supercenters will open tomorrow in the Ontario cities of London, Stouffville and Ancaster, the retailer said in a statement sent by Canada Newswire. The stores will be 160,000 to 200,000 square feet, or about 30 percent larger than existing Wal-Mart outlets in Canada, the company said. They'll carry 120,000 items, compared with 80,000 for a standard store, including fresh meat, cheese, produce and baked goods.

The retailer plans to open new supercenters in Sarnia, Scarborough, Brampton, and Vaughan next year, with each store providing as many as 500 jobs.

Wal-Mart shares rose 37 cents to $47.86 in 12:15 p.m. trading on the New York Stock Exchange. Loblaw rose 23 cents to C$$47.05 on the Toronto Stock Exchange.

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US plays RIL card for Wal-Mart's entry

SIDHARTHA
TIMES NEWS NETWORK
MONDAY, NOVEMBER 06, 2006                           [back to top] 

NEW DELHI: The entry of Indian biggies like Reliance in the retail sector is raising hackles for government. The US — which has made a case for India to open up retail to allow companies like Wal-Mart to enter the local market — has now cited the case of Reliance, the latest corporate house to bite the bullet, to make a case of entry of foreign chains.

Sources said the issue came up for discussion during the recent interaction of Indian officials with US counterparts during the CEOs Forum and on sidelines. India argued against entry of foreign players, saying that local livelihood would be hit as retail chains may oust the neighbourhood kirana stores. But US officials are learnt to countered this argument by saying that Reliance or Bharti’s retail chains will affect the local kirana stores in the same way as Wal-Mart’s stores.

Though the commerce ministry in the past has made the same point, it had little option but to represent the government’s point of view during the interactions. “It is true that there is no way we can regulate the Indian companies which have turned retailers but given the political opposition we are not in a position to allow the foreign chains to enter the Indian market,” an official said.

While government appears open to allowing foreign retailers to set local chains, the Left and BJP have opposed the move fearing wide-scale job loss and displacement of the Guptajis and Bansaljis in neighbourhood. For the moment, the government intends to limit foreign play to high-end branded goods through the single brand retailing mode. The rules allow foreign companies to set up JVs with local players for opening retail stores that can only sell one label.

Sources said FDI in insurance and banking was the other FDI-related issue to have cropped up during discussions. But in both cases, India again cited its domestic constraints in allowing greater play for foreign banks and insurers.

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Why I Hate Wal-Mart

By Heather Cannon                            [back to top] 

We all love Wal-Mart. Without Wal-Mart, we say we would go insane. Wal-Mart this, Wal-Mart that. Always Low Prices, Always Wal-Mart. ALWAYS Wal-Mart. Does it ever make you sick; just so sick to your stomach that you wonder why you ever shop there? Why not K-Mart; why not Target? The experiences I am about to list are only a few of the MANY shortcomings of Wal-Mart stores. It would take days for me to type every single reason I think Wal-Mart causes me to have major problems. 1. Whoever on this earth thought that the Self Checkout was going to make our lives easier is completely and ridiculously wrong! The other day my roommate and I stood in the Self Checkout line for nearly 30 minutes. Where we live, people go to Wal-Mart like it is going out of style, and frankly, 30 minutes is not that long. The only setback to the 30 minute wait was the old man in front of us. Bless his heart, he didn't know how the heck to use that thing. He kept pressing buttons, and when it came to the screen for the Wal-Mart Associate to press her "secret" number in, he punched his credit card number in... It was very funny, but annoying at the same time.

2. Why is there never anybody in the fabric center? I could ring that darn bell a hundred times, and if it was as loud as a thousand car horns, I still don't think anybody would come to help me cut the fabric I need. My solution: after waiting for nearly 45 minutes I decided to do it myself, and yes, I figured out how to use the little machine that prints out a bar code and the length of fabric you have to buy. Very useful having some technical skills.

3. I don't know if they do this in every town, but in my town, if you buy a lot of stuff, they check it off on your reciept as you exit the store. I am EXTREMELY impatient, making this "normal procedure" an everyday issue.

4. I am so happy that DVD's can be priced as low as $5.50, but putting them in a 80 foot deep black bin does absolutely nothing. They should at least "stir" them around every once in a while, but I guess it is my fault for already buying all the ones that are actually in reach, and my stupidity for going back and thinking that there are gonna be different ones on the top this time.

5. WOW... in the town I formerly lived in, the Wal-Mart decided to remodel. Well, instead of closing the store down every other day and maybe taking two or three weeks to remodel, they decided to keep it open the whole time. It is completely understandable that they could not close the store for fear of lost business and a decrease in funds, but they should try to think of something a little easier than what they did. For example, one time I went in there looking for a lemon... just a simple little lemon to put in my bottle of water. They had completely shut the fruit section down, and it just disappeared. So, being the optomistic person that I am, I decided to get some lemon juice in a bottle, well they had shut nearly all those ailes down too. What is the point of staying open, if they aren't going to open their products up for buying? Not to mention, there was enough caution tape marking off new floors to supply all the investigation agencies in the U.S.

6. I understand that it is store policy to acquire a liscense before a cashier can take a check, but when I have every other form of I.D. possible (my student I.D., work name tag, a few bills, my credit card, etc.) could you just not let it slip that once? Especially when I have $283.67 worth of groceries? Do you REALLY wanna go through the trouble of putting all that back on the shelves? Needless to say, I drove all the way back to my apartment and brought back my liscense. Thanks to the nice cashier lady, I didn' t have to go back and get all my groceries, she held them at the register.

7. One simple word: BIRDS... Do all Wal-Marts have a serious bird problem? It seems like every one I go into have about 87 birds flying all around the store landing in the food ailes and dropping little surprises for me to step in.

8. Slow people get on my nerves anyway, because I am a very fast paced person. I like to walk and drive without having to stop needlessly. Well, in Wal-Mart, I seem to come upon two old friends talking in the middle of the aile making it very hard for me to get to my much needed macoroni and cheese. If you wanna talk, go to the fruit section, its closed down anyways......

9. I believe out of the many, and I do mean MANY wrecks that I have encountered or been involved in myself, let's say that about 70% have happened in the Wal-Mart parking lot. I have seen people nearly take out a light pole, run into cars with buggies, jumping into buggies and flip out of them. I have seen cars hit eachother, as well as the "buggy gatherer" hit people. The possibilities are endless I suppose.

10. It is so FREAKING addictive. Wal-Mart should be made illegal and if prosecuted from Wal-Mart use, they should make people work there... perfect punishment.

So that is just a few of the problems I have with Wal-Mart, I am sure there will be a sequel with just a few more of the many reason I HATE WAL-MART.

2006 © Associated Content, All rights reserved.

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Wal-Mart warns of holiday price wars

By Anne D'Innocenzio
The Associated Press                       [back to top]

NEW YORK — Get ready for the midnight sales specials, 60-percent-off discounts on holiday toys and racks of marked-down merchandise.

The holiday season is always about price wars. But retailers are bracing for what could be the most brutal holiday season in recent years after Wal-Mart announced Thursday a disappointing October sales report and a bleaker outlook for this month.

Along with its bad news, the world's largest retailer had a warning: It will use price as a weapon as it competes for consumer dollars this holiday season.

Shoppers will be the beneficiaries, enjoying bigger discounts on toys and electronics like flat-screen TVs even earlier than usual in the season. But heavy price cutting is problematic for retailers, whose profits shrink along with prices. The most vulnerable this season are likely to be Wal-Mart's discount rivals including Target, toy sellers like Toys "R" Us and electronic retail chains such as Best Buy, according to Ken Perkins, president of RetailMetrics, a research company.

In apparel retailing, moderate-price players like Kohl's and J.C. Penney could also feel some pain.

Wal-Mart blamed its lackluster October sales, in part, on a failed women's fashion strategy that was too trendy for its customers, and on disruptions from a store-remodeling program. But the company is wasting no time in battling its rivals — next week Wal-Mart hopes to lure shoppers with $398 Compaq Presario laptop computers.

"The news from Wal-Mart is definitely discouraging," Perkins said. "They are going to be very price-aggressive. And it is going to have an effect on everyone. It is going to force other retailers to cut their prices, which in turn will squeeze their profit margins."

The latest development from Wal-Mart came as the nation's retailers reported mixed October sales, the result of consumers taking a breather after going on a buying spree in September.

Wal-Mart, which should have prospered, thanks to falling gasoline prices, reported a meager 0.5 percent gain in October same-store sales, below the 1.5 percent gain expected by analysts.

Meanwhile, rival Target had a solid 3.9 percent gain in same-store sales, though the figure was slightly below the 4.2 percent estimate from Wall Street.

BJ's Wholesale Club, Pier 1 Imports and the Gap were among the other retailers with disappointing sales. Meanwhile, department stores scored again, with robust business at Nordstrom, Federated Department Stores, J.C. Penney and Saks. And analysts think they should have a solid holiday season.

Perkins noted that upscale stores like Seattle-based Nordstrom won't be affected by the price wars.

Nordstrom's 10.7 percent increase beat the 6.2 percent projection.

Macy's operator Federated, which acquired May Department Stores last year, posted a hefty 7.7 percent gain in same-store sales, higher than the 6.2 percent estimate from Wall Street. Same-store sales include only Macy's and Bloomingdale's. Federated said it expects same-store sales to increase by 3 to 5 percent in November as well as in the fourth quarter as a whole.

Penney, helped by strong consumer demand for fall apparel and accessories, had a same-store sales increase of 8.1 percent in its department store business. The results beat the 6.2 percent estimate.

Limited Brands' 9 percent same-store sales gain topped the 7.2 percent estimate from Wall Street.

Gap, trying to turn around sales with a new merchandising strategy, struggled with a 7 percent drop in same-store sales, worse than the 2.4 percent expected. October's performance was hurt by a sharp sales drop at Old Navy.

Issaquah-based Costco Wholesale, the largest U.S. warehouse club, said sales gained 4 percent, missing the 4.3 percent average estimate.

Pier 1's same-store sales tumbled 13.7 percent in October, worse than the 8.2 percent decline anticipated by Wall Street.

Teen retailers had a mixed performance. Pacific Sunwear posted a 7.1 percent drop in same-store sales, worse than the 5.4 percent forecast. On Wednesday, Everett-based Zumiez reported same-store sales increased 15.9 percent in October compared with 10 percent a year ago. Also on Wednesday, American Eagle Outfitters reported a same-store sales increase of 8 percent, a bit below the 9.9 percent estimate.

The outlook for the holiday shopping had brightened for retailers since August amid falling gasoline prices and subsiding interest rates. In fact, earlier this fall, the worry was that stores may not have enough inventory amid better-than-expected consumer spending. That meant that stores could be stingy with discounts.

But that's now changed. Marshal Cohen, chief analyst at NPD Group, a market-research company, says this holiday season could be as promotional as three years ago, when Wal-Mart spoiled the season by sharply discounting hot holiday toys below cost.

This year, "The consumer is going to be the beneficiary of all this nervous energy," Cohen said. He thinks more stores will embrace midnight specials, a growing trend, on the Friday after Thanksgiving.

Information about Costco provided by Bloomberg News

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Fearing Slow Holiday Sales, Wal-Mart Cuts Prices

By MICHAEL BARBARO
The New York Times Company
November 3, 2006                                         [back to top]

The holiday shopping season is starting early this year. As in today.

Expecting a grim November, Wal-Mart Stores said it would immediately slash prices on 100 popular electronics, abruptly rearranging the Christmas calendar for its customers and competitors.

The drastic discounts on televisions laptops and cameras, traditionally reserved for the day after Thanksgiving, are expected to touch off a price war as discount rivals Target, Best Buy and Circuit City scramble to match the move.

For Wal-Mart, the strategy represents a bold bet that it can save Christmas by single-mindedly stressing low prices, a message that has become clouded by efforts to carry higher-end merchandise.

Over the past year, Wal-Mart had played down advertisements featuring its sword-wielding, price-slashing smiley face, replacing them with sleek-looking spots tempting customers to buy silk camisoles and 300-threat count sheets.

But this season, the rollback (as Wal-Mart calls price cutting) is back.

The sharp price cuts announced today — $500 off a Panasonic 42 inch HD plasma television (now $1,294) and $300 off a 37-inch Polaroid LCD television (now $997) — are the company’s second round of the season. It sliced the price of 100 popular toys, several by more than $20, on Oct. 18.

At stake, for Wal-Mart, is billions of dollars in holiday sales. For November, the retailer expects zero sales growth at stores open at least a year, which would represent its weakest performance in nearly a decade. The retailer reported growth of just 0.5 percent in October, well below its competition.

The numbers do not mean Wal-Mart is not growing — revenue is at record levels — but suggests that sales at existing stores are now growing at a slower pace

“By focusing on price this holiday, Wal-Mart is putting its competitors at a real disadvantage,” said Bill Dreher, an analyst at Deutsch Bank Securities.

Price cuts are by no means unusual to Wal-Mart — the company’s motto is “Always Low Prices” and employees visit rival stores every day to insure products are a few pennies cheaper.

But the deep price reductions announced over the past several weeks resemble those put in place far closer to Christmas. And retailers are generally wary of kicking off the season too early with deep discounts, for fear of confusing consumers and eating into profits.

But Wal-Mart executives clearly believe that by starting early, they can attract consumers who would normally begin shopping the day after Thanksgiving, the traditional start of the holiday season for retailers.

The low-price campaign stands out for another reason: it contrasts sharply with the retailer’s emphasis on style and fashion during the past year, which has hit a rough patch.

With Wal-Mart struggling to maintain the breakneck growth that defined its first 40 years, the company has tried to persuade shoppers to buy more than just cleaning products and food, areas it soundly dominates in the United States.

The solution, executives believed, was to persuade customers to spend more money in the clothing and home furnishings departments, as shoppers do at Wal-Mart’s biggest rival, Target.

Wal-Mart’s advertising reflected this shift, becoming sleeker and moving away from a single-minded focus on price.

But the fashions Wal-Mart chose, from a pair of skinny jeans to a velvet jacket, did not win over customers and chief executive H. Lee Scott has said the retailer “moved too far too fast” with its style initiative.

And so low price, that old standby for Wal-Mart, is suddenly front and center again for the retailer this holiday.

“They know this works,” Mr. Dreher said.

Copyright 2006 The New York Times Company

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Goodbye, Skinny Jeans; Hello, Holiday Discounts: Wal-Mart Tries to Recover From Fashion Faux Pas

By Ylan Q. Mui
Washington Post
November 3, 2006                                [back to top]

Having tried its hand at being hip, behemoth retailer Wal-Mart Stores Inc. is reverting to a more familiar approach this holiday season: slashing prices. It cut prices on 100 toys last month, bringing many board games down to $8. Internet speculation abounds that Sunday will bring the type of blockbuster deals on electronics normally reserved for the day after Thanksgiving. Company officials have openly promised discounts on thousands of key gift, entertaining and holiday items.

But one thing is eluding Wal-Mart: sales growth.

The company posted a meager 0.5 percent increase for October in sales at its namesake and Sam's Club stores that have been open at least one year, a key measure of a company's health in retail. Sales are predicted to be essentially flat in November, which includes the day after Thanksgiving, known as "Black Friday," the traditional kickoff of the holiday season.

The poor showing comes at the start of the most important shopping season of the year. Holiday sales account for roughly 20 percent of total revenue for retailers, and rival Target Corp. and department stores yesterday reported much larger gains. Wal-Mart broke its bad news to analysts in a meeting last week.

"Wal-Mart is going through a rougher patch than we, and management, had anticipated," Oppenheimer & Co. analyst Bernard Sosnick wrote in a research note after the conference.

The company is blaming its trendy clothing line, Metro 7, as part of the reason for weak sales growth last month. The clothing, which was advertised in Vogue, was expanded too quickly to 1,500 stores across the country, Wal-Mart said. Company officials said the apparel was more suited to just 600 stores, mainly on the coasts, and that shoppers in America's heartland were reluctant to embrace trends such as skinny jeans.

"We're continuing to work longer-term to improve the balance between fashion and core essentials in our stores," Wal-Mart Chief Financial Officer Tom Schoewe said yesterday.

Instead, this holiday seems to be all about price for Wal-Mart. It set off a price war three years ago when it began chopping prices on the season's hottest toys, helping to dethrone Toys R Us, which was later bought by a group of private investors.

Wal-Mart counted that season as a success. Its toy department raked in the most profit in the company's history.

The company is aiming to recapture that glory this season. It declared "Game on" in an announcement of this year's discounts on toys. The "Dora the Explorer" Talking Kitchen was slashed to $65 from $89.84, while the Cadillac Escalade Ride-On truck is down to $249 from $279.37.

The next target seems to be technology. GottaDeal.com, which compiles and posts advance copies of retailers' weekly promotional ads, claims to have gotten a copy of Wal-Mart's ad planned for release on Sunday. It says the ad features deep discounts on televisions, DVD players and a digital camera.

"They seem to want to start the gift-buying season as soon as possible," GottaDeal.com founder Brad Olson said in an e-mail. "It looks like they are making a 7-8 week push and not putting all their hopes for a profitable quarter on Black Friday alone."

Part of Wal-Mart's woes are also attributable to gas prices, according to senior economist Frank Badillo of Retail Forward, a consulting and market research firm. A company survey showed that more than half of low-income shoppers plan to spend less than they did last year or nothing at all. Discounters and dollar stores showed weak performance last month as a result, he said.

Gas prices are "still putting a crimp on what lower-income shoppers can afford at the stores," Badillo said. Stepping in are department stores, which had been squeezed between low-price big-box stores and more expensive specialty retailers for years. Michael P. Niemira, chief economist with the International Council of Shopping Centers, a trade group, estimated that same-store sales at department stores rose 6.2 percent last month -- outpacing the 3 percent increase in retail sales overall.

Federated Department Stores Inc., which owns Macy's and Bloomingdale's, said yesterday that sales at stores open at least a year were up 7.7 percent last month. However, that figure does not include sales at stores formerly owned by May Co., including the Hecht's chain. Federated chief executive Terry J. Lundgren said sales at those stores "continued to lag."

"There's been a lot of change in the former May Company doors, so the customers are getting accustomed to it," Federated spokesman Jim Sluzewski said.

Saks Inc. reported same-store sales growth last month of 9.2 percent. At J.C. Penney Co., sales were up 8.1 percent. Nordstrom Inc. was up 10.7 percent.

"Department stores are back," said Janet Hoffman, director of North American retail for consulting firm Accenture. "That's an exciting turn from two years ago."

The sector benefited from a disappointing performance by specialty apparel stores. Niemira estimated that sales there fell by 0.2 percent last month, though individual retailers posted a mixed bag of results. Abercrombie & Fitch Co., for example, suffered a 3 percent decline in sales in stores open at least a year, while rival American Eagle Outfitters Inc. recorded an increase of 8 percent.

Indeed, Wal-Mart is learning firsthand how fickle the apparel industry can be. In the conference with analysts, chief executive H. Lee Scott Jr. hinted that the company would be scaling back its foray into fashion. Out with the skinny jeans, in with the plain white socks. Wal-Mart sold 675 million pairs of white socks in the United States over the past year, Scott said.

"When I walk the store today, the thing I believe is that what we did is that we overloaded the fashion part," he said. "That's not who we are. It's not where the money is going to be made."

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Wal-Mart Employees Speak Out

By Anita French
The Morning News
November 2, 2006                      [back to top]

Wal-Mart, still smarting from recent public relations fiascoes and disappointing store sales, took it on the chin again Thursday during a teleconference in which employees vented their anger against the company over its new policy changes. The call was held by Wake-Up Wal-Mart in Washington, a union-backed group waging its own campaign against Wal-Mart Stores Inc. Two callers who identified themselves as Wal-Mart employees were Ramiro Gonzales of El Paso, Texas and Susan Smith of Ponca City, Okla.

Both Gonzales and Smith criticized Wal-Mart for its new wage-cap and absentee policies. By putting caps on some employee's wages, "We have nothing to look forward to," said Gonzales, who has worked for the company six years.

Smith also alleged that if employees do not confirm to Wal-Mart's new scheduling policy, workers have been "threatened" with wage cuts.

"Wal-Mart is definitely going over the line in many things," said Smith, a 14-year employee.

Paul Blank, director of Wake-Up Wal-Mart, said calls to his organization from Wal-Mart employees have "skyrocketed" since the company implemented its new policies. He also claimed the retailer has some more changes coming next year, including doing away with profit sharing and offering severance packages to longtime employees who will have their wages cut if they don't sign, he said.

Wal-Mart spokesman David Tovar said there is "absolutely no truth" to Blank's claim.

"This is another example of how Paul Blank and union leaders are spreading misinformation about Wal-Mart," Tovar said.

As far as the teleconference itself, Tovar said Wal-Mart hoped Blank and the others would discuss the jobs the company creates each year and the low-cost health care it offers employees.

"We regularly receive thousands of applicants for the few hundred jobs we create with each new store because people know we offer valuable job opportunities and highly competitive wages and benefits," Tovar said.

One former Wal-Mart employee who didn't take part in Thursday's conference is Lisa Hammond of Newton, Kan. She was an assistant manager for Wal-Mart who quit her job over alleged harassment and discrimination by her supervisor.

Hammond, in an e-mail to The Morning News, disputed a recent comment made by a Wal-Mart spokeswoman that the company doesn't have an "open availability" policy for its employees.

"While they do not have a written policy requiring 24/7 availability, they absolutely require managers to 'strongly encourage' open (availability) from associates and will openly tell associates that their hours will be cut unless they open it up," Hammond said. "It's pretty much blackmail, and there's no secret about that."

Hammond, who worked for the company two years, said she went up the chain of command to complain about her mistreatment but nothing was done. Hammond has set up her own Web site, called walmartassistantspeaks.com, outlining her case.

Tovar said it was Wal-Mart's policy not to comment on the circumstances of an ex-employee's departure.

Amy Leone has worked for Wal-Mart 15 years and is a claims employee at a store in Waterloo, N.Y. She told The Morning News in a telephone interview that she does feel Wal-Mart is trying to get rid of its long-term employees by putting in wage caps.

"I've been pro-Wal-Mart since I've worked there and I do get good pay and benefits. But it feels like the whole focus of the company is changing," she said.

Ron Galloway also has criticized Wal-Mart for its new wage-cap policy, and he counts himself a supporter of the company. Galloway, who is based in Atlanta, produced the 2005 documentary called "Why Wal-Mart Works and Why That Drives Some People Crazy" in which he interviewed several employees who praised their employer.

Galloway recently resigned from Working Families for Wal-Mart, which is funded by Wal-Mart, after one of the employees he interviewed for his documentary told him she had her wages capped by the company. For Galloway, it was the "last straw," he said.

"I'm still pro-Wal-Mart, and I made that clear (in a recent speech). But I think it's just wrong to make long-term employees suffer," he said. "Clearly, this is an attrition program."

Mike Duke, vice chairman of Wal-Mart International, said during a recent analysts conference, that how a company treats its employees affects how they will treat the customer. Analyst Patricia Edwards, of Wentworth, Hauser and Violich in Seattle, agreed.

"If you look at some of the best companies out there in the retail experience that Wal-Mart wants to have, Nordstrom, Costco and Starbucks are all renowned for how well they treat their employees who, in turn, treat the customer well. If you're trying to attract that upper-income shopper, they're used to a different shopping experience, and Wal-Mart right now isn't at its best," Edwards said.

Blank on Thursday encouraged callers and other Wal-Mart employees to draw up petitions to send to the company's headquarters. There are already two online petitions aimed at the company - one sponsored by American Rights at Work and another by a group called Concerned Associates.

The American Rights at Work petition shows more than 60,000 signatures, not all of them from Wal-Mart employees. There was no contact name or number for the Concerned Associates petition, which says it has 51 signatures towards its goal of 1.8 million.

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Another study: Wal-Mart expansion "devastating" to Chico

By Laura Urseny
Chico Enterprise Record
November 1, 2006                                   [back to top]

Opponents to Wal-Mart's two proposed projects in Chico have released an economist's study that forecasts a "devastating impact" on the local economy. Heather Schlaff, coordinator of a citizens group that calls itself Chico Advocates for a Responsible Economy, said an independent study of the Chico situation was done by a California State University professor of economics.

The study stated if both Wal-Mart projects are allowed to go forward, several grocery stores, including Food Maxx, both Raley's and Albertson's would close, among other retail businesses.

"The Forest Avenue Supercenter expansion will close the Food Maxx store and the Raley's in southern Chico and place severe pressure on nearby nongrocery retailers, especially the struggling Chico Mall."

The 15-page study also indicated that if a supercenter is allowed to be built in north Chico, the Albertson's and Raley's at that end of town will close, as well as damaging their surrounding shopping centers.

"The resulting blight will far outweigh any small benefits," the executive summary of the study concludes.

The entire report was not available at press time, and the study's author was out sick Tuesday.

Schlaff said the city should be concerned about such repercussions involving taxes and jobs.

Schlaff and CARE do not oppose the existing Wal-Mart, just any expansions.

San Francisco State University associate professor of economics Philip G. King produced the study for Stockton attorney Brett Jolley, who has been involved in opposing Wal-Mart projects and has brought several Wal-Mart-related lawsuits.

According to his resume, King has done a number of Wal-Mart related studies in other communities, and has commented on EIRs in supercenter projects in California, including Chico.

In 2004, Jolley represented a retired union meat cutter from Chico who brought a lawsuit against the Wal-Mart regarding traffic and economic impacts of the proposed Forest Avenue expansion.

News of this latest study comes days after another Wal-Mart-related report was released by the Chico Economic Planning Corp.

Chamber and economic development personnel in 15 communities told CEPCO employees during telephone interviews that communities benefited from Wal-Mart supercenters in taxes, jobs and charity contributions.

Of the CEPCO report, Schlaff said the survey was conducted by people already disposed toward Wal-Mart, and it talked to people who would be in favor of Wal-Mart expansions by virtue of being involved in economic development.

She noted the communities surveyed did not have two supercenters as Chico would.

Schlaff said the CARE study, plus petitions signed by about 2,000 people, will be submitted to the city.

Wal-Mart has proposed expanding its existing 126,000-square-foot Forest Avenue store by adding more than 97,000 square feet to make it a supercenter with discount groceries.

It is also proposing to construct a new 242,000-square-foot supercenter with a grocery on the site of the former Sunset Hills golf course in north Chico.

A city-hired consultant is producing separate EIRs on both projects, but the north Chico store report is expected first.

Schlaff said the CARE group coalesced when Wal-Mart first began discussing expansion of its existing store in early 2004.

Schlaff began talking to people she saw at city meetings and formed CARE to keep the community informed through a Web site, e-mail messages and public testimony. Its Web site is www.chicocares.org.

"A supercenter has over 50 percent discount groceries. We have existing groceries that offer groceries at a discount," she said, naming off WinCo, Food Maxx and Costco.

She said Chico is already a regional retail hub and doesn't need help.

A Food Maxx executive in 2004 told the city Planning Commission he feared the Chico store would close if Wal-Mart was allowed to go forward.

Economic impact — or how the projects will affect Chico's economy — will be part of the city's EIR.

"However, you know who's paying for the EIRs. It's Wal-Mart," Schlaff said.

Regarding CARE, Schlaff described the organization as a grass roots one attracting people from throughout Chico and from every economic level.

The roughly 2,000 who signed CARE petitions over several Saturday's farmers' market in downtown Chico opposed both projects.

Schlaff said some of the signers said they shopped at Wal-Mart, but didn't want it to expand.

Schlaff said the group's goal is to examine growth coming to Chico, but make sure Chico's character are maintained and growth happens "in an intelligent manner, but preserve local business while providing a range of choice for consumers."

Schlaff said with the projected job loss shown by the study, "There's no net gain."

Having six supercenters so close to each other will also impact the economies of other communities, she said.

Anderson already has a supercenter, and another is already approved in Willows. Planned expansions to Red Bluff and Oroville will create supercenters there as well.

Schlaff said Stockton attorney Jolley helped CARE find the university economist, but said no outside people or union members encouraged or helped the local group.

Schlaff said she is awaiting Jolley's bill for the study.

Jolley has been characterized as being an attorney representing unions and union issues.

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Trouble in Wal-Mart’s Toyland

Internet Retailer                   [back to top]

Who could find fault with two friendly elves presiding over Wal-Mart Stores Inc.’s Toyland microsite? Well, the Campaign for a Commercial-Free Childhood, for one, a child advocacy group that charges the retail giant is “ruthlessly coming between parents and children and actively encouraging kids to nag for their holiday gifts.” It has called on its 7,000 member to write Wal-Mart to urge that the site be shut down.

At the site, elves “Wally” and “Marty” give running commentary as a wide array of toys parade past on a conveyer belt. “If you show us what you want on your wish list, we’ll blast it off to your parents,” the elves say. “We’ll help plead your case.”

When a child clicks a ‘Yes’ button indicating he wants the toy, he hears applause and the toy is boxed and put into a spaceship. Children are periodically asked to enter their parents’ e-mail addresses so the spaceship carrying the wish list can be sent to mom and dad.

On its site, the child advocacy group notes that many of the toys are expensive or may be in conflict with parental values. “Yet children do not need a parent’s permission to enter Toyland, there is no age requirement to use the site and kids are encouraged to submit their parents’ e-mail addresses in order to send their wish list,” the group says.

For its part, Wal-Mart defends the program as a modern version of the Christmas list. “Making a list for Santa and sharing it with parents is a tradition that goes back as long as Santa,” a spokesman for Walmart.com says. “Today’s parents certainly remember going through the Christmas catalogs and circling every other item.”

Wal-Mart adds that parents “have the same control that they’ve always had over what to do with that information.”

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