By Ylan Q. Mui
Washington Post
September 30, 2006                         [back to top]

Wal-Mart Stores Inc. yesterday launched a voter registration drive aimed at its 1.3 million U.S. employees in what it describes as the largest such effort by a private company. The kickoff was held in Iowa, a key battleground in the upcoming midterm elections. Workers at Wal-Mart's roughly 3,800 other facilities across the country also received registration forms yesterday. Although the world's largest retailer said it does not want to influence how its workers vote, David Tovar, director of media relations, said the drive was prompted by recent criticism of the company by politicians.

Wal-Mart workers "read the newspapers and see the headlines, just like you and I do," Tovar said. "They recognize there were some elected officials that were saying some things that didn't really represent the company. They wanted to have an opportunity to have their voice heard."

Wal-Mart is working with Democratic strategist Charles Baker of the law firm DLA Piper and Republican strategist Terry Nelson, founder of Crosslink Strategy, on what it has dubbed the Voter Education Program. The company has prepaid postage for voter registration forms in Iowa and several other states. It is also allowing workers whose shifts do not give them three hours to visit the polls to take paid time off to vote. Before the elections in 2004, they received two hours of unpaid time off.

Wal-Mart sent letters to 18,000 Iowa employees in August criticizing Sens. Evan Bayh of Indiana and Joseph R. Biden Jr. of Delaware and Govs. Tom Vilsack of Iowa and Bill Richardson of New Mexico -- all Democrats -- for participating in a bus tour arranged by Wake Up Wal-Mart, which is funded by the United Food and Commercial Workers International Union. Similar letters were sent to workers in New Hampshire, South Carolina and Nevada.

The bus tour was designed to attract new members to Wake Up Wal-Mart and draw attention to the company's health benefits package.

Labor groups have accused the retailer of blocking employee attempts at unionizing. They also assert that Wal-Mart runs small companies out of business, depresses wages and does not provide adequate health coverage for its employees.

Wal-Mart Watch, which is backed by the Service Employees International Union, said it supports the retailer's voter drive but was still critical of its political efforts.

"Wal-Mart's employees realize that the company's lobbyists don't represent their personal interests," spokesman Nu Wexler said.

Some activist groups questioned the retailer's motives, citing Wal-Mart's policy of banning voter registration drives conducted by outside parties from its stores.

"If Wal-Mart is truly interested in promoting a just democracy, then customers and employees should be included in registration activities," said Edward A. Hailes Jr., senior attorney with Advancement Project, a national civil rights group organization that works on voting issues.

In the spring, volunteers with Project Vote and the Association of Community Organizations for Reform Now, a nonprofit group that has been critical of Wal-Mart, attempted to set up voting drives at several Florida stores, said Brian Mellor, the elections counsel for Project Vote. He said they were quickly asked to leave.

Tovar said the company's blanket policy bans such drives because it disrupts customers' shopping experience but that it has made exceptions for some nonpartisan groups.

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Wal-Mart Next Year Only To Offer New Employees Lower-Premium Health Plans With Higher Deductibles

MediLexicon
29 Sep 2006                   [back to top]

Wal-Mart Stores will stop offering new employees traditional low-deductible health plans beginning Jan. 1, 2007, and instead will offer new hires high-deductible plans with lower premiums, the Washington Post reports. Under the revised health care plan, employees will be able to purchase a plan that has a monthly premium of $11 and a $1,000 deductible or a plan with a $17 premium and a $3,000 deductible. Under the changes, the lowest monthly cost for an employee and his or her spouse would be $38 with a $6,000 deductible (Mui/Joyce, Washington Post, 9/27). One of the plans will allow workers to contribute to a health savings account. Current employees still will be able to renew their lower-deductible health plans, according to the company (AP/Chicago Sun-Times, 9/27). Wal-Mart spokesperson Dan Fogleman on Tuesday said that a review of the company's health benefit plans showed that most employees opted for a package with a monthly premium of between $70 and $100 with a $350 deductible, though more than half of employees did not pay that much. Fogleman said, "We've done the math on this, and we have a pretty good understanding of what this is going to mean. Most associates are going to come out better on this." Fogleman added that Wal-Mart provides health benefits to about 47% of its workforce. However, the plan changes are "sparking fresh criticism over whether the giant retailer is providing adequate coverage to its workers," the Post reports. Wake-Up Wal-Mart, a union-backed group, said the changes will force many Wal-Mart employees to seek public health coverage. Paul Blank, campaign director for the group, said, "Wal-Mart is cruelly hurting its employees, cutting health care options and shifting costs on to the American taxpayer." Paul Fronstin, director of health research and education at the Employee Benefit Research Institute, said the changes appear to be "pretty standard." Fronstin said, "There is always shifting going on, and it tends to be modest at best" (Washington Post, 9/27).

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Wal-Mart to Trim Options for Health Coverage

By Kris Hudson
Wall Street Journal
September 29, 2006                         [back to top]

Wal-Mart Stores Inc. next year will curtail options it offers newly hired workers for health-care coverage, promoting a low-premium, high-deductible plan. The retailer anticipates its "Value Plan" will let employees with few health-care needs save money through low premiums. Critics, however, argue the shift allows Wal-Mart to cut its costs for health-care benefits and discourage unhealthy people from seeking work at its stores.

Wal-Mart introduced the Value Plan early this year. It allows employees to pay premiums as low as $11 a month in some areas in exchange for a relatively high deductible of $1,000. It also allows a given employee three visits to the doctor and three prescriptions for generic drugs a year before the deductible kicks in. It imposes no lifetime cap on coverage.

On Jan. 1, the Value Plan will become the primary of three options available for Wal-Mart's new hires. Another is a health-savings-account plan that gives employees a tax-free option to set aside part of their own pay with supplements from Wal-Mart of as much as $2,400 a year for use in paying medical expenses. In 16 states, Wal-Mart also provides coverage through health-maintenance organizations.

Employees hired this year and earlier can continue to get their coverage from the retailer's standard plans. Those plans require higher premiums than the Value Plan, but they offer much lower deductibles. However, Wal-Mart will increase premiums on those plans next year by an average of 8%. That compares with an average increase of 7.7% in premiums for U.S. employer-sponsored plans in the past year, according to the Henry J. Kaiser Family Foundation.

In the U.S., Wal-Mart employs more than 1.3 million store-level workers, of which roughly 46% are enrolled in its health-care plans. The Bentonville, Ark., company has been dogged for years by critics' allegations that it provides inadequate health-care benefits.

Documents outlining the impending health-benefit changes were obtained and distributed to the media by anti-Wal-Mart group WakeUpWalMart.com. The group pointed out additional price increases in Wal-Mart's health-care coverage for next year: In addition to the Value Plan's $1,000 deductible, the new plan establishes separate deductibles of $1,000 for inpatient hospital stays, $500 for each outpatient surgical visit and $300 for pharmacy purchases.

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Wal-Mart counters critics with voter registration

Reuters
Fri Sep 29, 2006                    [back to top]

WEST DES MOINES, Iowa, Sept 29 (Reuters) - Long criticized by union groups and some U.S. Democrats for not providing employees with adequate pay or benefits, Wal-Mart on Friday gave workers something else: voter registration cards.

The retailing giant kicked off a voter registration drive in Iowa -- the state which hosts the first contest in the presidential campaign -- and said it would give election information to all of its 1.3 million employees before the Nov. 7 midterm vote.

About 30 Wal-Mart employees, most clad in bright blue vests with the phrase "How may I help you?" printed in white on their backs, were given registration forms after being led in morning cheers at the West Des Moines Wal-Mart.

"It doesn't really cross my mind to go register to vote," said 23-year-old Mike Leng, one of the Wal-Mart employees who received the registration kit. "(This is) an opportunity to voice my opinion."

While the retailer said it would not push employees to support a particular party, Wal-Mart media relations director David Tovar said some employees had been upset by a union-led campaign against the company and wanted to counter the attacks.

A bus trip drawing support from scores of big-name Democrats crisscrossed America this summer claiming Wal-Mart, the country's biggest private-sector employer, provides inadequate wages and health-care coverage while shipping new jobs overseas.

It was launched by the UFCW grocery workers union, which ended efforts to unionize the company last year.

Tovar said he believed Wal-Mart workers upset with the campaign could affect the result in key states at the midterm election, when control of Congress is at stake.

"In certain states where we have a lot of associates -- which is a lot of states -- we think Wal-Mart associates who are very passionate about the company can make a difference in some of these elections," Tovar said in an interview.

Some of the closest races of the midterm election are in Florida, where Wal-Mart has 100,000 employees, Ohio, where it has 50,000 and Pennsylvania, where it has 47,000 workers.

Still, Wal-Mart workers who received voter registration kits in West Des Moines were not universally enthusiastic about the prospect of casting a ballot in November.

Armin Auskic, 33, who fled war-ravaged Bosnia seven years ago and became a U.S. citizen in April 2005, has never voted.

"I don't like politics," he said.

© Reuters 2006. All rights reserved.

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Wal-Mart in drive to persuade its 1.3m workers to vote

By Jonathan Birchall
Financial Times
Sept 29, 2006                                  [back to top]

Wal-Mart, the largest US retailer, on Friday launched a drive to encourage its 1.3m employees to register to vote, in the biggest operation of its kind ever by a US private employer.

The company has begun distributing voter registration packages – including postage-paid application forms – to more than 17,000 employees at its stores and warehouses in Iowa, with other states due to follow.

The company has framed the initiative as a public service effort, with Lee Scott, chief executive, saying on Friday Wal-Mart was "eager to see our associates take a more dynamic role in the electoral process".

But the registration drive also highlights Wal-Mart's increasing engagement in politics, at a time when its employment policies have been publicly criticised by some leading Democrats, including several potential candidates for the party's presidential nomination.

In August, Wal-Mart distributed a letter to its employees in Iowa and three other states, highlighting what it said were inaccuracies in criticism by Governor Tom Vilsack, as well as Senators Evan Bayh of Indiana and Joseph Biden of Delaware and New Mexico's governor Bill Richardson.

The letter encouraged employees to talk to "friends, neighbours and family about the good that Wal-Mart does". It also promised that the company would "keep you informed about what these political candidates are saying about your company while on the campaign trail".

Wal-Mart has also highlighted the significant number of its employees in both swing states.

In Ohio its 50,000 workers represent roughly 1 per cent of voters in the 2004 presidential election – enough to be a factor in the current Senate battle between Sherrod Brown – a Wal-Mart critic – and Mike DeWine, the Republican incumbent. Wal-Mart's political action committee is also one of the largest corporate donors to Mr DeWine's campaign.

Wal-Mart is the largest single corporate donor to the this year's congressional campaigns, having given $1.9m (€1.5m, £1.3m), with roughly two-thirds going to Republican candidates, according to the Center for Responsive Politics.

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Wal-Mart tracks shoppers and sales

by Will Hadfield
ComputerWeekly.com
Friday 29 September 2006                [back to top]

Wal-Mart is looking to deploy an IT system that tracks shoppers' progress around its stores and compares their movements to actual sales.

The world’s largest retailer could use the system to calculate “audience ratings” for the products on its shelves. Armed with this data, store planners would be able to assess the effectiveness of in-store promotions.

Wal-Mart hopes that the system will enable it to attract more advertising money to its in-store promotions. The system,called Prism, was developed by a consortium made up of retailers and large suppliers.

Infra-red beams are used to track shoppers’ movements around the store. Prism then correlates shoppers’ movements with actual sales data.

The Prism consortium is made up of Coca-cola, Kelloggs, Kroger, Procter & Gamble, Walgreens and Walt Disney.

It has undertaken a month-long pilot study in 10 US stores, and plans to attract more retailers and suppliers to the consortium.

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Wal-Mart flexes DVD muscle over iTunes profits

A slice of Apple's pie

By MICHAEL LEARMONTH
Thurs., Sep. 28, 2006                        [back to top]

Apple and Wal-Mart are in discussions over an alliance that could allow the giant retailer to profit from iTunes video downloads, which have been a source of great tension between Hollywood and the retailer in recent months. A deal could take the form of a digital download "coupon" that would allow consumers to buy movies, TV shows or music on iTunes with Apple paying the retail giant a percentage of the proceeds, one industry insider said.

What's in it for Apple? Since studios (except for Disney, of course) have so far turned a cold shoulder to iTunes because of Wal-Mart's demands, the computer giant would then gain access to titles from every major.

Wal-Mart is one of the nation's biggest sellers of iPods.

Apple does sell gift cards through some other retailers such as Best Buy, Target and Amazon.com, but not at Wal-Mart.

Talks are in early stages and may not result in any deal.

But they do appear to mark a thawing of relations between allies Disney and Apple, which struck a download deal in August, and Wal-Mart.

The giant retailer warned Hollywood over the summer that it expects to be a major player in the evolution of the digital marketplace, and that studios mustn't undercut the price of DVDs in its stores with product sold on iTunes.

Wal-Mart didn't return calls and Apple declined to comment.

Disney so far is the sole studio in a deal with Apple, allowing Steve Jobs' company to buy new movie releases for about $3 less than the wholesale price charged to Wal-Mart.

Others studios balked, fearing to alienate their biggest customer.

Subsequently, Apple CEO Steve Jobs, who is also a board member and major shareholder of Disney, is said to have personally reached out to Wal-Mart CEO H. Lee Scott, who badly wants to get into the digital film biz.

Hollywood has been closely watching Disney's relationship with Wal-Mart in the wake of the deal. When Wal-Mart caught wind of talks between the studios and Apple, it threatened to cut its order of "High School Musical" over the summer.

Disney CEO Bob Iger did the deal with Jobs anyway, and the rest of Hollywood has been watching to see if and when the other shoe drops.

So far, to the surprise of many, it hasn't.

Instead of cutting orders and slashing shelf space, Wal-Mart has apparently ordered a healthy 49,000 copies of Pixar's "Cars." It will sell "Pirates of the Caribbean: Dead Man's Chest" for $12.99, meaning it will take a hefty loss on each DVD to drive foot traffic in stores.

Studio sources say the rest of the majors are very close to joining Disney in a deal with Apple but are holding off until the end of the key fourth quarter, when half of all DVD sales occur.

An alliance between Apple and Wal-Mart would demonstrate how all elements of the entertainment food chain are struggling to get ahead of the curve.

Studios are trying to calculate how much longer DVD sales -- 40% of which go through Wal-Mart -- will be a cornerstone of their business. So, too, is Wal-Mart.

The retailer is furthermore trying to figure out how to translate its enormous foot traffic into the digital biz that entertainment is becoming.

Tensions peaked over the summer as Wal-Mart movies and music veep David Porter paid a call to the studios as they talked with Apple's iTunes.

As late as July, three other studios were planning to join Disney in inking an iTunes pact that would allow the Apple service to buy new releases for $14.50 vs. the $17 the studios typically charge Wal-Mart for a new release.

Jobs, who personally made the sales pitch to the studios, insisted on passing a lower price on to consumers since the cost of producing and shipping a DVD was taken out of the equation.

Wal-Mart also made it clear to the studios that if they did a deal with iTunes, it expected the same terms for its own download business, which is under development.

"Porter came in and said if you're going to play this game, we want the same terms as iTunes," said a source who attended one of the meetings.

Wal-Mart's demand was enough to shatter a planned alliance among Fox, Universal and Lionsgate to join Disney in supplying films to iTunes.

Fox, which manages the DVD category for Wal-Mart, had a verbal agreement with Apple requiring that it be joined by two others.

U pulled out of the deal first, with the other non-Disney studios following suit.

Paramount balked at the idea of doing an iTunes deal early on, in large part because of DreamWorks Animation chief Jeffrey Katzenberg's close ties to Bentonville and the brewing management chaos at Viacom.

With no back catalog and a stream of kid-oriented pictures, DreamWorks Animation is extremely reliant on Wal-Mart, which accounts for close to 50% of its DVD sales.

Unlike the recording biz, which watched its sales plummet due to downloads, the DVD business is still relatively healthy and remains a predictable source of profit for the studios.

But both the studios and retailers such as Wal-Mart are watching closely for signs of a dropoff; no one wants to be caught flat-footed.

At some point, however, studios know they will have to undergo a transition as the homevid market transforms from the production, sales and marketing of a packaged good --the DVD -- into the sale of a digital product, perhaps in the form of a subscription business.

But studios don't want to hand digital sales over to Apple in the way that the record labels did a few years ago -- a move that took away much of their power to set pricing in the marketplace.

Wal-Mart, meanwhile, has some angst about a falloff in DVD sales as well. Customers who throw a disc in their shopping carts spend an average of $75 per trip to the store -- far more than those who don't pick up a DVD.

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Koç Holding denies reports on sale of Migros to Wal-Mart

turkishdailynews.com
Thursday, September 28, 2006                   [back to top]

ISTANBUL Koç Holding denied Tuesday's media reports claiming that Koç Holding, owner of retail chain Migros, was negotiating with Wal-Mart for the sale of Migros shares.

Media reports on the sale of Migros shares to Wal-Mart were refuted in a Koç Group statement sent to the Istanbul Stock Exchange (IMKB) on Wednesday. “Media reports on plans to sell shares of Migros to Wal-Mart are not true. Consequently, we are not in search of a financial consultant for such an operation,” said the statement.

Referans business daily reported on Tuesday that the Koç Group planned to sell Migros to Wal-Mart. It was reported that Wal-Mart and Koç had negotiated over the sale of Migros about one-and-a-half years ago, when Wal-Mart representatives had indicated they would be ready to buy Migros if the retail chain expanded further.

Now that Migros has purchased and incorporated another retail chain, Tansaş, last year, Migros' sale turnover in the first six months this year reached YTL 2 billion. The current market value of Migros is estimated to be around $1.5 billion.

© 2005 Dogan Daily News Inc.

Wal-Mart finds more violations at foreign plants

The Associated Press
September 28, 2006                [back to top]

Wal-Mart Stores has reported finding a higher rate of severe violations at foreign factories last year as it stepped up inspections for labor and environmental standards in more than 60 countries where it buys clothes, toys, shoes and other products.

"In 2005, we audited more factories than any other company in the world, performing more than 13,600 initial and follow-up audits of 7,200 supplier factories," the report said.

Twenty-three factories were cut off from Wal-Mart's business for repeated violations, a sharp decline from 1,200 in 2004. But Wal-Mart partly attributed the decrease to changes in its auditing rules and said that it expected the number to increase again this year. The findings are in the company's "2005 Report on Ethical Sourcing," which Wal- Mart posted on its Web site last week, said a spokeswoman, Beth Keck.

Union-backed critics said the results showed that Wal-Mart's pledges to use inspections to improve conditions at foreign factories in Asia, Central America and elsewhere were ringing hollow.

"Wal-Mart is ignoring the crux of the problem, which is that they are paying their suppliers too little to meet even minimal standards," said Nu Wexler, a spokesman for Wal-Mart Watch.

Inspectors found moderate to severe violations at 89 percent of factories, up from 79 percent in 2004. Wexler said that finding was an indictment of Wal- Mart's ethics program.

The report said that 80 percent of inspections were announced in advance. Wal-Mart said the worsened showing was due to more vigorous inspections, including more surprise visits, and stricter standards.

Wal-Mart says it uses the findings to encourage factory owners to improve conditions. If violations are found, inspectors give a list to the owners and return for an another audit.

Repeated violations, as well as grave problems like using underage or prison labor, can lead to being barred from selling to Wal-Mart for up to one year.

Wal-Mart is also the target of a U.S. lawsuit seeking class-action status for factory workers in Bangladesh, China, Indonesia, Nicaragua and Swaziland.

In 2005, Wal-Mart's inspectors reported "high-risk" violations at 52 percent of those factories, compared with 36 percent in 2004.

Medium-risk violations were reported at 37 percent of plants, down from 43 percent the year before. Only 10 percent of factories were found to have no violations or only minor ones, compared with 21 percent in 2004.

"Several consistently found serious violations at the factory level include problems with payment of overtime compensation, coaching of workers for worker interviews, and the use of double-books to hide the true numbers of hours worked or wages/benefits paid," the report said.

Wal-Mart said that it gave companies a chance by wiping their pre-2005 records clean.

Wal-Mart Stores has reported finding a higher rate of severe violations at foreign factories last year as it stepped up inspections for labor and environmental standards in more than 60 countries where it buys clothes, toys, shoes and other products.

"In 2005, we audited more factories than any other company in the world, performing more than 13,600 initial and follow-up audits of 7,200 supplier factories," the report said.

Twenty-three factories were cut off from Wal-Mart's business for repeated violations, a sharp decline from 1,200 in 2004. But Wal-Mart partly attributed the decrease to changes in its auditing rules and said that it expected the number to increase again this year. The findings are in the company's "2005 Report on Ethical Sourcing," which Wal- Mart posted on its Web site last week, said a spokeswoman, Beth Keck.

Union-backed critics said the results showed that Wal-Mart's pledges to use inspections to improve conditions at foreign factories in Asia, Central America and elsewhere were ringing hollow.

"Wal-Mart is ignoring the crux of the problem, which is that they are paying their suppliers too little to meet even minimal standards," said Nu Wexler, a spokesman for Wal-Mart Watch.

Inspectors found moderate to severe violations at 89 percent of factories, up from 79 percent in 2004. Wexler said that finding was an indictment of Wal- Mart's ethics program.

The report said that 80 percent of inspections were announced in advance. Wal-Mart said the worsened showing was due to more vigorous inspections, including more surprise visits, and stricter standards.

Wal-Mart says it uses the findings to encourage factory owners to improve conditions. If violations are found, inspectors give a list to the owners and return for an another audit.

Repeated violations, as well as grave problems like using underage or prison labor, can lead to being barred from selling to Wal-Mart for up to one year.

Wal-Mart is also the target of a U.S. lawsuit seeking class-action status for factory workers in Bangladesh, China, Indonesia, Nicaragua and Swaziland.

In 2005, Wal-Mart's inspectors reported "high-risk" violations at 52 percent of those factories, compared with 36 percent in 2004.

Medium-risk violations were reported at 37 percent of plants, down from 43 percent the year before. Only 10 percent of factories were found to have no violations or only minor ones, compared with 21 percent in 2004.

"Several consistently found serious violations at the factory level include problems with payment of overtime compensation, coaching of workers for worker interviews, and the use of double-books to hide the true numbers of hours worked or wages/benefits paid," the report said.

Wal-Mart said that it gave companies a chance by wiping their pre-2005 records clean.

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Wal-Mart to install shopper ratings device

By Doug Cameron
Chicago Financial Times
Sept 28, 2006                                [back to top]

Wal-Mart may look at revamping its store lay-outs using a new electronic system to measure customer traffic and generate television-style "audience ratings" for products on its shelves.

The world's largest retailer said the new system, unveiled in Chicago on Wednesday, could also boost operational efficiency and trigger a shift in marketing expenditure among competing media at a time when the industry continues to grapple with the impact of the internet on traditional channels such as television and magazines.

"I do think a lot of marketing resources are up for grabs," said Stephen Quinn, Wal-Mart's senior vice-president marketing, following the launch of the Prism system, developed over the past year by a consortium of retailers and consumer goods manufacturers including Procter & Gamble, Coca-Cola and 3M. Mr Quinn told the FT that the system could trigger "a big change in our business model" by providing information on consumer behaviour, allowing it to redesign stores, alter product displays and improve customer flows.

"There are big gaps in the understanding of what drives [customers] to make their decision," he said. "Prism can be a major determinant of store lay-outs." The system uses infra-red beams to track shoppers' movements and correlate them with actual sales data, producing what its proponents claim is the first scientific metric for the effectiveness of in-store sales tools such as shelf location and promotional displays.

"Without the metric, the importance placed on in-store marketing is low," said Laura Desmond, chief executive for the Americas at Starcom MediaVest, a unit of Publicis, the French marketing and communications group. Ms Desmond declined to predict how in-store marketing spending could grow, but called Prism a "game changing" move to target consumers based on shopping habits rather than demographics.

"This is huge for our industry," added Jim Stengel, global marketing officer at P&G, which is viewed as both the largest and most influential advertiser in the world. Mr Stengel had castigated the advertising industry in a landmark 2004 speech for its lack of innovation, and yesterday des-cribed Prism as the type of advance he was seeking.

"The store is the moment of truth," he said. "We will now be able to measure consumer 'reach' with far better accuracy."

The Prism consortium plans to build on the results of a month-long pilot study in 10 US stores by recruiting more retailers and manufacturers. Peter Hoyt, executive director for the In-Store Marketing Institute, said it has started talks with companies such as Nielsen to roll out a ratings system in the future for products and stores based on the data collected by an expanded system.

Copyright The Financial Times Ltd. All rights reserved.

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Wal-Mart Doesn't Discount Politicians

No rollback here: The No. 1 retailer has ramped up political contributions—especially at state and local levels

By Pallavi Gogoi
BusinessWeek.com
SEPTEMBER 28, 2006                [back to top]

California Governor Arnold Schwarzenegger has legions of close friends, collected over decades as a Hollywood box office draw and rising political star. Yet few may consider him as dear as Wal-Mart Stores (WMT ), which gave the Republican governor $22,300 on May 15, and earlier contributed $200,000 for initiatives Schwarzenegger had supported. In addition, the company has given $300,000 to the state GOP and additional funds to local politicians, making California the biggest recipient of Wal-Mart's political largesse.

California is just one of the places where local politicians are benefiting from Wal-Mart's growing interest in state affairs. Over the past four election cycles, the giant retailer has been steadily boosting its contributions to state and local politicians, just as such politicians have been taking on bigger roles in deciding key issues concerning the company's operations, from the local minimum wage and required health-care benefits to zoning for big-box retailers. Money has gone to everyone from Schwarzenegger and New York gubernatorial candidate Eliot Spitzer to Maryland Governor Robert Ehrlich and Illinois state Senate President Emil Jones Jr.

RAMPING UP. Wal-Mart gave a total of $326,875 in the 2000 election cycle, $431,017 in 2002, and $857,179 in 2004, according to research by The Institute on Money in State Politics, a nonpartisan, nonprofit research organization based in Helena, Mont. For the 2006 election cycle, the company has given $644,655 so far and seems to be on track to hit a record for political contributions.

"They've gone from zero to warp speed in political giving all across the board," says Bruce Freed, co-director of the Center for Political Accountability, a nonprofit group that tracks corporate political spending. The totals include only direct contributions to politicians and political parties. Adding in money for ballot initiatives and other local issues brings the total of Wal-Mart state giving so far this cycle to $1.25 million.

Wal-Mart says it's become necessary to step up its contributions. For two decades it largely shunned politics because company founder Sam Walton didn't believe such activities benefited his customers. In fact, Wal-Mart didn't hire any lobbyists or establish any political action committees until 1998.

NO LONGER ON SIDELINES. But that reticence, the company now says, has allowed critics to launch unilateral attacks and set the agenda on a number of issues. "For years we didn't participate—to our detriment," says company spokesman John Simley. "Now we're participating in the same political process as any citizen, in this case a corporate citizen."

Simley says contributions are now a carefully considered component of Wal-Mart's business strategy. "The process that we use to choose to whom we contribute has to do with the voting record and position of each official," he says. "We look at their records on anything that's relevant to our business, like trade, taxes, legislation related to pharmacy and grocery, and we also consider the magnitude of our presence in the districts they represent."

Today, Wal-Mart has become one of the most active corporations in the U.S. At the federal level, Wal-Mart is already the No. 1 corporate political contributor, giving $943,455 in the 2006 election cycle, followed by General Electric's (GE ) $788,711 and Anheuser Busch's (BUD ) $671,644, according to the Center for Responsive Politics, another nonpartisan watchdog.

BATTLEGROUND STATES—FOR WAL-MART. As for the states, Wal-Mart has become one of the most active givers, though it still ranks well behind telecom companies such as AT&T (T ) and tobacco companies like R.J. Reynolds (RAI ).

Wal-Mart's contributions vary greatly by state, in part because the rules governing such donations are widely divergent. Twenty-one states prohibit corporate contributions altogether, and two dozen other states impose limits. For example, a corporation can give a maximum of $22,300 to a gubernatorial candidate in California, while New York limits corporate contributions to $5,000 per year. Five states—Illinois, New Mexico, Oregon, Utah, and Virginia—have no giving limits.

The states have become an increasingly crucial battleground for Wal-Mart, as the federal government has declined to get involved in initiatives to boost the minimum wage or mandate higher health-care benefits. Politicians in at least 20 states have sponsored pieces of legislation (many of them dubbed "Wal-Mart bills") that aim to force the Bentonville (Ark.)-based company to pay higher wages and offer workers more generous health benefits. Many cities—from Belfast, Me., and Bennington, Vt., to Ashland, Ore., and Bozeman, Mont.—have passed ordinances banning large stores like Wal-Mart's behemoth supercenters, and others have enacted ordinances to force Wal-Mart to pay higher wages.

GOLDEN STATE FOCUS. As state and local politicians consider legislation on everything from pay and health packages to expansion plans, the financial implications for Wal-Mart can be huge. When Maryland passed a law that would have required the company to boost health-care coverage for its workers in the state, the costs would have run into the millions. In July, a federal judge overturned the law (see BusinessWeek.com, 7/19/06, "Rollback Ruling Favors Wal-Mart").

In New York, Spitzer broke with top Democratic lawmakers and several powerful unions over similar legislation. Three months after receiving a Wal-Mart contribution, he came out against a measure that would tax businesses such as Wal-Mart that don't provide health benefits to all employees. A Spitzer campaign spokeswoman said the retailer's contribution had no bearing in his decision, but rather "the bill was about complex issues that would be better addressed through comprehensive health-care reform."

California may be the most contentious state for Wal-Mart. Many locals oppose the retailer, for a variety of reasons. And several towns and districts such as Oakland, Antioch, Inglewood, and Turlock have passed rules that don't allow Wal-Mart's supercenter stores, which typically are 100,000 square feet or greater in size and include a grocery, pharmacy, salon, and bank all under one roof. Wal-Mart is trying to make up lost ground and has an aggressive goal to expand its number of California supercenters, from just seven at the beginning of 2006 to 40 by next year. The company gave the state Republican Party $300,000 in the first six months of 2006, according to data from California Secretary of State Bruce McPherson.

LOCK-IN LOCATIONS. Governor Schwarzenegger has been a huge beneficiary. This year's $22,300 contribution came on top of last year's $100,000 to Citizens to Save California, a committee created by Schwarzenegger's business supporters. And Wal-Mart contributed another $100,000 to Proposition 77, a redistricting attempt that was the governor's pet measure, which was defeated. In the past two years, Schwarzenegger has vetoed bills that Wal-Mart opposed. Schwarzenegger campaign press secretary Julie Soderlund denies any link with the company's donations and says the governor "always makes decisions based upon what's best for the people of California."

One of the California bills the governor vetoed would have prohibited employers from locking workers into stores while they work. The other bill would've forced the disclosure of corporations that have employees who rely on taxpayer-funded health care. The bills arose out of a huge furor over Wal-Mart's practice of locking in janitors in some of its stores at night and information that many Wal-Mart employees and their children were receiving state-funded health care. Wal-Mart says it opposed the latter bill because it had several flaws, one of which was that it didn't require data from public sector employees.

Wal-Mart still locks in employees at night despite incidents reported in Texas and Colorado where medical attention for injured or sick employees was delayed due to the policy. Says spokesman Simley: "It is only in some locations that we lock in associates at night and it is done for the protection of the associates, the safety of the store, and to guard against internal theft that may occur, and managers who have the key will let them out in case of an emergency."

NEW CHALLENGES. Today, Schwarzenegger has at least two more bills sitting on his desk that are targeted at Wal-Mart. One of the bills would require big-box retailers to conduct an economic impact report before opening large stores. Another would force large retailers to pay the legal fees of communities that win cases challenging zoning ordinances in court. Wal-Mart has sued towns with such ordinances in the past—Fresno and Turlock have won their cases and other towns have lost. But the huge legal bills that piled up during the court fights have scared other municipalities.

"The question now is: Will the governor succumb to the financial influence that Wal-Mart and the Walton family are trying to exert over his administration with their multimillion-dollar donations, and neglect a cry for help from small cities, small businesses, and workers?" asks California state Senator Richard Alarcon, who authored the latest bills.

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

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Wal-Mart to curtail staff health care options

Reuters                           [back to top]

NEW YORK, Sept 28 (Reuters) - Wal-Mart Stores Inc. <WMT.N> will next year curtail the options that it offers newly hired workers for health-care coverage, promoting a low-premium, high-deductible plan, The Wall Street Journal reported on Thursday.

Wal-Mart anticipates its "Value Plan" will let employees with few health-care needs save money through low premiums, the Journal said.

Critics, however, argue the change allows Wal-Mart to cut its costs for health-care benefits and discourage unhealthy people from seeking jobs at its stores, the newspaper said.

Wal-Mart could not immediately be contacted for comment.

© Reuters 2006. All rights reserved.

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Walmart Threatens Movie Studios

by Janet Meyer
Sep 27, 2006                        [back to top]

On September 6, James Stoup wrote about what he called the gathering storm between Wal-Mart and Apple. In it he suggested that Wal-Mart would open it’s own online movie store. He asked what other choice the retail giant has.

This week Wal-Mart decided they do have another choice.

According to the New York Post, the Disney studio offers Apple a better deal than it does to Wal-Mart. Other studios have expressed an interest in coming aboard. They have seen the success of iTunes and want a piece of the download pie.

Wal-Mart doesn’t want to risk losing its DVD business to Apple. They have threatened retaliation. According to an unnamed source in the article, Wal-Mart plans to use it’s massive buying power to keep the studios in line. In other words, they have told retailers that if they follow Disney’s lead, they will notice a drop in orders from Wal-Mart.

Somehow I find that ironic. For years Wal-Mart has used its ability to purchase items cheaper than anybody else to undercut the competition. Now that another company is doing it to them, they don’t like it at all.

Do you think Wal-Mart’s threat will have any impact on whether or not Hollywood joins iTunes? I’m not so sure that Wal-Mart will really be hurt by the ability to download movies. A lot of customers would prefer to purchase a hard copy instead of loading it their iPods. There is also a certain amount of impulse buying when people shop at Wal-Mart.

Wal-Marts threat to purchase fewer movies from the studios does, however, have potential to hurt them. The risk is that customers will turn to iTunes to find the movies they can’t get at the retail store. Posts on several internet forums suggest that many users don’t want to download and watch a movie on the small screen. Yet buyers will go where it is easy to get the product. If they can’t get the DVD they want while shopping at Wal-Mart, they may just develop the habit of going to iTunes for it.

If I were a retailer I wouldn’t even consider trying to make a deal with Apple just yet. I’d wait until after the Christmas season, and during this time I’d be watching Disney closely. After Disney’s deal with iTunes, Wal-Mart sent several cases of DVDs back to them. I’d wait to see if any of this seemed to hurt the company.

Wal-Mart’s threats are an interesting strategy. Wal-Mart is afraid that iTunes will cut into their sales, so they packed up Disney’s DVDs and sent them back to the company. This gives them fewer DVDs to sell, thereby cutting into their sales.

How about you? Do you think movie studios will listen to Wal-Mart, or will they get enough business from iTunes to risk losing their largest customer?

I’m guessing that with time things will cool down. Just like with music, you’ll eventually be able to purchase DVDs from both. Maybe Wal-Mart will even be able to negotiate a better deal with the movie studios. This could only benefit consumers.

I don’t have any plans to download movies for the same reason I’ve never bought those tiny televisions that were being sold everywhere at one time. I like a larger screen to watch movies on. If I can’t find what I want at Wal-Mart, I’ll stop looking there and go somewhere else.

Do you think this is a smart move by Wal-Mart? Does iTunes really pose a threat?

Maybe movie studios don’t want to lose this chain as a customer, but obviously Wal-Mart feels they need the DVDs, too. It might be smarter to try to find a way to work together

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Wal-Mart threatens farmers, report says

By Tom Daykin
Milwaukee Journal Sentinel
September 27, 2006                           [back to top]

Plans by Wal-Mart Stores Inc. to increase its offerings of organic foods could create a competitive threat to smaller organic farms and food producers, according to a briefing paper released Wednesday by a Wisconsin-based group. Wal-Mart already is buying milk and other organic products from large-scale dairies and other large, conventional food producers that have little experience with organic production, creating what the Cornucopia Institute calls "corporate organics." The non-profit group is an advocate for what it calls "family-scale farms."

"This competitive challenge has the potential to destroy healthy markets for other retailers, distributors, manufacturers/processors, and family-scale domestic farmers," the paper says.

Wal-Mart, which is Wisconsin's largest private employer, is the world's largest retailer, with annual sales of $312 billion. Its continued development of Supercenters - combined discount stores and supermarkets - has made it the nation's largest supermarket chain. Wal-Mart operates dozens of supercenters throughout Wisconsin, and last week disclosed plans for its first Milwaukee Supercenter.

Wisconsin has a large presence in organic farming, including the Cooperative Regions of Organic Producer Pools, headquartered in La Farge. The co-op, which sells milk, cheese, meat and other products under the Organic Valley brand, represents more than 800 farmers in 24 states, and in 2005 posted sales of $245 million.

The Cornucopia Institute, in its briefing paper, says Wal-Mart is already the nation's largest retailer of organic milk through its relationship with Dean Foods Co., which owns Horizon organic milk. The paper says Wal-Mart's business strategy of buying large amounts of products at low prices from conventional food producers like Dean will shut out small- and medium-sized organic food producers "who cannot compete on price with these industrial behemoths."

The group also questions whether large-scale conventional food producers such as Dean truly reflect what the paper calls the "organic movement." It said Dean and another Wal-Mart organic milk supplier, Aurora Organic Dairy, have confined their cattle in feedlots with little access to pasture, as required by federal organic standards.

Wal-Mart responds

In a statement, Wal-Mart spokeswoman Karen Burk said the company believes organic standards must not be compromised.

But the statement did not address the specific allegations made against Dean and Aurora, which are being investigated by the U.S. Department of Agriculture.

"We believe that both organic and conventional agriculture provide safe, healthy and sustainable products for customers," Wal-Mart's statement says. "It is up to our customers to choose which type of product they want to buy, and we want to give them the choice."

That freedom to choose will determine whether Wal-Mart's organic strategy will succeed, said Mark Kastel, Cornucopia Institute co-founder.

That's why the group is publicizing what it considers Wal-Mart's practice of "cutting corners" when it buys organic products from companies like Dean and Aurora, Kastel said.

Armed with that information, Kastel said, consumers can better "partner with companies that share their values."

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USA Today Editorial Addresses IOM Report, Wal-Mart, Medicare Prescription Drug Benefit

Opinion
Kaiser Daily Health Policy Report
Wednesday, September 27, 2006                  [back to top]

A USA Today editorial on Wednesday addresses FDA, Wal-Mart and the doughnut hole in the Medicare prescription drug benefit. Summaries of comments appear below.

FDA: According to USA Today, a "troubling" recent Institute of Medicine report finds that FDA "remains plagued by bureaucratic infighting, poor management and a dangerous passivity in evaluating drug safety." FDA maintains that approved drugs are "safe and effective," but the side effects of some medications are not "known until years later, when millions use them and adverse effects show up," the editorial states. "Rather than aggressively monitoring these problems, FDA waits for reports from doctors to trickle in," according to the editorial. FDA says Congress needs to increase funding and authority for the agency so it can require drug makers to conduct follow-up safety studies, but "[h]ow many more reports will collect dust on a shelf before FDA and Congress act?" the editorial asks.

Wal-Mart: "Unlike FDA," the editorial states, "Wal-Mart ... moves quickly to confound its critics and meet needs of customers." Wal-Mart has announced that next year it plans to offer 150 generic drugs at $4 for a 30-day supply in its pharmacies nationwide. According to the editorial, "Wal-Mart isn't being charitable. Even at $4, it expects to make money on generics and hopes to attract customers to buy other products." The editorial notes that the company's "size gives it the clout to create big changes in the marketplace," adding, "Stiff competition, coupled with tough negotiations with vendors to squeeze costs out of the system, are the best ways to hold down the cost of prescription drugs."

Doughnut hole: "Six weeks from the congressional elections, some Democrats are trying to make political hay of the fact that" more than three million U.S. residents could reach a gap in Medicare coverage known as the doughnut hole, the editorial states. Some Democrats have proposed "revamping" the Medicare program to fill the coverage gap, which "would be about as wise as eating a dozen Krispy Kremes," according to the editorial. Eliminating the coverage gap "could add hundreds of billions of dollars over 10 years to the program's already unaffordable costs," the editorial states, concluding, "Plans to fill the doughnut hole might sound tasty on the campaign trail but would worsen the nation's fiscal indigestion" (USA Today, 9/27).

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Wal-Mart to Shrink Options For New Hires' Health Care

By Ylan Q. Mui
and Amy Joyce
Washington Post
September 27, 2006                     [back to top]

Wal-Mart Stores Inc. is scaling back the health-care plans available to new employees, sparking fresh criticism over whether the giant retailer is providing adequate coverage to its workers. As of Jan. 1, the company will offer new hires only two health benefits packages in which the monthly premium can be as low as $11 but the deductible can reach $6,000, according to documents provided to The Washington Post by Wake-Up Wal-Mart, a union-backed group.

The company's two other benefit plans, which have lower deductibles, will no longer be offered to new employees. However, the plans will remain available to current employees who choose to renew their coverage.

Wal-Mart spokesman Dan Fogleman said yesterday that he expected the change to save most employees money. He said a review of the company's health-benefits plans showed most had opted for a package with a monthly premiums between $70 and $100, and a $350 deductible, but that more than half never paid that much.

That drove the decision to require new hires to sign up for Wal-Mart's new plans that have lower monthly payments but higher deductibles. The option known as the "value plan" starts at $11 per month for employee coverage in some markets and has a $1,000 deductible. The "freedom plan" starts at about $17 per month for employee coverage but has a deductible of $3,000 and the option to create a health savings account. The cheapest monthly cost for an employee and his or her spouse is $38 with a deductible of $6,000.

"We've done the math on this, and we have a pretty good understanding of what this is going to mean," Fogleman said. "Most associates are going to come out better on this."

Wake-Up Wal-Mart disagrees. It has accused the company of depressing wages and benefits, forcing many of its workers to seek public health care.

"Wal-Mart is cruelly hurting its employees, cutting health-care options and shifting costs on to the American taxpayer," said Paul Blank, campaign director for Wake-Up Wal-Mart.

Paul Fronstin, director of health research and education at the Employee Benefit Research Institute, said the new Wal-Mart changes look "pretty standard." But he noted that a biweekly increase in a surcharge from $50 to $75 for spouses who have access to other medical coverage seemed high.

"There is always shifting going on, and it tends to be modest at best. It might be that way here as well," he said.

Fogleman said that about 615,000 employees are covered by the company, about 47 percent of its workforce, and Wal-Mart is working to expand that number.

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Wal-Mart to change health plans

Associated Press
Wednesday, September 27, 2006                 [back to top]

Wal-Mart Stores Inc. will stop offering traditional low-deductible health plans for new hires next year in favor of low-premium plans with higher deductibles.

Union-backed Wal-Mart critics, who made the change public Tuesday based on internal company documents, claimed America's largest private employer was pushing the rising costs of health care onto its workers.

Wal-Mart confirmed that it will drop traditional plans for new hires from January 1.

Those plans offer annual deductibles as low as $350 for a yearly premium of $1,043 for single person coverage.

New account

One of the new plans also includes a health savings account, which allows an employee to put money aside tax-free in a special account reserved for health costs.

Wal-Mart's current employees will still have the option of coverage under the traditional plans, according to the company benefits guide for 2007.

Only seven per cent of companies that provide health coverage currently offer high-deductible plans with a savings option, according to an annual survey released Tuesday by the Kaiser Family Foundation, a health care research organization.

WakeUpWalMart.com said the change meant the retailer was providing worse health coverage because it would be more expensive.

Wal-Mart spokesman Dan Fogleman said the change was aimed at helping employees, which it calls associates, after internal surveys showed that half of all workers with company insurance used up less than their full deductible last year. (AP)

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Pro-Family Groups Blast Wal-Mart's Latest Pro-Homosexual Promotion

By Mary Rettig
and Jenni Parker
AgapePress
September 27, 2006                       [back to top]

(AgapePress) - Prominent pro-family groups say Wal-Mart is once again giving its full endorsement to the homosexual agenda. A recent Boise State University press release reveals that Wal-Mart and "the Pleasure Boutique" are two of the co-sponsors of this year's Lesbian, Gay, Bisexual, and Transgender Diversity Week at BSU October 9-13.

The Pleasure Boutique is a company that openly boasts of having the "largest adult toy section in Idaho," as well as the state's largest selection of adult movies and DVDs. Bryan Fischer, executive director of the Idaho Values Alliance, says it is "just bizarre" that a retailer that has traded on a pro-family image in the past "would join forces with a porn peddler to promote the homosexual agenda."

Faithful Wal-Mart shoppers, Fischer observes, must be wondering what the company's corporate executives are doing to Sam Walton's once family-friendly company. "If companies are known by the company they keep, like people are," he adds, "Wal-Mart has some serious explaining to do."

The Idaho Values Alliance spokesman believes those at the helm of the world's largest retailer are making a costly mistake. "By pandering to two percent of the population, they're running the risk of alienating the millions of families that have made Wal-Mart one of the most successful businesses in history," he comments. "Why Wal-Mart would want to take that kind of a risk is a mystery."

But Don Wildmon, chairman of the American Family Association, says Wal-Mart's sponsorship of LGBT Diversity Week at BSU comes as no surprise after the company's move to join the Gay and Lesbian Chamber of Commerce and its support for other pro-homosexual events. Wildmon says there can be no denying the true intent of the university's "Diversity Week," based on some of the scheduled events.

One of these events, the AFA chairman notes, is the Idaho Votes No Campaign Update. He says Idaho citizens will be voting on a state constitutional amendment in November to ban same-sex marriage, "and this workshop will teach people how to oppose that and how to promote homosexual marriage."

Another event being held during Boise State University's week of LGBT promotions is a lecture called "Heterosexism," Wildmon points out. In this presentation, the pro-family leader says, a heterosexual couple will "help" heterosexuals deal with their supposed bigotry toward homosexuality.

Other LGBT Diversity Week events or lectures being sponsored by Wal-Mart include a "Gay History of Idaho," and discussions of "Hate Based Crimes," "LGBT Youth in Trouble," "Women's/Lesbian Issues," and "Diversity in the Workplace."

© 2006 AgapePress all rights reserved.

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S.Korea's Shinsegae told to sell some Wal-Mart stores

Reuters
Wednesday September 27                 [back to top]

SEOUL (Reuters) - South Korea's anti-trust agency has approved the $882 million sale in May of Wal-Mart Stores Inc.'s 16 outlets in the country to Shinsegae Co. Ltd. , but ordered Shinsegae to sell a quarter of the stores.

The Fair Trade Commission said Shinsegae, South Korea's top discount store operator, must sell four or five Wal-Mart outlets as the acquisition could increase its dominance in some parts of the country and "lead to rising prices and deteriorating service quality ..."

But in a statement, the FTC said that at a nationwide level, "It's hard to see the merger as hampering competition."

Earlier this month, the regulator approved Carrefour's $1.85 billion sale of its 32 Korean outlets to local fashion retailer E-Land Ltd.

After eight years in South Korea, Wal-Mart, the world's largest retailer, won just 4 percent market share, and posted a 2005 net loss of 9.9 billion won ($10.49 million) on sales of 728.7 billion won.

Analysts say the exits of Wal-Mart and Carrefour highlight intense competition among global retail players in Asia and a shift into fast-growing markets such as China and India.

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Pastors behind 400 new Wal-Mart jobs

UPI                                    [back to top]

CHICAGO, September 27 (UPI) — Chicago officials are praising a local alliance of pastors for Wal-Mart Stores Inc.'s decision to create 400 jobs in the city.

The world's biggest discounter opened its first Chicago store Wednesday after a lengthy campaign by a group of ministers.

Emma Mitts, who represents the city's 37th Ward, hailed the Christians' work.

"It's a great day for the residents of the West Side," said Mitts.

"I'd like to take this opportunity to thank the 37th Ward Pastors Alliance and the many members of my community who worked along side me for the last three years to make this day happen. Many have selflessly dedicated their time and expertise from assisting me in winning zoning approval to helping to develop the partnership we have created with Wal-Mart. This partnership has created a true store of the community ... a store that was built by the community ... a store that has given residents of the community employment opportunities ... and a store that will provide new local shopping choices for the community." Wal-Mart received more than 15,000 applications for the 400 jobs at its new store.

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Bharti Set to Name Retail Venture Partner Next Month

By Saikat Chatterjee
Bloomberg                             [back to top]

Sept. 27 (Bloomberg) -- Indian billionaire Sunil Mittal, the nation's sixth-richest man, said he'll select an overseas partner next month for his planned retail venture after reviewing offers from the world's biggest retailers.

Carrefour AS, Tesco Plc and Wal-Mart Stores Inc. are competing to help set up a network of stores with Mittal's Bharti Group, the 49-year-old Mittal told reporters in Ludhiana, in the northern state of Punjab, today. The company will start with groceries and subsequently add other products, including ``lifestyle'' goods, he said.

Tesco, the biggest U.K. food retailer, Wal-Mart, the world's largest retailer, and Carrefour, the world's second- largest, are seeking local partners to enter India's retail industry, which is dominated by small stores. Overseas companies are planning ventures in a nation where organized retailing may exceed $100 billion by 2014, according to March JP Morgan report.

Overseas investment in India's retail industry is limited to single-brand merchants, preventing global chains from taking an equity stake in the Bharti Group's proposed retail unit unless rules are changed. The government is in discussions with Wal-Mart, Carrefour and other retailers to develop a foreign investment policy, Commerce and Industry Minister Kamal Nath said on Sept. 18.

Economic expansion and greater disposable incomes in the hands of the burgeoning middle class in the South Asian nation are making the country an attractive destination for overseas retailers. Consultant McKinsey & Co. estimates there will be 351 million middle-income Indians in 65 million households by 2010, up from 40 million households now.

Growing Economy

Annual growth in India's economy averaged 8.1 percent in the three years ended March 31, making it the second-fastest growing major economy after China. The country's retail industry is expected to more than double to $637 billion in 2015 from the estimated $300 billion this year, according to Technopak Advisors Pvt., a New Delhi-based consulting firm.

The Bharti Group has started supplying fruits and vegetables to Tesco, Britain's largest supermarket owner. Bharti owns half of FieldFresh Foods Pvt., an equal venture with ELRo Holdings India Ltd., an investment company founded by Sir Evelyn de Rothschild, a member of the British banking family of the same name, to export farm produce from India.

Indians undertake as much as 97 percent of their spending at small, independently owned neighborhood shops.

In cities including the capital New Delhi and the financial hub Mumbai, local retailers such as Pantaloon Retail India Ltd., which runs the Big Baazar supermarket chain, and RPG Enterprises' Spencer have set up retail chains.

Tesco has a support center and non-food sourcing operation in the southern Indian city of Bangalore. Wal-Mart said in July that India had permitted it to open a second office to study the local retail market.

Metro AG, Europe's third-largest retailer, has already entered India. The company opened two cash-and-carry locations in India in 2003.

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South Korea's Shinsegae Buys Local Wal-Mart Operations

Asia Pulse
Wednesday September 27                  [back to top]

SEOUL, Sept 27  - South Korea's corporate regulator on Wednesday conditionally approved Shinsegae Co.'s purchase of local Wal-Mart's operations.

The decision by the Fair Trade Commission's (FTC) nine-member committee called for Shinsegae to sell 4-5 stores in four cities including Incheon and Pohang to negate concerns of excessive market concentration.

Shinsegae, which runs both Shinsegae Department Store and E-Mart, the nation's No. 1 discount store, agreed to buy local operations of Wal-Mart Stores Inc. for 825 billion won (US$873.69 million) on May 22.

The 100 per cent purchase of stocks gave it control over all 16 Wal-Mart stores. The South Korean retailer, which has a 30 per cent market share, has 99 discount outlets in the country.

The U.S. retailer, which entered the country in 1998, has been struggling to stay afloat, posting a net loss of 9.9 billion won in 2005. It was the weakest of the country's five major discount chains.

At present, the Korean market is shared by E-Mart, Lotte Mart, Eland and Samsung Tesco Homeplus.

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Breaks at issue in Wal-Mart lawsuit

By Jane M. Von Bergen
Philadelphia Inquirer
September 26, 2006                     [back to top]

The problem was always worse at the holidays, said Delores Killingsworth Barber, 25, of North Philadelphia. That's when she and other Wal-Mart workers say they missed many meal and rest breaks and that's when they'd sometimes have to work off the clock to get shelves restocked before the overnight crew came in.

Workers were told to "do whatever it takes to get it done; and if that meant missing your break, that's what had to be done," Barber testified in a Philadelphia courtroom yesterday. She is one of several former Wal-Mart Stores Inc. employees to take the stand in a class-action lawsuit involving 186,000 current and former employees of Wal-Mart, the state's largest private employer.

The case in Common Pleas Court is the third class-action lawsuit over wage and hour issues to go to trial. In December, California jurors ordered the big-box retailer to pay $172.3 million in compensatory and punitive damages to 115,919 current and former workers at Wal-Mart and Sam's Club stores in California who missed meal breaks. Wal-Mart said it would appeal.

In Oregon, 90 Wal-Mart workers got about $2,000 each, and a case was settled in Colorado for $50 million.

Pennsylvania's case is bigger than California's because it involves more plaintiffs and three issues - off-the-clock work, missed rest breaks, and missed meal breaks. At least 40 similar suits have been filed, according to Bloomberg News.

Wal-Mart has been under attack from unions and activists over its employment policies, health benefits and business practices. The discount retailer has responded by improving its benefits, embarking on public relations campaigns, and donating money to community causes.

Yesterday, Wal-Mart executives, who testified by video, said it was up to store managers to make sure that employees got their breaks.

"If they are getting tired and they don't get their meals and their rest, their productivity comes down," testified Joseph Campbell, Pennsylvania's regional personnel manager in 2004 and 2005.

He said that Wal-Mart had an "open-door" policy for workers' complaints, but he received few about missed breaks. When he did receive them, he said, he investigated them.

Barber, who worked at the Wal-Mart on Roosevelt Boulevard from July 2003 to May 2005, said that when the stores closed, cashiers working the 3 p.m. to midnight shift would "zone" the store, returning carts of discarded merchandise to the shelves.

If they did not finish, they could not leave. Sometimes they would have clocked out, but then were called back to the floors. Sometimes they would fill out forms to get paid. Other times, "you just wanted to get out of the door," she said.

When she worked the overnight shift as a stock clerk, she would have 40 to 50 pallets of merchandise to unload during the holiday season - work she said should have been handled by at least two people.

Sometimes, to make sure she finished, she would take her meal and rest breaks at the end of the shift. The company fired her for that, she said, accusing her of stealing time.

Under questioning by Wal-Mart's attorney, she said that she often got paid overtime. The attorney said that time clock records showed she only missed 24 lunch breaks, but she said she missed more than that.

The case, which opened Sept. 8, is being heard by Common Court Pleas judge Mark I. Bernstein, who handles complex class-action cases.

While most of the attorneys are from out of town and traveling around the nation on these cases, local attorneys are Michael Donovan, of Donovan Searles in Center City, for the employees, and Brian P. Flaherty of Wolf, Block, Schorr & Solis-Cohen for Wal-Mart.

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Stop the Wal-Mart Health Care Crisis

Take Action:                         [back to top]

1: Send a letter to the editor of your local paper

2: Download the report: America Pays, Wal-Mart Saves

3: Tell your friends

4: Support fair share health care

5: Spread the word to Wal-Mart workers: download the Wal-Mart Workers of America cards.

State By State Analysis

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Wal-Mart in Their Sights, States Press for Health Benefits

Maryland Puts a Premium on Employer-Paid Healthcare Work Study On February 23, WakeUpWalMart.com released a shocking new study of Wal-Mart’s health care crisis entitled, "America Pays, Wal-Mart Saves." Among the key findings are: Wal-Mart health care spending actually dropped in the latest public filing with the Internal Revenue Service (from 2003-2004); In 2005, nearly 300,000 Wal-Mart workers and their family members depended on taxpayer-funded public health care at an estimated total cost to American taxpayers of $1.37 billion. In 2005, Wal-Mart failed to provide company health care to 57% of its workforce, leaving over 775,000 Wal-Mart workers and their families without company health care; The Wal-Mart health care crisis will cost taxpayers an estimated $9.1 billion over the next five years; On February 28, WakeUpWalMart.com released additional research, including a state-by-state analysis of the Wal-Mart Health Care Crisis. Below is a listing of the top 5 most affected states.

State 2005 Estimated Total Cost Texas $134,161,466 Florida $80,523,268 Ohio $70,882,417 New York $61,497,167 Pennsylvania $59,721,445

You can download the full updated report today.

The report paints a disturbing picture of the scope and cost America bears because of the Wal-Mart health care crisis. Additional findings include:

Despite Wal-Mart claiming only 5% of its workforce is on public health care assistance, based on the available data, Wal-Mart has an average of 13 percent of its workforce on public health care assistance. The 13 percent figure is 3.25 times higher than the national average of 4 percent for all employers and 2.6 times higher than the 5 percent average Wal-Mart states publicly. In Georgia, for example, nearly 10,000 children of Wal-Mart workers are enrolled in the state PeachCare program - nearly 14 times more than any other employer. Nationwide, it is estimated that 183,382 Wal-Mart workers and 112,768 family members of Wal-Mart workers are forced onto taxpayer-funded public health care assistance. The total number of Wal-Mart workers and family members who experience the Wal-Mart health care crisis is 296,150. For 2005, if Wal-Mart had provided affordable health care to its workers thus ending the Wal-Mart Health Care crisis, Americans would have an extra $1.38 billion in additional funding for national and state health care programs. In terms of actual programs, the $1.38 billion in tax dollars currently going to subsidize Wal-Mart could be used to reinstate proposed funding cuts in the 2007 budget of over $1 billion in health care grants to states. Take Action Today It's time for all of us to stop the Wal-Mart health care crisis.

Americans need to know the truth. Wal-Mart is spending millions of dollars on high-priced lobbyists and public relations specialists to deceive the American public. We are fighting back with the truth.

Join WakeUpWalMart.com's Rapid Response Network and write a letter to your local paper today letting your community know about the new data on Wal-Mart's health care crisis.

We need you to help fight back against Wal-Mart's war rooms and corporate consultants. We need you to be our eyes and ears, and our voice in towns all across America.

You can start by writing a letter to the editor of your local newspaper about the new report. Speak out and help let all of America know why it's wrong for Wal-Mart shift to shift its cost onto taxpayers, and why providing health care to hard-working Americans is a value all employers need to embrace.

Below are a few of the Wal-Mart myths we must fight to expel.

Wal-Mart Myth Reality Wal-Mart offers affordable health care benefits to its associates. In 2005, Wal-Mart failed to provide company health care to 57% of its workforce, leaving over 775,000 Wal-Mart workers and their families without company health care. Wal-Mart provides similar levels of health care coverage to other employers. Only 43% of Wal-Mart workers have company health care, whereas the industry average for Fortune 500 companies is 68%. Wal-Mart offers competitive health care compared to other retailers in the industry. Wal-Mart spends an average of $3,500 per employee for health care, while the average spending per employee in the wholesale/retailing sector is $4,800 - 27% less than the industry standard. Wal-Mart claims its "average full-time hourly wage rises to $10.11 and even higher in urban areas" in 2005. Wal-Mart workers across the country refute this claim. While Wal-Mart managers earn over $103,545 per year, the average Wal-Mart worker continues to earn below the poverty line for a family of four. Wal-Mart offers competitive wages when compared to other retail companies. According to a UC-Berkeley study, Wal-Mart workers earned an average of 31% less than employees of other large retail establishments. Wal-Mart has a positive impact on job creation in communities where it exists. A recent study shows that overall payrolls are reduced by about 5% after Wal-Mart opens in a given labor market. Over the past thirty years - during which time Wal-Mart has become the dominant firm in retail trade - the median wage for this sector has decreased when adjusted for inflation. Wal-Mart values the associates that make the company profitable. CEO Lee Scott makes over 871 times more an hour than the average associate, raking in over $335,000 per week.

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SmartCare Opens in Two Northern Colorado Wal-Mart Stores

PRNewswire
Sept. 26                         [back to top]

GREENWOOD VILLAGE, Colo.,  -- Colorado marks another "first" today when SmartCare Family Medical Centers opens the state's first retail medical centers inside two Wal-Mart Supercenter locations in Northern Colorado, bringing a new concept of consumer-driven healthcare to Coloradoans.

The newest SmartCare Centers are located inside Wal-Mart Supercenters in Greeley, at 920 47th Ave., and in Loveland, at 1325 N. Denver Ave.

"The emergence of retail medical centers is a growing movement across the United States because consumers are ready for a new level of access to healthcare services," said Lawrence W. Hay, chief executive officer of SmartCare. "As SmartCare is a Colorado company, we take great pride in being the first provider to bring consumer-driven healthcare to the state."

SmartCare offers convenient, cost-effective care for basic health services such as flu shots and other immunizations, common ailments such as sore throats, ear infections and seasonal allergies, as well as school and employment physicals and cholesterol screenings. Each SmartCare Center is staffed by Nurse Practitioners and Certified Medical Assistants, with a physician on call at all times.

"At Wal-Mart we know that family health and wellness is a high priority for our customers," said Amee Chande, vice president of health care strategy and communications for Wal-Mart. "Wal-Mart is pleased that SmartCare Family Medical Centers will be in our stores to offer our customers more affordable, convenient healthcare."

In celebration of its grand openings, football great Ed McCaffrey will be on hand to sign free autographs at the Loveland location on Friday, Sept. 29 from 5 - 7 p.m., and at the Greeley location on Sunday, Oct. 1 from 2 - 4 p.m. SmartCare also will offer complimentary bone density analyses, dermascans and body fat analyses, and $10 non-fasting cholesterol screenings through Oct. 31, based on availability.

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Wal-Mart To Open Chicago Store On Wednesday; To Provide 400 Jobs

RTT NEWS
9/26/2006                 [back to top]

Wal-Mart Stores, Inc. (WMT) revealed that it would open the doors of its first store in Chicago on Wednesday, September 27. The company said that it would 400 jobs upon opening. Wal-Mart also said that it would provide $117,500 to various organizations in Austin and across the city, the largest of the donations $55,000 to Lorretto Hospital. We're glad to bring these jobs to the city," said Ed Smith, manager of the Austin Wal-Mart. "The incredible number of applicants really demonstrates that Chicagoans want the competitive wages and benefits Wal-Mart provides."

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Wal-Mart's plan for superstore goes before City Council -

Patrick Hoge,
Chronicle 
Tuesday, September 26, 2006                      [back to top]

Wal-Mart wants to build a giant store on the Vallejo waterfront, but city officials say the proposal would violate an adopted plan for the area while critics want the new proposal turned down at a City Council meeting tonight.

The nation's largest retailer proposes to build a 206,000-square-foot superstore, plus associated shops, at the corner of Redwood Street and Sonoma Boulevard on a 12.45 acre parcel where a Kmart once stood. The land, which Wal-Mart owns, abuts White Slough, a long-neglected body of water bordered by a marsh that connects to the Napa River under Highway 37.

The proposal, unveiled Friday, conflicts with the city's decade-old White Slough Specific Area Plan, which calls for less intense development, clustering of buildings around public spaces that open onto the water, and windows, terraces and entryways that face the water, City Manager John Thompson said in a memo to the council.

City staff, nevertheless, recommends that the seven-member city council vote tonight to commission studies, which Wal-Mart would fund, of the 393,000-square-foot project, nearly half of which would be a first-floor garage. At least two council members already oppose it.

Wal-Mart officials say the superstore -- which would include groceries and replace another Wal-Mart already in Vallejo -- would produce about $600,000 in annual sales tax revenue for the city.

Such promises may be alluring to Vallejo, which faces a $4 million budget shortfall. But Wal-Mart has not won over all communities that it has been targeting with its supercenters, which critics insist would hurt other retailers.

In Hercules, the city council voted in May to use eminent domain to seize a 17-acre parcel that Wal-Mart owns in a waterfront redevelopment area. The Central Valley city of Turlock passed a law in 2004 banning superstores and fought all the way to the California Supreme Court, which in July rejected Wal-Mart's appeal.

Wal-Mart's proposal for Vallejo is updated from an earlier version that featured a 160,000-square-foot store, which city officials rejected because it was in conflict with the specific plan.

"This is an entirely new proposal, and we've taken into consideration quite a bit of the suggestions raised by city staff,'' said Wal-Mart spokesman Kevin Loscotoff.

Changes included turning the store to face the water; putting 173,000 square feet of parking on the first floor to reduce the development's footprint; and adding features such as arched entries intended to make the building more visually interesting.

Opponent Victoria Gray, chair of a group called Vallejoans for Responsible Growth, said the new plan was "a finger in our eye. They are being terribly arrogant and disrespectful of Vallejo. They assume we're poor and stupid and they can push through whatever they want.''

Thompson said it would be "difficult, if not impossible,'' for a big box development to satisfy the White Slough plan's requirements. He and city Development Director Brian Dolan have asked the council to decide tonight whether it is interested in amending the specific plan to allow for a Wal-Mart.

If the council votes to go forward, Wal-Mart would pay a consultant hired by the city to produce detailed analyses, but the city would not be committed to approving the proposed development, Thompson wrote.

A second alternative before the council has been proposed by the city's Planning Commission, which sent a letter June 29 asking for a one-year development moratorium in the area, pending consideration of whether to change the specific plan.

The council, which passed an ordinance last year requiring detailed economic and environmental analyses of big-box proposals, could also reject Wal-Mart's proposal.

That is what Councilman Gary Cloutier and Councilwoman Stephanie Gomes would like to see happen.

"I think it's going to crush our downtown revitalization,'' said Gomes, who refused to meet with Wal-Mart representatives. The city's historic downtown is the focus of a redevelopment plan that is costing the city millions of dollars.

Kiran Sidher, owner of Meadows Video across the street from the proposed Wal-Mart, thinks the increased traffic to her area would be great. "Small businesses should be happy,'' she said.

©2006 San Francisco Chronicle

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Arcadia Expands Relationship with Wal-Mart

Opening Six More Arcadia Home Medical Supply Centers Locations added in Florida, Texas and New Mexico

PRNewswire-FirstCall                       [back to top]

SOUTHFIELD, Mich., Sept. 26 /PRNewswire-FirstCall/ -- Arcadia Resources, Inc. is opening six more Arcadia Home Medical Supply centers inside Wal-Mart stores in Florida, New Mexico and Texas, continuing the expansion of its direct-to-consumer sales channels. The new locations, acquired from Companion Health Services, will join the St. Petersburg, Fla. Wal-Mart location that opened in August.

The stores provide durable medical and respiratory equipment, including sleep apnea equipment, nebulizers, and other in-home health care products, in addition to more than 1,000 patient safety items and mobility devices ranging from wheelchairs, scooters, stairway lifts and walkers, to orthopedic support, bathroom safety items and adjustable beds.

Arcadia is a leading national provider of home care and staffing services, home care products including respiratory and durable medical equipment, and retail operations that include walk-in health clinics, home health care centers, and a home care product catalogue.

Arcadia Chairman and CEO John Elliott II said, "More than ever, consumers are looking for healthcare resources that allow them the opportunity to remain independent and in the comfort of their own homes. Arcadia Home Medical Supply is a logical extension of our focused efforts to expand our direct-to-consumer sales channels. We have similar centers inside locations of Sears, Roebuck and Co. in Michigan and provide walk-in, non-urgent medical care at Meijer locations in Michigan and Indiana."

The new Arcadia Home Medical Supply centers will be located in the following Wal-Mart stores:

* Boynton Beach, Fla. * Bradenton, Fla. * Hialeah, Fla. * Pompano Beach, Fla. * Midland, Texas * Albuquerque, N.M.

About Arcadia Resources Arcadia Resources, Inc. is a national provider of home care services and products, including respiratory and durable medical equipment; non-medical and medical staffing, including travel nursing; a mail-order pharmacy; and a catalog of health care-oriented products, also available for purchase on http://www.arcadiahomehealth.com and other leading retailer websites. Through industry partnerships, the Company is also establishing walk-in routine (non-emergency) medical clinics inside of supercenter retail stores. Arcadia's comprehensive solutions help organizations operate more effectively and with greater flexibility, while enabling individuals to manage illness and injury in the comfort of their own homes or through the convenience of local health care sites. For more information, visit: http://www.arcadiaresourcesinc.com.

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Wal-Mart to trim waste with packaging cutbacks

Lauren Coleman-Lochner
2006-09-25                                           [back to top]

WAL-MART Stores Inc said it plans to reduce its use of packaging 5 percent by 2013, saving the world's biggest retailer as much as US$3.4 billion.

Wal-Mart announced the plans at the Clinton Global Initiative, an event organized by former President Bill Clinton where companies have pledged almost US$7 billion this year to combat global warming. Bentonville, Arkansas-based Wal-Mart is aiming to limit trash in landfills and lower carbon dioxide.

The company said it will work with 60,000 suppliers to come up with ways to cut packaging, according to Bloomberg News. Last year Wal-Mart promised to reduce waste and energy use amid criticism from labor groups and politicians that its business practices contribute to congestion and pollution.

"Even small changes to packaging have a significant ripple effect," Chief Executive Officer H. Lee Scott said in a statement. "Improved packaging means less waste, fewer materials used, and savings on transportation, manufacturing, shipping and storage."

On November 1, the retailer will start gathering information from 2,000 manufacturers that make goods sold under Wal-Mart brands. The company will approach the rest of its suppliers in February.

The plan won't penalize manufacturers who don't make the targeted reductions, said Matt Kistler, a Sam's Club vice president.

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Wal-Mart Board Adopts Majority Vote Standard for Election of Directors

PRNewswire-FirstCall
Sept. 25                               [back to top]

BENTONVILLE, Ark., Wal-Mart Stores, Inc. today announced that its board of directors has amended the Company's bylaws to adopt a majority voting standard for the election of directors. The new standard is effective immediately and will apply to all future elections of directors.

The Company's majority vote standard requires each nominee for election to the board to receive a majority of the votes cast in order to be elected to the board. Previously, directors were elected under a plurality vote standard, in which candidates receiving the most votes were elected, regardless of whether those votes constituted a majority. Plurality voting still will apply in contested elections, where the number of director candidates exceeds the number of available director positions.

"The majority vote standard has been proposed by our shareholders in previous years," said Wal-Mart Board Chairman Rob Walton. "We believe that due to recent changes in Delaware law, the majority vote standard is now in the best interests of the Company and its shareholders."

The Delaware General Corporation Law was amended in August to make it possible for a director to submit an irrevocable resignation in advance of an election that would take effect upon his or her failure to achieve a specified vote for reelection. Properly structured, this allows Delaware corporations to switch from a plurality to a majority voting standard and avoid the situation, under Delaware law, where a sitting director is not elected but could nevertheless continue to serve as a "holdover director."

Copyright © 2006, PRNewswire

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Seeking Expansion in Urban Areas, Wal-Mart Stores Gets Cold Shoulder

By Kris Hudson
and Gary McWilliams
Wall Street Journal
September 25, 2006                            [back to top]

Cities like Boston might be the best hope for Wal-Mart Stores Inc. to grow in the U.S. For the retail giant, that's a problem. Last year, Wal-Mart's discussions about opening its first store here, in retail space that was soon to be vacated, spurred public outcry. The retailer eventually dropped its pursuit of the property. "Wal-Mart does not suit the clientele we have in the city of Boston," says Mayor Thomas Menino, explaining his opposition. "They don't pay wages that are sufficient. Their benefit structure is poor. I don't need employers like that in our city."

Mayor Menino has no such qualms about trendier rival Target Corp., which he has been actively recruiting. "It's a different image they have in how they market their product and the appearance of their stores," he says. "That's a lot to do with it, the image of the store."

For years, Wal-Mart, of Bentonville, Ark., thrived in rural and suburban America where land was cheap and local governments didn't interfere. Now Wal-Mart is trying to break into the last areas of the country where it isn't dominant, and the going is tough.

Wal-Mart is used to opposition, but these antagonists are tougher and better organized than earlier breeds. In the Northeast and America's big urban centers, they've augmented a traditional anti-Wal-Mart message with something more potent: an appeal to urban cultural values. Here, Wal-Mart is a metaphor for the worst of middlebrow America.

After missing out in Boston, the company lost a two-year fight to open in Leominster, in central Massachusetts. Some of the same antagonists are now organizing to block Wal-Mart in adjacent Lancaster.

Officials in Miami prevented Wal-Mart from locating a store amid a 55-acre midtown redevelopment project, on the grounds that its sprawling, suburban aesthetics and low-end appeal didn't conform to the city's architectural and social vision for the project.

"I feel bad for Wal-Mart, but that's their image," says Johnny Winton, the former Miami commissioner who helped plan the project.

Wal-Mart, which responded in writing for this article, says it's committed to starting stores in urban markets and that many towns welcome the resulting jobs and tax revenue. "We know that customers want what we have to offer," the company says in a written statement. "In the end, the customer should have the opportunity to decide where to shop."

Behind Wal-Mart's push into this inhospitable terrain is the onset of middle-age. The company reported a 9.5% increase in annual sales last year, falling short of the double-digit pace it set in nearly all of its 34-year history as a public company. Sales growth at stores open at least a year slowed to a 3.4% gain, far from their 10-year high of 9%, a record reached in 1999.

It faces this challenge both in the U.S. and abroad. Wal-Mart grew into the world's largest retailer by relentlessly cutting prices, putting local retailers out of business while passing on savings to consumers. The company is a powerhouse in Mexico -- where it's the top retailer -- and it's surging in South America, Central America and Canada. Yet Wal-Mart's international operations account for just 22% of its overall sales, and the retailer has found itself hindered in some countries.

Hit by stiff competition from cut-rate retailers, strong unions and labor restrictions, Wal-Mart recently withdrew from Germany after eight rough years, taking a $1 billion charge in the process. In China, Wal-Mart has only 64 stores, or one for every 20 million Chinese. Its expansion, which includes plans for another 18 to 20 stores this year, is subject to the whims of China's Communist Party.

Last year, Wal-Mart applied to open a specialized bank in Utah, pledging to use it for credit-card transactions and accepting deposits from charities, not to open branch banks. That didn't forestall an outcry from critics, bankers and politicians, and in July the Federal Deposit Insurance Corp. imposed a six-month moratorium on such applications.

To jump-start sales in the U.S., the company has begun revamping the merchandise and layouts of existing stores to appeal to specific groups, such as African-Americans and Hispanics. It is stocking trendier items such as organic food and designer décor. The move represents a risky departure from the company's successful one-size-fits-all strategy.

Investors are skeptical whether Wal-Mart can continue to rely on U.S. expansion to sustain its growth. Wal-Mart's shares trade at 16.6 times projected earnings, below the ratios notched by rivals Target Corp. and Sears Holdings Corp.

Some on Wall Street would prefer the company tap the brakes on its building plans. New urban stores cost a lot to build and operate, and might not be as successful as other areas, at least initially. Due mostly to local resistance, Wal-Mart says it sometimes takes twice as long to plan, construct and open stores in markets such as California compared with a typical time frame of 18 to 24 months.

Wal-Mart dominates rural America, with 45% of its stores located in rural and semi-rural counties, according to market researcher ACNielsen. The retailer is acting to correct the imbalance: In the 12 months since July 2005, two-thirds of the stores opened by Wal-Mart have been in urban or semi-urban areas, ACNielsen says. Wal-Mart won't provide information about future store openings.

Yet sales gains at new stores, located mostly in urban areas, are lower this year than last, indicating that urban shoppers might be turning up their noses. Joanne Dudevoir, 53, a computer specialist for the Defense Department in Boston, dismisses the company with a wave of her hand. "I don't do Wal-Mart. There's nothing there I need to shop for."

Wal-Mart says it will prosper even in challenging markets if it serves customers well. The company adds that it has a "very disciplined approach" to building new stores. Wal-Mart is on track to expand its square footage in the U.S. this year by 8%, its average over the past six years, adding the equivalent of nearly 40 regional malls. Wal-Mart executives said in June that the retailer has plans for at least another 1,400 U.S. stores, but it has not announced a time frame in which all will be built.

"With more than 3,900 stores and clubs in the U.S., we represent a small number of retail outlets in the United States and a much smaller percentage internationally," the company says. "We see continued opportunity for growth and we are committed to that growth."

Community opposition to Wal-Marts dates back to the early 1970s, when Vermont passed a law requiring regional planning commissions to consider the environmental and economic impact of large developments.

Opposition has grown more organized in recent years as nonunion Wal-Mart advanced on union strongholds. In California, Wal-Mart's pledge to open 40 supercenters -- massive stores offering general merchandise and groceries -- precipitated a four-month strike of grocery unions in 2003 as rival chains sought to cut labor costs to compete. A year later, Wal-Mart suffered a setback when voters in the Los Angeles suburb of Inglewood decided by a three-to-two margin to reject a proposed Wal-Mart store.

Wal-Mart officials characterize Inglewood as an anomaly, noting that they have won 32 of 39 such public votes during the past two years. The majority of new Wal-Marts face little or no opposition, they say.

Today, politicians and residents use a variety of snares and roadblocks to slow the giant's advance. Recently, the Institute for Self-Reliance, a community activist group based in Washington, D.C., launched a Web site -- www.bigboxtoolkit.com -- where Wal-Mart opponents can gather data to use in public speeches and letters. The organization has helped 30 towns adopt ordinances to block big retailers and advised about 100 others.

The institute supports what it calls "sustainable communities," or those that grow using their own environmental and economic resources. It opposes big retailers, contending they take more from communities than they contribute.

In New York City, which has no Wal-Mart, the company's opponents helped kill proposed stores in Queens and Staten Island. In February, the city council approved plans for a retail center near Yankee Stadium with a proviso that only retailers already operating in the city could locate there. Translation: Wal-Mart need not apply.

Wal-Mart has won some victories on the urban battlefield. In 2004, it won approval to open its first store in Chicago, in a depressed neighborhood on the West Side, which is set to open later this month. The city's alderman responded by passing a law mandating that big retailers pay employees an hourly wage of at least $10 and health-care benefits equivalent to at least $3 an hour.

Chicago Mayor Richard Daley vetoed the law earlier this month and persuaded the council to not override his decision. In Maryland, a federal judge recently struck down a law mandating how much money large employers -- effectively meaning Wal-Mart -- should spend on workers' health-care coverage.

The retailer has had no such luck in Massachusetts, a state that is urbanized, educated and liberal. Wal-Mart operates 47 stores there, as opposed to 106 in Oklahoma, a state with roughly half the population of Massachusetts. In the Bay State, films such as the anti-Wal-Mart documentary, "Wal-Mart: The High Cost of Low Price," are regularly shown in college halls and independent theaters.

Anthony Citrano, a 36-year-old tech entrepreneur who lives in South Boston, describes the company as a "weed" that "drains the life out of other plants" and as a symbol of America's "unsustainable way of living." Mr. Citrano argues that Wal-Mart is a business that grew in an era of cheap oil, which he says is coming to an end.

After Boston Mayor Menino last year pronounced Wal-Mart persona non grata, five Maine towns and the neighboring city of Cambridge put store-size restrictions in place that effectively barred Wal-Mart. Several of the moves were triggered by a mere rumor of Wal-Mart interest.

In central Massachusetts, Wal-Mart's nemesis is businessman Arthur P. DiGeronimo Jr., known as Jay. Mr. DiGeronimo, 54, is a native of Leominster, a city of 41,000 in the rolling hills of central Massachusetts. Business-savvy and well-spoken, he is a community fixture, having run a grocery-store chain started by his Italian immigrant family until its sale in 2004. He now owns a sound and video equipment company.

Mr. DiGeronimo says Wal-Mart's arrival will hurt the area's nine grocery stores and half-dozen department stores. Driving through the city in his pickup truck, he argues that Wal-Mart won't improve residents' well-being. "It is a question of the quality of life that's become important for a lot of communities," he says.

Mr. DiGeronimo developed his anti-Wal-Mart fervor while running his family's grocery store chain. "He has difficulty with Wal-Mart's method of operation and how they treat their help," says Robert Capobianco, an attorney who has worked for DiGeronimo companies since 1968.

In 2003, Mr. DiGeronimo tapped Mr. Capobianco to represent residents in their fight to stop a proposed 24-hour Wal-Mart in Leominster. They filed a suit against the developer and the city alleging, among other things, that the city didn't adhere to its own application procedures. After two years of wrangling, the defendants agreed to restrictions that in effect shut out Wal-Mart.

During that fight, Mr. DiGeronimo hired anti-Wal-Mart activist Al Norman as a consultant. He had heard about Mr. Norman from a DiGeronimo company manager, who had attended a seminar about how to fight Wal-Mart that was sponsored by one of its wholesaler competitors.

Mr. Norman, a health-care worker, turned a 1993 campaign against a Wal-Mart in his Greenfield, Mass. home into a second career. He recently traveled to Japan to advise a group there. "My fifth international gig," he says.

Wal-Mart's push into communities like Leominster has spawned a tenacious opposition, Mr. Norman says. "What used to be a two or three month turnaround [to get a store approved] can turn into a two-year turnaround and sometimes longer," he says.

Messrs. Norman and DiGeronimo rejoined forces this year after Wal-Mart returned from its Leominster defeat with a 200,000-square-foot store proposal in Lancaster, a neighboring town of 7,400. Patrice Harvey, a mother of two small children, called Mr. DiGeronimo for advice.

Ms. Harvey and her husband John, both 35, didn't actively oppose the Leominster store plan, even though their house is technically within city limits. The second site, by contrast, is directly across from their home. Ms. Harvey says she used to shop at Wal-Mart when her children were small but stopped after encountering Wal-Mart critiques, such as the documentary, "Is Wal-Mart Good for America?" Wal-Mart "doesn't fit the character of the town," Ms. Harvey says.

Wal-Mart says the type of opposition it faces in Massachusetts isn't affecting its plans. "We believe that the customers want to decide for themselves where they work and shop, as opposed to having those decisions made for them by special interest groups with ulterior motives," the company says.

Under Mr. DiGeronimo's guidance, Ms. Harvey put together a group of about a dozen residents who meet at a different member's house each week. The group includes a university computer manager, a software-company office manager and two local businessmen.

Mr. DiGeronimo has been attending the group's meetings where he offers advice. Whenever the discussion veers into Wal-Mart's environmental record or health care practices, he steers it back to local issues: "water, sewer, wetlands and traffic. Those are the only pressure points that can be brought" to bear on town officials, he says he tells them.

He adds: "That seemed to work in Leominster and is working here."

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Wal-Mart Weighs on Walgreen

By Nat Worden
TheStreet.com 
9/25/2006                                   [back to top]

Investors ignored Walgreen's (WAG) 25% increase in fourth-quarter earnings Monday and instead concentrated on the threat posed to its business model by Wal-Mart (WMT) .

The No. 1 U.S. pharmacy chain said it earned $412 million, or 41 cents a share, in its fourth quarter, up from last year's $329 million, or 32 cents a share. The earnings per share met Wall Street's expectations, but the gain was driven by an 18% jump in same-store sales from prescription drugs -- a business where the world's largest discounter lurks.

Wal-Mart unveiled a plan last week to sell a month's supply of generic prescription drugs for $4, a price that undercuts pharmacy chains like Walgreen, CVS and Rite Aid (RAD) . The plan currently covers nearly 300 generic drugs for customers in the Tampa Bay, Fla., area, but if the retailing juggernaut can eventually expand such pricing to other markets in the country, the pharmacies could find themselves with no prescription to help them compete.

"Wal-Mart has decimated the retail toy industry, supermarkets, music stores and other industries," says Morningstar analyst Mitchell Corwin. "Walgreen gets 65% of its sales from prescription drugs. If Wal-Mart and other discount chains can undercut that, it would have a serious financial impact on them."

Walgreen's total sales for the fourth quarter rose to $12.17 billion from $10.49 billion. The results were slightly higher than analysts' average forecast of $12.0 billion. The chain's overall same-store revenue, measuring sales at stores open at least one year, rose 9.7%. The bulk of the growth came from prescription sales.

Fast-growing pharmacy chains, like Walgreen, have long benefited from consolidation in the business as their larger scale and lower prices have helped them overtake mom-and-pop drugstores across the country. Now, discounting chains like Wal-Mart could beat them at their own game.

Wal-Mart's chief competitor, Target (TGT) , has said it will match Wal-Mart's pricing for generics in the Tampa Bay region, and Fred's (FRED) , a smaller discount chain in the Southeast, announced that it would roll out its own cheap generic drug-pricing in Memphis, Tenn.

"Wal-Mart does not need its generic drug sales to be as profitable as Walgreen does," says Corwin. "If their new program is a success in Tampa and Wal-Mart expands it, health insurers could really start to get onboard with the plan and encourage people to go to Wal-Mart [instead of pharmacy chains like Walgreen] ."

On a prerecorded conference call accompanying its quarterly earnings release, Walgreen addressed Wal-Mart's announcement, which sent drugstore chains' shares tumbling last week.

"Our initial review of the program leads us to believe it won't significantly impact our business," said Rick Hans, Walgreen's director of finance, on the call.

Hans pointed out that about 95% of Walgreen's pharmacy customers buy drugs using health insurance, meaning they're responsible for only a small co-pay. For the 291 drugs that Wal-Mart is selling for $4, the average co-pay at Walgreen is $5.30. And, for Medicare Part D patients, it's only $3.18.

Hans also said Walgreen sells about 1,800 different generic drugs, most of which aren't offered under Wal-Mart's new pricing plan.

"Over the years, our convenience, locations and services have proven to be bigger factors for our patients than a few dollars in price difference," said Hans.

Corwin says that insurance co-pays don't reflect the total cost of prescription drugs at pharmacy chains, and health insurers likely will find a way to benefit from Wal-Mart's lower prices if the plan is expanded to other markets and other drugs.

"There won't be much of a near-term impact on Walgreen, because the program is so small, but I think people are concerned more about he potential long-term impact," says Corwin. "It's a threat that investors should be aware of."

Shares of Walgreen recently were down $2.26, or 4.8%, to $44.64.

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Wal-mart denies Hollywood threats over digital services

Simon Aughton
Monday 25th September 2006             [back to top]

Wal-Mart has denied a report that it told Hollywood movie studios to expect retaliation if they began selling feature film downloads through Apple's iTunes Store. The US retail giant and Asda-owner described the report in the New York Post, as 'a rehashing of misinformation', possibly referring to a BusinessWeek article last month which suggested that Wal-Mart was attempting to dissuade studios.

'Customers want to watch movies and they want to be able to make the choice when and how they want to view them,' the Wal-Mart spokeswoman said. 'While we recognise there are various current and potential providers of this service, we are not dissuading studios from conducting business with other providers.'

The New York Post had claimed that studio executives said that Wal-Mart had 'overtly threatened to retaliate' if the studios signed up with Apple. So far only Disney is making its movies available, with sales that suggest it will not be long before the rest of Hollywood joins it.

According to the Post, Wal-Mart has previously expressed its unhappiness with Disney selling TV shows through iTunes by returning 'cases and cases' of DVDs.

The dilemma for the studios is that as much as they want a slice of the ever larger digital cake, Wal-Mart is their biggest customer and likely to remain so for the foreseeable future. That gives the retailer considerable clout, enough to worry Apple CEO Steve Jobs, who, the Post said, telephoned his opposite number at Wal-Mart, asking him to moderate his position.

In all likelihood, Wal-Mart is hoping that Hollywood will respond to its threats by cutting the wholesale price that the retailer pays for DVDs, currently said to be around $3.50 more than it charges Apple for the digital version.

It remains to be seen what impact digital content will have on physical sales; Apple has been selling music for several years without any discernible effect on CD sales while Disney CEO Robert Iger said last week that the company's DVD sales had not been affected by digital competition.

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Wal-Mart Launches 5-Year Plan to Reduce Packaging

GreenBiz.com
25 September 2006        [back to top]

Wal-Mart Stores, Inc. last week announced plans to measure its 60,000 worldwide suppliers on their ability to develop packaging and conserve natural resources.

This initiative, scheduled to begin in 2008, is projected to reduce overall packaging by five percent. The announcement came at the conclusion of the Clinton Global Initiative in New York City.

In addition to preventing millions of pounds of trash from reaching landfills, the initiative is projected to save 667,000 metric tons of carbon dioxide from entering the atmosphere. This is equal to taking 213,000 trucks off the road annually, and saving 323,800 tons of coal and 66.7 million gallons of diesel fuel from being burned. This initiative will also create $10.98 billion in savings, just from a 5 percent reduction in 10 percent of the global packaging industry. Wal-Mart alone is poised to save $3.4 billion.

"Packaging is where consumers and suppliers come together and can have a real impact both on business efficiency and environmental stewardship," said Wal-Mart CEO H. Lee Scott. "Even small changes to packaging have a significant ripple effect. Improved packaging means less waste, fewer materials used, and savings on transportation, manufacturing, shipping and storage."

On November 1, 2006, Wal-Mart will introduce a packaging scorecard to more than 2,000 private label suppliers. This is a tool that will allow Wal-Mart buyers to have all the information about packaging alternatives or more sustainable packaging materials in one place, allowing them to make better purchasing decisions.

On February 1, 2007, tools and processes will be made available to all of the company's global suppliers. For 12 months, these suppliers will learn and share results within this process. And beginning in 2008, Wal-Mart will measure and recognize the entire worldwide supply base for using less packaging, utilizing more effective materials in packaging, and sourcing these materials more efficiently through a packaging scorecard.

Scott added, "When you bring the capabilities of the entire supply chain together, the ability to make a difference really pops. There's a multiplier effect. Instead of just looking at what Wal-Mart can do alone, we have the opportunity to inspire thousands of companies and millions of customers, as well."

Wal-Mart's packaging vision began to form when the company partnered with suppliers to improve packaging on its private label Kid Connection toy line last year. By reducing the packaging on fewer than 300 toys, Wal-Mart saved 3,425 tons of corrugated materials, 1,358 barrels of oil, 5,190 trees, 727 shipping containers and $3.5 million in transportation costs, in just one year. Now Wal-Mart is taking what it learned from Kid Connection and applying it to the more than 160,000 products that are seen globally by 176 million customers each week.

The Wal-Mart Sustainable Packaging Value Network, a group of 200 leaders in the global packaging industry, is leading the project. This group includes representatives from government, NGOs, academia and industry.

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Mexican leftists protest in Wal-Mart stores

People's Daily Online                     [back to top]

Mexico's leftists staged protests in several Wal-Mart stores in the Mexican capital on Sunday, accusing the U.S. retail giant of exploiting workers and supporting President-elect Felipe Calderon.

Supporters of defeated presidential candidate Andres Manuel Lopez Obrador obstructed cash registers in the stores and threw around merchandise.

In a statement read to media, the protesters said that Wal-Mart "pays badly and does not respect human rights" and "also has an open campaign in favor of the right-wing candidate."

Wal-Mart de Mexico denies the alleged support for the president-elect. There were no reports of injuries or arrests.

Calderon, candidate of the ruling National Action Party (PAN), won the election with a slim margin of 0.56 of a percentage point. Lopez Obrador has refused to concede defeat, alleging massive fraud in the electoral process, and has vowed to form a parallel government.

Source: Xinhua

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WAL-MART HOPES CHEAP-RX PLAN WILL PERK UP IMAGE

By TERRY KEENAN
NY POST                                  [back to top]

September 24, 2006 -- WAL-MART has been doing a lot of late to try and spruce up its image - and with good reason: A poll taken late last year showed that 56 percent of Americans think the giant retailer is "bad for America."

So it's little wonder that this week when Wal-Mart announced it would offer super-duper discounts on hundreds of generic prescription drugs, many brushed it off as another p.r. stunt. Perhaps, but if Wal-Mart does what it says it will, and hews to its typical business model, the move into discounted drugs could herald a new era that will impact the entire U.S. healthcare system.

For now, Wal-Mart's plan is modest enough - not that the retailing behemoth does anything in a modest fashion. The program, launched Friday in 65 Wal-Marts and Sam's Club stores around Tampa, will cut the price on about 150 popular generic drugs to $4 for a 30-day supply.

Sure, the push into prescription drugs may be a loss-leader for Wal-Mart at the get-go, but the prospect of having millions of Americans shopping in its aisles while their prescriptions are being filled is more than worth it. And it's a fair bet that it won't be long before Wal-Mart extends its deep discounts not just to generics but to patented pills as well.

Look at Wal-Mart as a kind of giant Canada - but one with a cut-throat capitalistic agenda. If you think the Canadian provinces played hardball with the drug companies in price negotiations for similar drugs, imagine what Wal-Mart will do.

If Wal-Mart does to the price of prescription drugs what it did to the price of toys and electronics, imagine the ramifications. Over time, the drug discounts may only give a small boost to Wal-Mart's bottom line, but they could crush profit margins across the entire pharmaceutical complex.

In a fitting coda to the do-nothing 109th Congress, House Republicans this week unveiled a plan that would allow Americans traveling to Canada to bring a 90-day supply of prescription drugs back into the United States without threat of seizure by U.S. Customs officials. Ironically, it may not be long before Canadians are coming to a Wal-Mart across the border to buy their drugs instead.

Copyright 2006 NYP Holdings, Inc. All rights reserved.

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Wal-Mart’s Manifest Destiny

Intent on Western expansion, the world’s largest company turns democracy upside-down — but now, communities are fighting back

by Tim Sullivan                       [back to top]

INGLEWOOD, CALIFORNIA — It seems like the perfect site for a shopping center: A burning slab of undeveloped blacktop spreads over 60 acres, while traffic rushes by on all sides; houses stack up the surrounding hills and into the smoggy horizon. The people who live in those houses are tired of driving to nearby cities like Gardena, Torrance and Los Angeles to dine and buy clothes and widgets. Besides, Inglewood could use an economic shot in the arm. Downtown is dead. The Lakers basketball team moved out of the arena next door, years ago. And all the unemployed young people need jobs.

Inglewood, a city of about 112,000 residents, mostly black and Latino, butts up against Los Angeles International Airport, just a few breezy miles from the Pacific Ocean. Despite its reputation as an extension of inner-city L.A., Inglewood functions like a small town, with its tightly knit community, proud middle class, subtle provincialism — and insecurities about jobs and municipal revenue, which is why the proposed shopping center, sweetly named the HomeStretch at Hollywood Park, held so much promise.

Inglewood resident Danny Tabor saw the potential. The space might have been filled by businesses he likes — maybe a Chili’s restaurant, an Outback Steakhouse, or an Old Navy clothing store. As a former city councilman, he knew a shopping center could bring in needed tax revenue. After all, he was on the council when it approved a Costco, and now, he says, he’s addicted to shopping there.

But this spring, Tabor helped lead a local uprising against the shopping center proposal, because there was one problem: The only surefire tenant, and the primary backer, was Wal-Mart Stores Inc. The company planned to build one of its giant, 200,000-square-foot Supercenters — the combined discount-pharmacy-grocery stores that Wal-Mart is planting in communities around the West.

From suburban Denver, Colo., to Washington’s apple country, from the resort blowout of Park City, Utah, to the faux-adobe subdivisions of New Mexico, Wal-Mart’s aggressive expansion has become a symbol of how big-box retailers and franchise chains invade communities, bringing a range of impacts and reactions. Some local people welcome Wal-Mart, with its low prices and employment opportunities. Others resist, worrying that the corporate giant will siphon away profits and ruin local businesses, leaving a sprawling, homogenized commercial landscape and a retail graveyard on Main Street. They are wary of Wal-Mart’s low wages, and its reputation for mistreating its workers and discriminating against women.

In self-defense, many Western communities have adopted "anti-big-box ordinances" that require Wal-Mart to pay impact fees, limit the size of its stores, and abide by other restrictions. But the company has refused to back down.

Wal-Mart has threatened lawsuits, sued, and, when that hasn’t worked, it has taken to what may be its most dangerous practice: co-opting local democracy itself. In community after community, it has gathered enough petition signatures to put the issue to voters, overwhelming its opposition with millions of dollars in advertising and mailers, frosting its agenda in a populist coating. The practice has triggered deep concerns about the power of corporations to hijack local decision-making.

In Inglewood, Wal-Mart took this approach to the next level, attempting to exempt itself from all of the local planning rules. As one opponent here puts it, "Wal-Mart was trying to establish a sovereign state inside the city of Inglewood."

Yet here, local opponents beat Wal-Mart at its own game. Today, as Danny Tabor sits at a table at Bourbon Street Fish, he can look across the street and see the 60-acre space where Wal-Mart wasn’t allowed to build. To him, the empty space represents neither a lost opportunity for low-priced meals or shopping, nor a missing municipal gold mine. Instead, it symbolizes his community’s stand against the biggest corporation in the world.

"Democracy worked for people in this sense," Tabor says, "against big business."

Stories about Wal-Mart typically mention that the first Wal-Mart was a five-and-dime in a small town in Arkansas, opened by Sam Walton in the 1950s — precisely the kind of mom-and-pop store now threatened by today’s Wal-Mart empire. From its tiny beginning, Wal-Mart has grown into a retail behemoth through its single-minded focus on slashing prices, cutting costs, and moving huge volumes of merchandise.

Wal-Mart tries to project a friendly image, with greeters at every store wearing smiley-face pins. Travelers in RVs are encouraged to camp overnight in the parking lots. The corporation pours millions of dollars into scholarships, the United Way and recycling programs.

But today’s Wal-Mart is a species of corporation never seen before. It is the world’s largest company, with annual sales of more than $250 billion, "a sum greater than the economies of all but 30 of the world’s nations," reports The New York Times. In the United States, Wal-Mart is the number-one seller of clothing, toys, home furnishings, home textiles, housewares, tableware, DVDs, vacuum cleaners, televisions and video game consoles, and it has the nation’s largest private trucking fleet, reports the Denver Post.

Soon after it launched its Supercenters in 1988, Wal-Mart also became the nation’s leading grocer. The nation’s approximately 1,448 Wal-Mart discount stores have been joined by 1,506 Supercenters, and the number increases by dozens nearly every week. To find space for its outlets, which include Sam’s Club warehouse stores and small Neighborhood Market grocery stores, the corporation buys more than $1 billion worth of land per month, according to The Economist.

In the West, Wal-Mart’s expansion is nothing short of a stampede. In Utah, Wal-Mart took out $130 million worth of commercial building permits in 2003, according to a University of Utah study — 12 percent of the state’s nonresidential total. Westwide, Wal-Mart opened 42 discount stores and Supercenters last year. In California alone, it plans to open another 40 Supercenters — each larger than five football fields — within six years. And as Wal-Mart has grown, its image has changed. It has been accused of "predatory pricing" — coming in initially with lower prices, killing off the competition, and then raising prices. The relentless pressure on its 21,000 suppliers to lower their costs has contributed to the trend of U.S. manufacturers moving jobs to Latin America and Asia. And it has become abundantly clear that Wal-Mart’s low prices are built on the backs of its 1.2 million employees.

Wal-Mart’s low wages also force its competitors to lower their pay in order to compete, says Harold Meyerson, an L.A. Weekly editor and Washington Post columnist, and as a result, a vital chunk of society is withering. Now that many manufacturing jobs have moved overseas, retail jobs support much of the working class — but thanks to Wal-Mart, Meyerson writes, even retail wages are shrinking.

"We have lost something in Los Angeles, something huge: a decently paid working class ... The loss is national as well," Meyerson writes. "Wal-Mart is both the leading metaphor and No. 1 economic force in this downward spiral."

But although workers and local governments are becoming more concerned, attempts to get the retailer to increase its wages might as well be demands to raise the "always low prices." It’s a part of the equation that’s not up for discussion, as sacrosanct as the company’s growth itself.

One hundred and twenty miles east of Inglewood is California’s first Wal-Mart Supercenter. Opened this March in the desert resort town of La Quinta, the store sits a few hundred yards down the road from the old, non-super Wal-Mart, which went dark when the new one opened. Already, the Supercenter is the kind of place where motorists camp out waiting for vacant parking spots and you have to stand in line for the bathroom.

La Quinta, like many fast-growing Western resort communities, is a place with its lines drawn: The box stores are separated from the boutiques, and the wealthy and their golf courses are gated in, away from the working class, which consists largely of Mexican immigrants.

But they all meet at Wal-Mart, where elderly Anglos push carts among Latina clerks and shelf stockers.

Cashier Cecilia Juarez says she likes the work OK, but her co-worker, Maria Cuevas, says, "I don’t like it, because they don’t pay much." Cuevas, a cashier who started working at the Supercenter two months ago, says she earns $7.25 an hour. Like many other Wal-Mart employees, she’s a working mother, and her wages don’t go far. But, as Juarez says, there’s not much else available.

The city of La Quinta was happy to welcome the Supercenter, says Assistant City Manager Mark Weiss. Other cities, however, have felt quite differently.

In early 2001, Calexico, Calif., across the Mexican border from Mexicali, became one of the first cities in the state to establish an ordinance dealing with big-box stores. City Attorney Michael Rood says local grocers and unions presented the template for an ordinance prohibiting stores larger than 150,000 square feet that sold more than a small amount of groceries. The city council went along with the idea, Rood says, because it wanted to protect local grocers.

In response, Wal-Mart circulated petitions, and garnered enough signatures to put the ordinance up for a public vote in the fall of 2001. Wal-Mart reportedly invested about $140,000 in the campaign, creating a nice-sounding front group called "Calexico Families Against Higher Prices" that reportedly conducted phone surveys, asking personal questions about local grocers and insinuating that they were bad people. In the end, the voters sided with the corporation by a margin of 2-to-1. Wal-Mart plans to break ground in a couple of months, Rood says.

To the north, the board of supervisors in Contra Costa County, in the San Francisco Bay area, approved an anti-Supercenter ordinance similar to Calexico’s in 2003. Again, Wal-Mart circulated petitions and put the issue on the ballot. It also created the so-called "Wal-Mart Customer Action Network," and recruited members at three existing discount stores in the county. In exchange for signing up, about 10,000 customers got a personal membership card, free newsletters, bulletins and an invitation to special events, according to the San Francisco Chronicle. Members also got voter registration forms, so they would be sure to be able to vote in the company-backed referendum.

As Wal-Mart’s Contra Costa campaign ratcheted up, the central issue became clear to county supervisor John Gioia: Does local government have the ability to regulate development? "For us, it’s about setting the terms and conditions under which big boxes enter our community," Gioia says.

The campaign became a storm of spin, messaging and money — for both sides. Contra Costa County spent $800,000 on the campaign against Wal-Mart’s initiative. But Wal-Mart spent $2 million, a county record for a ballot measure. In March, residents voted 55 to 45 percent to knock down the big-box ordinance.

"So, they outspent us. I think it was as simple as that," Gioia says. "A complex issue like this is hard to argue in a limited campaign. Planning issues shouldn’t be turned into marketing."

Wal-Mart, meanwhile, defends its tactics. "Legislative bodies are unfairly targeting Wal-Mart. That’s why we do referendums or lawsuits," says Wal-Mart spokesman Peter Kanelos. "It’s about governments treating everyone equal and fair."

The use of the ballot box to override local and state government decisions has become common throughout the West. A decade ago, California coastal communities rallied to fight sprawl, using the state’s initiative process to overturn bad planning decisions. Since then, says Larry Kosmont, a Southern California land-use and economics consultant, California voters have decided some 1,000 land-use related initiatives. At their best, initiatives offer citizens a way to influence decisions from which they have been excluded by bureaucrats and elected officials. But "ballot-box planning" can be unhealthy, Kosmont says, because "it hands a decision to people who aren’t necessarily paying attention to the details." Government works best when it forces quarreling interests to reach compromises, and that takes time, he adds. Ballot-box planning, in contrast, isolates decisions, and the result is always an absolute yes or no.

Ballot-box planning has also become a handy tool for corporations. With millions to invest in public-relations campaigns, and armies of loyal shoppers, Wal-Mart has grabbed hold of the grassroots, and not just in California.

In Taos, N.M., for example, the city council approved a new zoning code in 1999 that quashed Wal-Mart’s plan to expand an existing discount store to a Supercenter. Wal-Mart responded with a campaign using slogans first coined by labor organizer Cesar Chavez, such as Si se puede or "yes, we can." The company gathered 7,000 signatures on petitions supporting the store. While the council stood up to the pressure, Wal-Mart hasn’t given up: It now wants to build a Supercenter on the outskirts of town.

In Fort Collins, Colo., developers used a manufactured grassroots campaign, fueled with cash, to convince voters to pass a ballot initiative overturning the city council’s 1996 decision to reject a Supercenter. The opposition was preparing a lawsuit that challenged the ballot initiative, when Wal-Mart supporters brought in their own lawyers. They threatened a countersuit that would have held organizers personally responsible for stopping the project. Wal-Mart foes backed down. Fort Collins now has a Supercenter — and a locally owned grocery store has closed.

The tactic doesn’t always work: Voters in Glendale, Ariz., defeated a ballot measure introduced by Wal-Mart that would have overturned a city council decision to rule out a Supercenter. But almost always, Wal-Mart has won. "When it comes to ballot-box planning, the question is: Is this really what it was intended for?" asks Ethan Seltzer, director of Portland State University’s School of Urban Studies and Planning, who points out that other corporations have defeated smaller foes with the same method.

With its strip of well-patronized box stores along Century Avenue, breezy Inglewood seems like an unlikely stage for the most spectacular political battle yet between Wal-Mart and local community foes. Many of Inglewood’s working-class residents would gladly save money on groceries and other necessities, and the community’s high unemployment rate suggests that the town should be eager for the jobs.

But Inglewood is also a strong union town, with an estimated 10,000 households that include a union member. Many families moved here to work in aerospace and education, as well as in the chain groceries. As a result, the unions have a strong role in local politics.

So early last year, when Wal-Mart and its partner, Rothbart Development, came forward with the HomeStretch Supercenter proposal, the Inglewood City Council hastily drafted a generic big-box ordinance that banned stores larger than 150,000 square feet that sold more than a limited amount of groceries. Once again, Wal-Mart began to gather signatures and threatened to sue. The council backed down, rescinding the ordinance. As the opposing sides marshaled their forces, a crucial seat on the council was up for grabs in the spring election, and the rest of the council members were evenly divided over whether to allow a Supercenter.

Barbara Maynard, spokeswoman for the United Food and Commercial Workers Local 770, says that when the union interviews city council candidates, a standard question is: Do you support a Wal-Mart in Inglewood? "If the answer is yes," she says, "they’re not going to get an endorsement."

The union found a candidate: Ralph Franklin, a former grocery clerk, a Local 770 vice president, and a Wal-Mart hater. "I am a victim of Wal-Mart," says Franklin, who came to Inglewood from a town in Kansas, where a Wal-Mart invasion wiped out several existing businesses, he says. The union thrust Franklin onto the campaign trail in an election that became entirely about Wal-Mart.

Meanwhile, the union was leading 70,000 Southern California grocery workers on strike against the traditional grocery chains, demanding guarantees that the chains wouldn’t slash their wages and benefits to compete with Wal-Mart. The strike forced the workers’ issues into the headlines.

Ralph Franklin defeated his pro-Wal-Mart opponent, and Wal-Mart gave up working on a proposal that the new Inglewood council might reject. Instead, it concentrated on wooing the public. The company crafted "Measure 04-A," a 71-page plan for the HomeStretch shopping center, and started gathering signatures to put it on the ballot.

Wal-Mart’s plan, says Inglewood City Administrator Mark Weinberg, "would have superseded all local control."

The plan would have allowed Wal-Mart to do its own environmental and traffic reviews, instead of the city. Down the road, says Weinberg, Wal-Mart or the developer could have changed the style of its signs, the setbacks or other aspects of the development, and the city couldn’t have done anything about it. To change the terms of the plan, the city would have had to hold another election and win the approval of two-thirds of the voters.

It was a new frontier in ballot-box planning, according to Kosmont: "I haven’t seen this kind of measure that would circumvent all processes." Nonetheless, Wal-Mart found a supportive community leader in David Stewart, the president of the Inglewood Airport Area Chamber of Commerce, who helped lead a citizens’ group to get the measure on the ballot. Like Franklin, Stewart carries strong memories of Wal-Mart from his hometown, except that his are sweet, not sour.

"I grew up in Wal-Mart country," says Stewart, who moved to Inglewood from Mississippi, where he says the corporation was involved in improving his community. "I don’t view them as the big, bad bully." Stewart helped organize the petition drives, which collected more than 10,000 signatures on Inglewood sidewalks.

In an attempt to build an army of support that included greater Los Angeles, the company hired Kerman Maddox, a locally famous political consultant and TV personality, to spread the word about a recently opened discount store in nearby Baldwin Hills — a "good Wal-Mart story," as Kanelos puts it. And, playing to the predominantly black communities in South L.A. and Inglewood, Wal-Mart joined organizations like the Greater Los Angeles African-American Chamber of Commerce.

Wal-Mart’s CEO, Lee Scott, even sat down for a lengthy interview on the local public TV station. The show was underwritten by Wal-Mart. The host, Tavis Smiley, read some e-mails from angry opponents. "Tavis, when Wal-Mart touts its commitments to diversity in their promo spots on your show, don’t you realize you’re being played?" read one e-mail. "They’re using you as their little black pawn."

To which CEO Scott replied, "The people who wrote those e-mails, I would guess, do not know Wal-Mart. Our company is really about stores and clubs. It’s about people in those stores and clubs. And I think when people get to know the people in those stores and clubs, they tend to like ’em, and like them being in their community."

But Measure 04-A was clearly driven by a corporate, not a community, agenda. Stewart, who deflected most questions about citizen involvement in the campaign, couldn’t remember the name of the pro-development citizens’ group. No wonder, since it morphed over time, from the "Citizens Committee to Welcome Wal-Mart to Inglewood" on the initiative itself to the "Committee to Welcome The HomeStretch at Hollywood Park Shopping Center" on some of the last-minute mailings. The address of the "citizens" group was listed as a "suite" in a downtown office building, but proved to be nothing more than a post office box.

Taken aback by Wal-Mart’s unprecedented move to establish itself in Inglewood, the Local 770 geared up for a monumental fight. "Everybody saw this Inglewood battle as the watershed battle," says the union’s Maynard. "If Wal-Mart can do this here, they can do this anywhere."

At first, the opposition came mostly from the labor union — after all, the United Food and Commercial Workers had been fighting Wal-Mart proposals all over California. In Inglewood, the Los Angeles County Federation of Labor poured in its support and its money. Then, from its headquarters in downtown L.A., the Los Angeles Alliance for a New Economy, an advocate for "living wages," offered its assistance. Union reps, workers and alliance organizers knocked on doors and met with community leaders, and the momentum began to shift.

Danny Tabor, the former city councilman, had been a Wal-Mart shopper until he saw Measure 04-A. The fact that Wal-Mart was avoiding the process that Costco and all the other big-boxes had gone through irked him, so he stopped shopping there, and started explaining the issue to others. "Ours was an education campaign," Tabor says.

Elionai Padilla, a grocery worker who had taken part in the Southern California strike, followed up his months on the picket line by going door-to-door in Inglewood, warning residents that Measure 04-A could mean low wages and meager benefits, not just for Wal-Mart workers, but for other retail workers as well. Often, he says, he was met with indignation and hostility from people who really wanted Wal-Mart in their town.

"I said, ‘Let me tell you something, I’m just fighting for my rights and my future,’ " Padilla says. "Especially Hispanic people, when you explain to them, some of them keep quiet and some of them start crying."

Maynard also saw the change. "Along the way, the community stepped in to help us. It became very organic. I’ve never seen people outside of our usual world fighting for this."

People began to see that Wal-Mart was giving them only one side of the story. Many also came to believe that the company was targeting their town because it thought it could find cheap labor among its black and Latino residents. Eventually, much of Inglewood’s powerful clergy joined the fight.

The Rev. Altagracia Perez of Holy Faith Episcopal Church, who already had an interest in economic justice issues, urged her congregation – many of whom were eager to see a Supercenter in Inglewood — to explore just what the 71 pages of Measure 04-A would do. She said people in Inglewood wanted jobs so badly that they didn’t stop to consider how Wal-Mart could drag everyone down.

Perez talked to other ministers, most of whom were at first hesitant to get in the way of economic development, about how Wal-Mart was attempting an end run around the city’s planning process. Many churches, including the Faithful Central Bible Church, along with organizations like the Southern Christian Leadership Conference, changed their public stands on the issue.

"When they realized it wasn’t about a store, it was about the process," Perez says, "that’s what made it safe. It wasn’t a big business thing."

Wal-Mart also made mistakes in Inglewood. Measure 04-A was a jungle of subsections, statute references and site plans. It was hard for people to understand, and that generated suspicion.

Even Inglewood Mayor Roosevelt Dorn, who backed Wal-Mart and endorsed the measure in mailings and commercials, acknowledges that voters "resented the 71 pages that took everything out of the hands of the council."

On April 6, despite outspending its opponents at least 5 to 1, Wal-Mart lost. Inglewood voters shot down Measure 04-A by a 3-to-2 margin. Corporate Manifest Destiny hit a wall.

Over the past few months, Inglewood’s victory seems to have emboldened other city leaders in the West.

In California alone, nearly a dozen towns and counties have adopted anti-big-box ordinances. The L.A. City Council is preparing to consider an ordinance that would restrict stores larger than 100,000 square feet that sell significant amounts of groceries in struggling neighborhoods, where the city has invested in public housing and businesses. Josh Kamensky, a legislative deputy in the office of L.A. Councilman Eric Garcetti, predicts that big-box stores, with their low wages and paltry benefits, would damage the city’s investments in these neighborhoods.

Wal-Mart’s Kanelos is angry that the city has singled out Wal-Mart. Consumers, Kanelos says, "do not want government reducing their shopping choices. America was built on open competition and that’s what consumers want."

Many Westerners are beginning to realize that the actual cost of shopping at Wal-Mart is much higher than the numbers on the price tags, however. In Idaho Falls, where Wal-Mart plans to build the town’s second Supercenter, Post-Register publisher Jerry Brady suggested in a recent editorial that his city needed a new entrance sign reading, "Welcome to Wal-Mart Falls, Idaho, where we’re willing to work cheap."

While there has been little local opposition to Wal-Mart, Brady says that when he heard about Inglewood, "I was encouraged and surprised. I think it’s good somebody had the courage to (stand up to the company)."

In southern Oregon, the neighboring communities of Central Point and Medford have recently defeated proposed Supercenters. "It’s clear from seeing the Inglewood case that they’re running into problems everywhere," says Becca Croft, whose group, Central Point First Inc., was created to fight Wal-Mart.

Like other anti-Wal-Mart organizations, Croft’s group has become a broader political force. In Taos, N.M., where Wal-Mart is pushing its new proposal, Taoseños Against Wal-Mart Super Store is encouraging residents to keep a close eye on their leaders. Local democracy, says group member Fritz Hahn, "requires citizens to go to meetings, and meet with their councilors … People show up for the fire, but what we need is kindling."

But even with invigorated opposition, the corporate giant remains the undeniable victor: Millions of people still shop at Wal-Marts every day, and for every Supercenter proposal that is defeated, dozens more are approved.

Even in Inglewood, the promise of low prices is too good to shelve completely. The victory over Wal-Mart may not be permanent. Only 11,624 people voted in the referendum, a small fraction of Inglewood’s population.

Mayor Dorn desperately wants Wal-Mart to try again. "The city needs these 60 acres to be developed," he says. "The city needs these jobs. The city needs $3 to $5 million in sales tax."

So the Inglewood city government plans to ask Wal-Mart to put together another proposal — this time, for just a regular-size discount store.

Tim Sullivan writes from Portland, Oregon. This story was made possible by the support of the EMA Foundation.

© copyright 2002- 2006 High Country News 

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Target says it will match Wal-Mart's $4 generic drug price

By Julie Appleby,
USA TODAY
9/23/2006                        [back to top]

Chain store Target (TGT) said late Thursday that it will match rival Wal-Mart's $4 price on 150 generic drug prescriptions in the Tampa Bay area. Target's brief press release didn't say whether it would keep pace with Wal-Mart's plan to take the lower prices nationwide, but it did say it has a "long-standing practice to be price competitive with Wal-Mart."

Wal-Mart (WMT), the nation's third-largest seller of prescription drugs, said earlier Thursday that it will offer the $4 price on about 150 generic drugs to the insured and uninsured alike, starting immediately in the Tampa area and will take the program statewide by January.

"We intend to take it nationwide next year," says Bill Simon, Wal-Mart's executive vice president of the Professional Services Division. For uninsured consumers, the $4 price for some generics is below what they would pay at most pharmacy counters and is less than typical $10 to $15 co-payments on generics offered by many insurance plans.

Wal-Mart's move could save modest amounts for some consumers. It may also draw more customers to its stores or prompt a price war with other pharmacies.

LIST OF DRUGS : Generics Wal-Mart is offering for $4 (pdf file).

Savings could be less than $1 per prescription to more than $20, depending on the drug and pharmacy where customers shop, according to information from Wal-Mart and prices of other retailers posted at MyFloridarx.com, a state-run website.

That could draw more customers to Wal-Mart, already the largest seller of groceries and toys, possibly forcing other chain drugstores to cut their prices, says Ed Kaplan of the Segal Co., a benefits consulting firm.

"Customers who take five or seven medications a month and can save $10 on each, might switch," says Kaplan.

WHAT OTHERS ARE SAYING : Florida papers weigh in

The move caused share prices for generic drug and pharmacy companies to drop Thursday.

Wal-Mart says the $4 for 30-day supply price would save customers $7.98 a month for blood-pressure drug lisinopril, $3.85 for diabetes drug metformin and 80 cents for blood-pressure drug atenolol.

Simon says the $4 generics are not expected to be a "loss leader," meaning Wal-Mart doesn't expect to lose money on the drugs in hopes of attracting more customers to buy other products.

That's because the drugs offered are longtime generics that have multiple manufacturers and they are already inexpensive on the wholesale market. Large companies such as Wal-Mart can often buy in bulk for less than the $4 cost.

Wal-Mart's press release said 291 drugs will be covered, a total that includes different dosage strengths of the same drugs. When the differing dosage strengths are taken out, the list includes fewer than 150 products, including treatments for high blood pressure, infection and diabetes, along with some vitamins and painkiller ibuprofen. That's a fraction of the estimated 2,100 generic products available.

"This is a much narrower list than they're giving the impression it is," says drug-industry expert Stephen Schondelmeyer at the University of Minnesota.

Simon says the drugs chosen for the list represent 20% of the prescriptions Wal-Mart currently fills and cover a wide range of medical needs. More products may be added, he says.

The move comes as Wal-Mart works to counter critics who say the firm doesn't make health insurance affordable for many of its workers.

"Providing low-cost drugs is a good thing. But not providing affordable health care to workers is not a good thing. Why can't Wal-Mart address the serious health care crisis in its own stores?" says Chris Kofinis, with WakeUp Walmart.com.

Some praised Wal-Mart's move.

"That's a great price for a 30-day supply of drugs and will be a tremendous boon for seniors," says Devon Herrick, economist at the National Center for Policy Analysis.

Contributing: USA TODAY's Stephanie Armour and Mindy Fetterman, Reuters

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Wal-Mart is/isn't threatening studios over iTunes Movie Store

by Paul Miller
Sep 23rd 2006                  [back to top]

The New York Post came out hard yesterday with a piece about how Wal-Mart is threatening movie studios over the iTunes Movie Store, to which the retail giant quickly responded with a statement denying the claims. The NYP claims that Wal-Mart is telling studios that they'll start ordering fewer DVD movies if the studios jump aboard the iTMS bandwagon, similar to their temporary reaction when TV shows started being sold by Apple. Wal-Mart quickly disputed the claims, saying "While we recognize there are various current and potential providers of this service, we are not dissuading studios from conducting business with other providers." According to Reuters, a source "familiar with the situation" says that while Wal-Mart "freaked out" over TV show sales, the online sales haven't impacted their own, and they're not too concerned over iTunes movie sales. None of this really confirms or denies rumours of Wal-Mart prepping their own download store, but we're definitely not giving up hope of a price-slasher moving to the online space.

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Relief for Some but Maybe Not Many in Wal-Mart Plan for $4 Generic Drugs

By Michael Barbaro
and Reed Abelson
New York Times
September 22, 2006                     [back to top]

At first glance, Wal-Marts plan to sharply cut the cost of generic drugs, to $4, seems like a signal event in American health care. It could make scores of treatments affordable to the uninsured, reduce the burden on Medicaid and bring competitive pricing to the pharmacy industry. Even company critics have praised the plan, conceding that it represents a case of the giant retailer using its size and ability to wring out costs to improve the lives of regular Americans.

But a close examination of the program, with details confirmed by the company yesterday, suggests that its impact could be blunted by several factors.

The plan, which is said to cover 300 drugs, includes only about 124 separate medicines in various dosages, like 12 versions of the popular antibiotic amoxicillin. It leaves out some popular drugs altogether, like the generic version of the cholesterol-lowering treatment Zocor.

And while uninsured people should benefit from the program, those with insurance may save only a dollar or so, making a trip to Wal-Mart not worth their while, analysts said. In Florida, where the program will have its debut, most people on Medicaid pay nothing and may have little incentive to shop around for cheaper prescription drugs.

It is not as significant as it first seems, in our opinion, said Joseph Agnese, an analyst at Standard & Poors, who expressed surprise at investors reaction to the Wal-Mart announcement, which sent shares of its competitors CVS and Walgreen down sharply yesterday.

As it has for dozens of consumer products, Wal-Mart reduced prices of generic prescription drugs by attacking the few remaining pockets of inefficiency in its operations. For example, it cut out third-party distributors that stood between the chain and drug manufacturers.

There is a huge profit margin in the generics for the middlemen like pharmacy benefit managers, the distributors and the pharmacies themselves, said Patricia Wilson of Associates & Wilson, a Rosemont, Pa., health care consulting firm. Wal-Mart appears to be taking some of those profits from the traditional middlemen to lower the prices it is charging for these generic drugs.

The company also introduced rapid, automated machines into its pharmacy distribution centers that had long relied on workers to fill orders. In doing so, Wal-Mart reduced the amount of time that costly drugs sat in warehouses, rather than on store shelves where they could create revenue. It is not glamorous, said Bill Simon, an executive vice president at Wal-Mart. Its pennies at a time.

Wal-Mart said that by covering one-fifth of the generic drugs it prescribes at its more than 3,000 United States pharmacies, the new program would make it possible for thousands of people to buy drugs they either cannot afford or currently ration, sometimes by cutting pills in half, to cut costs.

Under the plan, which will begin in the Tampa, Fla., area and the company says will eventually expand to the rest of the country beginning next year the $4 fee charged by Wal-Mart will be paid by a combination of consumers, insurance companies and the federal government, depending on a persons health coverage. On average, generic drugs are now sold at retail for $10 to $30 for a 30-day supply.

An insured customer will not pay more than $4, no matter what the co-payment is, the company said. Wal-Mart would bill the insurer for the difference if the co-payment was below $4. Customers whose co-payment is above $4 are unlikely to use insurance, but pay for the drug out of pocket. Where required, Medicaid users would still pay a small co-payment for a prescription drug, with the government billed the balance. In the past, Wal-Mart might have billed the government significantly more than $4 for a generic drug. Its a tremendous savings for state Medicaid, said Mr. Simon, the Wal-Mart executive.

But Christa Calamas, secretary of the Florida Agency for Health Care Administration, said the state would probably save money only on those Medicaid consumers who already fill prescriptions at Wal-Mart. Since most Florida Medicaid users pay nothing for their prescriptions, they are likely to choose convenient pharmacy locations over lower prices, experts said.

Wal-Mart said it would not lose money on the low-cost generic drugs and, in fact, several industry analysts predicted the companys pharmacy business would benefit from the new plan. Unlike CVS or Walgreen, which rely on prescription sales for most of their revenues, Wal-Marts pharmacy business represents less than 10 percent of its total revenue and the company has identified it as an area that needs improvement.

By luring customers of all incomes into the store at least once a month to fill generic drug prescriptions, Wal-Mart could increase overall pharmacy and store sales, these analysts said.

Health care analysts were quick to point out that Wal-Mart has carefully chosen which drugs it will cover 300 out of roughly 11,000 generic drugs available. Moreover, it is not offering some expensive drugs, like any of the cholesterol-lowering statins, at the $4 price. And some of the drugs covered, like generic ibuprofen, cost very little and may be currently available for less than $4. They are not losing money on all these products, said Ms. Wilson, the health care consultant.

But she praised Wal-Mart for bringing attention to the cost savings available from generic drugs, which are significantly less expensive than their branded counterparts. Wal-Mart could also introduce much greater competition to the marketplace by pushing the concept of discounts into what has traditionally been an inefficient market. People will begin to compare prices, she said.

Wal-Mart has come under fierce attack for its employee health benefits; critics contend the benefits are too costly, given the typical Wal-Mart workers wages, and frequently force employees to rely on state programs or forgo coverage altogether. With the lower generic drug prices, which apply to its workers as well as customers, the company appears to be trying to address those concerns.

Still, critics say this plan does little to confront the high costs of health care for the uninsured, including Wal-Mart employees, since they still face the expense of going to a doctor to get a prescription, for example. While the plan is a good first step, it is clearly as much a public relations effort as a substantive change, said Ron Pollack, the executive director of Families USA, a Washington consumer group that has often criticized Wal-Marts health care offerings.

Wal-Marts chief executive, H. Lee Scott Jr., said that competition and market forces have been absent from our health care system, and that has hurt working families tremendously. The company, he added, is excited to take the lead in doing what we do best driving costs out of the system and passing those savings to our customers and associates, as Wal-Mart refers to its employees.

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RETAIL-IATION

WAL-MART WARNS STUDIOS OVER DVD DOWNLOADS

By TIM ARANGO
NY POST                              [back to top]

September 22, 2006 -- Worried about its massive DVD sales, retail behemoth Wal-Mart has told some of Hollywood's biggest players it will retaliate against them for selling movies on Apple's iTunes. Last year when Disney announced it would begin offering episodes of the hit shows "Lost" and "Desperate Housewives" on Apple's iTunes, the reaction of the world's largest retailer sent shockwaves through the entertainment industry.

Wal-Mart, worried that offering the shows for viewing on iPods would cut into DVD sales at its stores, sent "cases and cases" of DVDs back to Disney, according to a source familiar with the matter.

Now, following Apple's entrance in to the business of selling full-length films for download, the battle between Hollywood and its largest client is getting uglier, as studio executives say Wal-Mart has overtly threatened to retaliate if they go into business with Apple.

So far, Apple has only inked a deal with one studio - Disney - on whose board Apple boss Steve Jobs sits. But after seeing the success Apple had in creating a legal download business for the music industry, the movie industry would like to come aboard.

"We all want to be in the Apple business," said one high-level executive at a major movie studio. But Apple's pricing - $9.99 to $14.99 - is lower than DVD prices at Wal-Mart.

The studios generally charge Wal-Mart a wholesale price of $17.95 for new DVDs, while Apple is paying Disney a wholesale price of about $14.50 per film, according to a studio source.

The last thing studios want to do before the holiday shopping season is to offend their biggest sales outlet; the studios, collectively, rely on Wal-Mart for some $5 billion of DVD sales in the fourth quarter.

But several weeks ago, in the midst of rumors that Apple was close to announcing a deal with Disney, Wal-Mart's David Porter - the executive responsible for stocking the retailer's shelves with DVDs and CDs and whose influence is so immense in Tinseltown that he's been named to Premiere magazine's annual power list - made the rounds of Hollywood studios.

His message, according to a studio exec involved in the discussions: that there would be "serious ramifications" if the studios hopped in bed with Apple.

"They threatened to hurt us in terms of buying less products," said this person.

The situation between Bentonville and Hollywood has gotten so heated and so high-level that Jobs recently phoned Wal-Mart CEO Lee Scott to ask him to moderate his stance, according to a source.

"What they probably will do is not hurt Disney on new titles, but will buy less of their library titles," said one source.

Library titles, however, are where Wal-Mart makes money from DVDs. The retailer typically slashes the price of new releases below cost, making up for it by selling other products to shoppers.

A Wal-Mart spokeswoman said, "We intend to meet our customer needs whether they choose to purchase movies online or in the store and will continue to work hard with all our partners to do that."

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Wal-Mart's Generic-Drug Plan Draws Mixed Reactions

While some may benefit, especially the uninsured, other consumers may be disappointed, experts say

By Steven Reinberg
HealthDay News
FRIDAY, Sept. 22                         [back to top]

Wal-Mart's announcement that it will begin selling almost 300 generic prescription drugs for as little as $4 for a 30-day supply will undoubtedly benefit many Americans, health industry experts say.

But other experts contend that the program, scheduled to start Friday in Tampa, Fla., and then roll out across the country sometime next year, probably won't prove to be a revolutionary step in the push to contain soaring health-care costs for consumers in the United States.

In fact, some critics are labeling the program little more than a public relations stunt by the nation's largest retailer. Others point out that the new plan omits some key drugs.

Wal-Mart's move "underscores the need for cost-effective medications to help Americans struggling with spiraling prescription drug prices," Gail Shearer, health policy director for Consumers Union, publisher of Consumer Reports, said Thursday in a prepared statement.

"There is a critical need in this country for low-cost, effective prescription drugs because millions of people are going without needed medications simply because they can't afford them," she added. "Generic drugs are a vital piece in the puzzle to bring down health care costs. They are just as effective and safe than most high-priced, heavily advertised drugs."

"This decision by Wal-Mart hopefully will encourage more competition in the drug marketplace that will lead to lower drug prices overall," Shearer said.

Wal-Mart's announcement Thursday -- that it would lower the costs of generics that usually run between $10 and $30 for a one-month supply -- seemed to have exactly that effect in the marketplace.

On Friday, Target, the nation's No. 2 discount retailer, said it would match Wal-Mart's lower prices for generic prescription drugs in the Tampa area immediately.

It was not clear, however, if Target would expand the program beyond Tampa, although the company said it has a "long-standing practice to be price competitive with Wal-Mart."

Still, some find the Wal-Mart move wanting.

The program actually includes only about 124 separate medicines in various dosages, and omits widely popular drugs, The New York Times reported Friday.

And while people without health insurance will certainly save some money, those with health insurance may save only a dollar, which could make a trip to a Wal-Mart store not worth the time.

"It is not as significant as it first seems, in our opinion," Joseph Agnese, an analyst at Standard &amp; Poors, told the Times.

Most of the drugs on Wal-Mart's list are older generics that are relatively inexpensive already, Stephen Schondelmeyer, professor of pharmaceutical economics at the University of Minnesota, told the Chicago Tribune.

And the covered drugs also don't include the generic equivalents of such widely used drugs as the cholesterol-lowering treatment Zocor and the antidepressant Zoloft. Both drugs' patents expire this year, the newspaper said.

"This isn't addressing what is the source of people's frustrations with drug prices," Schondelmeyer told the Tribune. "This is a very limited set of drugs. It's a lot of hype and will create a lot of traffic going into Wal-Mart stores. But I think people are going to be disappointed when they go into the stores and find out their drug isn't there."

Ron Pollack, executive director of Families USA, a health-care watchdog group, called Wal-Mart's announcement part of the company's public-relations campaign to bolster its image. The company has been a target of criticism for the health benefits it offers employees, with some contending the benefits cost too much.

"I think what Wal-Mart is doing is a limited good thing," Pollack said. "Clearly, this limited, positive initiative is as much a part of Wal-Mart's public-relations efforts to blunt the deserved criticism of its poor health coverage for its workers as it is a substantive improvement."

Responding to criticisms of the program, Wal-Mart spokesman Kevin Thornton said Friday that the company would continue to add drugs to the list of cheaper medications, based on customer feedback and deals the company can make with drug manufacturers.

"Overnight we have added a medication, making the total 292 medications," Thornton said. The added drug is lovastatin, which is used to lower cholesterol.

As to whether the Wal-Mart plan was a public-relations move, Thornton said, "That is so absolutely incorrect. This is a win-win situation for customers. It stands to give significant savings for customers. This is about real solutions for health care for working families in America. This is an example of Wal-Mart doing what it does best, which is taking the cost out of the system and passing savings on to our customers."

Patricia Wilson of Associates &amp; Wilson, a Rosemont, Pa., health-care consulting firm, said Wal-Mart apparently plans to finance the drug program by taking some of the profits from traditional middlemen to lower the prices it is charging for the generic drugs.

"There is a huge profit margin in the generics" for the middlemen like pharmacy-benefit managers, the distributors and the pharmacies themselves, Wilson told the Times.

More information

For more details on the Wal-Mart program, including a list of drugs covered, click here.

SOURCES: Kevin Thornton, spokesman, Wal-Mart Stores Inc; Bentonville, Ark.; Ron Pollack, executive director, Families USA, Washington, D.C.; Wal-Mart Stores Inc. press release; Target Corp. press release, The New York Times; Associated Press; Chicago Tribune

Copyright © 2004 ScoutNews, LLC. All rights reserved.

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Wal-Mart Faces Higher Hurdles in Long Beach

By Hector Becerra
and Nancy Wride
Los Angeles Times
September 21, 2006                        [back to top]

Raising the stakes in the campaign to keep Wal-Mart Supercenters out of the Los Angeles area, the Long Beach City Council this week approved a sweeping ordinance that would effectively ban the retail giant and other big-box retailers from selling food and groceries at their stores. With the vote, the state's fifth-largest city joined Los Angeles as a large urban area that had made it harder if not impossible to open the kind of mega-stores that made Wal-Mart the country's largest seller of groceries.

Wal-Mart Stores Inc. is also facing a challenge in San Diego, where officials are considering an ordinance that would ban Supercenter-type stores, which combine a regular Wal-Mart with a discount grocery store.

"These ordinances seem to be proliferating," said Nelson Lichtenstein, a labor historian at UC Santa Barbara who wrote a book about Wal-Mart. "Wal-Mart's efforts in [California] ... are definitely being slowed down."

Wal-Mart had said in 2004 that it wanted to build 40 Supercenters in California, but it has faced stiff opposition from labor unions and some Democratic lawmakers. Critics argue that the giant stores would kill surrounding businesses and depress wages, especially for unionized workers at grocery stores that would be the Supercenters' main competition.

Many of the 20 Supercenters that have opened in the state are in outlying areas like the Inland Empire and north L.A. County, where the political sway of big labor is less than in big cities.

The retailer scored a coup over the weekend when a Supercenter opened in Rosemead, about 12 miles east of Los Angeles. On Tuesday, voters in the suburb rejected the recall of two Rosemead council members who had supported the plan. Wal-Mart spent an estimated $300,000 on the campaign.

Kevin McCall, a Wal-Mart spokesman, said the company questioned the legality of ordinances that amounted to bans. In San Diego, McCall said, the main proponents of the "big box" ordinance were the United Food and Commercial Workers union, and supermarkets like Vons and Ralphs.

"So you have our opponents and our competitors practicing the worst kind of protectionism," he said.

The Long Beach City Council voted 7 to 2 on Tuesday to ban sales of food and non-taxable merchandise by big-box retailers. Exempted were membership discount stores such as Sam's Club and Costco. Before becoming law, the ordinance must be read at the next council meeting Oct. 3. It then takes effect 31 days later. The city has two Wal-Marts, but neither are Supercenters.

Councilman Patrick O'Donnell, a schoolteacher in Paramount who made the motion to vote on the measure, said the ban was designed to articulate the city's wish for land use and planning of future development.

"This is about identifying what's best for your community, what fits best for your community.... And are big-box stores the best use of our land?" said O'Donnell, who garnered teacher union and Democratic Party support in his last two elections. "In my opinion they negatively impact mom-and-pop stores, the smaller retail establishments that are the back[bone] of your city."

Fellow council members Bonnie Lowenthal and Tonia Reyes Uranga, along with a then- council member, launched the city toward the ban in October 2005, with a memo that sought a city staff review of such a move.

Their memo said that grocery chains like Vons and Albertsons were among the 25 largest employers in Long Beach.

Long Beach Business Journal publisher George Economides called the vote a badly disguised political payback to labor and the Democratic Party for support in the June elections.

"If Wal-Mart was unionized," he said, "I don't think this issue would even have come up, and certainly not with so little warning."

The Long Beach action came two years after the L.A. City Council voted to require the company to study whether communities would be harmed by the centers. Though not a ban, the L.A. law requires retailers that seek to build stores larger than 100,000 square feet and with more than 10% of their sales floor devoted to food to pay for an economic analysis before obtaining building permits. Inglewood enacted a similar law in July.

McCall said the Rosemead recall vote, which occurred on the same day as the Long Beach council vote, showed that the retailer was making progress in the L.A. area.

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CVS Feels Wal-Mart Cut

By Melissa Davis 
www.thestreet.com
9/21/2006                                   [back to top]

Wal-Mart (WMT) plunged the pharmacy sector into a debilitating price war Thursday.

Shares of CVS (CVS) and other drug store chains tanked.

The selloff started after Wal-Mart said it will sell a month's worth of generic drugs for $4.

The Bentonville, Ark., retail giant said the move covers nearly 300 generic drugs in the Tampa Bay, Fla., area. Wal-Mart plans to expand the offering to the entire state in January and the rest of the country later.

"Each day in our pharmacies we see customers struggle with the cost of prescription drugs," said CEO H. Lee Scott Jr. "By cutting the cost of many generics to $4, we are helping to ensure that our customers and associates get the medicines they need at a price they can afford. That's a real solution for our nation's working families."

Wal-Mart said its pricing plan represents a substantial discount to list prices on covered generic drugs.

Wall Street read that as a notice to flee the pharmacy aisle. CVS plunged 9%, Walgreen (WAG) dropped 6% and Rite Aid (RAD) lost 5%.

The trading was furious and the selloff steep. CVS lost nearly $3 billion in market value in trading that amounted by 11:30 a.m. EDT to quadruple its daily average volume.

Among pharmacy benefit managers, which mail discounted drugs in bulk to customers, Medco (MHS) , Caremark (CMX) and Express Scripts (ESRX) each sank at least 3% Thursday.

Wal-Mart dropped 41 cents to $48.46.

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Wal-Mart proposes Daiei merger with Seiyu-paper

Reuters
Wed Sep 20, 2006               [back to top]

TOKYO, Sept 20 (Reuters) - Wal-Mart Stores Inc. <WMT.N> has proposed that Japanese trading house Marubeni Corp. <8002.T> merge affiliate Daiei Inc. <8263.T> with Wal-Mart's local unit, Seiyu Ltd. <8268.T>, the Yomiuri daily reported on Wednesday.

Marubeni has been in talks with Wal-Mart and Japanese retailer Aeon Co. <8267.T> to sell part of its 44.6 percent stake in Daiei as a way to help restructure the retailer, once a symbol of Japan's 1990s debt crisis.

Daiei shares reclosed up 5.3 percent at 2,190 yen, while Seiyu rose 6.9 percent to end at 216 yen. The Nikkei average <.N225> fell about 1 percent.

The paper said Wal-Mart wanted to merge the operations of Daiei and Seiyu to create Japan's third-biggest retail group after Seven & I Holdings <3382.T> and Aeon.

Wal-Mart also proposed to eventually unify the Daiei and Seiyu's brands, it added.

A spokeswoman at Wal-Mart's Japan unit declined to comment.

A spokesman for Marubeni, the biggest shareholder in Daiei, said the trading house intended to choose a partner by the end of October but declined to comment further.

The paper also said Aeon had proposed to take a stake in Daiei's supermarket unit, Maruetsu Inc. <8178.T>.

Wal-Mart has invested a total of $1.3 billion in Seiyu since it first took a small stake in the supermarket in 2002, but Seiyu has not made a profit since.

Seiyu, now a Wal-Mart subsidiary, had nearly 400 outlets as of June.

Despite the struggling operations in Japan, the U.S. retailer, which has quit the German and South Korean markets in the last four months, has repeatedly said it was committed to Japan, saying it saw growth potential even in a shrinking market.

Combined annual sales of Daiei, which operates some 210 stores, and Seiyu would be nearly 2.7 trillion yen ($23 billion).

That compares with Seven & I's 5.2 trillion yen and Aeon's over 4.8 trillion yen, projected for this business year. ($1=117.36 yen)

© Reuters 2006. All rights reserved.

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SmartCare Family Medical Centers Enters Deeper Strategic Alliance With Wal-Mart Stores

PRNewswire             [back to top]

GREENWOOD VILLAGE, Colo., Sept. 20 /PRNewswire/ -- SmartCare Family Medical Centers, a rapidly growing operator of retail healthcare centers, will increase its expansion into the Denver area with an agreement to design, build and operate a significant number of SmartCare Centers inside Denver-area Wal-Mart stores.

The expansion is an extension of SmartCare's initial agreement to lease space inside Wal-Marts located in Colorado, Arizona and Nevada. Specific locations and opening dates will be announced soon.

"We're pleased that Wal-Mart has selected SmartCare to aggressively build out the retail healthcare concept in Denver," said Lawrence W. Hay, chief executive officer of SmartCare. "Denver, like communities throughout the United States, will benefit from this unparalleled access to quality medical care for everyday needs."

"SmartCare's further expansion into Denver provides an opportunity to serve a large number of people across the metro area," said Amee Chande, vice president of health care strategy and communications for Wal-Mart. "At Wal-Mart we are always looking for ways to add value and convenience to our customers' shopping experience. We believe the clinics provide immediate, convenience and affordable access to basic health care services, delivered by trained medical professionals."

SmartCare is developing its high quality, consumer-focused healthcare concept throughout the United States by operating centers in a variety of grocery, mass merchandiser and pharmacy retail hosts. SmartCare Centers offer convenient, quality care for common ailments such as sore throats, ear infections and seasonal allergies, as well as basic health services such as flu shots and other vaccines, school and employment physicals and cholesterol screenings. Each SmartCare Center is staffed by Nurse Practitioners and Certified Medical Assistants, with a physician on-call at all times.

About Wal-Mart

Wal-Mart Stores, Inc. operates Wal-Mart Stores, Supercenters, Neighborhood Markets and SAM'S CLUB locations in the United States. The company operates in Argentina, Brazil, Canada, China, Costa Rica, El Salvador, Germany, Guatemala, Honduras, Japan, Mexico, Nicaragua, Puerto Rico, South Korea and the United Kingdom. The company's securities are listed on the New York and Pacific stock exchanges. More information about Wal-Mart can be found by visiting http://www.walmartfacts.com.

About SmartCare Family Medical Centers

Colorado-based SmartCare Family Medical Centers operates retail healthcare centers throughout the country. It was formed in 2004 by a group of medical and business professionals from TIVIS Ventures. SmartCare aims to revolutionize the experience and delivery of healthcare by being the premier provider of specific-scope retail healthcare that offers convenience along with quality care from dedicated health professionals focused on families' everyday medical needs. SmartCare's practitioners provide treatment for minor acute illnesses, blood tests, physicals and screenings, whiles emphasizing wellness and quality of medical care. Guest education is part of every visit. No appointment is necessary, and centers accept most health insurance plans and self-pay and offer extended hours -- including evenings and weekends. SmartCare has plans to open up to 1,050 centers within five years. For more information, visit http://www.SmartCareCenters.com.

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Wal-Mart promotes voter registration

Big News Network
Tuesday 19th September, 2006                  [back to top]

Wal-Mart Stores Inc. says it will give state-specific voter registration forms to all its 1.3 million U.S. store, Sam's Club and distribution center workers.

To simplify the process, the forms will have pre-paid postage in most states so employees can just fill out the voter registration form and drop it in the mail, Wal-Mart said in a news release Tuesday.

Also as part of the drive, Wal-Mart plans to distribute educational materials made available by the League of Women Voters as well as a voter education packet. This will help familiarize associates with new election procedures and direct them to additional resources.

The League of Women Voters is pleased by Wal-Mart's efforts to help its workforce understand the importance of voting and make it easier to register to vote. We are happy to be able to provide our '5 Things You Need to Know on Election Day' information, which provides useful tips for voters about Election Day, said Mary G. Wilson, the League's national president.

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Wal-Mart teams with QuickHealth in California

By Doug Desjardins,
Drug Store News
Tuesday, September 19, 2006             [back to top]

QuickHealth Inc. will partner with Wal-Mart next month to open an in-store medical clinic at a store in Rohnert Park, Calif. The company stated it plans to open more clinics at “selected Wal-Mart stores in California” in the coming months. “Locating within Wal-Mart stores will offer consumers the ability to access quality medical care delivered by a physician at a price they can afford and in a location they already frequent,” said QuickHealth president Dave Mandelkern.

QuickHealth currently operates three clinics in the state, including one adjacent to a Longs drug store, that target uninsured and Hispanic consumers with a list of services that includes a standard doctor's visit for $39.

Wal-Mart is already testing in-store health clinics through several different providers including SmartCare Family Medical Centers and MedPoint Express

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Wal-Mart strides into election fray

By Alexander Bolton
Capitol Hill Publishing Corp                  [back to top]

Wal-Mart, the nation’s largest employer, is planning to launch a voter registration and education campaign this fall targeted at its 1.3 million employees in an effort to combat growing criticism from Democrats and labor unions.

By doing so, the world’s largest retailer is striding into the national political arena, which until this election cycle it has taken pains to avoid.

Wal-Mart’s voter registration and education programs could be among the biggest in the country, though not as big as those of its labor union opponents. The AFL-CIO, for example, has nearly 13 million members.

The company’s decision appears to be a response to several high-profile Democrats, including Senate Minority Leader Harry Reid (D-Nev.) and four 2008 Democratic presidential hopefuls, who participated in a labor-organized anti-Wal-Mart campaign this summer.

Compensating for its lack of experience educating potential voters, Wal-Mart has worked with the League of Women Voters, one of the nation’s preeminent voter education groups, to craft materials to distribute to employees.

Wal-Mart had been scheduled to announce the program today but because of last-minute reviews by its lawyers it delayed the launch until next week. The Hill learned of Wal-Mart’s plans from a public relations official who circulated news of them before the company gave its go-ahead.

Lee Culpepper, head of the company’s government relations office in Washington, declined to comment on the plans because he was not yet authorized to do so.

Nancy Tate, executive director of the League of Women Voters, said her group had given Wal-Mart the template for an informational card telling voters how to make sure their vote counts on Election Day. She said Wal-Mart would distribute it to its 1.3 million “associates,” the title given to its rank-and-file staff.

Tate said Wal-Mart was the only organization her group has worked with in the 2006 election cycle, although it worked with others two years ago.

But providing the educational information would be the extent of its partnership with Wal-Mart, she added.

Wal-Mart for years had tried to stay out of politics. “They shunned politics for so long,” said Nu Wexler, spokesman for Wal-Mart Watch, a labor-backed organization. “For the better part of two years they were claiming the debate [over its business practices] wasn’t political and shouldn’t be politicized. This is an enormous change from what they were saying.”

Wal-Mart’s new focus comes after labor unions have made it a primary political target. Union leaders say Wal-Mart has depressed wages and fiercely opposed employees’ efforts to organize.

Wal-Mart’s opponents escalated their attacks this summer with a “Wake Up Wal-Mart” tour. The tour, funded by the United Food and Commercial Workers union, held anti-Wal-Mart rallies around the country.

Several Democratic presidential hopefuls such as former Sen. John Edwards (N.C.), Sen. Evan Bayh (Ind.), New Mexico Gov. Bill Richardson, and Iowa Gov. Tom Vilsack joined in. So did Democratic Senate candidates including Sen. Joe Lieberman (Conn.), Sen. Maria Cantwell (Wash.), Ned Lamont, Rep. Sherrod Brown (Ohio), and Rep. Ben Cardin (Md.).

“Wal-Mart is already one of the largest, most profitable companies in this country,” said Bayh at a rally in Cedar Rapids, Iowa, last month. “The time has come for it to do what it takes to be one of the most respected, too. And it’s going to accomplish that by treating its workers with basic dignity and justice. That’s what we’re asking for here today.”

The chorus of criticism from Democratic lawmakers and liberal activists appears to have had an effect. A Wall Street Journal/NBC News poll published Friday showed that 52 percent of Americans said companies like Wal-Mart “should be reviewed and regulated more” over its health and pension benefits. In the poll, 45 percent of the respondents rated Wal-Mart positively while 31 percent did not.

Wal-Mart responded to criticism from Democratic presidential hopefuls by rebutting them in letters to 18,000 Iowa employees.

“We would never suggest to you how to vote, but we have an obligation to tell you when politicians are saying something about your company that isn’t true,” Wal-Mart stated in its August letter, according to a report by the Associated Press. “We urge you to talk with your friends, your family and your neighbors about the good Wal-Mart does.”

Wal-Mart also sent letters to staff in other presidential primary states such as New Hampshire and South Carolina, said Paul Blank, campaign director for WakeUpWalMart.com.

The company appears poised to expand its efforts to all its employees and to follow up by encouraging them to register to vote and giving the information they need to cast ballots on Election Day.

© 2006 Capitol Hill Publishing Corp., a subsidiary of News Communications Inc.

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Dear EarthTalk: What environmental impacts should our community expect if we allow Wal-Mart to open up a store nearby?

Sara Jones
EarthTalk                  [back to top]

With more than 6,000 stores spread out across the globe--Wal-Mart is the world’s biggest retailer, hands down, and also a magnet for criticism for its low wages, inadequate health coverage and effect on struggling downtowns. Wal-Mart has also had its share of environmental problems. Environmentalists complain that the company’s stores--often on the outskirts of rural communities--eat up open space, replacing farms and forests with concrete and pavement. And the company has been fined repeatedly in recent years by various agencies for environmental negligence. For example, in 2005, Wal-Mart paid $1.15 million in fines to the state of Connecticut for the improper storage of pesticides and other toxins that polluted streams near its stores there, according to the website WakeUpWalMart.com. A year earlier, Florida fined the company $765,000 for violating petroleum storage tank laws at its auto service centers. The company admits that it failed to register its fuel tanks and to install devices that prevent overflow, and that it did not perform monthly monitoring, and that it blocked state inspections. That same year, Georgia fined Wal-Mart $150,000 for contaminating water outside of Atlanta. And the U.S. Environmental Protection Agency penalized the company $3 million in 2004 for violating the Clean Water Act in nine states. The company was also forced to change its building practices so as to prevent future water contamination. This came on the heels of a $1 million fine for Clean Water Act violations at 17 locations in four other states. Wal-Mart also agreed to establish a $4.5 million environmental management plan to improve its compliance with environmental laws at construction sites. Wal-Mart says that change is afoot within the company. CEO Lee Scott has said that sustainability in all its forms is a key concern moving forward. “As one of the largest companies in the world, with an expanding global presence, environmental problems are our problems,” Scott told company employees last October. Scott’s green vision includes powering facilities and fleet with renewable energy, cutting back on waste, and selling green products. Wal-Mart reportedly crafted their greening plan with the help of former Vice President Al Gore. Commitments include reducing greenhouse gas emissions by 20 percent at existing locations 20 percent, and investing $500 million in environmental improvements each year moving forward. Wal-Mart is also reportedly ramping up plans to offer organic produce and using local farms to save transportation costs. According to Ron McCormick, an executive in the company’s produce division, Wal-Mart is already buying a wide variety of produce based on what’s available in each region, instead of shipping produce across the country. “Our whole focus is: How can we reduce food-miles?” he says. The green attitude also extends to other products, with the company increasing offerings of sustainably harvested fish and organic cotton clothing and bedding. Critics say Wal-Mart is so focused on profit that such efforts will never stick. Only time will tell if Scott’s vision for a greener Wal-Mart becomes reality. CONTACTS: Wal-Mart, www.walmartstores.com; WakeUpWalMart.com, www.wakeupwalmart.com.

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Wal-Mart could look to Poland for expansion

By Neil Merrett
19/09/2006                   [back to top]

US retail giant Wal-Mart could be set to enter the Polish retail sector as part of a possible expansion into Eastern Europe, according to reports in the Polish media.

Polish broadsheet Rzeczpospolita reports that Wal-Mart who has shown an interest in entering the country’s growing retail market through greenfield investment, with French chain Auchan believed its most likely target.

Wal-Mart are already prevalent in Western European countries like the UK and Germany, through chains like Asda, and the news could mark the beginnings of their expansion into Eastern Europe.

While Wal-Mart declined to comment on the speculation, the news would follow similar moves by its rivals earlier in the year.

In July, Tesco invested more than €104m into acquiring the Leader Price chain in the country from French group Casino in a bid to increase its 5.5 per cent market share.

Tesco’s acquisitions came just a few months after Carrefour, one of the world largest retailers, announced annual investments of around €65-€78m over five years to increase its presence in the country.

With 32 hypermarkets and 71 supermarkets in Poland already, Carrefour appears confident the market has further room to grow.

The presence of these stores is yet another indication of the strength of retail markets in Eastern Europe, though there are some worries that the market is becoming saturated.

Consultancy group PriceWaterhouseCoopers' (PWC) said recently that retailers could not afford to ignore emerging Eastern European markets – but it warned that only the most exploratory and adaptable food retailers would succeed.

With over 7,000 stores in economies as diverse as Asia, Europe and South America, Wal-Mart has shown it has already managed to adapt to specific regional tastes.

© 2000/2006 – Decision News Media SAS – All Rights Reserved.

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Revisiting The Wal-Mart Question

by Vaughn Ververs
September 18, 2006                          [back to top]

Despite what we may think of as the ideal, the news business is, well, a business. You can argue about the economics of it all, but the bottom line is that it costs money to gather and distribute news.

It is a business that relies primarily on advertising revenue to pay the bills and that creates obvious ethical concerns about the level of separation between the “news” and “business” sides of the industry. A question along those lines hit our in-box this week. Viewer Curtis H. was curious about an interview correspondent Anthony Mason conducted with Wal-Mart CEO Lee Scott, one he had seen promoted and was curious about before it even aired (you can watch the piece as it actually aired by clicking the picture). Here is his missive:

I have a serious concern about your exclusive interview with Wal-Mart's CEO, which was teased on your broadcast this evening. Wal-Mart, as noted at the close of your broadcasts last week … partially sponsors CBSNews.com. This does cause one to wonder about your editorial objectivity. Was the interview part of getting the advertising buy? I would have less of an issue if the advertising copy was not read by the same announcer who does the voice-over for other CBS items within your broadcast. This is a reasonable question, and should be addressed as part of your newscast tomorrow evening. I asked “Evening News” Executive Producer Rome Hartman to respond to these concerns and, in and e-mail, he wrote, “news judgments and advertising are completely unrelated, in this and every case. Period.” We visited this issue last December and asked Mike Sims, director of news and operations for CBSNews.com, whether advertising impacted editorial content in any way:

"Absolutely not," said Sims. "I would invite you to search for Wal-Mart on our site. You'll see a number of stories that are negative." Sims adds that when CBSNews.com runs a negative story about the company, Wal-Mart has the option to keep their ad from running on that page – but the company typically doesn't exercise that option. In response to this specific e-mail, Sims reiterated those comments, saying, “the evidence shows that neither Evening News nor CBSNews.com have ever been shy about doing negative stories about Wal-Mart during the term of their sponsorship. The proof is on the web site.” Sims also wanted it to be clear that “the announcer used for the Wal-Mart commercial on CBSNews.com is not used elsewhere on the site.”

I also asked Mason what he thought about the question. Mason told me in an e-mail that Curtis “is certainly right to raise the flag. I've done it myself with our senior producers whenever I've done a Wal-Mart story. I've always been told not to worry about the ads. And so I haven't.” Mason added that the Wal-Mart sponsorship has “never effected a word I've written about the company,” but added that he can understand the perception that it might.

It’s worth noting that the “Evening News” and CBSNews.com have done stories critical of Wal-Mart in the past and our very own Brian Montopoli did a very thorough job of vetting this very issue last year. I urge anyone who might be concerned about the issue to go back and read his post. As Brian said then, “As long as media outlets accept advertising … they will always be open to charges that they can be influenced.” And vigilant viewers are needed to keep asking these questions.

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Price Leaked for Microsoft's Zune?

Web Site for Retailer Wal-Mart Slips Up, Reveals Price of 'iPod Killer'

ABC NEWS
Sept. 18, 2006                              [back to top]

In what appears to be a serious mistake by retail giant Wal-Mart, the company posted a price for Microsoft's recently announced 30-gigabyte media player, Zune, at $284.00 on its Web site.

If that price holds up, the player would fall in line with similar products from Apple and Creative. Apple's 30-gigabyte iPod, for example, retails for around $300.

As reports began surfacing on the Web, the company quickly moved to take the item down.

"This price was incorrectly and inadvertently listed at Walmart.com," said Amy Colella, a spokesperson for Wal-Mart. "However, once this item is available, we'll offer it at the lowest available price that our customers expect from Wal-Mart.

Zune is Microsoft's answer to the iPod. It features a larger screen than current Apple offerings and through built-in wireless technology, will allow owners to trade and share media with other Zune owners.

But some have speculated that the device isn't much of an answer to Apple's popular product.

While Apple has moved on from just offering music to offering television shows and now full-length feature films, Zune will focus on music and so-called "viral" videos like the ones popularized on the Internet.

Many think that could leave Microsoft with a product that can't even compete with iPod, let alone steal market share.

When Microsoft first unveiled the details on Zune to the public, Michael Gartenberg, vice president and research director wrote on his blog that although he didn't get much time to play with the device, it didn't appear to be enough to topple the iPod juggernaut.

"It's also a step backward. Unlike PMC [Portable Media Center], there's no integration to recorded TV shows, no downloaded movie or video offerings," he wrote. "At a time that the market is moving beyond music to video, lack of a good video story seems to be a big minus."

Copyright © 2006 ABC News Internet Ventures

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A Milk War Over More Than Price

By MELANIE WARNER
New York Times
Saturday, September 16, 2006                [back to top]

Many organic foods have been popping up on the shelves of Wal-Mart in recent years, but none have been as popular as organic milk. For many shoppers, particularly mothers with small children, it is the first organic product they try.

Now organic milk is about to become much more widely available, as Wal-Mart rolls out its own organic brand, which will be cheaper than similar milk on the market. But critics worry that what consumers will be getting is a diluted form of organic milk.

Sold under Wal-Marts popular Great Value label, half-gallon cartons of the milk have been quietly introduced at 1,200 supercenters and Neighborhood Markets, according to a Wal-Mart spokeswoman, Karen Burk.

Wal-Marts own organic milk is likely to create stiff competition for many other makers of organic milk which comes from cows that have not been treated with hormones or antibiotics and even sellers of conventional milk.

Harvey Hartman, president of the Hartman Group, a market research firm working with Wal-Mart on its organic initiatives, said Wal-Marts own brand of organic milk will mean a lot more will be sold in the United States. Theyre creating incremental users because theyre removing one of the big inhibitors to buying organic, which is price, he said.

Last year, organic milk sales increased by 25 percent from the year before and Mr. Hartman predicts that Wal-Marts brand could lift annual growth to as much as 35 percent. Currently, organic dairy represents 3.5 percent of all dairy products sold in the United States, according to the Organic Trade Association.

The organic milk Wal-Mart is selling under its own label comes from Aurora Organic Dairy, which also supplies Safeway, Costco, Target and Wild Oats with their store brands of organic milk. But Wal-Marts entry into the market stirs greater attention from critics.

Activist groups, as well as some organic food retailers and dairies, contend that the company where Wal-Mart and the other big retailers get their milk operates large factory farms that are diluting the principles of organic agriculture and delivering customers a substandard product. They argue that Auroras cows do not spend any significant time roaming pastures and eating fresh grass; instead they live on a diet high in grains.

They are trying to cut corners in the interest of producing milk as cheaply as possible, said Mark Kastel, senior farm analyst at the Cornucopia Institute, which represents organic family farmers.

Wal-Mart and its supplier say that those allegations are misleading and that Auroras two farms in Colorado and Texas are in full compliance with Agriculture Department standards for organic dairy.

Executives at Aurora, which is based in Boulder, Colo., acknowledge that their farms, with 4,000 cows in Platteville, Colo., and 3,300 in Dublin, Tex., are among the largest organic dairy operations in the country. But they say their animals are healthy and contented and that the companys organic milk is of the highest quality.

Wal-Marts buying power is certainly cutting the cost of its organic milk. An informal survey of organic milk at Denver area grocery stores found that Wal-Marts label was 8 percent to 35 percent cheaper than other brands. At Wal-Mart, it was selling for an average of 10 percent less than Horizon Organic milk, the brand Wal-Mart has been carrying for three years.

The controversy turns on how closely Aurora adheres to the principles behind the organic food movement. Many organic farmers say grass feeding is essential for organic dairy production because it is part of a cows natural behavior. Milk from grass-fed cows, they say, is also higher in beneficial fatty acids than milk from cows fed grain, making it more nutritious.

At Auroras Platteville operation, about 40 miles north of downtown Denver, 4,000 cows are put on grass only when not being milked or when they are nearing the end of a lactation cycle. That totals about two to three months a year. The rest of the time they stay in dirt-lined outdoor pens where they eat from an ample trough filled with a mixture of hay, silage, corn and soybeans.

Clark F. Driftmier, head of marketing at Aurora, said the company planned to reduce the number of cows in Platteville to 1,000 by next summer so all the animals could graze. In addition, he said, the number of acres of pasture at the Texas farm will triple by next spring.

The company, he added, is opening a 3,200-cow dairy farm in Kersey, Colo., that has been designed to allow for year-round daily access to pasture. Mr. Driftmier acknowledges these changes are being made partly in anticipation of the Agriculture Departments plans to tighten rules requiring more grazing for milk to be called organic.

Mr. Kastel of Cornucopia calls Auroras efforts greenwashing. He says the farms acreage per cow will still be low and that the company is overtaxing its animals by milking them three times a day instead of twice, which is the norm at organic farms.

John Mackay, chief executive of Whole Foods Market, the nations largest organic food supermarket chain, toured Auroras Platteville farm in May with Margaret Wittenberg, vice president for quality standards. They found it to be unacceptable and not up to our standards, said a spokeswoman, Ashley Hawkins.

While a 4,000-cow farm is not large among conventional dairies, which can hold as many as 25,000 cows, it dwarfs most organic farms. Jim Riddle, organic outreach coordinator for the University of Minnesota and former chairman of the National Organic Standards Board, said that putting thousands of cows on pasture is almost impossible.

Wal-Mart would not say how much it was paying Aurora for its milk and whether that price was lower than the typical $26 per hundred pounds of milk that most organic dairy farmers get. But on its Web site, Aurora boasts that it is one of the lowest-cost producers of organic milk in the country, in part because the Platteville farm has a milking plant on site.

Because Aurora milks its cows three times a day and feeds its animals diets of calorie-dense grains, its milk production per cow is also higher than that of other organic milk producers. In Platteville, Auroras annual milk output per cow is 20,000 pounds, according to the company, whereas most organic dairies get 14,000 to 18,000 pounds per cow, Mr. Kastel says.

Mr. Driftmier at Aurora says that grass feeding should not be the only measure of animal health and well-being. Our record of animal welfare is certified by an independent third-party expert, he said. Our animals are outside all year long; theyre never locked into barns.

In accordance with organic standards, Aurora cows also get no hormones or antibiotics and all their feed is grown organically.

Many in the organic industry, however, say that Wal-Mart, in its push to move organics into the mainstream, could do more than simply search for the biggest and lowest-cost producer in the market.

Mr. Riddle, the organic coordinator, points to subsidy programs that dairy companies like Organic Valley, Horizon Organic and Stonyfield Farms are operating to help small and midsize dairy farmers move to organic methods. These programs are going to help alleviate the organic milk shortage by next year, he said. But you cant increase the supply overnight or place orders and have them immediately filled. Organic takes time.

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Everyday Low Wages

New York Times Editorial
September 15, 2006                                  [back to top]

Mayor Richard M. Daley of Chicago wielded the first veto of his 17-year tenure this week - and the City Council supported him - striking down Chicago’s short-lived plan to force behemoth retailers like Wal-Mart to pay higher wages and benefits. In this round, Mr. Daley, the retailers and local Wal-Mart suppliers argued that mandating higher compensation would do more harm than good by driving business and employment opportunities away from low-income neighborhoods.

But the choice - between no jobs or low-wage jobs - is probably a false one. Wal-Mart and other mega-retailers, like Target and Home Depot, need market share. With suburban areas saturated, cities are the logical places to grow. Wal-Mart especially needs more American consumers, having recently pulled the plug on unsuccessful attempts to expand in Germany and South Korea. It is currently planning to expand in Santa Fe, N.M., where local laws require higher wages than the company normally pays.

Another argument propounded by Wal-Mart is that paying higher wages would compel the company to raise its prices, hurting low-income consumers. Wage gains do not automatically lead to higher prices. They could be absorbed by higher productivity or by a narrowing of profit margins. Given Wal-Mart’s profits, the company could improve its wage structure and still beat the competition.

The Chicago ordinance raised legal and technical questions. If Mr. Daley had not wielded the veto, it would surely have faced a court challenge. But proponents of living wages have the moral high ground, and are increasingly finding a political voice. Chicago hasn’t heard the last of them, and Washington hasn’t either.

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China to top U.S. in economic growth

Burgeoning exports to Europe and Latin America to propel Asian nation, IMF report says.

NG HAN GUAN
The Associated Press
Fri, Sep. 15, 2006                           [back to top]

THE ASSOCIATED PRESS Business is booming in China. On Thursday a worker built a display booth for a bank in Beijing. However, the IMF expressed concerns about China’s construction boom.

China’s booming economy shows no sign of slowing, the International Monetary Fund said Thursday, prompting the organization to raise its global growth forecast for this year and next.

The higher forecast came despite a lowered 2007 forecast for U.S. economic growth of 2.9 percent, down from a 3.3 percent forecast in April. This year the U.S. economy is seen expanding 3.4 percent, the fund projected in its semiannual World Economic Outlook.

The report came at the same time as other developments showing China’s growing economic power and world influence.

•Chinese Premier Wen Jiabao’s grand tour of Europe this week is underscoring how the opportunities presented by the “super-market” that is China’s billion people may be trumping the continent’s long-standing concerns about human rights.

•China’s delegation to the Nonaligned Movement summit in Cuba, which the United States declined to attend as an observer, plans to hold bilateral meeting with several Latin American countries to strengthen its ties to the region.

In the International Monetary Fund’s report, the organization said much of the rest of the world was picking up steam while a housing market slowdown was dampening U.S. prospects. In addition to China, Japan and Europe are expanding and the IMF raised its forecast for global growth to 5.1 percent this year and 4.9 percent next year — both up a quarter-point from April.

“This is really the fourth year of very strong global growth,” said Raghuram Rajan, the fund’s chief economist in Singapore, where the IMF and its sister institution, the World Bank, will be holding their annual meeting next week.

The IMF predicted that China’s economy would continue to surge, rising 10 percent this year and next, propelled by surging exports. But it expressed concern about China’s construction boom, which authorities have been trying to restrain.

Meanwhile, Wen’s visits to Finland, Britain and Germany have been marked by a contract with Finnish mobile phone giant Nokia Corp., the announcement of a new factory in China for automaker DaimlerChrysler AG, and bolstered trade agreements with Germany and Britain.

Annual EU-Chinese trade has topped $217 billion, $5.7 billion more than U.S.-Chinese trade.

The European Union has continued its ban on arms sales to Beijing, and China was criticized for continuing problems with software and entertainment piracy.

But Western governments have toned down criticisms of China’s human rights record, even though human rights groups say there are still plenty of serious abuses.

China also is making a splash in Latin America after decades of doing little in that region. China’s imports from Latin America quintupled to $20.3 billion and exports to the region tripled to $15.4 billion from 2000 to 2004.

© 2006 Kansas City Star and wire service sources. All Rights Reserved.

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Wal-Mart talk ups Coles

Wendy Pugh,
Reuters
September 15, 2006          [back to top]

SHARES in retailer Coles Myer hit a new high yesterday on talk Wal-Mart Stores Inc. may launch a takeover offer to rival a $17.3 billion private equity bid.

But analysts and fund managers said the world's biggest retailer was unlikely to take part in a bidding war to enter the mature Australian market, and noted that it also had strong links with Coles' rival Woolworths. Coles shares hit $14.63, above the $14.50 private equity offer, after an internet report suggested Wal-Mart would bid. The stock later eased to close up 0.3 per cent at $14.44.

"The market has worked itself into a general lather of expectation. Any additional fuel on the fire contributes," said ABN AMRO Asset Management analyst Matthew Hoult.

A local website said directors of the US company and its advisers were in Melbourne to bid for Coles Myer and break up the company.

Coles's Target variety stores would be sold to retail magnate and Coles shareholder Solomon Lew, while its Officeworks stationery chain would be sold to the highest bidder.

A spokesman for Coles declined to comment, while a representative for Mr Lew was unavailable.

Coles last week said it had rejected a highly conditional $14.50 indicative bid by a private equity consortium.

The consortium includes Kohlberg Kravis Roberts, Bain Capital, Blackstone Group, Carlyle Group, CVC, Texas Pacific Group/Newbridge Capital and Pacific Equity Partners.

Coles is due to post its annual results on September 21.

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Wal-Mart moves on digital movie downloads

The No. 1 retailer is believed to be pushing to launch its own digital movie service later this year.

By Parija Bhatnagar,
CNNMoney.com
September 15 2006                          [back to top]

NEW YORK (CNNMoney.com) -- Wal-Mart, which has been eyeing the downloadable movie waters for some time, is now preparing to dive in.

According to sources familiar with the matter, the world's largest retailer and seller of movie DVDs is accelerating its efforts to launch a digital movie service in the months ahead. The quickened pace comes after both Amazon (Charts) and Apple (Charts) this month unveiled their own movie download services.

Wal-Mart (Charts) currently accounts for about 40 percent of all DVD sales in the United States. By launching its own service, industry watchers say Wal-Mart can protect that DVD market dominance.

The retailer is still apparently debating price models. One option Wal-Mart is considering is a free digital download of the movie along with a purchase of the DVD version at a Wal-Mart store. Another option is letting customers purchase a download of the movie for a few extra dollars when they buy the DVD version at the store.

Wal-Mart would make the digital downloads available through its Web site walmart.com, according to executives.

A published report late last year said Wal-Mart was also considering installing in-store kiosks where consumers could use digital technology to download films on to portable discs.

One movie industry source said his studio was in talks with Wal-Mart about a digital download setup that includes such in-store kiosks

"We're more than happy to work with Wal-Mart to sell the content whenever they're ready to launch the service," he said.

"The last time we talked with Wal-Mart a couple of weeks ago, our sense was that they had dropped back on this launch. But given Apple's move, it wouldn't surprise us that they want to get moving with it," he said. "It would make perfect sense for Wal Mart to sell DVDs in stores and coupons for digital downloads."

Wal-Mart spokeswoman Jolanda Smith said she could neither confirm nor deny Wal-Mart's intent to launch a new movie download service later this year.

"Our customers want to watch movies and they want to be able to make the choice when and how they want to view them," she said in an email to CNNMoney.com

"We believe many of our customers like to touch and feel the movies in-store and receive additional benefits such as the bonus features not currently available online.

"We intend to meet our customers needs whether they choose to purchase movies online or in the store and will continue to work hard with all our partners to do that," she added.

This wouldn't be the first time that Wal-Mart has attempted to make headway in the digital movie marketplace. Wal-Mart's online movie rental service failed. Walmart.com now refers customers to Netflix (Charts) for movie rentals.

One analyst who covers Apple and who did not want to be identified, said Apple has priced its digital movie offering so low that competitors like Amazon and possibly Wal-Mart would be hard pressed to make any money from their service by further undercutting Apple's prices.

Apple has said that new releases will cost $12.99 initially and $14.99 later, while older films titles will be $9.99.

However, Wal-Mart might be able to extract value and pose a "significant challenge" to Apple if it does decide to bundle its DVD and downloadable versions, he said.

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Personnel consultant hits Wal-Mart

Bloomberg
September 14, 2006                  [back to top]

Wal-Mart Stores Inc. paid bonuses to store managers that encouraged them to limit employee meal and rest breaks, a human resources consultant testified at a trial over claims the company cheated workers in Pennsylvania. The bonuses sometimes exceeded managers' salaries, Frank Landy, a Colorado-based psychologist, said in a third day of testimony in Philadelphia. The bonuses averaged $85,000 last year, with a quarter of store managers receiving more than $140,000, he said.

``If we have a manager who is able to capture one minute a week, 52 minutes a year, from 300 associates in his or her store, he would add to his bonus something around $1,300," Landy told jurors in state court. ``If he was able to capture one hour a week, his bonus would be enhanced by $82,000 for the average manager."

Landy testified on behalf of two former Wal-Mart workers who claim the world's largest retailer forced hourly employees to skip breaks and work off the clock . Michelle Braun and Dolores Hummel seek as much as $300 million in damages in their suit, one of more than 70 filed in federal and state courts that claim Bentonville, Ark. - based Wal-Mart failed to pay wages for all time worked.

Wal-Mart's bonus policy was one of several factors that led to the company's wage-hour violations, Landy said today. Number one on the list is the company's preferred scheduling system, which use s sales to determine store staffing levels, he said. The system pressures managers to limit employee hours and doesn't hold them accountable for missed breaks and lunches, Landy said.

``There's a lot of money sitting out there for a store manager if he or she can reduce payroll costs as a ratio to sales," he said. ``The more they can reduce costs, the more they get at the end of the year."

That focus on curbing payroll led hourly workers at Pennsylvania stores to skip more than 33 million breaks and 2 million meal periods between 1998 and 2001, attorney Michael Donovan said during opening arguments on Sept. 8.

Wal-Mart denies any violations of wage and hour laws.

Under the company's policy, 30-minute meal periods granted after six hours work are unpaid, Wal-Mart attorney Neal Manne told jurors last week.

Rest breaks are paid, with employees who work more than six hours allowed two 15-minute periods, he said.

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Wal-Mart Stores to cease layaway service

By MARCUS KABEL
AP Business 
Sept. 14, 2006                   [back to top]

Wal-Mart Stores Inc. will end layaway service this year due to falling demand and rising costs, scrapping a tradition started when Sam Walton founded the chain in 1962 catering to cash-strapped rural shoppers in northwest Arkansas.

Wal-Mart said Thursday it will stop accepting layaway items Nov. 19 with a pickup deadline of mid-December. In its layaway program, customers make a down payment to hold an item and then generally had up to 60 days to pay it off, with a shorter deadline in the peak Christmas season.

Layaway services are used mainly by people at the lowest end of the income scale, who don't have credit cards and may not qualify for credit, analysts say.

The move comes as Wal-Mart is changing on many fronts, from adding upscale fashions to targeting new urban customers, in a bid to revive growth rates that have fallen behind smaller rivals such as Target Corp.

"Demand for layaway service has declined steadily as consumers turn to current options including online shopping, shopping cards and no-cost credit alternatives that were not available when the company was started," said Pat Curran, executive vice president of Wal-Mart store operations.

Analysts said most retailers have already dropped layaway service as it is expensive and cumbersome. Merchandise can be tied up for months and employees have to keep track of a steady trickle of payments.

One holdout is Kmart, a wholly owned subsidiary of Sears Holdings Corporation, which issued a statement Thursday stating that it continues to offer layaway services at its 1,300 stores.

"This is another recognition that Wal-Mart is no longer a little Ozarks company but instead is the nation's largest private employer and the world's largest retailer," said Patricia Edwards, portfolio manager and retail analyst at Wentworth, Hauser & Violich in Seattle, which manages $8.2 billion in assets and holds 51,000 Wal-Mart shares.

Still, Wal-Mart's union-backed critics said the move marked another step away from its founder's vision.

"Sam Walton's Wal-Mart _ the one that 'bought American', treated workers with some dignity, and gave low income customers a chance to buy an expensive item over time _ that Wal-Mart is now on permanent layaway," said Chris Kofinis, spokesman for WakeUpWalMart.com.

It is Wal-Mart's latest break with tradition this year.

Wal-Mart introduced pay caps for hourly workers last month after four decades of no limits on annual merit raises. It stopped selling guns in about a third of stores to make room for more non-hunting sporting gear. It is also tailoring stores to local demographics rather than stocking all Wal-Marts alike.

Wal-Mart said it is working on ways to make other payment methods available to shoppers with limited credit, such as Wal-Mart-specific cards that offer zero interest for the first 6 to 12 months.

Edwards said dropping layaway will not chase off Wal-Mart's lowest income shoppers because those customers still need low prices. Getting some of those shoppers to take in-house credit cards can also mean more money for the chain in the form of card fees.

Wal-Mart's shoppers have an average household income of around $30,000 to $35,000 a year, compared to $50,000 to $60,000 for customers at smaller rival Target Corp., Edwards said.

Wal-Mart spokeswoman Linda Blakley said that, as demand for layaway has dropped, the costs have gone up since the department has fewer customers.

Blakley said she did not have a precise estimate for the number of Wal-Mart's more than 1.3 million U.S. employees who will be affected.

But she said a typical layaway department has three employees. Multiplied by Wal-Mart's 3,256 U.S. discount stores and Supercenters, that would mean around 10,000 could be impacted somehow. Wal-Mart said layaway employees will be encouraged to seek new opportunities in their stores.

"We will do whatever we can to help them find those new positions," Blakley said.

Wal-Mart stores shares rose 29 cents to close at $48.37 Thursday on the New York Stock Exchange.

 © 2006 The Associated Press

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Wal-Mart Fashion Week designs 'democratic'

United Press International                      [back to top]

NEW YORK, Sept. 13 (UPI) -- A rooftop runway show featuring reasonably priced clothes by anonymous designers during New York's Fashion Week could be the wave of the future, a report said.

Wal-Mart's Rock the Runway event showed 27 outfits with the highest price $98.94 for a leather jacket, The New York Times reported.

Seventh Avenue's place at the center of the fashion industry is shifting to Sri Lanka and Romania, the Times said.

"Not everyone is in New York," Senior Vice President of Wal-Mart Karen Stuckey said. "Fashion is not just for a chosen few who have front-row seats in some elite tent somewhere."

In fact, approximately one-third of the U.S. population visits one of Wal-Mart's 3,256 stores each week, the discount retailer claims.

Stuckey called the Wal-Mart show "the democratization of fashion."

Wal-Mart's fashions were very similar to the high-end designers' -- striped hoodies, squashed boots, leggings and denim swing skirts.

"What we believe is that we have millions in our stores every day that have been underserved," Stuckey said.

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

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Schuyler joins fight against new Wal-Mart assessment

By Glenda Gephart
Star-Gazette
September 12, 2006              [back to top]

WATKINS GLEN -- Schuyler County legislators have agreed to join the town of Dix, the village of Watkins Glen and the Watkins Glen school district in defense against Wal-Mart's legal attempt to have the store's property taxes lowered. The four taxing bodies will hire the Davidson and O'Mara firm of Elmira.

The resolution passed unanimously Monday by lawmakers states that a reduction in the assessment of the Wal-Mart property on state Route 414 on the eastern edge of the village would have an adverse affect on the taxing jurisdictions.

The property is assessed at $12.5 million, and Wal-Mart has started the legal action in state Supreme Court to ask for an assessment reduction. It previously had asked for a reduction to $5.4 million, which was denied by the town.

Assessing also came up during the meeting when legislators approved an intermunicipal agreement that can be used with towns interested in having their property values set under the guidance of the county Real Property Tax Services Department.

With the agreement, towns would continue to appoint their own part-time assessors, who would become county employees. Fees for the services would be based on the number of parcels involved.

County Administrator Timothy O'Hearn said the town of Orange has already voted to join the program.

He said last week that he does not expect all towns to participate, but "the assessors, without exception, support this initiative," he said Monday.

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Wal-Mart hiring hundreds in Illinois

United Press International                  [back to top]

MARION, Ill., Sept. 12 (UPI) -- Wal-Mart Stores Inc. will open a 203,000-square-foot superstore in Williamson County, Ill., later this month.

The Marion Wal-Mart will be the largest prototype Wal-Mart in existence, and employ 350 to 450 people, 75 percent of them full-time, the Southern (Illinoisan) newspaper said. The new store is projected to inject abut $1.8 million in annual sales tax money to the city.

As a "prototype," the store will have a new exterior look, a meat and dairy department and a new interior layout.

Copyright 2006 by United Press International

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Combating Wal-Mart Asymmetrically

by James H. Joyner, Jr.
Sep 12, 2006                                 [back to top]

Among the many arguments lodged against Wal-Mart by its critics is that, by selling goods at very low prices and offering comparatively low wage and benefit packages to its workers, they are leading a “race to the bottom” that is dragging down the entire service economy. American Prospect writer Ezra Klein puts the case succinctly:

So let’s say you’re a midsize retailer with national ambitions. You essentially can’t offer a decent benefits package because Wal-Mart doesn’t, and you can’t allow their prices to remain substantially below yours (where they’ll already rest thanks to Wal-Mart’s economy of scale).

Wal-Mart and other big box chains have designed a business model around selling large volumes of commodity items at small markups. To the extent that Wal-Mart is the 800 pound gorilla, competing against them on their terms is an uphill fight.

Then again, why would anyone want to do that? As the late philosopher Jim Croce counseled, one is ill advised to tug on Superman’s cape or pull the mask off the Lone Ranger.

Why not instead compete asymmetrically? Rather than trying to outdo Wal-Mart’s “everyday low prices” on everything from soup to nuts, why not instead come up with a different business model emphasizing your comparative advantage?

Before moving to the Washington, D.C. area, which has the worst Wal-Mart stores I’ve ever seen, I lived in a small Southern town where a new Wal-Mart SuperCenter was where everyone from the university president to the hospital chief to the lowest wage earners did most of their shopping. I made several trips to the store a week, as it was my venue of first choice for everything from groceries to hardware.

Despite this, there were all manner of things I would never have thought of buying there. For example, Wal-Mart sells everything a business man needs to wear to work: suits, dress shirts, neckties, socks, belts, and dress shoes. Yet, aside from a couple pairs of socks, I have not bought any of those items from Wal-Mart despite owning an amount of those items that would place me in the 99th percentile and having lived most of my life in places where Wal-Mart was the best store in town.

Why? Because Wal-Mart is aiming considerably lower on the fashion scale than my tastes dictate and my budget allows. So, despite regularly being in a store where I could dress myself head to toe for under $200, I go out of my way to shopping malls, specialty stores, and other places that charge many times that.

For various reasons, my wife and I buy books, coffee, pet food, wine, toiletries, and a whole array of things available much more cheaply and conveniently at Wal-Mart and its upscale rival Target from specialty outlets that charge considerably more. (And, I’d wager, provide better compensation to its employees.)

Apparently, we’re not alone. Despite competition from big box stores, chains like Whole Foods, Trader Joe’s, Linens and Things, PetsMart, Pier One, World Market and dozens of others are thriving by catering to those willing to spend more for quality and selection. This shouldn’t be surprising. After all, McDonald’s has many of the same advantages in the restaurant business as Wal-Mart has in retailing and yet thousands of other eateries manage to stay in business by catering to customers who want more than a cheap, quick meal.

Come to think of it, fast food chains don’t pay particularly well, either, nor are they on the leading edge of employee benefit packages. Yet, somehow, they’re not the subject of anything like the vitriol that the Democratic Party and its interest group allies reserve for the world’s number one retailer. Perhaps Jonah Goldberg is on to something in dubbing the Left’s obsessions with the subject “Wal-Mart derangement syndrome.”

Copyright © 2006 HUMAN EVENTS. All Rights Reserved.

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Union Advocates Blast Wal-Mart's 'Obscene Profits'

By Susan Jones
CNSNews.com
September 12, 2006                        [back to top]

(CNSNews.com) - A union-affiliated group that is waging a pressure campaign to unionize Wal-Mart (i.e., "change it for the better") is blasting Chicago Mayor Richard Daley for vetoing an ordinance that would have forced the city's largest retailers to pay employees a "living wage" by 2010.

Daley said the "big box" ordinance would hurt minorities and poor people by driving big stores -- and the jobs and development they bring -- out of the city.

"I understand and share a desire to ensure that everyone who works in...Chicago earns a decent wage. But, I do not believe that this ordinance, well-intentioned as it may be, would achieve that end," Daley said in his veto message. He called it his "duty" to veto the measure.

But union advocates see it differently: "It is an incredibly sad day when an elected official would veto Chicago's working families and taxpayers in favor of rich, powerful corporations like Wal-Mart," said Chris Kofinis, communications director of the union-affiliated WakeUpWalMart.com.

"Rather than require wealthy companies to be responsible, Mayor Daley evidently thinks its okay that big corporations make obscene profits while their workers get paid poverty-level wages and cannot afford health insurance."

But Working Families for Wal-Mart, a group formed to counter the union-led campaign against the retailer, called Mayor Daley's veto a victory for working families in Chicago.

"Wal-Mart provides communities with good jobs, opportunity for growth, affordable health care and huge savings for working families," said Catherine Smith, the group's interim chair. "We encourage the City Council to support this veto."

But the union affiliated group urged the city council to "stand together in their fight for a better Chicago and a better America by overriding Mayor Daley's veto."

It looks like the union advocates will be disappointed, however. According to the Chicago Sun-Times, three city council members who voted for the big-box ordinance have now agree to sustain Mayor Daley's veto.

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Daley vetoes `big box' law

By Gary Washburn
and Dan Mihalopoulos
Tribune
September 12, 2006                      [back to top]

Three aldermen, including one hungry for the jobs that a new Wal-Mart store would bring to her impoverished South Side ward, said they will switch sides and support Mayor Richard Daley's veto Monday of the "big-box" minimum wage ordinance.

It was his first veto in 17 years as mayor, and he obviously knew he had the support to make it stick.

"I am going to be changing my vote, joining the mayor in a veto," said Ald. Shirley Coleman (16th). "The community wants me to make sure that an opportunity exists for people willing to work for something other than $10 an hour, and Wal-Mart has expressed strong interest in building in my ward."

Ald. Danny Solis (25th), a Daley ally, said, "This was a difficult choice, but I'm going to go with the mayor. This ordinance is unfair. The Wal-Marts and Targets of the world can just set up shop on the borders of the city. I'm about a living wage, but not if it handicaps the city."

Ald. George Cardenas (12th), who voted in favor of the measure but signaled a possible switch shortly afterward, said he also would join with Daley.

He said he changed sides on the issue after the mayor spoke to him about the ordinance.

"My decision is based on Mayor Daley's track record," Cardenas said in a statement. "Chicago has never looked better."

Cardenas, a freshman alderman elected with the backing of the pro-Daley Hispanic Democratic Organization, said the ordinance would harm "the very people unions are trying to help."

"I am angry, but not surprised," Ald. Joe Moore (49th), sponsor of the ordinance, said after Daley filed his veto letter with the city clerk's office.

Other "living wage" advocates predicted that a new push for another, and perhaps broader, minimum pay measure would come in the future.

"We are not going away," said Dennis Gannon, president of the Chicago Federation of Labor. "Labor has been in the city of Chicago for over 120 years and, because we may have lost this battle with the mayor, it doesn't mean the war is over."

But opponents of the ordinance applauded Daley's move.

"I think that this encouraging news is not only good for the business community," said Gerald Roper, president of the Chicagoland Chamber of Commerce, "it's equally good for parts of the city that need economic development and jobs."

"I understand and share a desire to ensure that everyone who works in the city of Chicago earns a decent wage," Daley said in the letter. "But I do not believe that this ordinance, well intentioned as it may be, would achieve that end.

"Rather, I believe it would drive jobs and businesses from our city, penalizing neighborhoods that need additional economic activity the most," Daley said. "In light of this, I believe it is my duty to veto this ordinance."

The measure would require that employees of retail stores with at least 90,000 square feet operated by companies with a minimum of $1 billion in annual sales be paid at least $10 an hour and receive $3 an hour in fringe benefits by 2010.

The legislation was passed 35-14 by the council in July.

Moore would need to muster 34 votes to override the veto, but it appeared Monday that he would fall several votes short.

Suspecting that Daley's action was coming, Moore had sought to schedule the override vote for the October council meeting.

But Daley, clearly wanting to put the volatile and politically troublesome issue to rest, filed the veto 48 hours in advance of Wednesday's council meeting. That constituted proper legal notice to enable a vote then.

The ordinance would affect more than 40 existing retail stores in the city. There has been loud and lengthy debate over whether it would stifle plans by retailers for more big boxes in neighborhoods hungry for economic development.

Wal-Mart, Lowe's and Target Corp. said they were putting plans for future stores on hold pending the fate of the big-box ordinance, news that drew scorn from ordinance supporters who contended the Chicago market is too attractive for big retailers to bypass.

"We commend Mayor Daley for vetoing the ordinance and ensuring more jobs, more convenience and more choice for Chicago's working families," said Michael Lewis, a Wal-Mart senior vice president. "His action encourages desperately needed business investment and development in the city with job opportunities and savings for those who need it most."

Solis said Wal-Mart officials assured him they would build at least five new Chicago stores if the ordinance were repealed.

"I think the mayor did the right thing," said Ald. William Beavers (7th). "I voted against the ordinance because I felt that $7 an hour was better than no dollars.

"It's a union issue, but the unions need to get off their behinds and organize instead of coming to the City Council to try to get us to organize for them," Beavers asserted.

Supporters of the measure vowed more legislation.

"We are going to write another ordinance," said Ald. Freddrenna Lyle (6th). "We are going to start over again. ... Since everybody was complaining that this would only attack (big-box retailers), maybe we will go ahead and go after everybody this time and say everybody has to pay" a city minimum. Only small store operators would be exempt under such a measure, Lyle said.

Daley is expected to seek re-election in February, but "I don't believe he will pay a political price" for the veto, Roper said. "I think people will see this as a positive move on behalf of all of Chicago, not just a win for the business community."

But Tom Balanoff, president of the Illinois Council of the Service Employees International Union, said he was "disappointed" with Daley's decision.

"After he has taken this position, I don't see how unions could endorse him," Balanoff said.

U.S. Rep. Jesse Jackson Jr. (D-Ill.), who is considering a mayoral run, asserted that Daley stands with "President Bush and the Republican-led Congress" against increasing the minimum wage.

"I suggest that the mayor give up his $200,000-plus job for six months and try living on the salary that the Chicago City Council passed" in big box, Jackson said in a statement. "Richard M. Daley is the mayor of the `city that works' and now the mayor of the city that works for lower wages."

Daley supports an increase in the federal minimum wage, said Jacquelyn Heard, his press secretary.

"It is completely understandable the congressman would be for the big-box ordinance," she said. "Much of the area he represents is in the suburbs, which stand to gain greatly if this ordinance [stands]. Mayor Daley represents all of Chicago, including the West and South Sides. ...

"After years of trying to get to a point where retailers want to come into these underserved neighborhoods, we are not prepared to say `no thanks, go to the suburbs,'" Heard said.

Copyright © 2006, Chicago Tribune

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Wal-Mart: Where The Lights Are Bright

Tom Van Riper,
09.12.06                             [back to top]

For Wal-Mart Stores, the great American city may yet prove to be the final frontier.

Chicago Mayor Richard Daley set the stage for the retail giant to restart plans to open its first store within the city limits. The mayor vetoed an ordinance passed by the City Council in July that would have forced retailers with at least $1 billion in annual sales to pay workers at least $10.75 an hour in wages and benefits. That means Wal-Mart .

Eventually, this could be parlayed into more urban expansion if legislators and community activists around the country are impressed by the results in Chicago, America's third-largest city.

"Daley is saying to Wal-Mart, 'Come on and give the urban community the same deal you're giving the suburban customers, ' " says Britt Beemer of America's Research Group, referring to the low prices the company offers. Wal-Mart's expansion into the nation's urban centers could also mean the beginning of the end for Kmart, Beemer predicted, since its size would undercut Kmart's prices on most goods.

Daley said that while he understood the desire to provide a "living wage" to workers, he was persuaded by Wal-Mart's assertion that the job creation and low prices brought by a new store would mean a net gain for local residents. Retail experts point out that his decision could allow Wal-Mart to demonstrate with a real-life example how it would do business in a major urban center.

The original ordinance, passed by a 35-14 vote, "would drive jobs and businesses from our city, penalizing neighborhoods that need additional economic activity the most," Daley said in a statement.

Those words were no doubt music to the ears of Wal-Mart executives. The company's size and market influence has drawn ever-increasing government scrutiny in recent years, including a law in Maryland--passed over the governor's veto--that would require the company to devote 8% of its payroll to employees' health coverage.

With growth pretty much tapped out among the company's core rural customers, according to many experts, breaking more ground in urban areas is critical if Wal-Mart is to continue its expansion. To do that, the company has touted a more generous health benefits policy as part of a campaign aimed at placating liberal politicians who tend to be reflexively anti-Wal-Mart. The company is also experimenting with more upscale goods, like organic foods and sit-down bookstores, which appeal to city shoppers.

Competitors Target and Costco have effectively marketed select upscale goods with everyday low prices.

"We commend Mayor Daley for vetoing the ordinance and ensuring more jobs, more convenience and more choice for Chicago's working families," says Wal-Mart's senior vice president, Michael Lewis.

The council could still override the mayor's veto with 34 votes, though local media in Chicago were reporting that it seemed likely some members who originally voted for the ordinance would not vote for an override, thereby clearing the way for Wal-Mart.

While city growth is a key hurdle for Wal-Mart, there are limitations, Beemer points out. Less space probably means more regular discount stores and fewer supercenters, while loss from theft tends to run much higher in cities than in the suburbs.

"The suburbs are low-hanging fruit. It's an easier market to fill," he says.

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Mean or Green?

by LIZA FEATHERSTONE
September 11, 2006                        [back to top]

A laughing baby is covered in baby food. He's making a gushy mess, as babies do, but having a grand time. A magic word reassures us--before we've had a chance to worry--that the food itself is wholesome. That word, of course, is "organic." More surprising, to many viewers of this advertisement, will be the origin of this virtuous feast: Wal-Mart. This summer, the mega-retailer launched a multimillion-dollar ad campaign with an irresistible promise: "Introducing Organics at the Wal-Mart price." The commercial, which cannily plays to mothers' worries about how pesticides and additives may affect their children's health, has run on network and cable TV; a print version will appear in Parenting, Real Simple, Self and Cooking Light. Already one of the nation's leading organics vendors, Wal-Mart announced this past spring its intention to enter the market far more aggressively, to double its inventory and eventually offer organics at only 10 percent above the price of conventional food.

Food bearing the government's organic label can be, for low- and middle-income shoppers, prohibitively expensive. That's why, to many observers, an "organic Wal-Mart" represents the democratization of healthier--and better-tasting--food. Bob Scowcroft of the Organic Farming Research Foundation argues, too, that environmentalists should cheer Wal-Mart's move, which will "turn hundreds of thousands of acres" now being farmed conventionally to organic. "Think of the tonnage of toxins and carcinogens which will disappear from the earth," he says. Scowcroft also points to research by the Swiss government showing that organic farming can reduce global warming--actually drawing nitrogen and carbon from the atmosphere. Like the retailer's push for fuel-efficient trucking, Wal-Mart's entry into the organic sector could turn out to be another example of how one decision by this company--however market-driven--might do tremendous good, simply because of its scale.

But while there are potential upsides to Wal-Mart's move, it also offers plenty of reasons to worry. To advocates of local economies, like Judy Wicks, founder of Philadelphia's White Dog Cafe and co-chair of the Sustainable Business Network of Greater Philadelphia, an organic Wal-Mart could do "more harm than good" because of the changes it will bring about in the organic food industry. For example, she cites Wal-Mart's likely impact on many small farmers. In other industries Wal-Mart's aggressive competition has proved devastating to small producers, from TV manufacturers to conventional pork farmers. Though Wal-Mart, like Whole Foods, has agreed to source some products locally, most family-scale organic farmers will not supply big-box retailers directly. But many farmers will nonetheless struggle to meet Wal-Mart's price, in order to supply competing retailers or simply hang on to customers. "Every farmer has to compete because Wal-Mart is in every market," explains Mark Kastel, senior farm policy analyst at the Cornucopia Institute, a progressive research group that advocates for small farmers. "From an economic justice standpoint," he adds, Wal-Mart's plan to go more aggressively organic is "a disaster" because it could prove ruinous for so many family farms.

Some of the concern over small farmers may be sentimental, a remnant of our national identity as a land of Jeffersonian citizen-yeomen. And some detect, in the progressive reaction to Wal-Mart's organic ambitions, a whiff of countercultural cliqueishness. Gary Hirshberg, president of Stonyfield Farm, which supplies organic yogurt to Wal-Mart, is a former hippie who lived on an organic solar- and wind-powered farm in the 1960s and '70s. He dismisses Wal-Mart critics in the organic movement as "activists who don't want to think of organic as a segment. They think of it as a lifestyle." To Hirshberg, organic Wal-Mart is a sign of the movement's success, and those who don't like it are elitist purists, dedicated to their own marginality.

But there are unsentimental reasons to root for small farmers in this drama. They are important to a progressive vision, partly because they are more likely to be farming organic out of principle than a large corporation is and thus more inclined not to cut corners and compromise standards. People who live on their farms with their families also have a compelling incentive to treat the land better. Regina Beidler is a Mennonite who lives with her dairy-farmer husband, Brent, and 8-year-old daughter, Erin, on 145 acres with forty cows in Randolph Center, Vermont. Because the Beidlers farm organically--which as defined by the Department of Agriculture means no pesticides, petroleum-based fertilizers or sewage-sludge-based fertilizers--Erin roams the farm freely (her job is to push the button on the grain elevator). "It's reassuring to know she isn't being exposed to those [toxic] substances," says her mother. "It's much more child-friendly."

Perhaps even more convincingly, as groups like the Organic Consumers Association point out, transporting food long distances is a staggering waste of energy and contributes to global warming. According to research by Brian Halweil of the Worldwatch Institute, our food typically travels 1,500 to 2,500 miles to reach our plate, 25 percent farther than in 1980. By the time we sit down to eat it, a meal from a conventional grocery store has used four to seventeen times more petroleum than a meal made from local ingredients. While Wal-Mart officials have expressed concern about the "food miles" issue, industry observers predict that most of Wal-Mart's produce will travel significant distances--Chile, Kenya and China are some of the likeliest low-cost sources, according to Mary Hendrickson, director of the University of Missouri's Food Circles Networking Project--raising confusing questions about whether organic Wal-Mart will, on balance, hurt or help the planet. (Just to confuse the environmental issue still more, Bob Scowcroft points out that converting all those acres in China will clean up a lot of groundwater there, which is obviously good for the Chinese.)

Most small organic farmers interviewed for this article believed that in organics, as in many other sectors, Wal-Mart's low prices would, ultimately, mean lower standards. Stonyfield Farm's Hirshberg, who has had many discussions with Wal-Mart officials about the company's commitment to organics, says Wal-Mart does not plan to lower its price by lowering standards; rather, he says, Wal-Mart is committed to delivering the savings through efficiencies within its own system. But Wal-Mart's behavior as a major player in the organic dairy industry has already suggested otherwise. It has also provided a window on how the company will treat small organic farmers: just fine, until they can no longer provide the lowest possible price.

When Wal-Mart began selling organic milk, one of its first suppliers was Organic Valley, a cooperative of small farmers committed to organic principles. Organic Valley farmers, including Regina Beidler, were proud to be reaching Wal-Mart's customers, people like themselves who were struggling to make ends meet. But Organic Valley faced a milk shortage, so when the co-op found itself outpriced by a competitor, Horizon, which is owned by Dean Foods, the farmers decided not to engage in a price war to stay on the Wal-Mart shelf but to continue supplying the smaller food stores that had long formed the backbone of their customer base. "We didn't want to make compromises," says Organic Valley CEO and farmer George Siemon, meaning that the farmers needed to get a fair price while maintaining their product's integrity.

Horizon, which controls 55 percent of the organic dairy market, meets Wal-Mart's low price in part by providing appalling conditions for its cows. The Cornucopia Institute's Mark Kastel, first reached for this article as he was standing on Horizon's 4,000-cow Idaho feedlot, says the cows were "standing in 90-degree heat. No shade, no water. These animals are living very short lives." (To be considered "organic," animals--whether they are raised for meat, milk or eggs--must be given some access to the outdoors. It is an irony of the bureaucracy and inequity surrounding federal certification that by following the letter if not the spirit of such regulations--that is, for some of their lives Horizon's cows are outside, even if they have no room to move around--Horizon can call its milk organic, while many small farmers, whose cows roam freely and munch on grass, cannot; in many cases the farmers can't afford the expense of the certification process, or are put off by the paperwork.) The Organic Consumers Association has urged shoppers to boycott Horizon. As savvy consumers learn that sometimes the organic label tells an incomplete story, Organic Valley stands to benefit. "Organic Valley has long been built on the idea that family farming is a better way to give care to animals and the land," Siemon says diplomatically. "Consumers have a hard time believing that large factory farms are really organic."

To be sure, some family-scale organic farmers are benefiting from Wal-Mart's entry into the industry. Horizon buys at least half its milk from hundreds of small-scale farmers, as even a dogged critic like Kastel, author of a report called "Maintaining the Integrity of Organic Milk," acknowledges. And while Organic Valley isn't supplying Wal-Mart directly anymore, some Organic Valley milk does end up, much transformed, in the Wal-Mart customer's shopping cart: Stonyfield Farm buys milk from the cooperative to make organic yogurt. Says Stonyfield's Hirshberg: "If you're serious and sincere about family farms, then your ultimate goal is to be in Wal-Mart, to be where food is sold."

Still, the Horizon/Wal-Mart alliance is potentially ominous for family-scale dairy farmers, because, as Kastel points out, "there's a shortage today, but a year from now," as producers rush to meet the demands of big retailers like Wal-Mart, "you could have a surplus." A milk surplus could erode the organic premium and drive many small organic dairy farmers into bankruptcy, just as it has wiped out many of their conventional neighbors. Organic farmers, especially in the Northeast, are already in a precarious situation because of high fuel, grain and transportation costs. Travis Forgues, a second-generation farmer in Alburg, Vermont, the state's farthest-northwest town, milks eighty grass-fed cows. A 33-year-old father of three young children, he speaks for many small farmers when he says, "If we didn't have the organic market, my dad and I would have been out of here long ago." On the danger of a surplus fueled by demand from Wal-Mart and other big-box stores, Forgues says, "Anyone who's not worried about what's going to happen is crazy."

With Wal-Mart on the scene, the strength of alternative and local economic institutions will determine whether small farmers like Forgues survive. With 871 farmers and growing, Organic Valley, the largest organic farmers' cooperative in the country, is still going strong even without Wal-Mart's business, maintaining farmer control while still distributing on an impressive scale. (In the grocery store on my corner in New York City, which is not a natural-food store or a food co-op, Organic Valley milk is sold right next to Horizon, and that's the case in stores all over the country.) Farmers agree that the co-op model is critical, helping them maintain some power in an increasingly concentrated market. "The farmer has to be in the driver's seat," says Forgues. Because of the organic milk shortage and the Organic Valley cooperative, he continues to get a fair price and has survived a difficult season far more easily than most of his farmer neighbors. Of Wal-Mart, he says, "We're not going to cut our price so we can get onto that shelf. We have to make sure farmers don't get removed from the process, as happened in the conventional food market."

In a nod to the savvy consumer's growing interest in nearby food, Organic Valley is in the process of regionalizing many of its operations, so that even though farmers in twenty-three states belong to the co-op, customers in New England buying Organic Valley milk will be, increasingly, buying from New England farmers. Farmers' markets, which are growing in popularity, will also be critical institutions in the organic Wal-Mart era. Jim Goodman, a Wisconsin dairy farmer who tends 400 certified-organic acres with his brother, sells to a local cheesemaker (as well as directly to customers through mail order) but also relies on the weekly farmers' market in Madison, where he sells beef. He doesn't think Wal-Mart is going to affect his business. "People who come to the farmers' market are shopping there because they want to deal directly with the farmer," he says. "They want to meet the person who raised it, put it in their hand. When they get home they can say, 'This came from Mike, this came from Jim.' When you're sitting down to dinner that makes so much difference. I'd be surprised if they would go to Wal-Mart just because it's cheaper."

For local food to become more than a niche market and begin to transform our relationship to the environment, however, energy is going to have to be a lot more expensive. For the majority of Americans to have the incentive to buy local, the cost of food transport would have to reflect its true environmental costs. Many local food advocates speak--half with alarm, half wishfully--of "peak oil," the notion that we are running out of oil and will soon be forced to grow our own food and cooperate with our neighbors. That neo-primitivist scenario, if it ever comes to pass, is not going to arrive nearly quickly enough to substitute for the necessary work of persuading Americans to change our lifestyles, and advocating policies that conserve energy.

"Consumers have to be more educated," says Goodman. He thinks it's important to tell people why the prices are higher: Organic is not overpriced; rather, conventional food is cheap because its costs are passed along to the environment, small farmers and the health of those who eat it. "If people can't afford to buy organic," he says, "it's because they are not paid enough in their jobs, and don't have health insurance." That, Goodman insists, should be part of a broader economic justice agenda: A living wage should allow a person to buy responsibly grown, healthy food for her family. "With organic food," he explains, "there's no hidden cost." It's also true that at farmers' markets and roadside stands, organic food is often cheaper than in stores, because there's no profiteering middleman.

Taking their case to the shopper, Organic Valley farmers like Travis Forgues have been traveling the country on speaking tours. The Organic Consumers Association is working to create a domestic fair-trade group, whose label would assure the consumer that food was produced in a way that was environmentally and socially responsible--giving an edge to smaller, more conscientious producers over Dean Foods. With the goal, too, of making local organic produce affordable to the poorest Wal-Mart shoppers--those who will probably never be able to afford a meal at the White Dog Cafe, which runs around $50--the OCA is also working to broaden a program making it easier for farmers' markets to accept food stamps.

Many organic farmers are social activists and idealists who care about the environment, animal rights and economic justice. But many are also entrepreneurial--and that's how they will survive the new era of big-box organic. The challenge Wal-Mart poses, says Bob Scowcroft, is "to get consumers who discover organics at the Wal-Mart to get out of their car and to the farmers' market."

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Chicago mayor vetoes big-box wage increase

Mayor Richard Daley says 'living wage' ordinance would drive retailers like Wal-Mart and Target out of the area, hurt jobs.

CNNMoney.com
September 11 2006                           [back to top]

NEW YORK (CNNMoney.com) -- Chicago Mayor Richard M. Daley on Monday vetoed a "living wage" ordinance that would force big-box retailers like Wal-Mart and Target to increase their hourly pay and other benefits.

In July, Chicago City Council approved the ordinance by a 35 to 14 vote. It would require large chain store retailers with more than $1 billion in annual sales and at least 90,000 square feet to pay wages of at least $10 an hour plus $3 in benefits by 2010.

"I understand and share a desire to ensure that everyone who works in the City of Chicago earns a decent wage. But I do not believe that this ordinance, well intentioned as it may be, would achieve that end," Daley wrote in a statement.

"Rather, I believe it would drive jobs and businesses from our city, penalizing neighborhoods that need additional economic activity the most. In light of this, I believe it is my duty to veto this ordinance," he said.

Best jobs in America Wal-Mart (Charts), which plans to open its first Chicago store this year, applauded Daley's decision. "[Daley's] actions encourage desperately needed business investment and development in the city, with job opportunities and savings for those who need it first," company spokesman Michael Lewis said in a statement.

But Daley's vote can still be overridden when the City Council meets on Wednesday. It would require a total of 34 votes in support of the ordinance.

If passed, the ordinance would apply to other large retailers such as Target (Charts) and Home Depot (Charts).

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Uxbridge's Wal-Mart staying put, says company

By Jeff Hayward
Sep 11, 2006                         [back to top]

UXBRIDGE -- Despite new Wal-Mart stores coming to Uxbridge's east and west neighbours, the existing store in Uxbridge isn't going anywhere, said a company executive. Kevin Groh, director of corporate affairs at Wal-Mart Canada Corporation, confirmed an approximately 120,000-square foot Wal-Mart will be built in Port Perry at an undetermined time in the future. Scugog Township staff are recommending Scugog approve, with conditions, a controversial amendment to the Township's official plan. It would allow for 355,000 square feet of retail space at the site, when the official plan in Scugog currently only allows for 215,000 in that section of town.

But despite plans to build nearby, Wal-Mart is not pulling out of Uxbridge, said Mr. Groh.

"We are still keeping our store in Uxbridge," he said. Wal-Mart had expressed interest before Uxbridge council's summer recess to expand the store here, adding a 40,000-square foot grocery component. The application came following Township consultants completing a commercial study determining how much food store space is warranted in town. Four other applications for grocery stores had already been reviewed in public meetings.

Wal-Mart is "taking into account all the applications" on the table, said Mr. Groh. As a result, he said the company is holding off on its expansion plans in Uxbridge for now. "It allows us to look at the market to determine if expansion is warranted," he explained. But he maintains that "Port Perry and Uxbridge are very separate markets."

When asked how the company will react if Uxbridge turns down the application to expand, if Wal-Mart decides to follow that option, he said, "First of all (Wal-Mart) puts an expansion plan on the table if it makes sense.

"We have a sense (the application) would be supported from planning... We're committed to the store."

The current location in Uxbridge is roughly 80,000 square feet. The expansion would match the size of the coming Port Perry store, but still fall short about 15,000 square feet of Wal-Mart's average store size, said Mr. Groh.

Meanwhile, a group known as the Concerned Citizens of Scugog continues to fight the massive proposed retail development west of Port Perry on Hwy. 7A. The group stated in a media release its members are "disappointed" at news Scugog staff recommended the approval to amend the Official Plan.

"The vision isn't just against a Wal-Mart, or any one big box store, but to really have things fit within our community," said Cheryl Helm, spokeswoman for Concerned Citizens. "And within the growth that we can support.

"It has to be limited to the size of our other stores in our area," she added.

Another Wal-Mart store is planned for Uxbridge's western neighbour, Stouffville.

--- with files from David Stell

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Wal-Mart needs a makeover

Many shoppers think the store’s clothes are too cheap to be chic

By NEDRA RHONE
Cox News Service                  [back to top]

ATLANTA -- Bargain shoppers engage in a never-ending quest for the perfect deal, whether it’s a blouse purchased at 80 percent off or Italian leather shoes for $12.50. The thrill of the hunt lies in how much money they save.

Therein lies the problem for Wal-Mart. The world’s largest retailer wants its shoppers, while cruising the aisles for eggs and nail polish, also to check out its new lines of trendier clothes. But convincing shoppers, even discount die-hards, that clothing from the land of low prices can also rank high in style and quality will be a formidable task.

"If I’m there, I’m grocery shopping," said Angela Maher, 24. "I’m not there for my weekend outfit. They have to change the overall image of the store, because when you go there, you think cheap."

"Apparel habits are long in forming, long in breaking," said Michael J. Silverstein, author of Treasure Hunt: Inside the Mind of the New Consumer. ""Women don’t buy clothes to take a risk; they buy clothes to get compliments."

And in the minds of many, Wal-Mart clothes are just too cheap to be chic.

In the past year, the retailing giant has revamped No Boundaries, its junior clothing line. It also introduced Metro 7, a hip brand for trendy women, and Exsto, a line of urban-themed attire for young men.

Last month, glossy advertisements in Vogue, InStyle and other fashion magazines announced the arrival at Wal-Mart of George ME, from Mark Eisen, an award-winning designer who also produces cashmere garments under the brand name Karoo.

George ME places Wal-Mart on par with other discount retailers that have partnered with high-end designers, such as Vera Wang for Kohl’s and Nicole Miller for JC Penney.

Target perfected the strategy, industry analysts say. Several years ago, the retail chain partnered with designers Liz Lange and Isaac Mizrahi to offer stylish, affordable clothing. And since February, Target’s Go International program has enlisted a roster of international designers to create limited-time-only collections for the store. The marketing campaign, which featured designers such as Luella Bartley and, currently, Paul & Joe, convinced many shoppers that it was possible to buy attractive designer clothing at low prices.

Although Wal-Mart spokeswoman Linda Blakley insists that the retailer’s move toward more upscale clothing is not in competition with Target, it has drawn inevitable comparisons to the bull’s-eye brand from industry analysts and customers alike, and Target usually comes out on top. Twenty per cent of Target customers in 2004 had a household income of $100,000 or more, compared with 11 per cent of Wal-Mart customers, according to Retail Forward, a market research firm. Some 32 percent of Target shoppers fall into the trend-conscious age bracket of 18 to 34, vs. 25 per cent of Wal-Mart shoppers.

"Even though they may have really cool stuff, you may not want to go around telling people you got your clothes at Wal-Mart," said Dominique Frascino, who recently visited the Wal-Mart to buy a gift card. Once inside, she noticed that the store was cleaner, its apparel section was larger and that some of the clothes looked "interesting." But "Target is more socially acceptable," Frascino said.

It’s possible that Wal-Mart can change that opinion in shoppers’ minds. Among discount retailers, Wal-Mart has the highest share of loyal shoppers, according to Retail Forward, and it sells more women’s clothing than JC Penney, Kohl’s or Target.

"We are recognizing that we have this loyal base out here, but we can’t ignore the fact that we have competition," said Blakley, the Wal-Mart spokeswoman. "We want the shopping experience to encourage them to come back."

One of the challenges is persuading longtime Wal-Mart shoppers to buy more expensive items. A lined suede George ME jacket at Wal-Mart costs $69.82, a velvet No Boundaries shrug $14.83.

Robin Lewis, a retail strategy consultant and publisher of a monthly newsletter on the industry, said that any difference in quality between Wal-Mart’s apparel and that of its competitors is more perception than reality.

Lewis predicts that Wal-Mart ultimately will find its way in the world of apparel. "Wal-Mart’s pursuit of designer-level brands, organic foods and more upscale products in general is not about copying Target," she declared. "It’s about necessity

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Mayor Richard Daley Vetoes Chicago Living-Wage Bill

By Lauren Coleman-Lochner                      [back to top]

Sept. 11 (Bloomberg) -- Chicago Mayor Richard Daley vetoed a city ordinance that would have boosted the minimum wage for employees at retail stores of at least 90,000 square feet, a requirement that could have prevented Wal-Mart Stores Inc. from opening multiple stores in the third-largest U.S. city.

Alderman Joe Moore, the main sponsor of the ordinance, confirmed the veto today in a telephone interview.

Many state and local governments, including New York, have taken steps to pass minimum levels for wages or benefits amid criticism Wal-Mart doesn't pay enough. The company has responded by saying it would raise starting wages by an average of 6 percent for almost a third of its U.S. Wal-Mart and Sam's Club stores.

This is the first time Daley has vetoed a bill, mayoral spokeswoman Jodi Kawada said. An override of the veto would require a two-thirds vote, or 34, of the council's 50 members.

Chicago's city council approved the increase of the minimum wage to $9.25 an hour, plus $1.50 in benefits, starting July 1, 2007. The pay rate would be increased each year up to $10 an hour, plus $3 in benefits, by July 2010. Illinois' overall minimum wage is $6.50 an hour.

The city council passed the measure on July 26 by a vote of 35-14. As many as 10,000 workers could be affected, Moore said that day.

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Wal-Mart to customize stores Ethnic groups and affluent shoppers targeted

By AP
September 10, 2006                      [back to top]

BENTONVILLE, Ark. -- Wal-Mart Stores Inc. will retool its 3,256 U.S. stores over two years to give them a more-customized mix of goods and layout for six key groups of customers, including Hispanics, African-Americans and affluent shoppers, the executive in charge of Wal-Mart's U.S. operations said.

The move is the latest strategy twist for the world's largest retailer as it struggles to revive growth rates falling behind smaller rivals such as Target Corp. and after the company's first quarterly profit drop in a decade.

The approach, called segmentation, follows months of new initiatives from Wal-Mart to make sure each store is better tailored to its locale and to lure more affluent shoppers, who may come to Wal-Mart for groceries and basics but skip the company's more profitable aisles like apparel and electronics.

Eduardo Castro-Wright, president and CEO of Wal-Mart U.S., said stores will get a more specific mix of products and layout to appeal to a target group.

"Driving customer relevancy will drive growth," Castro-Wright said.

The target groups identified by researchers are Hispanics, African Americans, "empty-nesters/boomers," affluent, suburban and rural shoppers, according to Castro-Wright.

But he said the approach will not require changing more than a small part -- about 3,000 -- of the roughly 200,000 items sold by a typical Supercenter, the retailer's largest stores that combine merchandise with a full grocery section.

And each demographic category will include hundreds of stores, so Wal-Mart will not be sacrificing the economies of scale that have allowed it to offer low prices, Castro-Wright said.

For now, Wal-Mart is testing the approach in 20 to 40 stores.

In Houston, one store is adopting a Hispanic identity, by offering more Hispanic grocery products, a fresh-from-scratch bakery and breakfast tacos.

The results relative to other Houston Supercenters include sales per square foot 7.6 % higher and a higher gross margin, which means more profits per item sold.

In the Chicago area, Wal-Mart has defined a store as African-American, including offering more urban apparel, a music selection that is all gospel, rap and urban and what it describes as "ethnic hair care" products. Gross margin in that store is also far above other Chicago-area Wal-Marts, Castro-Wright said.

In March, Wal-Mart opened a new upscale store in Plano, Texas, aimed at shoppers in that affluent Dallas suburb. It includes high-end electronics, more fine jewelry, hundreds of types of wine ranging up to $500 a bottle, and even a sushi bar.

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Biyani will take on Reliance, not Wal-Mart

Satish John
Sunday, September 10, 2006                    [back to top]

MUMBAI: Kishore Biyani says he sleeps well these days.

Truth or dare? Hard to tell.

Dare he must, however, as sitting in the front row to hear him at the India Retail Forum on Saturday was Mukesh Ambani’s top team from Reliance Retail — Raghu Pillai, president and chief executive, retail operations and strategy; Bijou Kurien, president and chief executive, lifestyle and luxury’ and, Rajeev Karwal, president and CEO.

Then there is Noel Tata of Trent, standing on the sidelines as he finds all the seats in the over 10,000 square feet hall filled to the brim, till one volunteer finds him a place to sit.

Biyani says he is unfazed by domestic competition — Reliance’s Rs 25,000 crore plan notwithstanding.

He says the country should not allow the the Wal-Marts, Tescos and Carrefours — yet.

“They can come later,” he says. “The government shouldn’t let them in now”.

Why?

“If they are allowed now, they get a cheap entry — they can just buy out Indian companies for about a billion dollars (Rs 4,600 crore). Let them come after a few years, we’ll get at least $5 billion then,” he explains.

The Future Group honcho’s math is illuminating. He may have also thrown light on what’s going on in his mind here: is this a strategy to sell out big later?

Only time will tell.

A self-proclaimed black sheep of his family, Biyani first tasted the rigours of entrepreneurship as a garment manufacturer.

He let in on a little secret on why he entered retail. It’s all thanks to Shoppers’ stop.

“I have never told this before. I was a manufacturer of garments. Shoppers’ Stop declined to stock my products in their malls and that’s when I decided to set up my own retail malls,” Biyani said.

Later the Hindi film buff even produced Bollywood flicks as he embarked on setting up a chain of retail malls across the nation, that was 98% controlled by unorganised frat. Would he prefer Reliance or Wal-Mart has competition, the Q&A anchor asks. “Reliance anytime.”

While he is furiously building scale to his retail business, Biyani is also diversifying into allied fields.

Into insurance and private equity as he tries to get a bigger share of the customer’s wallet. By next year, he declares Pantaloon’s revenues would double to $2 billion (Rs 9,200 crore). By 2010, Pantaloon they would cross $6 billion (Rs 27,600 crore).

He is not rattled by the Reliance Retail juggernaut moving in, buying out land and driving prices up. “People like us, believe in us and they give us the space. We have enough leased space for the next 3-4 years,” he says. The biggest challenges, Biyani says, come from “managing his business at the speed of change. We are being watched. We Indians are not the perfectionists that managements talk about and we should know which war to fight and which war to avoid.”

Someone in the audience asks him why he’s selling foreign brands when he’s against foreign retailers.

Yet another quizzes him that modern retail as a concept originated in the west. His stock replies do not seem convincing.

Later when DNA Money asks Noel Tata, managing director of Trent whether he agrees with Biyani, Tata shrugs. Those are “his views”.

The Tatas are building a partnership with the UK-based Woolworth’s for a consumer durables retail venture, so Noel Tata may have a different opinion on the topic, but he’s not talking yet.

Raghu Pillai of Reliance Retail is more forthcoming on the topic on whether foreign direct investment is to be allowed. “There is enough capital and talent in India to be able to take organised retailing to greater heights.”

Some, however, beg to demur.

As Arvind Singhal, chairman, Technopak at a panel discussion said that India will need an additional 600 to 700 million sq ft of retail real estate space to meet a likely increase of $127 billion in consumption in the next five years.

The growth in space and consumption will have to come from Tier 2 cities and rural hubs. Contrary to the belief that fashion is the largest segment in organised retail in India, Singhal said food & beverages was the largest segment, worth $195 billion.

Kamal Nath, the commerce minister, would surely agree.

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Wal-Mart won't appeal Beaverton store

Associated Press
September 8, 2006              [back to top] 

BEAVERTON (AP) - Wal-Mart said Thursday it will not appeal a Beaverton City Council decision to reject a proposed store at a main intersection just off one of the busiest stretches of U.S. 26. The retail giant proposed a 152,300-square-foot store for the Cedar Mill area that the city council said would be a disaster for motorists, pedestrians, bicyclists and transit riders.

Steve Kaufman, chairman of Save Cedar Mill, said he was pleased and surprised by Wal-Mart's decision not to appeal.

He said Wal-Mart has a reputation of going to the Oregon Land Use Board of Appeals if the company feels there is any chance it could win approval on appeal.

“I think their decision was probably based on the City Council's unanimous rejection of the application,” Kaufman said.

Save Cedar Mill appealed the issue to the Beaverton City Council after it was approved by the city's Board of Design Review.

Jennifer Holder, a Wal-Mart spokeswoman, said the retailer decided that a long legal fight over the site was not in the best interest of the company or those who opposed it.

Holder had criticized the decision to reject the proposal last month as “a politically motivated decision.”

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Wal-Mart Finds an Ally in Conservatives

By MICHAEL BARBARO
and STEPHANIE STROM
September 8, 2006                                    [back to top]

As Wal-Mart Stores struggles to rebut criticism from unions and Democratic leaders, the company has discovered a reliable ally: prominent conservative research groups like the American Enterprise Institute, the Heritage Foundation and the Manhattan Institute.

Top policy analysts at these groups have written newspaper opinion pieces around the country supporting Wal-Mart, defended the company in interviews with reporters and testified on its behalf before government committees in Washington.

But the groups — and their employees — have consistently failed to disclose a tie to the giant discount retailer: financing from the Walton Family Foundation, which is run by the Wal-Mart founder Sam Walton’s three children, who have a controlling stake in the company.

The groups said the donations from the foundation have no influence over their research, which is deliberately kept separate from their fund-raising activities. What’s more, the pro-business philosophies of these groups often dovetail with the interests of Wal-Mart.

But the financing, which totaled more than $2.5 million over the last six years, according to data compiled by GuideStar, a research organization, raises questions about what the research groups should disclose to newspaper editors, reporters or government officials. The Walton Family Foundation must disclose its annual donations in forms filed with the Internal Revenue Service, but research groups are under no such obligation.

Companies and such groups have long courted one another — one seeking influence, the other donations — and liberal policy groups receive significant financing from unions and left-leaning organizations without disclosing their financing.

But the Walton donations could prove risky for Wal-Mart, given its escalating public relations campaign. The company’s quiet outreach to bloggers, beginning last year, touched off a debate about what online writers should disclose to readers, and its financing to policy groups could do the same.

Asked about the donations yesterday, Mona Williams, a spokeswoman for Wal-Mart, said, “The fact is that editorial pages and prominent columnists of all stripes write favorably about our company because they recognize the value we provide to working families, the job opportunities we create and the contributions we make to the community we serve.”

At least five research and advocacy groups that have received Walton Family Foundation donations are vocal advocates of the company.

The American Enterprise Institute for Public Policy Research, for example, has received more than $100,000 from the foundation in the last three years, a fraction of the more than $24 million it raised in 2004 alone.

Richard Vedder, a visiting scholar at the institute, wrote an opinion article for The Washington Times last month, extolling Wal-Mart’s benefits to the American economy. “There is enormous economic evidence that Wal-Mart has helped poor and middle-class consumers, in fact more than anyone else,” Mr. Vedder wrote in the article, which prominently identified his ties to institute.

But neither Mr. Vedder nor the newspaper mentioned American Enterprise Institute’s financial links to the Waltons. Mr. Vedder, a professor at Ohio University, said he might have disclosed the relationship had the American Enterprise Institute told him of it. “I always assumed that A.E.I. had no relationship or a modest, distant relationship with the company,” said Mr. Vedder, who has written a forthcoming book about the company. The book, he said in an interview yesterday, would eventually contain a disclosure about the Walton donations to the institute.

A spokesman for the Walton Family Foundation, Jay Allen, said there was no organized campaign to build support for Wal-Mart among research groups. All of the foundation’s giving, he said, is directed toward a handful of philanthropic issues, including school reform, the environment and the economy in Northwest Arkansas, where Wal-Mart is based. “That is the spirit and purpose of their giving,” Mr. Allen said.

Mr. Allen said the foundation, which had assets of $608.7 million in 2004, the last year for which data is available, has never asked the research groups to disclose the donations because “the family leaves it up to the individual organization to decide.”

Those groups, for the most part, say they have decided not to share the information with their analysts or the public.

For example, Sally C. Pipes, the president of the Pacific Research Institute, a free-market policy advocate, has written several opinion articles defending Wal-Mart in The Miami Herald and The San Francisco Examiner.

A month after a federal judge in California certified a sex discrimination lawsuit against the company as a class action in 2004, Ms. Pipes wrote an article in The Examiner criticizing the lawyers and the women behind the suit. “The case against Wal-Mart,” she wrote, “follows the standard feminist stereotype of women as victims, men as villains and large corporations as inherently evil.”

The article did not disclose that the Walton Family Foundation gave Pacific Research $175,000 from 1999 to 2004. Ms. Pipes was aware of the contributions, but said the money was earmarked for an education reform project and did not influence her thinking about the lawsuit. Asked why she typically did not disclose the donations to newspapers, she said: “It never occurs to me to put that out front unless I am asked. If newspapers ask, I am completely open about it.”

The lack of disclosure highlights the absence of a consistent policy at the nation’s newspapers about whether contributors must tell editors of potential conflicts of interest.

Juan M. Vasquez, the deputy editorial page editor of The Miami Herald, which ran an opinion article praising Wal-Mart by Ms. Pipes of Pacific Research, said his staff researches organizations that write opinion articles, including their financing. But that does not always require asking if the organization has received money from the subject of an article, he said.

The New York Times has a policy of asking outside contributors to disclose any potential conflicts of interest, including the financing for research groups.

Several of the research groups noted that their mission is to be an advocate for free market policies and less government intrusion in business. “Those aims are pro-business, so it’s not surprising that companies would be supporters of our work,” said Khristine Brookes, a spokeswoman for the Heritage Foundation.

Last year, for instance, The Baltimore Sun published an op-ed article by Tim Kane, a research fellow at Heritage, in which he criticized Maryland’s efforts to require Wal-Mart to spend more on health care. He objected to the move on the grounds that it was undue government interference in the free market, a traditional concern of Heritage.

“The existence of Wal-Mart dented the rise in overall inflation so much that Jerry Hausman, an economist from the Massachusetts Institute of Technology, is calling on the federal government to change the way it measures prices,” Mr. Kane wrote. “Translation: Wal-Mart is fighting poverty faster than government accountants can keep track.”

Ms. Brookes pointed out that the $20,000 Heritage has received from the Walton Family Foundation since 2000 amounts to less than 1 percent of its $40 million budget.

Ms. Brookes said it was unlikely that researchers and analysts at Heritage were even aware of the foundation’s contributions. “Nobody here would know that unless they walked upstairs and asked someone in development,” she said. “It’s just never discussed.”

She said Heritage did not accept money for specific research. “The money from the Walton Family Foundation has always been earmarked for our general operations,” she said. “They’ve never given us any funds saying do this paper or that paper.”

A spokeswoman for the American Enterprise Institute said the group did not comment on its donors. The group’s focus on Wal-Mart has been notable. In June, the editor in chief then of the group’s magazine, The American Enterprise, wrote a long essay defending Wal-Mart against critics. The editor, Karl Zinsmeister, now the chief domestic policy adviser at the White House, said the campaign against the company was “run by a clutch of political hacks.”

Conservative groups are not the only ones weighing in on the Wal-Mart debate. Ms. Williams of Wal-Mart noted labor unions have financed organizations that have been critical of Wal-Mart, like the Economic Policy Institute, which received $2.5 million from unions in 2005.

In response, Chris Kofinis, communications director for WakeUpWalmart.com, an arm of the United Food and Commercial Workers Union that gives money to liberal research groups, said: "While we openly support the mission of economic justice, Wal-Mart and the Waltons put on a smiley face, hide the truth, all while supporting right-wing causes who are paid to defend Wal-Mart’s exploitative practices.”

The lack of a clear quid pro quo between research groups and corporations like Wal-Mart makes the issue murky, said Diana Aviv, chief executive of the Independent Sector, a trade organization representing nonprofits and foundations. “I don’t know how one proves what’s the chicken and what’s the egg,” she said.

Last year, the National Committee for Responsive Philanthropy, a research and watchdog group, published a report, “The Waltons and Wal-Mart: Self-Interested Philanthropy,” that warned of the potential influence their vast wealth gives them.

But Rick Cohen, executive director of the group, said he was more concerned about the role the Walton foundation’s money might play in shaping public policy in areas like public education, where it has supported charter schools and voucher systems.

“These are certainly not organizations created and controlled by the corporation or the family and promoted as somehow authentic when they aren’t,” Mr. Cohen said. “More important, I think, is the disclosure of the funding in whatever’s written, a sort of disclaimer.”

Copyright 2006 The New York Times Company

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Swedish pension fund pulls out of Wal-Mart Mexico, citing human rights

By Cecilia Valente
09.08.2006                                  [back to top]

LONDON (Thomson IM) - The 195 bln skr Swedish second national pension buffer fund, AP2, has withdrawn its bond and equities investments in Wal-Mart Mexico, claiming the firm breaches human rights.

The Swedish fund's move to offload bond and equity securities worth 200 mln skr follows the Norwegian Government Pension Fund's decision to end its investments in the retailer in June, also citing employee rights concerns at the world's largest retailer.

'Dating from 2003, the Second AP Fund has written letters, exercised its voting rights at AGMs and participated in an investor group to influence the company, but the company has failed to indicate any change in its attitude to employee rights,' AP2 said in a statement.

The fund cited evidence gathered by the Norwegian Council on Ethics, which acts as an advisor to the Norwegian State Pension Fund.

According to the council's recommendation last November: 'An extensive body of material indicates that Wal-Mart consistently and systematically employs minors in contravention of international rules.'

The report also argued that working conditions at many of Wal-Mart suppliers were 'dangerous or health-hazardous.'

Runar Malkenes, spokesman for the Norwegian Finance Ministry, which is responsible for the Government Pension Fund, Told Thomson Investment Management News: 'When other funds, like the Swedish pension fund (AP2), follow our decision we see it as a recognition of the fact that our decisions are based on thorough and solid work.'

Eva Halvarsson, AP2's CEO, said: 'Wal-Mart has so many documented incidents concerning the infringement of norms, both within its own operations and throughout its supply chain that, in our opinion, the existence of an inherently unethical system is placed beyond all reasonable doubt.'

Rosen said AP2 is currently in talks with other companies on corporate governance and ethical issues, but stressed the fund saw divestments as a last resort when negotiations come to no fruition.

Wal-Mart was not available for comment.

Copyright AFX News Limited 2005. All rights reserved.

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The Undeclared War on America's Middle Class

By Thom Hartmann,
AlterNet
September 6, 2006                 [back to top]

You can't be middle class if you earn the minimum wage in America today.

The American dream and the American reality have collided. In America we have always said that if you work hard and play by the rules, you can take care of yourself and your family. But the minimum wage is just $5.15 per hour. With a 40-hour workweek, that comes to a gross income of $9,888 per year. Nobody can support a family, own a home, buy health insurance, or retire decently on $9,888 per year!

What's more, 30 million Americans -- one in four U.S. workers -- make less than $9 per hour, or just $17,280 a year. That's not a living wage either.

The U.S. Census Bureau's statistics for 2004 show the official poverty rate at 12.7 percent of the population, which put the number of people officially living in poverty in the United States at 37 million. For a family of four, the poverty threshold was listed as $19,307. If the head of that family of four were a single mother working full-time for the government-mandated minimum wage, she couldn't even rise above the government's own definition of poverty.

Becoming middle class in America today is like scaling a cliff. Most middle-class Americans are clinging to the edge with their fingernails, trying not to fall. In the 1950s middle-class families could live comfortably if just one parent worked. Today more than 60 percent of mothers with children under six are in the work force. Not only do both parents work but often at least one of those parents works two or more jobs.

Middle class at 80 hours per week

In a 2005 article in the Chicago Tribune, reporters Stephen Franklin and Barbara Rose introduce us to Muyiwa Jaiyeola. Jaiyeola, who is 33 years old, works a 40-hour week as a salesman at a Sears store, then works another 20 hours in the stockroom of a Gap store in downtown Chicago. When Jaiyeola pulled two all-night shifts at his stockroom job in late August, he was able to sleep only two hours in the afternoon, then two more in the morning before going back to his sales job. He hoped to nap during his break in the middle of the night.

Jaiyeola is not hoping to get rich -- he's just trying to pay his bills. Working two jobs at this wage level is what it takes to be middle class these days. And he's not alone. According to Franklin and Rose:

Nearly 7.6 million Americans straddle two or more jobs and must find time to work, sleep and live somewhat contorted lives in a very full 24 hours. According to a 2001 U.S. Labor Department survey, most workplace moonlighters do it because they want or need extra money to pay bills ...

Those who specifically need the extra work to pay bills are most often women who take care of their families, and divorced, widowed or separated workers. For a quarter of the American work force, not only is the American dream not a reality, no part of it is.

Low wages are being paid not only to entry-level workers at places like Wal-Mart and McDonald's but also to adults like Jaiyeola who have work experience. The people being forced to work two jobs to make a living are the heartbeat of our society. They are child-care workers and nursing home workers, janitors and security guards, salespeople and stockers. They often have the most hazardous jobs, the late-night jobs -- the jobs that rarely include benefits.

Americans have traditionally believed in an economy where those who make a contribution are rewarded. A man like Jaiyeola should be able to work eight hours at Sears and then go home.

Low prices, low paycheck

Cons argue that we have to choose between having high wages and having low prices. They are wrong.

Take the case of Wal-Mart. According to the United Food and Commercial Workers union (UFCW), Wal-Mart could pay each employee a dollar more per hour if the company increased its prices by a half penny per dollar. For example, a $2 pair of socks would then cost $2.01. This minimal increase would add up to $1,800 annually for each employee.

I wouldn't mind paying more for a pair of socks if it meant that my fellow Americans would be able to pay for good health care. That would save me money because right now Wal-Mart's uninsured employees run up hundreds of thousands of dollars in bills at emergency treatment centers when their problems often could have been solved more cheaply and with better results had they been caught earlier at a doctor's office.

And I wouldn't mind paying one cent more for a pair of socks if it meant that parents could be home at night and on the weekends spending quality time with their kids. That's a real family value.

Here's what all this talk about wages really comes down to: Would you rather pay 10 percent more at Wal-Mart and get 30 percent more in your paycheck, or would you rather have lower prices and an even lower paycheck? That's the real choice: We're either spiraling up into a strong middle class, or we're spiraling down toward serfdom.

Looking at the arc of U.S. history, we discover we've been on a downward spiral ever since Ronald Reagan declared war on working people in 1981. Companies cut prices and then cut wages so they can still turn a hefty profit. Folks whose wages have been cut can't afford to shop at midrange stores like Macy's, so they have to buy at "low-wage" discount stores like Wal-Mart. That drives more midrange stores out of business and increases pressure on discount stores to send their prices even lower. To compensate for lower prices, they lower wages so they can still turn a hefty profit. On and on it goes -- until the people working those jobs are no longer middle class and have to work two or three jobs to survive.

Our choice is not between low prices at Wal-Mart and high prices at Wal-Mart. It's between low prices at Wal-Mart with lousy paychecks and no protection for labor, and the prices Wal-Mart had when Sam Walton ran the company and nearly everything was made in the United States and people had good union jobs and decent paychecks.

The choice is ultimately about whether we want to have a middle class in this country.

Why unions?

Unless you are a CEO, you don't have a lot of leverage to demand benefits at your workplace. Every year or two, you might go to your boss and ask for a raise or an extra day of vacation, but usually you can't do much about what hours you work, what health benefits you receive, or how your retirement benefits are structured. Unions give workers that leverage.

Unions are designed to give workers a voice in decisions that affect their jobs. They allow workers to negotiate with their employers for wages, health benefits, retirement benefits, and good working conditions. In the best circumstances, unions partner with companies -- both have an interest in satisfied, happy workers.

Unions create a middle class by allowing you and me to ask for the wages and the benefits we need to become or remain middle class. Unionized workers earn higher wages, have better benefits, enjoy greater job stability, and work in a safer environment. In 2003 union workers earned an average of 27 percent more than nonunionized workers. Seventy-three percent of union workers received medical benefits compared with just 51 percent of nonunion workers.

And 79 percent of union workers have pension plans. Cons have slandered unions for more than a hundred years. Professional people have bought the line that it is unprofessional to be in a union, that only blue-collar workers unionize. People worried about their status and legitimacy -- like nurses -- tend not to join unions.

But it's not true that unions are just for blue-collar workers. Unions are for anyone who wants to be middle class. Teachers are almost all unionized. Actors -- most of whom are not Sean Penn or Charlize Theron and don't get paid big bucks -- are almost all unionized. Anyone who works needs the rights that unions can provide.

Democracy in the workplace

Most of us don't think about workplace rights. We assume that because we live in America, we have all the rights we need.

There are no constitutional protections in the workplace. Most people are at-will employees, which means they can be hired or fired at will. Federal law protects you from being fired because of race, age, gender, or disability, but it doesn't protect you from being fired for saying that the boss is overworking you or the company's actions are immoral. You can't say that sort of thing in the workplace because the workplace is not a democracy.

Why does that matter?

If you can't talk freely about your working conditions, you can't negotiate changes to those conditions. If you're afraid the boss will fire you if you complain about overtime, you have no way to prevent your boss from requiring you to work extra hours.

We have a democracy in this country because the founders realized that they could not change the king of England's lousy taxation system unless they had representation in government. Democracy gives us the power to create a society that matches our needs. Democracy in the workplace allows us to negotiate the conditions of our work. It ensures that honest working people like Muyiwa Jaiyeola can be middle class without having to work 60 hours per week.

According to Thea M. Lee, assistant director of public policy for the American Federation of Labor and the Congress of Industrial Organizations (AFL-CIO), for there to be democracy in the workplace, workers must have fundamental rights. These rights include freedom of association -- which means the right to organize and bargain collectively -- and prohibitions on child labor, forced labor and discrimination in employment.

You may think that we have all of these rights now. We don't. U.S. workers have almost no right to organize. Every 23 minutes in the United States, a worker is either fired or harassed for trying to unionize. Our president goes around the world, talking about the importance of bringing democracy. We loved Lech Walesa and his union movement in Poland. But today, if the middle class is to survive, we need a Lech Walesa in the United States -- or at least some honest education about our own country's labor history.

Labor in America

Labor goes back a long way in U.S. history. In 1874 unemployed workers were demonstrating in New York City's Tompkins Square Park. Riot police moved in and began beating men, women and children with billy clubs, leaving hundreds of casualties in their wake. The police commissioner said: "It was the most glorious sight I ever saw."

Three years later, on June 18, 1877, ten coal-mining activists were hanged. That same year a general strike in Chicago -- called the Battle of the Viaduct -- halted the movement of U.S. railroads across the states. Federal troops were called up, and they killed 30 workers and wounded more than a hundred. In September 1882, 30,000 workers marched in the first-ever Labor Day in New York history. In 1884 the Federation of Organized Trades and Labor Unions was established, and it passed a resolution stating that eight hours should constitute a legal day's work. Hundreds of thousands of American workers began following that rule.

In May 1, 1886, the Knights of Labor took to the streets to call for an eight-hour day. Eighty thousand workers shut down the city of Chicago. On May 4, 3,000 workers gathered in Haymarket Square. A bomb was thrown that killed seven policemen. Eight of the people present were rounded up, tried for murder, and sentenced to death. The Haymarket riot became the symbol of labor injustice in America.

This is but a fragment of the history of the labor movement in the United States.

Matters improved when labor got organized -- but not much. In fact, by the 1920s things looked a lot like they do today: The robber barons were in charge, and the situation for working people was bleak. The rich were incredibly rich, and the few middle-class workers were deeply in debt. The labor movement appeared virtually dead.

It took the Republican Great Depression to wake people up. It took Franklin D. Roosevelt to speak the truth. If a politician said the same things today that Roosevelt did in the 1930s -- openly accusing big business of being anti-American and antiworker -- he'd be accused of socialism and communism. Very few national figures have the courage to speak out today the way FDR did back then.

Roosevelt provided courageous leadership. In his first term, he had sent to Congress the National Industrial Recovery Act, which set standards for wages and working hours and established the right of laborers to organize. This set the stage for labor groups to bargain for wages and conditions. Thanks in large part to FDR's work on behalf of labor, in the 25 years after World War II the real incomes of the middle class doubled.

Why we need a labor movement today

Today America is regressing. Middle-class income has stopped growing. The net worth of those who earn less than $150,000 per year (which includes everybody from the working poor to the highest end of the most well-off of the middle class) is down by 0.6 percent.

The problem isn't the economy. Corporations are making more money than ever. The real income of people whose net worth exceeds $100 million is doubling.

What's happening is simple: The rich are getting richer and the entire spectrum of the middle class is disappearing.

We can easily trace this decline to Reagan's first public declaration of war on the middle class when he went after the Professional Air Traffic Controllers Organization (PATCO) in 1981. He broke the back of the air-traffic controllers' union and began the practice of using the Department of Labor -- traditionally the ally of workers -- against organized labor and working people.

Reagan liked to say he was against "big government." What he really meant was that he was against Roosevelt's New Deal. He was against Social Security, the minimum wage, free college education (he ended that in California as its governor), and programs like the WPA. He believed in the discredited concept of "trickle-down" economics -- the theory that if you create a corporatocracy, the rich will nobly spend some of their money to help the rest of us. The American people don't need handouts. Our workers just want to be paid a living wage for a fair day's work. We can't count on the corporatocracy to give us what we earn, so we need a strong labor movement to give us the power to negotiate our wages and benefits. Ultimately, it's all about power.

Workplaces are not democracies -- in the United States they're run more like kingdoms. Employers have the power to hire and fire, to raise or lower wages, to change working conditions and job responsibilities, and to change hours and times and places. Workers have only the power to work or to not work (known as a strike). The strike -- a tool that can effectively be used only by organized labor -- is the only means by which workers can address the extreme imbalance of power in the workplace. And because organized labor is a democracy -- leadership is elected and strike decisions and contracts are voted on -- unions bring more democracy to America. We spend about half our waking lives at work -- at least we can have some democracy in the workplace, and a democracy means a strong middle class. ...

To-do list

The cons have almost succeeded in throttling American democracy by screwing over the middle class. To fight back we must battle on two fronts.

First, we must recognize and reclaim the government programs that create a middle class:

Return to the American people our ownership of the military, the prison system, and the ballot box. Fight for free and public education that encourages critical thinking, historical knowledge, and a love of learning in each child. Combat the No Child Left Behind Act and the belief that education is a commodity that can be tested. Fight for a national single-payer health-care system based on Medicare. Fight for Social Security -- do not let it be privatized or co-opted. Fight for progressive taxation: reinstate a rate of 35 percent on corporations and a rate of 70 percent on the wealthiest 5 percent of Americans -- and use the money to pay back the Social Security system and to fund an economic investment program. Fight for a living wage and for the right of labor to organize. Fight for a national energy program that puts people and the planet -- not Big Oil -- first.

When America has a strong middle class, democracy will follow. The opposite is also true. To fight back, we must also make use of the ballot box. We can achieve the economic programs that make the middle class possible by using the power of our democracy to vote for those politicians who support the middle class. We've been conned for long enough. It's time to take back America.

Thom Hartmann is an author and nationally syndicated daily talk show host.

© 2006 Independent Media Institute. All rights reserved. 

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Swedish State Fund Sells Wal-Mart Holdings

By Johan Carlstrom,
Dow Jones Newswires
September 7, 2006                            [back to top]

STOCKHOLM -(Dow Jones)- Swedish state pension fund the Second National Pension Fund, known as AP2, Thursday said it has sold its entire holding in U.S. retail giant Wal-Mart Stores Inc. (WMT) and Wal-Mart De Mexico SA (WALMEX.MX) worth around SEK300 million ($41 million).

Carl Rosen, head of ownership issues at the fund, told Dow Jones Newswires that the decision was based on alleged abuses of workers' rights at Wal-Mart's various businesses.

"Since there are so many accusations from so many parties, in so many countries, it's impossible to say that there have been no systemic abuses," he said.

He said that the fund has tried to change the alleged situation since 2003 through letters and meetings but to no avail, prompting the decision to sell.

A Wal-Mart spokesperson described the allegations as inaccurate and unfounded, saying the company offers competitive salaries and supports unionization. "They (AP2) are accepting just one side of the story," he said.

Earlier this year, the Norwegian government pension fund also divested its stake in Wal-Mart citing violations of workers' rights.

Copyright (c) 2006 Dow Jones & Company, Inc.

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Wal-Mart aims for even lower prices Wal-Mart

CEO says the retail giant is 're-energizing' its discount programs to offset gas prices, boost traffic.

By Parija B. Kavilanz,
CNNMoney.com
September 7 2006                           [back to top]

NEW YORK (CNNMoney.com) -- Wal-Mart is preparing to go deeper with discounts in a bid to boost customer traffic and offset lost sales as higher gas prices force its core low-income shoppers to cut back, Wal-Mart CEO Eduardo Castro-Wright told an industry gathering Thursday.

"We've reenergized our rollback program to convince consumers that the smart thing is to go to Wal-Mart and save more," Castro-Wright announced during his presentation to analysts at the Goldman Sachs retail conference in New York.

Castro-Wright said the company was gearing up to develop media and in-store advertising efforts to communicate this latest initiative to its consumers.

He added that the move was in response to Wal-Mart's (Charts) own market research, which evaluated its customers' exposure to gas prices and asked what "we could do to help make it worthwhile for shoppers to make the additional two to three mile trip to our stores."

He said the recent run-up in fuel prices was changing the way Wal-Mart customers shopped. "They're cutting down on the number of trips to Wal-Mart stores and stocking up on weekends."

Wal-Mart spokesperson Sarah Clark stressed that Wal-Mart was constantly evaluating its "rollback" discount program. "We want to ensure that it continues to provide significant savings at a time when every penny counts to our customers."

Castro-Wright's presentation was monitored via webcast in New York.

Wal-Mart, the world's largest retailer, recently reported August sales at its stores open at least a year - a key measure of retail performance known as same-store sales - that were at the high end of its moderate forecast.

At the same time, the sales growth was fueled mostly by purchases of food, drinks and other consumables rather than by other discretionary items such as apparel, footwear and electronics.

Indeed, value-priced chains like Wal-Mart and Target (Charts) are highly vulnerable during periods of gas price inflation because of their low-to-moderate-income clientele.

But higher energy costs also hurt these big-box operators on the back end of their business .The risk to Wal-Mart, which operates more than 3,000 namesake stores in the United States, is in the higher utility and transportation costs embedded in running its vast trucking fleet, according to Castro-Wright.

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Wal-Mart to drop one-size-fits-all approach: WSJ

Reuters
Thu Sep 7, 2006                   [back to top]

NEW YORK (Reuters) - Wal-Mart Stores Inc. <WMT.N>, the world's biggest retailer, is trying to boost sluggish sales gains by dropping its one-size-fits-all approach to retailing, The Wall Street Journal reported on Thursday.

Instead of stocking mostly the same products, the retailer is custom-fitting its merchandise to appeal to demographic groups, the Journal said.

Wal-Mart is custom-fitting its merchandise assortment to reflect each of six demographic groups -- African-Americans, the affluent, empty-nesters, Hispanics, suburbanites and rural residents, the newspaper said.

The Journal cites Eduardo Castro-Wright, chief executive of the Wal-Mart's U.S. stores and architect of the new approach. The newspaper said Castro-Wright is a director of Dow Jones & Co Inc. <DJ.N>, publisher of The Wall Street Journal.

Wal-Mart's attempt to divide its roughly 3,400 U.S. stores into six different models is a big shift for a company that grew on the strength of standardization, The Journal said.

Wal Mart was not immediately available for comment.

© Reuters 2006. All rights reserved.

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Wal-Mart, CVS Alarm Doctors as Retailers Push Walk-In Clinics

By Josh Fineman                            [back to top]

Sept. 7 (Bloomberg) -- Lillian Grabel had one day of blood pressure medication left and didn't want a long wait in a doctor's office for a new prescription. So she turned to the drop-in clinic at a Duane Reade drugstore in New York.

``It's wonderful,'' says Grabel, 66, after a stop at the RediClinic on the second floor. ``It was worth every penny