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walmart subsidy watch.org

WALMART ALERT


Wal-Mart's Healthcare Cost To Taxpayers By State


wakeupwalmart.com

 
walmartwatch.com

sprawl-busters.com

walmartworkersrights.org

warnwalmart.org

walmartwork.org

walmartsurvivors.com

indiafdiwatch.org

lawmall.com/wal-mart

livingeconomies.org

amiba.net

newrules.org

«
VIDEOS


Wal-Mart: The High Cost of Low Prices

(walmartmovie.com)

Independent America:
The Two Lane Search
for Mom & Pop
(independentamerica.net)

Big Box Mart
(jibjab.com

Garth Brooks Parody (walmartworkersrights.org)

"Is Wal-Mart Good for America?"
Frontline, PBS Video,
www.pbs.org

The Labor Video Project Fighting Wal-Martization

«
BOOKS

The Case Against Wal-Mart
By Al Norman Raphel Marketing ruth@raphael.com:

Wal-Mart: The Face Of Twenty-First Century Capitalism
Edited By Nelson Lichtenstein
The New Press www.thenewpress.com

The Great Risk Shift:
The Assault on American Jobs, Families, Health Care and Retirement
By Jacob S. Hacker
Oxford University Press www.oup.com

War On The Middle Class:
How the Government, Big Business, and Special Interest Groups Are Waging War on the American Dream and How to Fight Back
By Lou Dobbs Viking,
a member of Penguin Group www.penguin.com

Momentum: Igniting Social Change in the Connected Age
By Allison H. Fine Jossey-Bass www.joseybass.com:

Big-Box Swindle:
The True Cost of Mega-Retailers and the Fight for America's Independent Businesses
By Stacy Mitchell,
www.beacon.org
 www.newrules.org

Wal-Mart: The Face Of the Twenty-First-Century Capitalism Edited by Nelson Lichtenstein 
by The New Press www.thenewpress.com

The Bully Of Bentonville
How the high cost of Wal-Mart's Everyday Low Prices is Hurting America
By Anthony Bianco
by Doubleday  specialmarkets@randomhouse.com

How Wal-Mart Is Destroying America (and the World),
By Bill Quinn,
www.tenspeed.com

The United States of
Wal-Mart,
By John Dicker,
www.penguin.com

 Slam-Dunking Wal-Mart,
By Al Norman,
www.sprawl-busters.com

Nickel and Dimed,
By Barbara Ehrenreich, 
www.henryholt.com

Death By Discount,
By Mary Vermillion, 
www.maryvermillion.com

The Wal-Mart Effect
By Charles Fishman www.penguin.com

Megamall On The Hudson
By David Porter and
Chester L. Mirsky
www.trafford.com

«
STUDIES

Big Box Backlash
«
Alachua County Commission
«
Trip Generation Characteristics of Free-Standing Discount Supercenters
«
Shameless: How
Wal-Mart Bullies Its Way Into Communities Across America Study

«
What Do We Know About Wal-Mart? 
«
The Wal-Mart Game
«
The Shils Report
«
PBS Frontline Report
Is WalMart Good For America?

«
Bakersfield Ruling
«
Bakersfield Report
«
momandpopnyc.com
momandpopnyc.blogspot
«
UC Berkeley Labor Center
The Hidden Cost of WalMart Jobs

«
Northern California Big Box Studies 
«
Radio Broadcast
Past Radio Shows
«
The EEOC will hold the companies like Wal-Mart accountable for violating
the Americans With Disability Act. 

read more

«
BIG BOX
SITE FIGHTS

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send us your Link at
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Red Bluff, CA
Chelan, WA

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Search for:

« ARTICLES FROM OCT 2005 TO DEC 2005   

Article Date Published Newsource
WalMart Gets Mixed Welcome from Small Towns Dec 29, 2005 By Jim Kent
City cuts Wal-Mart $5M deal Dec 29, 2005 jarrington
Montgomery Advertiser 
Work begins on south-side Wal-Mart Supercenter Dec 24, 2005 Bob Petrie
The Sheboygan Press
Wal-Mart Plans to Appeal $172M Judgment Dec 23, 2005 By DAVID KRAVETS
Associated Press 
Jury Awards $172M to Wal-Mart Employees Dec 23, 2005 By DAVID KRAVETS
Washington Post Company
Wal-Mart Wins "Grinch of the Year" for Second Year in a Row Dec 22, 2005 By Jobs with Justice
A Little Man Takes on Wal-Mart Dec 22, 2005 Donald Luskin
Chains nervous as Wal-Mart focuses on electronics Dec 22, 2005 By Maria Halkias
The Dallas Morning News
Wal-Mart withdraws application for Elk Grove Supercenter Dec 21, 2005 Sacramento Business Journal
Waste Not, Wal-Mart Dec 21, 2005 By Tim Beyers
TMF Mile High
Wal-Mart's Waiting Game in Japan Dec 21, 2005 By Ian Rowley
BusinessWeek
Wal-Mart Supporters Form New Group to Counter Critics Dec 21, 2005 By Randy Hall
CNSNews.com
UPDATE 1-Wal-Mart is target of criminal probe over waste Dec 20, 2005 Reuters

The Motley Fool Take Wal-Mart's Been Kicked

Dec 20, 2005 The Motley Fool
Wal-Mart Subject Of Criminal Probe Dec 20, 2005 Yvonne Lee
All Headline News
Wal-Mart's World to Swell in '06 Dec 19, 2005 VNU eMedia Inc.
Wal-Mart vs. the world Dec 19, 2005 By Matthew Boyle
FORTUNE
Wal-Mart: Merchant of Shame Dec 17, 2005 National Organization for Women
Wal-Mart Uses "Secret" Chinese Sweatshops to Produce Holiday Goods Dec 17, 2005 NTDTV
Epoch Times International
Anti-Wal-Mart Activists See Local Threat in World Trade Talks Dec 16, 2005 by Michelle Chen
NewStandard
US House panel members urge FDIC delay Wal-Mart bid Dec 16, 2005 Reuters
Is it a sin to shop at Wal-Mart? Dec 16, 2005 By R. W. Dellinger
A sour note for choir at Wal-Mart Dec 16, 2005 BY CHRISTINE ARMARIO
Newsday Inc.
Brazil's top retailer names CEO as Wal-Mart prowls Dec 16, 2005 Reuters
Wal-Mart wins Japan Seiyu's approval for rescue Dec 15, 2005 Reuters
Wal-Mart in global expansion push Dec 15, 2005 BBC NEWS
Former Wal-Mart Exec Takes Helm at Seiyu Dec 15, 2005 By HIROKO TABUCHI
Associated Press
WAL-MART'S PUBLIC IMAGE CAMPAIGN Dec 14, 2005 MacNeil/Lehrer Productions
Wal-Mart Buys Brazil Stores for Expansion Dec 14, 2005 By ALAN CLENDENNING
AP Business
The Wal-Mart Question Dec 14, 2005 CBS News
Wal-Mart bringing superstores to Canada Dec 14, 2005 CBC News
Fla. Wal-Mart Axes Manager Over Bias Issue Dec 14, 2005 By MITCH STACY
Associated Press
Supermarkets brace for next Wal-Mart move Dec 14, 2005 By MARINA STRAUSS
Globeandmail.com
Wal-Mart's Asda Plans Improved Food Offering to Take on Tesco Dec 13, 2005 Bloomberg
 
Wal-Mart: Another hungry corporate monster Dec 13, 2005 By Sarah Kubik
CAMPAIGN DIARY
Leaders of Faith Mark Holiday Season by Bashing Wal-Mart Dec 12, 2005 By Randy Hall
CNSNews.com
Wal-Mart planning $12 million Hartford supercenter Dec 12, 2005 Pete Millard
The Business Journal of Milwaukee
Children protest outside Wal-Mart Sweatshop labor allegations cited Dec 12, 2005 By Stephanie V. Siek
Globe
Wal-Mart CEO Scott gives another PR speech, but cannot make secret management memo disappear Dec 11, 2005 By union-network.org
Advocacy group hits Wal-Mart on practices Dec 11, 2005 By Nathan Hurst,
Globe 
Religious Organization Boycotts Wal-Mart Dec 10, 2005 Andrea Moore
All Headline News
Lowry repeated misleading Wal-Mart health care defense Dec 9, 2005 mediamatters.org
A U.S. view: Wal-Mart and U.S. capitalism Dec 9, 2005 by Keith Gottschalk
Wal-Mart Critics: Where Would Jesus Shop? Dec 9, 2005 By MARCUS KABEL
AP Business 
Wal-Mart Runs Ads After Publishers Complain Dec 8, 2005 By MARCUS KABEL
AP Business 
Wal-Mart to locate in Jiujiang Dec 6, 2005 Asia Pusle
Wal-Mart Movie: A Wavering Thumbs-Up Dec 5, 2005 By S.J. Caplan
What To Do About Wal-Mart Dec 5, 2005 Stacy Mitchell
Bicycle Defect Case Begins Against Wal-Mart, Dynacraft Dec 5, 2005 Dow Jones Newswires
Wal-Mart: The Whole Story Dec 3, 2005 Washington Post Company
Who's afraid of Wal-Mart? Dec 3, 2005 Surajeet Das Gupta 
New Delhi Business Standard
City council in Detroit suburb votes to bar 24-hour operation for Wal-Mart Dec 3, 2005 Canadian Press
Wal-Mart Subpoenaed by Federal Grand Jury Dec 3, 2005 From Bloomberg News
Los Angeles Times
Wal-Mart's bid to obtain limited banking powers worries lenders Dec 2, 2005 Tamarind Phinisee
San Antonio Business Journal
Wal-Mart Denies Spying On Union Sympathizers In Quebec Dec 2, 2005 Dow Jones Newswires
Wal-Mart Gets Subpoena In Calif On Hazardous Waste Dec 2, 2005 By Tony Cooke,
Dow Jones Newswires
Majority Says Wal-Mart Bad for America: Poll Dec 2, 2005 by Emily Kaiser
Reuters
Wal-Mart hired security guards to spy on Quebec employees Dec 2, 2005 CBC investigation
Union workers at Que. Wal-Mart outlet to appeal decision to throw out lawsuit Dec 2, 2005 Canadian Press
Wal-Mart apologizes for bad check accusation Dec 2, 2005 The Associated Press
Wal-Mart, Critics Spar Over Co. Stature Dec 1, 2005 By MARCUS KABEL
Wal-Mart is labelled 'bad for US' Dec 1, 2005 BBC NEWS
City Council Votes to Bar 24-Hour
Wal-Mart
Dec 1, 2005 The Associated Press
Americans split over Wal-Mart Polls Dec 1, 2005 MSNBC.com
The Associated Press
This Season, Close Your Wallet to
Wal-Mart
Dec 1, 2005 Act For Change
Is Wal-Mart Really Going Green? Nov 30, 2005 By Liza Featherstone,
Grist Magazine
Wal-Mart loses 'philosophical argument' with Apple CEO Steve Jobs, gains top-selling iPod Nov 29, 2005 MacDailyNews
Chapters Take Action on Wal-Mart This Holiday Season Nov 28, 2005 National Organization for Women
PUSHING THE PARTY LINE AT WAL-MART Nov 28, 2005 By Labor Desk
CAPITALISM KILLS: Wal-Mart and Amerada Hess Nov 28, 2005 By Thomas Riggins
Use of force at issue in Wal-Mart case Nov 27, 2005 By ROBERT CROWE
Houston Chronicle
Battling Wal-Mart Nov 27, 2005 by Neal Peirce
the Oregonian
Wal-Mart Critics Have Clashing Objectives Nov 25, 2005 By Randy Hall
CNSNews.com
Wal-mart Consumer Complaints Nov 25, 2005 offtheshelf.us
Epping criticized for blocking 24-hour shopping at Wal-Mart Nov 24, 2005 New York Times
Angry Women Are Watching Wal-Mart Nov 23, 2005 by Martha Burk
MinutemanMedia.org
Gov. won't contest keeping Wal-Marts closed on Thanksgiving Nov 23, 2005 New York Times
Wal-Mart, Target ready for holiday sales battle Nov 23, 2005 The Associated Press
Back to Basics at Wal-Mart: Spare No Rivals Nov 23, 2005 By MICHAEL BARBARO
Wal-Mart in mess over cleaning crews Nov 23, 2005 Bloomberg News
New York Daily News
Wal-Mart will pitch again to erect store in Vancouver Nov 22, 2005 Jason Kirby
Financial Post
Wal-Mart's Upper-Crust Snobbery Nov 22, 2005 By Rick Aristotle Munarriz
(TMFBreakerRick)
Wal-Mart Check-Out Errors Exceed US Guidelines - Studies Nov 21, 2005 Dow Jones & Company, Inc.
Wal-Mart Check-Out Errors Nov 21, 2005 By MARCUS KABEL
The Associated Press
Wal-Mart janitors' lawsuit refiled with conspiracy complaint Nov 21, 2005 By MARCUS KABEL
Associated Press 
Wal-Mart to match competitors' prices on Friday Nov 21, 2005 Reuters
Columnists: McDonald's and Wal-Mart - Hard facts please Nov 20, 2005 Roger Cowe
 
Wal-Mart Arrests Are a Warning, Feds Say Nov 19, 2005 By MICHAEL RUBINKAM
Associated Press 
100 Arrested at Wal-Mart Construction Site Nov 18, 2005 By MICHAEL RUBINKAM
Associated Press
Pro-Growth City Denies Super Walmart California Nov 17, 2005 Posted by: Abhijeet Chavan
Wal-mart fails to ban work romance Nov 16, 2005 iafrica
Wal-Mart Girds for Battle on Md. Bill Nov 16, 2005 By John Wagner

Wal-Mart Memo Shows Huge Expansion in U.S.

Nov 15, 2005 By MARCUS KABEL
Associated Press

Wal-Mart sued over accused shoplifter's death

Nov 15, 2005 By ROBERT CROWE
Houston Chronicle
Fight intensifies over Wal-Mart Good or evil? Dueling movies make their cases Nov 15, 2005 By JESSICA HOLZER
Houston Chronicle Washington Bureau
Wal-Mart Official Responds to USA Today Editorial, Opinion Piece on Company Health Benefits Nov 15, 2005 medicalnewstoday.com
Wal-Mart Memo Shows Expansion in U.S. Nov 14, 2005 By MARCUS KABEL
Associated Press
Target Wal-Mart Nov 14, 2005 Robert L. Borosage
and Troy Peters
NASHUA Wal-Mart back, with altered plan Nov 13, 2005 By James Vaznis
Globe
Ministers to Use Pulpit to Urge Changes at Wal-Mart, Group Says Nov 12, 2005 Lauren Coleman-Lochner
Bloomberg
Dogged documentary presents a damning case against Wal-Mart Nov 11, 2005 By Ty Burr
Globe
$210,000 penalty sought in iwi case Nov 11, 2005 By Gordon Y.K. Pang
Catholic League Calls Off Wal-Mart Boycott Nov 11, 2005 By KELLY P. KISSEL
Associated Press 
Wal-Mart aims at small cities Nov 10, 2005 Shanghai Daily
Retail Wal-Mart Stands Up To Wave Of Lawsuits Nov 10, 2005 Tom Van Riper
Activist posts anti-Wal-Mart ad online Nov 10, 2005 By Marcus Kabel
AP Business
Wal-Mart, Metro to buy more from China Nov 9, 2005 Xinhuanet
Ex-Official at Wal-Mart Pleads Guilty to Three Counts Of Wire Fraud Nov 8, 2005 By ANN ZIMMERMAN
and JAMES BANDLER
THE WALL STREET JOURNAL
Wal-Mart banking move stirs record comment Nov 7, 2005 By Jonathan Birchall 
New York Financial Times
Feds: Wal-Mart Execs Knew Workers Illegal Nov 7, 2005 By MARCUS KABEL
Associated Press
Wal-Mart: sued for film piracy? Nov 7, 2005 p2p news / p2pnet
The Wal-Mart 22 Nov 7, 2005 Jonathan Tasini
Wal-Mart's plan a sham Nov 6, 2005 By Paul Blank
No Escape for Wal-Mart Nov 6, 2005 washingtonpost.com
Wall to wall Wal-Mart Nov 6, 2005 The New York Times
Wal-Mart opens door to critics Nov 5, 2005 By ANNE D'INNOCENZIO
The Associated Press
Wal-Mart's fear of the Googleplex Nov 5, 2005 by Dan Farber
Mixed Grade for Wal-Mart on Report Card Nov 5, 2005 By STEVEN GREENHOUSE
A Wal-Mart-brand symposium Nov 5, 2005 By Amy Joyce
The Washington Post
A hard look at Wal-Mart Economists discuss retailer's impact on U.S. Nov 5, 2005 By STEVEN GREENHOUSE
New York Times
Union Group Launches 'Association' for Wal-Mart Workers Nov 4, 2005 By Randy Hall
CNSNews.com
Government Report Confirms Wal-Mart Violated Child Labor Laws and Made a Sweetheart Deal with Bush's Labor Department to Avoid Oversight and Penalties Nov 4, 2005

 

afsme.org
Wal-Mart faces association that aims to organise workers Nov 4, 2005 Business Respect
Issue Number 88
Wal-Mart pledges greater transparency Nov 4, 2005 Reuters
To change Wal-Mart, first change America Nov 4, 2005 Joseph Nocera
The New York Times
Group to Form Association For Wal-Mart Employees Nov 4, 2005 By Amy Joyce
Washington Post
DUE DILIGENCE: At Wal-Mart, It's About Change -- Finally Nov 4, 2005 Dow Jones
Wal-Mart Seeks Unbiased Research -- and Gets It Nov 3, 2005 By Abigail Goldman
Times

Sweet Victory: Wal-Mart Roundup

Nov 3, 2005 Co-written by
Sam Graham-Felsen
Wal-Mart to Tighten Control Over Its Japanese Affiliate Nov 3, 2005 By MARTIN FACKLER
Wal-Mart Movie Opens With Fracas In Manhattan Nov 3, 2005 Disinformation
Wal-Mart exec to take helm at Japanese retailer Nov 2, 2005 MSNBC.com
The Associated Press
Labor Dept. to Wal-Mart — How may we help you? Nov 2, 2005 By L.M. SIXEL
HoustonChronicle.com
Jackson County court certifies class in Wal-Mart suit Nov 2, 2005 Kansas City Business Journal
Missouri Wal-Mart workers get class-action status Nov 2, 2005 St. Louis Business Journal
Wal-Mart completes $1B Seiyu bailout Nov 2, 2005 Reuters
Wal-Mart: Is This the Worst Company in the World? Nov 2, 2005 by Andrew Gumbel
Independent / UK
Campaign Against Wal-Mart to Heighten in Mid-November Nov 2, 2005 by F. Timothy Martin
NewStandard
A New Weapon for Wal-Mart: A War Room Nov 2, 2005 by Michael Barbaro
the New York Times
Wal-Mart To Make Japan's Seiyu A Group Unit On Dec 21 Nov 2, 2005 By Hiroyuki Kachi
and Natsuo Nishio
Dow Jones
Judge Limits Wal-Mart Suit vs. Ex-Executive Agreement to Not Sue Each Other Cited Nov 2, 2005 By Marcus Kabel
Associated Press
washingtonpost.com

Big Box Ordinance 

Nov 1, 2005 see article
Brazil Wal-Mart Unit To Invest BRL40 Million In Sao Paulo Store Nov 1, 2005 By Jeff Fick
Dow Jones Newswires
Labor Deal With Wal-Mart Criticized Nov 1, 2005 By Amy Joyce
Washington Post
Judge Dismisses Much Of Wal-Mart Suit Vs Ex-Executive Coughlin Nov 1, 2005 Dow Jones Newswires
Critics put Wal-Mart on 'war room' footing Nov 1, 2005 By Michael Barbaro
The New York Times
Wal-Mart to open 13 stores next year Nov 1, 2005 www.chinaview.cn
Labor Dept. Is Rebuked Over Pact With Wal-Mart Nov 1, 2005 By STEVEN GREENHOUSE
The New York Times
Wal-Mart critics to air first TV ads Oct 31, 2005 Reuters
Wal-Mart, Walton family support Schwarzenegger Oct 31, 2005 By Jim Hopkins,
USA TODAY
Walmart invests in super mall project Oct 31, 2005 www.chinaview.cn
Wal-Mart stumbles in reshaping image Oct 31, 2005 AFP WASHINGTON
Serious breakdowns in Wal-Mart settlement Oct 31, 2005 By Erica Werner
Associated Press
So, you want to work for Wal-Mart Oct 29, 2005 New York Daily News
Wal-Mart tests Mexico grocery Oct 29, 2005 By ELIZA BARCLAY
HoustonChronicle.com 
Wal-Mart forfeits soul to low prices Oct 29, 2005 By LOREN STEFFY
Houston Chronicle
Wal-Mart close to land grab in India Oct 29, 2005 By James Hall
Wal-Mart Doubles Down on Its Investment in Japan Oct 29, 2005 By MARTIN FACKLER NIIZ
New York Times
Protesters Target 'Shocking, Secret' Wal-Mart Memo Oct 28, 2005 By Susan Jones
CNSNews.com
Wal-Mart Pushes to Soften Its Image Oct 28, 2005 By Amy Joyce and Ben White
Washington Post 
Predicting the Next Wal-Mart Oct 28, 2005 By John Reeves
TMF Bane
Wal-Mart Responds To Critical Video Oct 28, 2005

Sandra O'Loughlin

Wal-Mart's Perverse Strategy on the Minimum Wage Oct 28, 2005 by Tim Kane, Ph.D.
www.heritage.org
Is Wal-Mart really changing? Oct 28, 2005 Anne D?Innocenzio
And Marcus Kabel
Canadian Press
Wal-Mart pressuring electronics rivals Oct 28, 2005 By Nicole Maestri
Subsidizing the World's Largest Corporation Oct 28, 2005 by Greg LeRoy
Association of Alternative Newsweeklies
Wal-Mart's Memo Blurs Its Message on Benefits Oct 27, 2005 By Abigail Goldman
and Lisa Girion
LA Times
Health insurance costs are on Wal-Mart's mind Oct 26, 2005 By L.M. SIXEL
Houston Chronicle
Health Care Memo Further Tarnishes Wal-Mart Oct 26, 2005 by Chris Arnold
NPR
Wal-Mart's Jumbo-Sized Plans Oct 26, 2005 By Mike Cianciolo
The Motley Fool
Wal-Mart Memo Suggests Ways to Cut Employee Benefit Costs Oct 26, 2005 By STEVEN GREENHOUSE and MICHAEL BARBARO
Wal-Mart's worldview Oct 26, 2005 Pia Sarkar
Chronicle
Wal-Mart vows changes in health care, environment Oct 26, 2005 By: Emily Kaiser
Wal-Mart Chief Says Customers Need Increase in Minimum Wage Oct 26, 2005 By Amy Joyce
Washington Post
Wal-Mart proclaims its conversion to a caring, sharing firm Oct 26, 2005 David Teather
Guardian
Trouble in Wal-Mart's America Oct 26, 2005 By Harold Meyerson
washingtonpost.com
A Stepped-Up Assault on Wal-Mart Oct 25, 2005 By Aaron Bernstein
Outside Audit Wal-Mart Investors Fret Over Costs Oct 25, 2005 By KRIS HUDSON
THE WALL STREET JOURNAL
Wal-Mart cuts insurance costs Oct 24, 2005 By UPI
Wal-Mart Tries to Win Over Consumers Oct 24, 2005 By MARCUS KABEL
Associated Press
Wal-Mart to open 270 to 280 supercenters Oct 24, 2005 Reuters
WAL-MART OFFERS SHAM HEALTH CARE PLAN AS PUBLICITY STUNT Oct 24, 2005 Jeremy Bird
Wake-Up Wal-Mart Campaign
Md. Community Sizes Up Its Future Neighbor: Wal-Mart Landover Hills Weighs Pros and Qualms Oct 23, 2005 By Ovetta Wiggins
Washington Post
Cleaning business to forfeit $200,000 Oct 21, 2005 BY JOHN BEAUGE
Patriot-News
Wal-Mart Nudges Foreign Suppliers Retailer to Demand Environmental and Social Responsibility Oct 21, 2005 By Marcus Kabel
Associated Press
Wal-Mart to Toughen Overseas Standards Oct 20, 2005 By MARCUS KABEL
Associated Press 
A Stepped-Up Assault on Wal-Mart Oct 20, 2005 By Aaron Bernstein
Grocers try to fend off Wal-Mart by going upscale Oct 20, 2005 By LOREN STEFFY
Houston Chronicle
Scott Warns China Wal-Mart Suppliers Re 'Standards' Oct 20, 2005 Greg Levine,
Wal-Mart to Start Equity Fund to Help Diversify Its Suppliers Oct 19, 2005 By MICHAEL BARBARO
Wal-Mart appeals to labour board, court in dispute with union Oct 19, 2005 Canadian Press
Wal-Mart Bank Proposal Ripped By Bankers Oct 18, 2005 By Leslie Wines
Wal-mart Consumer Complaints Oct 16, 2005 ReliableAnswers.com
Mr. Retail: Lou Puim, director of marketing, Wal-Mart Oct 15, 2005 by Annette Bourdeau
Strategy Magazine
Wal-Mart bank bid gets record comments, FDIC says Oct 13, 2005 By Jonathan Stempel
Pr. George's Move Clears Way For a Wal-Mart Inside Beltway Oct 12, 2005 By Ovetta Wiggins
Washington Post
Former Exec Seeks Wal-Mart Suit Dismissal Oct 11, 2005 By MARCUS KABEL
Associated Press 
Wal-Mart Can Hide, But It Can't Run Oct 11, 2005 Don Hazen
Disinfo.com
Wal-Mart to go in Middletown Station Oct 10, 2005 Brett Corbin
Business First of Louisville
Wal-Mart seeks to supersize Oct 10, 2005 Peter Van Allen
Philadelphia Business Journal
Will Women Wear Wal-Mart? Oct 10, 2005 By Alyce Lomax
www.fool.com
Anthropologie Sues Wal-Mart for Stealing Boho Chic Oct 10, 2005 by Donna Wentworth
For Local Grocers, Understanding Customers Holds Key To Competing With the Wal-Marts Oct 10, 2005 dbusinessnews.com
Legal Wal-Mart Can't Clean Up Oct 10, 2005 Michael Maiello
Forbes.com
Board: Wal-Mart proposal doesn't comply with town regulations Oct 9, 2005 New York Times
Federal judge refuses to dismiss Wal-Mart janitors' lawsuit Oct 8, 2005 Newsday Inc.
Wal-Mart's Giant Sucking Sound Oct 7, 2005 By Leo Hindery Jr.
McGraw-Hill
Ripon Residents Head Off Early Wal-Mart Plans with Petition Drive Oct 7, 2005 by Alan Marsden
Wal-Mart set back in Canada Oct 4, 2005 By G. Dunkel
workersworld.net

California pesticide regulators warn Wal-Mart

Oct 3, 2005 Russell J. Dinnage
Pesticide & Toxic Chemical News
Wal-Mart Workers Form Grievance Group Oct 2, 2005 Associated Press
Testimony of Robert Baugh, Executive Director, AFL-CIO Industrial Union Council, on WalMart and Outsourcing Oct 1, 2005 AFL-CIO
Wal-Mart to Boost Its Stake in Seiyu Oct 1, 2005 By YURI KAGEYAMA
The Washington Post
Wal-Mart workers band together Oct 1, 2005 By MITCH STACY
Associated Press
Florida Wal-Mart workers start to organize - without union Oct 1, 2005 MITCH STACY
Associated Press

WalMart Gets Mixed Welcome from Small Towns

By Jim Kent
Chadron, Nebraska
29 December 2005                     
[back to top]

American shoppers are on the lookout for bargains. Many find those bargain buys at one of the thousands of Wal Mart stores across the country. WalMart, the world's largest retailer, prides itself on offering the lowest prices on all its products. But many consumers not only refuse to patronize the mega-discount chain, they are actively campaigning against it.

Rapid City's Dahl Arts Center was packed recently for a showing of the documentary Poster from the documentary film "WAL-MART: The High Cost of Low Price" film "WAL-MART: The High Cost of Low Price." The documentary examines the company's alleged mistreatment of its employees, from race and sex discrimination to the squalid working conditions in the Asian factories that produce many of Walmart's goods.

But the filmmaker also included frequent images of abandoned small town stores and empty streets… highlighting the discount giant's impact on small businesses across America. And that was the primary concern of most of the 200 or so people in the audience. As one woman noted, "They're gonna bring a second one here in Rapid City,and we should try and do something about that, because family businesses, you see everywhere, are going down and I, yeah, I really dislike Wal Mart."

A man in the audience pointed out that Wal Mart has become the biggest corporation in the world. "It has phenomenal power, phenomenal reach...and, basically, is transforming our whole society. And we have very little control over what's going on. We need to wake up and take note or we're not gonna have what we have always had."

Someone else admitted, "I've always kind of had a hard time with Wal Mart's business practices, and I...I feel like it reflects a lot on us as a community if we would let them come here. I mean maybe people know, but if they know, they don't know how bad it is."

Opinions about "how bad it is" run the gamut from low wages and high-cost health insurance to the use of child labor in China. Cody Pesicka is a small business owner in Hot Springs, South Dakota. He's says he's concerned about all of these issues but, like many small town residents, his primary focus is on Wal Mart's impact on businesses in his community. "You can just kind of tell how corporate hurts a small business owner. People come in all the time and say, you know, we bought this at Wal Mart at such-and-such a price. And you kind of struggle to make a dollar on a product, compared to when they can go to Wal Mart and buy it."

One hour south of Hot Springs is the equally small town of Chadron, Nebraska. Patricia Giesler's family has owned a discount clothing store here for more than 80 years. Wal Mart "came into town" 6 years ago, and, she says, "a lot of people when they heard they were coming into Chadron decided to just go ahead and close their businesses, 'cause they knew it would be the eventual thing down the road. It has taken the smaller businesses that were fringe businesses to begin with and it's pretty much collapsed them and gone under."

Her family's business has managed to survive in spite of competition from Wal Mart, and what some might call an 'uneven playing field.' Patricia Giesler says she really resents the substantial tax breaks that local governments offer to encourage the discount chain to open a store in their community, welcoming the jobs it provides. "They were given a tax incentive of $500,000." She shakes her head in amazement. "Our store's been here 80 years and we've never been offered anything like that from our own community."

Gary Taylor, economics professor at South Dakota State University Calls to Wal Mart Corporation on the issue were not returned. But according to Gary Taylor, an economics professor at South Dakota State University, the discount chain's impact on any community is simply one of the stark realities of capitalism. "We're a capitalist society and generally, we look at, 'well, who can do things most efficiently at the lowest cost?' And currently, Wal Mart is doing a better job at that than other businesses. You know, Wal Mart still does employ people and generally they don't really pay that much less than what people were getting in the other jobs. There's a lot of other small businesses also don't provide health benefits and those are not really the highest paying jobs in town either."

Whether they like having a WalMart in town or not, most locals shop there, often because there's nowhere else to go for many items. Some, like Chadron resident Velinda Malone, see the corporation's arrival as a mixed blessing. "I believe they hurt some small businesses, [but] I've seen a lot more businesses coming to town because of Wal Mart."

In the end, Wal Mart's impact on small businesses across America may come down to what the individual consumer decides is more important - supporting community based businesses or saving money at mega-sales.

 [back to top]

City cuts Wal-Mart $5M deal

jarrington
Montgomery Advertiser 
12/29/2005                                  
[back to top]

To get a Wal-Mart SuperCenter built in Millbrook, city officials are willing to give the retail giant up to $5 million in sales tax rebates.

Mayor Al Kelley said Tuesday the city will hold a public hearing Jan. 9 to seek comment on a proposal to reimburse Wal-Mart up to 50 percent of its sales tax for up to five years to cover the cost of infrastructure improvements the retailer will make when it builds a store at the corner of Grandview Road and Alabama 14. The store is scheduled to be completed in 2007.

Kelley said the deal is best for the city because they do not have to borrow any money and he projects that the investment will be paid off in about three years.

He also expects the store to bring in $2.25 million for the city annually, which is a conservative estimate, he said.

"We are not having to pay up front for any of the infrastructure like Prattville is doing (for a new retail development)," he said. "We're not having to do that. (Wal-Mart) is doing it and they're paying for it, and we're just reimbursing them for infrastructure costs up to that amount of money."

Prattville is preparing to borrow as much as $48 million in part to fund infrastructure improvements for major retail developments in east Prattville. City officials have said the developments will bring in nearly $10 million annually.

In 2003, Wetumpka's Wal-Mart SuperCenter opened its doors on U.S. 231, next to the city's former Wal-Mart location. The only incentives offered were infrastructure improvements, and city records state that $238,000 was authorized for the improvements.

A Wal-Mart SuperCenter is in the works on Ann Street in Montgomery, though incentives for the retail giant are not part of the deal. Ken Groves, Montgomery's director of planning and development, said offering incentives to Wal-Mart is a mistake and that based on his experience, Millbrook didn't have to give up anything.

"People should not be giving Wal-Mart incentives. They know where they're going to make money," he said. "What communities ought to be doing is deciding what they're going to require of Wal-Mart to participate in their market and you can get better than just a plain blue and gray Wal-Mart store."

Kelley disagreed with Groves' comments.

"That's a different market. Our situation is just totally different because we're sandwiched right between Prattville, Montgomery and Wetumpka," he said.

Millbrook resident Jacqueline Griffin drives as far as Wetumpka when she needs to go to a Wal-Mart because it's nicer and less crowded than the store in Prattville, she said.

"My husband will never get me out of there," she joked about the new store coming to her city. "I think if they're going to improve that intersection and everything, it's worth it and it will bring more to Millbrook. Millbrook has been growing residentially, but the shopping hasn't been growing as much so I think it's worth it."

Though he did not provide specifics, Kelley said Millbrook Wal-Mart will be a new prototype store, with better lighting, an improved layout and more aesthetic appeal to shoppers. An additional 30,000 square feet of shopping space will be built with stores to accompany the Supercenter.

Part of the infrastructure improvements include adding an intersection to relieve traffic problems at Camp Grandview Road and Alabama 14.

"This bigger, newer store, we think and they think, is going to produce more sales than what your regular Wal-Mart will produce," he said.

PUBLIC HEARING

The Millbrook City Council will consider a resolution to authorize and approve a project agreement between Wal-Mart and the city during a meeting at 7 p.m. Jan. 9 in the council chambers at 3841 Grandview Road. Millbrook residents may address the City Council with concerns and comments about the agreement with Wal-Mart at the meeting.

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Work begins on south-side Wal-Mart Supercenter

Bob Petrie
The Sheboygan Press
12/24/2005                             
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The landscape is scruffy and snow-covered, but will soon sprout a new 212,000-square-foot Wal-Mart Supercenter on Sheboygan's far southwest side.

Crews have begun transforming 37 acres near Germaine Avenue and South Taylor Drive into the site for the store, grading the rolling ground into a flat surface, prepping the land for the footings that will eventually become the foundation for Sheboygan's first Supercenter.

Within five to six weeks, the steel and block walls of the Supercenter should begin rising, said Mick Michalak, of Corporate Construction Ltd., of Mad-ison, the superintendent for the project.

Completion of the store should be by August, Michalak said, and it will be another six to eight weeks until Wal-Mart can stock the Supercenter and open the building, putting a grand opening by next fall.

Over the past two weeks, workers have laid out the perimeter of the property and are ready to do the footings, despite the cold weather.

"Whatever Mother Nature brings, I guess," Michalak said Tuesday. "It all depends, it could be in the 30s or it could be below zero."

Sheboygan Mayor Juan Perez said the Supercenter is a big key to the city's economic future, bringing jobs and helping fuel development in the southwest business corridor.

"That area in itself is an area we've been working hard to build, and now with Wal-Mart coming in, I think our job will be a lot easier, because people are going to have a tendency to cluster around that whole area," Perez said.

DuWayne Schueler, assistant superintendent, said crews would be working fast to get the 4-foot-deep footings in place before the ground freezes for the winter.

"We can protect (them). We have blankets; we dig and pour the same day and cover it with blankets, it keeps the frost out," Schueler said.

The city and Wal-Mart are combining to pay for about $2.3 million in traffic improvements to serve the area surrounding the Supercenter over the next 10 years. The work will be done starting in the spring, during the construction of the Supercenter.

Wal-Mart is paying for extra turn lanes and signals at several intersections to handle additional traffic to be generated by its store, while the city agreed to pay $825,000 for new turn lanes and traffic signals at the intersection of Taylor Drive and Washington Avenue.

When the new Supercenter opens, Wal-Mart will close its current store in the Taylor Heights Shopping Center, and Perez said the retailer's real estate agent is advertising the Taylor Heights space for future tenants. The mayor said the agent is willing to subdivide the space and "do whatever is necessary."

Perez said he would like someone will fill the soon-to-be-empty Wal-Mart space, to keep it from being an "eyesore."

"I hope somebody moves in there pretty quick that will stir up some activity and some excitement and some traffic," he said.

Reach Bob Petrie at bpetrie@sheboygan-press.com and 453-5129.

Copyright © 2005 The Sheboygan Press

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Wal-Mart Plans to Appeal $172M Judgment

By DAVID KRAVETS
Associated Press 
Dec 23                           
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OAKLAND, Calif. (AP) -- Wal-Mart Stores Inc. plans to appeal a $172 million judgment awarded to thousands of employees who claimed they were illegally denied lunch breaks.

A jury on Thursday found the world's largest retailer violated a 2001 state law that requires employers to give 30-minute, unpaid lunch breaks to employees who work at least six hours.

The verdict came after nearly three days of deliberations and four months of testimony. In a statement, Wal-Mart said it would appeal.

The class-action lawsuit in Alameda County Superior Court is one of about 40 nationwide alleging workplace violations by Wal-Mart, and the first to go to trial.

"We absolutely disagree with their findings," company attorney Neal Manne said. Manne claimed the state law in question could only be enforced by California regulators, not by workers in a courtroom.

He conceded that Wal-Mart made mistakes in not always allowing for lunch breaks when the 2001 law took affect, but said the company is "100 percent" in compliance now.

The Bentonville, Ark.-based retailer was ordered to pay $57 million in general damages and $115 million in punitive damages to about 116,000 current and former California employees. The company earned $10 billion last year.

Attorney Fred Furth, who brought the case on behalf of the workers, said outside court that the jury "held Wal-Mart to account."

A California jury has awarded more than 172 (m) million dollars to thousands of Wal-Mart employees who claimed they were illegally denied their 30-minute lunch breaks.

The company claimed that workers did not demand penalty wages on a timely basis. Under the law, the company must pay workers a full hour's wages for every missed lunch.

Wal-Mart also said it paid some employees their penalty pay and, in 2003, most workers agreed to waive their meal periods as the law allows.

The company contended that the law does not allow for punitive damages because "the meal-period premiums in question are penalties, rather than wages," it said in the statement. "In short, California law prohibits penalties on top of penalties."

The class-action lawsuit was filed by several former Wal-Mart employees in the San Francisco Bay area in 2001, but it took four years of legal wrangling to get to trial. The workers claimed they were owed more than $66 million plus interest, and sought damages to punish the company for alleged wrongdoing.

The company settled a similar lawsuit in Colorado for $50 million.

A federal lawsuit pending in San Francisco accuses Wal-Mart of paying men more than women.

The verdict comes as the company wages an intense public-relations campaign to counter critics aiming to stop the retailer's expansion and make it boost workers' salaries and benefits.

Paul Blank, campaign director for WakeUpWalMart.com, an union-affiliated advocacy group that believes Wal-Mart's policies over wages, health benefits and other issues harm families and communities, said he was delighted by the verdict.

"It is a sad day when Wal-Mart provides these so-called low prices by exploiting their workers and even the law," Blank said.

The company added lower-cost health insurance this year after an internal memo surfaced that showed 46 percent of Wal-Mart employees' children were on Medicaid or uninsured.

© 2005 The Associated Press. All rights reserved. 

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Jury Awards $172M to Wal-Mart Employees

By DAVID KRAVETS                
The Washington Post Company                             [back to top]

OAKLAND, Calif. -- A California jury on Thursday awarded $172 million to thousands of employees at Wal-Mart Stores Inc. who claimed they were illegally denied lunch breaks.

The world's largest retailer was ordered to pay $57 million in general damages and $115 million in punitive damages to about 116,000 current and former California employees for violating a 2001 state law that requires employers to give 30-minute, unpaid lunch breaks to employees who work at least six hours.

The damages were originally tallied as $207 million after a court clerk misread the punitive damages as $150 million. The amount of punitive damages was later clarified.

The class-action lawsuit in Alameda County Superior Court is one of about 40 nationwide alleging workplace violations by Wal-Mart, and the first to go to trial. The Bentonville, Ark.-based retailer, which earned $10 billion last year, settled a similar lawsuit in Colorado for $50 million.

In the California lunch-break suit, Wal-Mart claimed that workers did not demand penalty wages on a timely basis. Under the law, the company must pay workers a full hour's wages for every missed lunch.

The company also said it paid some employees their penalty pay and, in 2003, most workers agreed to waive their meal periods as the law allows.

The lawsuit covers former and current employees in California from 2001 to 2005. The workers claimed they were owed more than $66 million plus interest, and sought damages to punish the company for alleged wrongdoing.

Attorney Fred Furth, who brought the case on behalf of the workers, said outside court that the jury "held Wal-Mart to account."

Wal-Mart attorney Neal Manne said the jury's verdict, reached after nearly three days of deliberations and four months of testimony, would likely be appealed.

He claimed the state law in question could only be enforced by California regulators, not by workers in a courtroom. He added that Wal-Mart did not believe the lunch law allowed for punitive damages.

"We absolutely disagree with their findings," Manne said of the jury's verdict. He conceded that Wal-Mart made mistakes in not always allowing for lunch breaks when the 2001 law took affect, but said the company is "100 percent" in compliance now.

The lawsuit was filed by several former Wal-Mart employees in the San Francisco Bay area in 2001, but it took four years of legal wrangling to get to trial.

The verdict comes as the company is waging an intense public-relations campaign to counter critics aiming to stop the retailer's expansion and make it boost workers' salaries and benefits.

Paul Blank, campaign director for WakeUpWalMart.com, an union-affiliated advocacy group that believes Wal-Mart's policies over wages, health benefits and other issues harm families and communities, said he was delighted by the verdict.

"It is a sad day when Wal-Mart provides these so-called low prices by exploiting their workers and even the law," Blank said.

The company added lower-cost health insurance this year after an internal memo surfaced that showed 46 percent of Wal-Mart employees' children were on Medicaid or uninsured.

A federal lawsuit pending in San Francisco accuses the company of paying men more than women.

© 2004 The Washington Post Company

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Wal-Mart Wins "Grinch of the Year" for Second Year in a Row

By Jobs with Justice
12-22-05                               
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With 52% of the 13,134 votes cast, Wal-Mart won the 5th annual online "Grinch of the Year" election sponsored by National Jobs with Justice. Nominated by Wake Up Wal-Mart, the company is criticized for leading the global race to the bottom; boosting profits for their executives on the backs of their employees through low wages, insufficient healthcare, and discrimination.

"Given the competition from Donald Rumsfeld and Verizon Wireless, Wal-Mart should be extremely satisfied to have won the 'Grinch of the Year' award," said Fred Azcarate, executive director of Jobs with Justice. "With no end in sight for their continued poor treatment of workers, the communities they live in, and the environment, we suspect that they'll go for a 3-peat next year."

Donald Rumsfeld, the U. S. Secretary of Defense, came in second place with 24% of the votes. Rumsfeld was nominated by the American Federation of Government Employees (AFGE) after he proposed to strip over 600,000 federal employees - men and women dedicated to serving their country - of their collective bargaining rights.

Verizon Wireless, nominated by the Communication Workers of America (CWA), came in third place with 16% of the vote. Verizon Wireless was, with the final 8% going to write-in candidates - President Bush receiving the bulk of the write-in votes.

The 'Grinch of the Year' awards began locally with Jobs with Justice Coalitions around the country highlighting the greedy grinch in their hometowns. That tradition has remained in many areas with Governor Mitch Daniels winning in Indiana after threatening to close 80% of the state's social service offices and Ron Lohr of Lohr Distribution winning in St Louis, MO for permanently replacing their striking beer delivery drivers. Their drivers were striking to protect health care for their families and a reasonable workload for a good wage.

Jobs with Justice is a national campaign for workers' rights. Around the country, local Jobs with Justice Coalitions unite labor, community, faith-based, and student organizations to build power for working people.

Visit our website at: http://www.unionvoice.org/ct/Qd1zzQE1JPgx/ to learn more about our campaign for workers' rights & economic justice.

LEARN MORE ABOUT WAL-MART

Jobs with Justice has been taking grassroots action across the country to change Wal-Mart in collaboration with WakeUpWalMart.com. Join the campaign today to receive specific action alerts in 2006 at: http://www.unionvoice.org/ct/Pp1zzQE1JPgw/

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A Little Man Takes on Wal-Mart

Krugman is paid to play his baseless leftist games.

Donald Luskin
December 22, 2005           
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Who was it that said that the measure of a man is what he worries about? President Bush is a big man who worries about big things like protecting America from global terrorism. New York Times columnist Paul Krugman — Bush’s most vicious media opponent and America’s looniest liberal pundit — is a little man who worries about little things, such as whether conservative pundits are being paid too much by lobbyists, and whether retail workers are being paid too little by Wal-Mart.

In his column Monday [subscription link via New York Times; free link via CREW], Krugman excoriates conservative think-tank scholars Peter Ferrara and Doug Bandow for taking money from indicted Republican lobbyist Jack Abramoff, allegedly in exchange for writing op-ed columns favorable to Abramoff’s clients. Yes, the immediate intuition is that these men’s ethics were compromised here. But, really, this is a little issue. Where’s the beef? Everyone — think-tankers, op-ed writers, etc. — gets paid by someone. And those who pay, naturally, choose to pay scholars and journalists who tend to already agree with them. It seems unlikely, then, that Ferrara or Bandow would have written anything different whether or not Abramoff paid them.

Krugman himself is no different than Bandow or Ferrara. They are scholars at think tanks, and Krugman is a scholar at Princeton’s Woodrow Wilson School of Public and International Affairs. And Krugman, too, gets paid by other people who rely on him to promote their viewpoints. First and foremost: that powerful liberal lobbying machine known as the New York Times. Since Krugman’s Times column began in 2000, has he ever — even once! — taken a position substantively different from that of the ultra-left-leaning Times editorial board, the folks who write his extracurricular checks?

Krugman has taken other extra-curricular paychecks over the years, and he has always promoted the points of view of whomever wrote those checks. He took Enron’s money as a consultant on its advisory board, and, while on the payroll, wrote a glowing column about Enron for Fortune. To be fair, he disclosed the connection then. At the time, Enron was riding high and Krugman was proud to take the corrupt company’s money. But he failed to mention the connection later — after the company failed and had to stop paying him — in dozens of New York Times columns lambasting the Bush administration for its past Enron connections. Most egregiously, he failed to mention his previous role as an Enron consultant in a Times column lambasting Enron’s consultants!

And when Krugman wrote a Times column justifying the anti-Semitic ravings of Malaysia’s premier Mahathir — the Times tagged that Krugman column “Anti-Semitism with a purpose” — he failed to mention that he had once been Mahathir’s guest at a Malaysian economics conference and had contributed to Malaysia's economic policies.

But where’s the beef? Krugman may well have written the same things even if he hadn’t taken Enron’s money or accepted Mahathir’s hospitality. Indeed, one suspects that Krugman would proudly recycle in his columns all the same talking points he finds on the Democratic National Committee’s website and all the ultra-leftist hateblogs, even if he had to dip into his own pocket and pay himself.

Consider Krugman’s column on Wal-Mart last week [subscription link via New York Times; free link via ReclaimDemocracy]. Krugman doesn’t find anything corrupt about the “union-supported group, Wake Up Wal-Mart” that has run television ads demonizing the non-union retail giant. Would Wake Up Wal-Mart have run those ads anyway, without union money? Probably not, but Krugman would likely have written the same column, in which he makes the absurd claim that Wal-Mart — by far America’s largest employer — destroys jobs. He even goes so far as to call Wal-Mart’s claims to the contrary “the worst economic argument of 2005.” Considering some of the loony economic arguments Krugman himself has made this year, that’s quite a claim.

Who’s paying Krugman to make such claims other than the New York Times? No one that I’m aware of, at least not directly. But unions supply a large fraction of the filthy lucre that fills the war chest of the Democratic party. So, naturally, Krugman will take up their cause — however absurd, and however hypocritical. Back in 1993, when Krugman used to write as an economist, not a political hack, he called Wal-Mart “the most significant American business success story of the late 20th century,” celebrating its application of “extensive computerization and a home-grown version of Japan’s ‘just in time’ inventory methods to revolutionize retailing.”

To back up his claims that Wal-Mart destroys jobs, Krugman cites the “sophisticated statistical analysis” in a paper by a University of California professor and two associates at the Public Policy Institute of California. But that paper only claims that Wal-Mart causes a drop in retail employment when it opens a store in a new community. Overall, it finds “there is some evidence that Wal-Mart stores increase total employment on the order of two percent.”

A study by Global Insight goes further, but Krugman doesn’t mention it. It says that Wal-Mart is “responsible for 210,000 net jobs, a level of total factor productivity (general economic efficiency of the economy) that is 0.75% higher by 2004 than it would have been” and that “real disposable income is 0.9% higher than it would have been in a world without Wal-Mart.” Why Krugman’s silence on this study? The unions wouldn’t be happy if he mentioned it.

Other liberal economists aren’t so concerned with flattering the Democratic party’s paymaster. Jason Furman, a scholar at New York University (yes, he too, has another patron — the leftist Center for Budget Policy and Priorities), recently wrote a paper on Wal-Mart. Krugman once wrote that Furman’s work at CBPP is “absolutely impeccable; there is nothing at all like it on the right, or anywhere else.” Surely Krugman would not say the same thing about Furman’s statement that “Wal-Mart is a progressive success story ... resulting in huge benefits for the American middle class and even proportionately larger benefits for moderate-income Americans.”

And speaking of getting paid by the unions, it’s probably not an entirely inexplicable omission that Krugman didn’t mention the recent Zogby poll that “found that 56 percent of American adults agreed with the statement — ‘Wal-Mart was bad for America.’” That’s possibly because Krugman didn’t want to deal with the fact that Zogby was paid by union-backed Wake Up Wal-Mart to do the poll (and John Zogby himself has been paid in the past to appear as an expert witness on behalf of plaintiffs suing Wal-Mart). The Pew Foundation, presumably not on the take from the unions, just found in a similar poll that 64 percent of Americans believe Wal-Mart is “Good … For the country.”

By the way, perhaps this is a good time to mention that I don’t get paid a penny for writing the Krugman Truth Squad column here at National Review Online. Not by NRO, not by Jack Abramoff, not by anybody. Why do I do it? Because, like President Bush, I’m worried about the big things. And one of the best ways I can help with the big things is by keeping the little things — like Paul Krugman — cut down to size.

— Donald Luskin is chief investment officer of Trend Macrolytics LLC, an independent economics and investment-research firm. He welcomes your visit to his blog and your comments at don@trendmacro.com.

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Chains nervous as Wal-Mart focuses on electronics

By Maria Halkias
The Dallas Morning News
Thursday, December 22, 2005              
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DALLAS _ When Wal-Mart wants to dominate a merchandise category, it usually gets its way. And the world's largest retailer is showing that it wants to be No. 1 in consumer electronics.

It has remodeled the electronics departments in about a third of its U.S. stores to accommodate big-screen plasma TVs, rows of digital cameras and satellite radio displays. It has bumped up its breadth of brands including Canon cameras, Toshiba notebooks and Sony camcorders. And it has started offering warranties on some products and service contracts with wireless phones.

"This year, they're going after the well-heeled consumer and the enthusiast," said Alan Wolf, senior editor at industry trade publication TWICE. "It's too early to tell because they haven't made a total transformation. It's a start _ and a scary proposition for electronics retailers."

By selling low-price televisions, DVD players and cameras, Wal-Mart Stores Inc. moved ahead of Circuit City Stores Inc. into the No. 2 spot in TWICE's 2003 sales rankings.

The discounter is still No. 2, with U.S. electronics sales last year of $12.11 billion (not including sales of $2.07 billion at its Sam's Club chain). Best Buy Co. is No. 1, with sales of $20.75 billion.

Wal-Mart management has said it views electronics as a way to entice customers from its grocery aisles to the other side of its stores. Although Best Buy still has a substantial lead, and electronics chains trump the discounter on selection, service, installation and warranties, no one is underestimating Wal-Mart.

When asked about Wal-Mart's potential in consumer electronics, analysts shrug and point to toys and groceries. The discounter reigns in both categories.

"Wal-Mart always wants more. In this category, it's No. 2, but Wal-Mart doesn't like being No. 2 when it thinks it can be No. 1," said Edward Weller, retail analyst at ThinkEquity Partners LLC. "It wasn't that long ago that people didn't think they would take the toy lead."

"Talk to the food guys a few years ago," CompUSA Chief Executive Larry Mondry said about Wal-Mart's fast rise to become nation's No. 1 grocer. Dallas-based CompUSA is the eighth-largest electronics retailer.

So far, electronics is Wal-Mart's best-selling category online, said Wal-Mart.com spokeswoman Amy Collela.

"We offer an expanded assortment of electronics to complement our stores on our Web site," she said.

Its top-selling item online this holiday season is its proprietary mobiBLU Cube. The 512-megabyte MP3 player sells for $99.72 and is the retailer's answer to Apple's wildly successful iPod. It comes with five free Wal-Mart music downloads.

Wal-Mart is now the leading major retailer of wireless phones. Rankings released in early December showed that it moved ahead of RadioShack Corp. in the category during the third quarter.

When Dell Inc. expanded into printers, cameras and flat-screen TVs a couple of years ago, TWICE's Wolf remembers Best Buy management calling Dell "dangerous." But it wasn't until Wal-Mart moved ahead of Circuit City that Best Buy started to respond to the competition with its "customer-centric" stores, he said.

Almost two years ago, Best Buy defined what these new and remodeled stores would look like and what items they would carry, based on neighborhood demographics. It opened several of these stores in California and acquired an upscale home theater company called Magnolia.

On Dec. 13, Wall Street battered Best Buy's stock price after the retailer said higher spending on new initiatives _ including its customer-centric stores _ and stiffer competition in Canada cut into third-quarter profits.

So far this holiday season, Circuit City's aggressive pursuit of market share has made the environment more competitive for Best Buy, Goldman Sachs analyst Matthew J. Fassler said in a report Dec. 14.

He downplayed the impact of Wal-Mart and Target Corp. on the consumer electronics specialty stores for now: "The threat from discount stores on near-term results has been overstated, but as flat-panel TVs commoditize, discounters will grow more relevant."

Wal-Mart advertised a big-screen TV for just under $1,000 and a $387 laptop computer the day after Thanksgiving. Both sold out, said Wal-Mart spokeswoman Gail Lavielle. "Those were our blitz products, but we're also selling out of some digital cameras and combo TV and DVD players," she said.

CompUSA's Mondry said stores that are selling technology have an advantage over Wal-Mart. "We all had $400 notebooks and huge lines the day after Thanksgiving, too, and so did Best Buy," he said.

Shoppers who want to integrate their big-screen HDTVs with their computers, install cables and cut holes in the wall "can't go to Wal-Mart," Mondry said. "Our sales associates know what else you can do with your new iPod and can show you what you need to run it through the car stereo or make it an alarm clock."

Best Buy said Dec. 13 that it added 2,500 Geek Squad agents during the quarter, bringing its total number of service staffers to more than 11,900.

Prudential Equity Research analyst Mark J. Rowen said in a report in mid-December that service revenue remains a significant driver at Best Buy.

"Geek Squad and home-theater installation revenues were up a strong double-digit percentage," he wrote.

Circuit City said Dec. 12 that it was expanding its service abilities by hiring PlumChoice Online PC Services to supply remote computer support. Technicians can access home or office computers remotely for complex repairs or to simply teach safe downloading of music.

"Our employees have gone through extensive training," said Amada Tate, spokeswoman for Circuit City. "Flat-panel, big-screen TV prices are down 30 percent from last year. That's driving a lot of interest, and more consumers are aware, but we deliver and offer installation and component and speaker hook-ups."

Warranties are also important to shoppers buying complex electronics, and Wal-Mart has started offering them. But a warranty is a product that needs to be sold, analysts said. Last year, warranties represented 3.8 percent of Circuit City's domestic sales.

Just before Thanksgiving, analyst Rowen published an in-depth report on Wal-Mart's potential threat to the consumer electronics chains this season and beyond.

Although Wal-Mart has improved its assortment of advanced-television technologies, he concluded that at least for holiday 2005, the electronics chains have better selections.

Wal-Mart's foray into selling warranties is alarming for the chains, he said. And ultimately, he said, Wal-Mart and such direct-to-consumer retailers as Dell pose threats _ especially in product categories that consumers view as commodities, such as DVD players and entry-level cameras.

At the Wal-Mart Supercenter in Garland, Texas, on Dec. 13, Jim Newsom of Rowlett, Texas, was looking at an 8-megapixel Olympus digital camera priced at $397.62.

"They're getting better, especially in digital, mobile phones and the MP3 players," he said of Wal-Mart. "I think online is a bigger threat for lots of these categories, but yeah, I'll consider Wal-Mart from now on."

He didn't know if the camera he was ready to buy was in stock and was waiting for someone to help him.

The electronics department has its own registers, and checkers were busy, with two lines formed. A few minutes later, Newsome had wandered into the automotive department.

"I'll go back when the lines go down," he said.

(c) 2005, The Dallas Morning News.

Copyright © 2006 MarketWatch, Inc. All rights reserved. 

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Wal-Mart withdraws application for Elk Grove Supercenter

Sacramento Business Journal
December 21, 2005
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Wal-Mart has withdrawn its application to build one of its massive Supercenters in Elk Grove, which had run into stiff opposition from the community.

The decision was made after Wal-Mart officials and local developer Angelo Tsakopoulos met with Elk Grove officials and residents.

Tsakopoulos owns the parcel at Sheldon and Power Inn roads where Wal-Mart was proposing to build one of its giant Supercenters, which sell groceries along with the usual merchandise carried by the big-box chain, the world's largest retailer.

"This is a prime example of community and business working together," said Elk Grove Mayor Dan Briggs in a news release. "I commend Angelo for listening to the concerns of the community and am pleased Wal-Mart will continue to explore other opportunities in the city."

Wal-Mart often faces community opposition to its stores. Frequent criticisms are that the giant retailer pays low wages and offers substandard benefits and that it drives smaller merchants, often local mom-and-pop stores, out of business because they can't compete with Wal-Mart's bulk buying power and aggressive pricing.

In Elk Grove, which already has one Wal-Mart, much of the criticism had to do with the proposed location, with nearby residents voicing concerns about the traffic that would be created by a store with nearly 250,000 square feet of retail space.

A Wal-Mart spokesman acknowledged the community's concerns and hinted that the retailer would look for another location in the city.

"After a number of meetings with local residents and community leaders, we have decided to withdraw the application, but we still recognize that there is a strong demand for a Wal-Mart Supercenter in Elk Grove and remain committed to serving those customers," said Kevin Loscotoff, community relations manager for Wal-Mart.

© 2005 American City Business Journals Inc.

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Waste Not, Wal-Mart

By Tim Beyers
TMF Mile High
12/21/2005                    
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Wal-Mart(NYSE: WMT) is in trouble again. Only this time, the allegations are all trash. In a filing with the Securities and Exchange Commission on Tuesday, the company disclosed that it is the subject of a criminal investigation into how it handles certain types of hazardous waste, including hair spray and charcoal.

At issue is how Wal-Mart used its own trucks to transport the materials, instead of vehicles certified to carry hazardous waste. In doing so, the company may have violated the Resource Conservation and Recovery Act. The U.S. Attorney's office in Los Angeles is leading the investigation.

Before you type that email bemoaning the Feds sticking it to Wal-Mart, consider that this marks the second time in less than 45 days that the company has been involved in a high-profile law enforcement action. The last one, in mid-November, featured the arrest of 120 workers on immigration violations.

And don't forget a long-standing class action suit that accuses it of discriminating against women employees in terms of salary and advancement.

Wal-Mart hasn't formally answered the latest charges. But a company spokesman gave a modest defense by telling Reuters that the government wasn't challenging the way it disposes of waste, only how it transports it.

Look, I'm not going to bash Wal-Mart. After all, the retailer has developed a superior business that has provided investors with generous returns over decades. But at some point, the flood of lawsuits will raise fundamental questions. Here are two: Just how far does Wal-Mart go to deliver rock-bottom prices? And are those practices legally sustainable? The anecdotal evidence suggests these lawsuits won't be a serious threat to Wal-Mart, but I suspect it will be some time before we know for sure.

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Short Wal-Mart? Not! It's a wavering thumbs up for the Wal-Mart movie. You-know-who has holiday photo cards, too. Ever dug through trash? You should try it sometime. Just ask Philip Durell, advisor forMotley Fool Inside Value; his investing approach is beating the market by more than 3% as of this writing. Get in on the action by taking a risk-free 30-day trial. Or sign up for a year and getStocks 2006, our analysts' best picks for the year ahead, free. Either way, all you have to lose is the prospect of better returns.

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Fool contributor Tim Beyers only takes out the trash. He refuses to dig through it. Tim didn't own shares in any of the companies mentioned in this story at the time of publication. You can find out what's in his portfolio by checking Tim's Fool profile. The Motley Fool has an ironclad disclosure policy.

Legal Information. ©1995-2005 The Motley Fool. All rights reserved.

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Wal-Mart's Waiting Game in Japan

By Ian Rowley
DECEMBER 21, 2005              
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The retailing titan has boosted its stake in the money-losing Seiyu supermarket group. What it needs now is a change in consumers' buying habits Japan has always been a tough slog for overseas retailers. Convoluted distribution, impenetrable supplier networks, the world's most demanding shoppers, and the lasting impact of a decade-long slump mean no easy pickings for shopkeepers -- foreign or otherwise. Just ask Carrefour: The world's second-largest retailer quit Japan in March, 2005, after accumulating losses of $264 million in four years.

For the world's No. 1 retailer, Wal-Mart Stores (WMT ), Japan has proven at least as troublesome. But it shows no signs of folding.

Three-and-a-half years ago, Wal-Mart bought into ailing Japanese retailer Seiyu and has since seen the Tokyo-based chain lose over $1 billion (see BW, 2/28/05, "Japan Isn't Buying the Wal-Mart Idea"). Nonetheless, the U.S. giant on Dec. 21 ponied up $565 million to improve the supermarket group's capital base and pay off bank loans. The move boosts Wal-Mart's stake in Seiyu -- which started as a 6.1% investment in May, 2002 -- to 53%, from 43%. Under the deal, Mizuho Corporate Bank also is investing $410 million in Seiyu.

WIDENING LOSSES. With greater control, Wal-Mart is shaking up Seiyu's management. Chief Executive Noriyuki Watanabe is being bumped up to chairman. He'll be replaced as CEO by Ed Kolodzieski, former chief operating officer of Wal-Mart International and a Seiyu board member since September, 2004.

"We're making this investment because we see a lot of long-term possibilities," Kolodzieski, 45, told reporters at a press conference. "My first priority is to learn from our customers and associates. Only then will I be in a position to improve conditions for our customers."

He'll also want to stem the red ink at Seiyu. It lost $105 million in 2004, and in October increased its 2005 loss projection to $115 million from $65 million -- a grim forecast that will mark its fourth consecutive annual shortfall. CSFB projects Seiyu's net loss will widen next year, though the investment bank expects Seiyu to finally turn a profit in 2007, as the economy improves and Wal-Mart's restructuring takes greater effect.

FRESH DILEMMA. Falling sales are also a problem. During the third quarter, Seiyu's same-store sales declined 1.4%, vs. the 0.4% dip the retailer had projected. "We need to see some black ink -- three years have already passed, and they've been very slow to improve," says CSFB analyst Yasuyuki Sasaki.

While welcoming the cash injection, Wal-Mart faces many hurdles before it can get Seiyu on track. One key factor that remains: fully understanding the nuances of the world's second-largest retail market and, in particular, Japanese consumers' love-hate relationship with discounting.

Raised on mom-and-pop shops and high-cost department stores, shoppers in Japan often perceive cheaper goods as substandard -- irrespective of their actual quality. "People like lower prices if they can get the same quality, but convincing Japanese consumers of the quality takes a lot of time," says David Marra, a consultant at A.T. Kearney in Tokyo.

NEIGHBORHOOD SUPPLIERS. That's not to say Seiyu has made no progress. Almost 80% of the workforce is now part-time, for instance, vs. less than 70% three years ago. The shift has helped trim millions of dollars from the wage bill. In 2004, for instance, wage costs fell 7.6%.

Yet finding savings elsewhere has proven more difficult. For example, fresh food -- an important part of the Japanese diet -- is tough to get, and sell, cheaply. One reason: Most farms and fisheries in Japan are small, local operations lacking the economies of scale that would allow them to deliver large quantities of produce at knockdown prices.

Wal-Mart execs are pinning their hopes on better inventory-tracking technology (see BW, 5/10/04, "Can Wal-Mart Woo Japan?"). The giant's info-tech systems have been a key factor in its success elsewhere, as they help stores keep on hand exactly the goods they need.

PAYOFF IN SIGHT? But cash-strapped Seiyu slowed the technology rollout earlier this year and now has the systems installed at just 250 of its 400 or so stores. With the new funds from Wal-Mart, the Japanese retailer expects to complete the process by 2007. The cash injection will also help pay for much-needed face-lifts at some older stores.

There are already some positive signs. Seiyu says stores that have used Wal-Mart's systems for more than a year are reporting sales increases that are several percentage points higher than the company average. Meanwhile, customer surveys are showing growing satisfaction, including in the important fresh-foods category.

"There has been quality work done in infrastructure investments, in distribution and systems," says Kolodzieski. "We're confident we'll see the dividends."

NOT ALONE. In the short term, though, Japan's rebounding economy could provide Seiyu with as big a boost as any technology changes. Recoveries aren't necessarily great news for discounters, since shoppers who feel wealthier might drift upmarket. Still, anything that makes Japan's consumers feel better about spending will likely help.

"No one in the industry is doing well at the moment -- it's not just Seiyu," says Michinori Shimizu, an analyst at Morgan Stanley in Tokyo. He says larger rivals such as Aeon and Ito-Yokado are experiencing similar problems, as they try to meet the needs of Japanese shoppers (see BW Online, 2/24/05, "Japan's Answer to Wal-Mart?"). "But next year," Shimizu adds, "because of a cyclical recovery, I think it will get better for everyone."

Rowley is a BusinessWeek contributing correspondent in Tokyo

Copyright 2000- 2005 by The McGraw-Hill Companies Inc. All rights reserved.

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Wal-Mart Supporters Form New Group to Counter Critics

By Randy Hall
CNSNews.com
December 21, 2005                     
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(CNSNews.com) - A group of community and religious leaders Tuesday announced the formation of Working Families for Wal-Mart, "an organization dedicated to talking about Wal-Mart's positive contributions" and responding to union-sponsored critics of the nation's largest retail chain.

One of Wal-Mart's most persistent critics immediately dismissed the new group's influence because its initial financial backing comes from Wal-Mart itself.

"Wal-Mart will create a projected 100,000 jobs this year, pays its associates competitive wages, offers health insurance for as little as $11 per month and donates nearly $200 million to charities annually -- 90 percent of it at the local level," said Bishop Ira Combs, Jr., a member of the new group's 16-member steering committee.

"Just like Sam Walton believed every consumer deserves the opportunity to benefit from discount shopping, every working family deserves to benefit from the savings and opportunity of a Wal-Mart in their community," Combs added.

"Wal-Mart saves the average American household more than $2,300 per year -- which would pay almost half the average tuition at a public four-year university," said Courtney Lynch, head of Lead Star, a company based in Fairfax, Va., that provides leadership training for women in business.

"Working families can use the money they save at Wal-Mart to buy more of what they need every day or to invest in a better and more secure future," noted Lynch, who also serves on the new group's steering committee.

Combs and Lynch pointed to a recent Pew Research Center poll that found "81 percent of those with a Wal-Mart nearby say it is a good place to shop."

The survey also found that "Wal-Mart's most faithful shoppers are ... those with annual incomes below $30,000" and seven in ten who make between $30,000 and $49,999 think Wal-Mart is good for their area.

Combs added: "I know Wal-Mart is good for working families because I know men and women in my congregation who work at Wal-Mart, shop at Wal-Mart and whose lives are touched by the compassion and commitment of this company every day.

"They support Wal-Mart because in so many ways, Wal-Mart supports them and indeed, the American people too," he noted.

Working Families for Wal-Mart has a website to provide an alternative source of information from that dispensed by such organizations as WakeUpWalMart.com, which is sponsored by the United Food and Commercial Workers International Union (UFCW), and WalMartWatch.com, which receives support from the UFCW and the Service Employees International Union.

As Cybercast News Service previously reported, this financial backing has led some supporters of the retail chain to claim that those groups are only interested in unionizing Wal-Mart workers.

However, Paul Blank, campaign director for WakeUpWalMart.com, told Cybercast News Service that he was unimpressed with Working Families for Wal-Mart because company spokeswoman Sarah Clark told the Associated Press that Wal-Mart is the largest financial backer of the new group.

"That's clearly not an independent organization," Blank said.

Lynch acknowledged that Wal-Mart is funding the group's effort, but she told Cybercast News Service that additional financial sources are expected.

"We're still in the very, very early stages" of the project, Lynch said, but "Working Families for Wal-Mart is going to accept funding from a variety of individuals and organizations that share the desire to talk about the positive contributions Wal-Mart makes.

"Growth is inevitable in this project," she added. "In any given week, 100 million consumers go in and out their doors to purchase things, so there are many, many people who have good stories to tell about Wal-Mart."

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UPDATE 1-Wal-Mart is target of criminal probe over waste

Tue Dec 20, 2005              [back to top]

NEW YORK, Dec 20 (Reuters) - Wal-Mart Stores Inc. (WMT.N: Quote, Profile, Research) on Tuesday said the U.S. Attorney's Office in Los Angeles has informed the retailer that it is the target of a criminal probe involving the transportation of material deemed "hazardous waste" in allegedly improper vehicles.

In a filing with the U.S. Securities and Exchange Commission, the world's biggest retailer said it is being investigated for violating the Resource Conservation and Recovery Act.

According to the Wal-Mart, the government is investigating whether it improperly used its own trucks to transport material deemed hazardous to centralized facilities, rather than using certified hazardous waste carriers to transport that material directly to designated disposal sites.

The company previously disclosed that it had received a grand jury subpoena in the matter, looking at, among other things, the transportation of material from California to Nevada.

Wal-Mart said in the filing it is cooperating fully with the authorities, but cannot predict any potential loss or range of losses from the probe.

© Reuters 2006

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The Motley Fool Take Wal-Mart's Been Kicked

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Is all the negative press that Wal-Mart Stores Inc. (NYSE: WMT) has been receiving lately creating a buying opportunity? Look at a five-year chart comparing its stock performance with Target's (NYSE: TGT) and Motley Fool Stock Advisor (www.fooladvisor.com) pick Costco's (Nasdaq: COST). Target has nearly doubled, Wal-Mart is nursing a loss, and Costco falls in between. So on a peer basis, the stock is definitely lagging. Still, the firm has been performing well. Sales for the completed fiscal year ended January 2001 were $181 billion. They rose to $285 billion for fiscal year 2005. Net income went from $6.2 billion to $10.3 billion. Analysts expect Wal-Mart to increase earnings 14 percent annually for the next five years. When you compare Wal-Mart with Target and Costco on a PEG ratio basis - which compares the stock's price (in terms of its price-earnings ratio) to its growth rate - Wal-Mart and Target both post 1.2, which looks like a bargain compared with 1.7 for Costco. With reasonable growth prospects still ahead, the stock is priced in line with at least one top-tier peer and well below another. Wal-Mart seems to have paid a price on Wall Street for all the bad publicity. In the future, the stock should be able to increase its stock price in line with its peers. If it does not, at some point the stock will become an overwhelmingly compelling value investment

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Wal-Mart Subject Of Criminal Probe

Yvonne Lee
All Headline News
December 20, 2005                
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(AHN) - Federal prosecutors are investigating Wal-Mart for its handling of merchandise classified as hazardous waste, the company said Tuesday.

Wal-Mart Stores Inc. said in a regulatory filing that the criminal probe centers on the transport of hazardous materials from stores in California to a return center in Las Vegas, reports The Associated Press.

"The government did not challenge the manner in which we disposed of hazardous-waste material once it arrived in the return center, but rather the transport of the material to the return center," said Wal-Mart spokesperson Sarah Clark said.

Federal prosecutors accuse the company of possibly violating the Resource Conservation and Recovery Act. It mandates that hazardous waste be shipped straight to a disposal site via a certified hazardous waste carrier, according to Wal-Mart.

The world's largest retailer said it normally moves hazardous materials, which include damaged aerosol cans and paint, to return centers, then takes the materials to sites approved for hazardous waste disposal.

Clark said the Wal-Mart is cooperating with authorities.

"We are currently reviewing our transportation procedures, taking the necessary action to correct any regulatory problems," Clark said.

Copyright © All Headline News - All rights reserved.

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Wal-Mart's World to Swell in '06

DECEMBER 19, 2005             [back to top]

BENTONVILLE, Ark. -- The world's biggest retailer said last week it intends to only get bigger. Wal-Mart Stores, Inc. here on Friday confirmed that its plans for the coming year include 370 U.S. units, larger stores for Canada, and up to 230 new stores in other countries.

Just last week, Wal-Mart acquired 545 new stores, along with more than 50,000 new associates, in Japan and Brazil, capping a year of robust growth. On Thursday, the company's proposed deal to acquire a majority interest in The Seiyu Ltd., a leading Japanese chain with 405 stores, was given the nod by Seiyu shareholders. This followed an announcement Wednesday that Wal-Mart would acquire 140 Sonae stores in Brazil.

Friday, Wal-Mart said it would build expanded stores, offering fresh food and a wider selection, in Canada next year.

These developments all followed the September announcement that Wal-Mart had purchased a one-third interest in Central American Retail Holding Co. (CARHCO) with 363 supermarkets and other stores in Guatemala, Honduras, El Salvador, Nicaragua, and Costa Rica.

Wal-Mart's growth plan 2006 includes opening as many as 600 new stores and clubs in various spots on the globe. Wal-Mart currently operates more than 5,400 stores and clubs worldwide.

"For many companies, any one of these announcements would be major news for the year," admitted Mike Duke, vice chairman, Wal-Mart Stores, Inc. "We are so grateful for the loyalty of customers all over the world who shop with us and allow us to grow. Clearly, our savings matter to working families -- in any currency."

Wal-Mart Canada confirmed last week that the company would expand three Wal-Mart stores in Ontario in late 2006. When complete, the stores will dedicate additional space to enhanced product offerings in its customers' most popular departments: food, fashion, electronics and home products. Wal-Mart Canada operates 257 Wal-Mart discount stores and six Sam's Clubs.

As of Nov. 30, 2005, Wal-Mart operated 1,224 discount stores, 1,929 Supercenters, 558 Sam's Clubs, and 97 Neighborhood Markets in the United States, and 1,707 units in international markets as follows: Argentina (11), Brazil (155), Canada (263), China (51), Germany (88), South Korea (16), Mexico (768), Puerto Rico (54) and the United Kingdom (313).

© 2005 VNU eMedia Inc. All rights reserved.

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Wal-Mart vs. the world

Overseas expansion is critical to growth, but success beyond the U.S. will be difficult.

By Matthew Boyle
FORTUNE
December 19, 2005          
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NEW YORK (FORTUNE) - While its retail competitors are grappling with what has proved to be a sluggish holiday season in the United States, Wal-Mart has been busy overseas, snapping up the Brazilian operations of Portuguese retailer Sonae for $757 million, and confirming the long-rumored opening of two or three supercenters in Canada in 2006.

"Expanding into new countries will play a critical role in whether or not Wal-Mart meets its aggressive growth goals," says Retail Forward analyst Sandy Skrovan. But will Wal-Mart's recent moves put the squeeze on its overseas rivals, or will it get squeezed itself?

With sales growth slowing in its home country—quarterly same-store sales increases (excluding Sam's Clubs) have dipped from between 7%-9% in 2002 to 1%-3% this year—Wal-Mart has little choice but to look outside America for a boost. International operations currently account for only about a fifth of Wal-Mart's sales, but the company says it hopes to increase that proportion to a third eventually.

Big in Brazil By adding Sonae's 140 stores to the ones it acquired back in 2004 from struggling Ahold, Wal-Mart bolstered its position as the third-largest retailer in Brazil. It now operates nearly 300 stores in Latin America's biggest economy. Meanwhile in Canada, the beast of Bentonville already has about 260 discount stores, which do not sell food, and a handful of Sam's Clubs.

All told, Wal-Mart currently operates in 15 countries besides the US, but its record outside these shores is spotty. It has struggled in Japan, failed miserably in Germany, and lately has even had troubles in the United Kingdom, where management of its Asda subsidiary recently admitted to analysts that some of its stores were "unshoppable" on occasion. One exception: Its Mexican operations are thriving.

As it plots its latest expansion, Wal-Mart would do well to pore over new research from Bain & Co. The consultants there analyzed about 100 overseas expansion moves by retailers between 1989 and 2004 and found that less than one in three were successful. Expansions into Latin American countries had only a 40% success rate, Bain found, while forays into Canada were much more likely to do well (over 80% were successful).

An analysis of Wal-Mart's overseas opportunities by Retail Forward confirms those findings. Wal-Mart's move into Brazil, for example, is forecast to have low prospects for growth and high risk, making it a poor choice for expansion. Canada, like Australia and the United Kingdom, is viewed as a much less risky proposition, with better growth prospects.

Tough prospects That stands to reason, as the U.S. is much closer culturally to its northern neighbor than it is to Latin America, but Bain found other reasons why expansion plans fizzle. For example, retailers make things difficult for themselves when they enter a market with clear and established leaders. Both Brazil and Canada have such frontrunners in Companhia Brasileira de Distribuição and Carrefour (Brazil) and Loblaw and Sobeys (Canada).

And while both Brazil and Canada are large markets, are they healthy enough to justify the massive investment? Brazil's retail scene is not exactly robust, and brutal price wars have turned at least one Canadian province, Ontario, into a "bloodbath," according to one analyst.

Wal-Mart (Research) already gets a substantially lower return on assets in international markets (6%) than it does with its domestic operations (24%), according to a report issued last week by Merrill Lynch analyst Virginia Genereux. Even so, she writes, "Wal-Mart's international operations are on balance a positive in our view, because the contribution of revenue and earnings growth outweighs the slight dilution to consolidated returns." Indeed, the 140 Sonae outlets generate annual revenue of $1.4 billion.

Theories abound as to why expansion has bedeviled retailers in the past. In a recent edition of the McKinsey Quarterly, authors John Horn, Dan Lovallo and Patrick Viguerie write that companies entering new markets frequently fail to learn from history. A "myopic focus on the market entry decision," they argue, prevents management from analyzing a group of similar past cases, which can provide a valuable reality check. One common expansion error is the "brick wall effect," where executives assume that competitors won't adjust their prices, broaden their product offerings, or otherwise change strategy in response to the entry.

It's been said that Wal-Mart's widely admired logistical prowess only extends to countries that it can drive a truck to. Brazil provides a perfect opportunity for Wal-Mart to prove those doubters wrong. Given its stagnant stock—flat in 2004 and down 5% so far this year—and the bad publicity surrounding recent Wal-Mart bashing documentaries, it's clear that investors are desperate for some good news out of Bentonville. Boa sorte, as the Brazilians would say. Good luck.

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Wal-Mart: Merchant of Shame

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Take Action: Sign the women-friendly workplace consumer's pledge Host a screening of the Wal-Mart movie, "The High Cost of Low Price"

The National Organization for Women, its Board of Directors, and its members have received numerous complaints regarding workplace environment and employment practices at Wal-Mart stores, distribution centers, regional and corporate offices. We have considered the extensive public record on cases filed against Wal-Mart and found the allegations disturbing. They are sex discrimination in pay, promotion, and compensation, wage abuse, exclusion of contraceptive coverage in insurance plans, violations of child labor laws and the Americans with Disabilities Act, and discrimination on the basis of sexual orientation. Cases have also been filed regarding firing pro-union workers, eliminating jobs once workers joined unions, and discouraging workers from unionizing. In addition, Wal-Mart continues to refuse to dispense Preven, the "morning-after pill."

Consistent with the goals of NOW's Women Friendly Workplace Campaign, NOW names Wal-Mart a Merchant of Shame. Wal-Mart's dismal record contradicts the worker-friendly image it projects to the public. Join NOW in its campaign to demand changes in Wal-Mart's unfair practices. Hundreds of activists demonstrated outside a Wal-Mart store in the Twin Cities, Minn. area on Saturday, June 22, 2002. Photo by Lisa Bennett.

Chapters Take Action on Wal-Mart This Holiday Season (11/05) NOW Kicks Off Wal-Mart Holiday Shopping Campaign (11/05) Spotlight on Wal-Mart's Shameful Practices (09/05) Upcoming Movie to Expose Wal-Mart's Anti-Women, Anti-Worker Practices (June 2005) Wal-Mart Tries to Respond to Critics with Newspaper Ads (January 2005) Wal-Mart: Always Low Prices? or Always Discriminates? (Fall 2004) Activists Gather at Las Vegas Wal-Mart to Protest Workplace Abuses (7/04) Working Women Won't Have to Settle for Less: Wal-Mart to Face Country's Largest Civil Rights Class Action Suit (6/04) Wal-Mart Announces New Diversity Initiatives at Annual Board Meeting; NOW Skeptically Awaits Implementation of New Worker-Friendly Policies (6/04) Good News! Case Against Wal-Mart Gets a Green Light (4/04) Grocery Store Workers Caught Up in Wal-Mart's Race to the Bottom (11/03) Gender-Pay Activists Step Up the Pressure on Wal-Mart (6/03) NOW Brings "Merchant of Shame" Campaign Into Wal-Mart Stores Nationwide (6/03) Wal-Mart Execs' Testimony Could Help Sex Bias Suit (5/03) Angry Workers Up The Ante At Wal-Mart (4/03) NOW Protests Wal-Mart Workplace Abuses Statement of NOW President Kim Gandy (9/02) Wal-Mart: The Facts Always In Court; Always Wal-Mart: Legal Developments Feminists Celebrate Judge's Ruling to Grant Class-Action Status to Wal-Mart Discrimination Suit (9/02) NOW Declares Wal-Mart A Merchant of Shame (Fall 2002) News Release: NOW Blasts Wal-Mart Workplace Abuses, Names the Company a Merchant of Shame (6/02) Women-Friendly Workplace and Campus Campaign Summary

Copyright 1995-2005, All rights reserved. Permission granted for non-commercial use. National Organization for Women

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Wal-Mart Uses "Secret" Chinese Sweatshops to Produce Holiday Goods

NTDTV
Epoch Times International
Dec 17, 2005                               
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If you were thinking of heading to Wal-Mart this holiday season in search of some discount gifts, you might want to think again. Many of these goods were produced in "secret" sweatshop factories in China, by workers who suffer under appalling conditions.

According to the National Labor Committee and China Labor Watch, workers at factories like the one in Lungcheong, for instance, are forced to work 13 hours a day, 6 to 7 days a week, for as little as 18 to 33 cents an hour.

What is more, the Chinese government helps to keep these factories from the public eyes, and away from proper scrutiny.

Mr. Li Qiang of China Labor Watch told NTDTV of his group's efforts to publicize the situation at Lungcheong. "We are a small organization and we obviously have no way of investigating all of the factories, plus they are all secret, but we hope that they will change conditions not only in these two factories, but in all factories throughout China. They need to absolutely publicize what factories they work in. This is the only way to have a good beginning, to have a positive change."

Charles Karnaghan, executive director of the National Labor Committee, says that it is Wal-Mart's willingness to continue to roll back their production costs, always at the cost of the worker, that has created the especially appalling situation in these Chinese factories.

Mr. Karnaghan said, " At some point that model cannot go forward unless you begin to drag wages down across the developing world, and eliminate benefits and roll back respect for women's rights, and worker's rights, and human rights."

Wal-Mart claims that it has addressed these concerns by adopting methods of internal regulation and corporate standards that supposedly aim to combat these types of worker exploitation and abuse, but the NLC is convinced that these measures are largely ineffective.

Karnaghan continued, " It's trying to confute the American people with a corporation's code of conduct."

So, what can we do this holiday season to help brighten the lives of these desperate Chinese workers?

Li Qiang added, "Americans should put pressure on Wal-Mart to change the situation there, and to follow Chinese law in China."

Copyright 2000 - 2005 Epoch Times International

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Anti-Wal-Mart Activists See Local Threat in World Trade Talks

by Michelle Chen
NewStandard                   
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Dec 16 - For over a decade, the residents of Greenfield, Massachusetts have been snubbing the biggest names in retail, aiming to protect local businesses and neighborhoods from corporate "sprawl." Backed by tight zoning regulations, including size limits for retail stores, local activists have kept Wal-Mart at bay and managed to avoid the wave of mega-stores engulfing the rest of the country.

But on the other side of the planet, negotiators at the World Trade Organization (WTO) meeting in Hong Kong are discussing trade rules that could empower corporations to override policies like Greenfield's zoning laws. According to critics of so-called "big box" retailers, the expansion of a WTO accord called the General Agreement on Trade and Services (GATS) may make it easier for giant retailers to squelch local laws.

Under GATS, which was adopted by more than 140 WTO member nations, federal, local and state governments cannot limit the size and operations of foreign service-sector corporations. If a community enacts such measures, a foreign government can challenge these "barriers to trade" through a WTO dispute-resolution process. In signing onto the accord in 1994, the US Congress committed several major sectors, including telecommunications, financial services and retail stores, to GATS rules.

In the ongoing WTO negotiations, corporate lobbyists are pushing proposals to strengthen the provisions of GATS and further constrain the authority of governments to control the terms on which corporations can do business in their communities. According to a report by the advocacy group Public Citizen, enhancing GATS could gut the state and local land-use regulations that hundreds of communities across the country have used to block mass retailers from setting up shop in their neighborhoods.

"Zoning is one of the last bastions of local control," said Al Norman, one of the Greenfield activists who campaigned successfully against a Wal-Mart development plan in the early 1990s. He now runs Sprawl-Busters, a group that helps communities develop strategies to keep out big-box chains. "To me," he argued, "it's unconstitutional for a trade agreement to take away that statutory power."

Industry leaders publicly support GATS as a tool to crack open foreign markets, but they say it will not impact their expansion in the US.

"We certainly oppose retail restrictions, size restrictions here, domestically," said Paul Kelly, senior vice president of government affairs for the Retail Industry Leaders Association, which represents Wal-Mart, Home Depot and other chains. But in the US, companies will continue to sell their development plans "through good old-fashioned, shoe-leather lobbying," he told The NewStandard.

"We have no intention of working through [the] WTO to do any kind of backdoor preemption," he added.

Yet grassroots groups say that although GATS has not yet factored into domestic clashes with mega-stores, retail giants are not above capitalizing on international agreements to mow down community opposition. Even if US-based companies do not invoke GATS, they argue, the accord could still foster the US expansion of foreign-owned stores, like Sweden's IKEA and the Netherlands' Stop & Shop. At a 2002 US Department of Commerce conference, both these chains were listed among multinational corporations that were running up against local restrictions on the size and location of retail developments.

Stacy Mitchell, senior researcher with the Institute for Local Self Reliance, a community-development think tank, commented that since Wal-Mart's empire encompasses several thousand stores in 15 countries, she suspects they are "imagining that one of their subsidiaries in another country could be used to help… challenge a local land-use law in this country." For example, she said, Wal-Mart could enlist its Mexican sister-store, Wal-Mex, to battle a US GATS violation by proxy.

Norman said that even local governments that welcome chain stores would want their own officials, not the WTO, to have the final word. "Whether people want big boxes or don't want them," he said, "they certainly don't want some sort of international trade agreement to step in between them and their right to control land use."

Some officials have already expressed concern about the impacts of WTO agreements on domestic service industries, especially public services like water utilities. Earlier this year, the Montana and Utah legislatures passed resolutions urging federal authorities to protect state regulatory authority when negotiating trade policies.

But watchdog groups say that big-box retailers and other corporations that stand to gain from GATS are steering the US in the opposite direction. In 2002, for example, the Retail Industry Leaders Association and Wal-Mart issued complaints to the US Trade Representative about regulations in some countries that limited where and how large they could build stores. Similarly, an internal memorandum of the WTO's Working Party on Domestic Regulation targeted licensing requirements and "unreasonable environmental and safety standards" as impediments to trade.

"Instead of going back and fixing problems that have been exposed," said Sarah Johnson of Public Citizen's Global Trade Watch program, "trade negotiators are trying to put more things on the table."

Earlier this year, a WTO tribunal ruling intensified fears that GATS could subordinate domestic law to the free-trade regime. The government of Antigua charged that US state and federal bans on Internet-based gambling limited the market access of Antigua's gaming industry. The WTO ruled that the anti-gambling statutes violated GATS, though the laws ultimately survived through a loophole for regulations relating to "public morals."

Johnson told TNS the decision indicated that "the way that the GATS is being interpreted is kind of confirming worst nightmares."

The backdrop to the GATS controversy is growing evidence that, contrary to the claims of developers, unbridled mega-store expansion tends to undermine local economies. According to the University of California–Berkeley's Institute for Industrial Relations, compared to large retail businesses overall, Wal-Mart spent about 15 percent less per worker on wages and healthcare benefits. In suburbs and cities, Wal-Mart has generally displaced higher-paying jobs in comparable retail stores.

Nonetheless, with or without the help of the WTO, chain retailers keep finding room to grow. In Bennington, Vermont, for instance, Wal-Mart managed to muster enough local influence to stamp out a law banning retail developments larger than 75,000 square feet, which would have blocked Wal-Mart's expansion plans. The company launched a political advertising campaign, vastly outspending community organizers that supported the measure, and the policy was overturned in an April referendum.

When it comes to winning over planning authorities, Norman said that retailers are often successful because "local officials either are in the hands of the developers or don't know what their powers are to stop developers."

© 2005 The NewStandard.

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US House panel members urge FDIC delay Wal-Mart bid

Fri Dec 16, 2005          [back to top]

WASHINGTON, Dec 16 (Reuters) - A bipartisan group of lawmakers on the U.S. House Financial Services Committee on Friday asked the Federal Deposit Insurance Corp. to delay action on Wal-Mart's application to open a bank until the regulatory agency's board vacancy is filled.

"This application is clearly of sufficient importance to require that it be made by the members of the FDIC Board itself and only by a full Board without vacancies," wrote the group, which included Massachusetts Rep. Barney Frank, the panel's top Democrat, and Ohio Republican Rep. Paul Gillmor.

The 25 members also urged the FDIC to hold public hearings on Wal-Mart Stores Inc.'s <WMT.N> application, due to the significant public interest it has generated. Wal-Mart's application drew more than 1,000 comments, more than any other application subject to public commentary.

© Reuters 2005. All rights reserved.

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Is it a sin to shop at Wal-Mart?

By R. W. Dellinger
Friday, December 16, 2005
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"Wal-Mart: The High Cost of Low Price" had its world premiere in New York Nov. 1 and L.A. opening two days later at the swanky Writers Guild Theater in Beverly Hills.

Since then, the 98-minute documentary, which was made on a shoestring budget of $1.8 million, has been shown at thousands of churches, synagogues, schools and other alternative outlets, including house parties. In fact, producer and director Robert Greenwald claims that with more than 3,000 screenings in 50 states, his film used the largest grassroots distribution in movie history.

Greenwald makes no pretense that his "Wal-Mart" is some kind of objective, balanced look at the world's biggest company.

"This is a movie about American families and American ideals, a movie about one corporation crushing the American dream for millions of ordinary people --- right or left, republican or democrat, red or blue," he has declared. "Wal-Mart is systematically destroying the fabric of our nation, pretending to be the great American workplace while at the same time showing thinly veiled contempt for working families, small business owners and the very people it employs."

In the film, lofty platitudes by Wal-Mart CEO Lee Scott and lavish company TV commercials of bubbly employees aren't just undercut but demolished by interviews with former workers, managers and executives who divulge alleged seedy business practices.

These include low base pay; coerced unpaid overtime; aggressive anti-union tactics; health-insurance packages that are so costly thousands of employees must turn to Medicaid; goods produced by foreign sweatshop labor; and the harm to local businesses and mom-and-pop stores when the company moves in.

Most of these corporate abuses have, of course, been dredged up before by both print and media journalists. But the detailed mixing of cold statistics with emotional ex-employee testimony --- although at times pretty disjointedly --- leaves a marked impression on many viewers.

But what makes the documentary most intriguing for Christians is the moral questions it raises. The Tidings recently addressed these issues with two Christian clergy: a minister/community leader who was instrumental in keeping a Wal-Mart supercenter out of Inglewood, and a local Jesuit theological ethicist.

The bottom line

The Rev. Altagracia Perez, senior pastor of Holy Faith Episcopal Church, is one of those interviewed in the "High Cost of Low Price" film --- interviewed, in fact, in her kitchen about organizing her congregation and working with the Coalition for a Better Inglewood.

"It was so grassroots," she told The Tidings, smiling. "We did it because we wanted to take a moral stand. We believed that our families should be able to survive in our country, being as wealthy and well off as we are. So for us, it was really a stand with poor families and with folks who need good jobs.

"There's no reason why Wal-Mart can't continue to offer a good price to customers and also pay their employees well. I mean, they make enough money where they can do that. And it might mean a little less profit. But it will mean that the people who make them great --- who are the workers on the ground --- are being compensated fairly for the riches that the company gets.

"The bottom line is not the dollar," she stressed. "The bottom line is the quality of life of the people who live in this community."

The battle lasted almost two years, Rev. Perez recalls, with the Arkansas-based company circumventing zoning ordinances, environmental impact reports, street closings --- "everything," including the city council. But in the end, an initiative passed to keep Wal-Mart from building one of its new supercenters, which includes a grocery warehouse, along with a Sam's Club.

(Just last week, Wal-Mart announced plans to build 50 of the supercenters throughout California.)

The thing that brought people out to vote against Wal-Mart was the company's reputation for being anti-union, she says, pointing out that supermarket union jobs are one of the last places in Inglewood where high school graduates can get a good job.

Rev. Perez is proud of her stand against Wal-Mart, although more recently she was part of a city delegation that presented the company with a community contract that, if agreed to, would bring a smaller version of the supercenter to her community. She stresses that jobs and benefits are life issues that more religious leaders need to pay careful attention to.

"I do think that right now the moral discussion in our society is way too narrow," she said. "We do want to respect life and the quality of life, but we have to do it on the meat-and-potatoes issues as well as the hot button issues. Families are not able to survive without more than one job because of the way the economy is going.

"So advocating for good jobs is an important moral stance to take as well. 'Cause we can want to support life, but what if people can't live because they can't afford to live. That's a contradiction."

'Social responsibilities'

When he was interviewed, Jesuit Father John Coleman had not seen "Wal-Mart: The High Cost of Low Price." But as the Casassa Professor of Social Justice at Loyola Marymount University, who holds the endowed chair in ethics for the school of liberal arts, he has some strong opinions on the business giant.

Like Rev. Perez, Father Coleman believes any company that claims the only bottom line that counts is profit is not a morally sound company. In addition to fiscal responsibilities to their owners to make money and customers to sell quality goods at competitive prices, he says all retail firms also have social responsibilities to the communities they operate in and the people who work for them.

From a Catholic point of view, according to Father Coleman, paying a living wage and allowing workers to engage in collective bargaining are core issues.

"Catholics hold for something equivalent to a living wage, so that people who work should have enough money to live a minimally decent life," he said. "You can't really do that working at Wal-Mart, especially when most of the employees can't afford the health plans they offer, either. So, basically, you have this anomaly that people have jobs that keep them in poverty."

Moreover, the church has strongly supported workers' right to organize for more than a century in papal encyclicals (e.g., Laborem Exercens by Pope John Paul II, 1981) to bishops' pastoral letters. As a result, Father Coleman points out that the company's often reported aggressive anti-union tactics run completely counter to Catholic social teachings.

Father Coleman is further troubled by Wal-Mart's practice of putting pressure on suppliers, especially in the textile industry, to decrease their own margin of profit to keep prices of socks, underwear and others items at rock-bottom prices.

"That means suppliers, too, have to pay lower wages," he noted. "So it's a race to the bottom on wages. And the company is so massive that you're at a competitive disadvantage if you can't sell to them.

"But if you do sell to them, you have to cost-cut an awful lot because they keep putting enormous pressure on you, which is how you get these Third World sweatshop conditions. So the whole process actually drives down labor standards around the world."

The social justice professor is also concerned with how the company drives smaller businesses and mom-an-pop stores out of business when it moves into a new area.

On the one hand, this can be chalked up to Wal-Mart's massive buying competitive advantages. But on the other hand, he observes, for the market place to work well classically in Adam Smith's terms, there must be true competition.

Finally, Father Coleman says there is a major hypocrisy about the company encouraging its low-paid employees to apply for Food Stamps and Medicaid, which "Wal-Mart: The High Cost of Low Price" documents. He points out that the government is subsidizing a business that's actually undermining the standard of living of members of the community.

When asked what Catholics trying to live a moral, ethical life should do about the super company, the priest didn't hesitate. "They can boycott it," he declared, "just as people have said they're going to try to buy coffee that supports fair labor practices. Why would you support it? Just because you can save a few dollars, a few cents?"

After a moment, he added, "Would I say from the pulpit, 'You can't go to Wal-Mart'? No. But I would say, 'Now, look. Given Catholic principles of a living wage and support of unions, and given Wal-Mart's history and size --- and how the company is unapologetic about what it does --- target them!"

The Tidings Corporation ©2004 

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A sour note for choir at Wal-Mart

BY CHRISTINE ARMARIO
December 16, 2005              
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A festive group of high school choir students from Central Islip singing at an Islandia shopping center discovered over the weekend that some people were not in the holiday spirit.

After entering a Wal-Mart store, the choir was quickly asked to leave before even starting to sing its first song.

The Central Islip High School concert choir had just finished a performance at the United Methodist Church off Veterans Memorial Highway, when the students proposed to go caroling in the shopping center across the street.

Their director, John Anthony, approved the move and the group of about 30 students found warm welcomes at the Stop & Shop grocery store and other shops in the center. That is, until they entered Wal-Mart.

Right away, a store manager approached the award-winning group, announcing that they did not have an appointment and that the sheer size of the group posed a fire hazard, Anthony said.

The teens then sang one song - "Guide Me," a classic Welsh tune - to the delight of the customers.

"Sing more!" Anthony said the shoppers were screaming. But Wal-Mart was adamant and even called police. The students left peacefully before police arrived and no arrests were made.

The choir's merriment quickly disintegrated, the director said. "The kids were just 'Bah humbug!'" he added.

Wal-Mart officials released a statement this week saying the choir's appearance was unscheduled and created a fire code violation. "For their safety and the safety of our customers, we asked them to move," the statement read.

Wal-Mart has offered the school an opportunity for the choir to return at a scheduled time. The store also made an undisclosed donation toward the choir's trip next summer to Austria, where they will be one of three student choirs from the United States to perform at a celebration of the 250th anniversary of Wolfgang Amadeus Mozart's birth.

Copyright 2005 Newsday Inc.

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Brazil's top retailer names CEO as Wal-Mart prowls

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SAO PAULO, Brazil, Dec 16 (Reuters) - Companhia Brasileira de Distribuicao <CBD.N><PCAR4.SA>, Brazil's top retailer, named a new chief executive on Friday, just days after Wal-Mart Stores Inc. <WMT.N> aggressively expanded its reach in Latin America's biggest market.

CBD, as the company is widely known, said in a statement that Cassio Casseb would assume the post, which was vacated four months ago when Augusto Cruz stepped down.

Casseb, 50, is an engineer who has spent most of his career in the financial sector. He has held several high-profile posts, including serving as president of government-run Banco do Brasil <BBAS3.SA>, a job he quit in November of last year because of accusations he failed to declare a U.S. bank account to Brazilian tax authorities.

He has denied the charges.

Casseb takes the helm at CBD as it faces fierce competition from France's Carrefour <CARR.PA> and Wal-Mart, which has been swiftly increasing its presence in Brazil in the last two years.

Wal-Mart, the world's biggest retailer, paid $757 million earlier this week for the Brazilian operations of Portuguese conglomerate Sonae SGPS SA <SON.LS>, moving it closer to the No. 2 ranking among retailers behind CBD and Carrefour, respectively.

The deal gave Wal-Mart a total of 295 outlets in 17 of Brazil's 26 states. Combined, Wal-Mart and Sonae rang up 10.4 billion reais ($4.46 billion) in sales in 2004, while Carrefour had 12.1 billion reais in revenue and CBD raked in 15.4 billion reais, according to the Brazilian Supermarkets' Association.

Founded in 1948 in Sao Paulo by the Abilio Diniz family as a corner bakery, CBD is now a 558-store chain better known in Brazil by the name of its flagship supermarket, Pao de Acucar.

Since May, the chain has been jointly owned by the Diniz family and the French retail group Casino Guichard-Perrachon & Cie. <CASP.PA>, which paid more than $520 million in cash for a 50 percent stake in a new holding company that controls CBD.

CBD plans to invest some 2.5 billion reais in the next four years, when it plans to open 160 new stores.

© Reuters 2005. All rights reserved.

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Wal-Mart wins Japan Seiyu's approval for rescue

Reuters
Thu Dec 15, 2005               
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TOKYO, Dec 15  - U.S. retailer Wal-Mart <WMT.N> on Thursday won approval from Seiyu Ltd.'s <8268.T> shareholders for a $1 billion rescue package for the struggling Japanese retailer, which will make it a Wal-Mart unit this month.

Ed Kolodzieski, Seiyu's newly installed chief executive sent from the U.S. retail giant, said the fresh fund injection is an expression of confidence in Seiyu and the Japanese market.

"The company makes this investment because it sees a lot of long-term, bright possibility," he told a news conference.

"Seiyu today is better positioned than it has been in the past ... We are confident in the future we'll get to see the dividends of the work that has taken place in the past."

Kolodzieski, 45, said his first priority was to learn and understand the needs of Japanese customers.

Under the deal, Wal-Mart will inject 67.5 billion yen ($574.3 million) to take a controlling 53.56 percent voting stake in Seiyu, up from 42.28 percent, allowing the world's biggest retailer to step further into the crowded Japanese market.

Mizuho Financial Group Inc. <8411.T>, Japan's second biggest banking group by assets, will also inject 47.5 billion yen through the purchase of preferred shares.

Seiyu, Japan's fourth-biggest retailer with 400 stores, last month nearly doubled its net loss forecast for the year to December to 13.5 billion yen, citing slower-than-expected improvement in its profit margin.

Restructuring, high costs and frequent changes in sales policy following reforms led by Wal-Mart have added to its problems.

It would be Seiyu's fourth straight year in the red.

Analysts see red ink for Seiyu again next year due to expected asset impairment charges. ($1=117.53 Yen)

© Reuters 2005. All rights reserved.

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Wal-Mart in global expansion push

BBC NEWS
Published: 2005/12/15 
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US retail giant Wal-Mart has embarked on a global expansion and acquisition spree, with a Japanese takeover and a doubling of its presence in Brazil. Shareholders in Japan's fifth biggest retail group Seiyu have approved a $1bn rescue deal from Wal-Mart.

Under the agreement, Wal-Mart will raise its stake in Seiyu - which in turn will become a Wal-Mart subsidiary.

Wal-Mart also doubled its outlets in Brazil by buying 140 stores from Portugal's Sonae for $757m (£427m).

Expansion plan

The stores, a mixture of hypermarkets, supermarkets and wholesale outlets, are scattered across southern Brazil.

We will continue to be opportunistic and look at both organic growth and mergers and acquisitions opportunities around the world Craig Herket, Wal-Mart

The deal means Wal-Mart now has 295 shops in Brazil, making it the country's third largest retail chain.

Last year Wal-Mart bought a 118-store supermarket chain called Bompreco for $300m from the Dutch retailer Ahold.

It also owns stores in Mexico, Argentina and Puerto Rico.

"We will continue to be opportunistic and look at both organic growth and mergers and acquisitions opportunities around the world," said Craig Herket, president of Wal-Mart Americas.

Looking East

Meanwhile, Wal-Mart's takeover of Seiyu will give it a foothold in the difficult Japanese market.

Under the rescue deal Wal-Mart will take a 53% stake in Seiyu in return for a 67.5bn yen ($585m; £328m) investment, while Japan's Mizuho Financial Group will invest 47.5bn yen.

Changes to sales policies, high costs and restructuring have hit Seiyu hard recently, and 2005-6 is expected to be the group's fourth straight year in the red.

Former Wal-Mart international vice president and chief operating officer Ed Kolodzieski will take over the running of the new Japanese unit.

"The company makes this investment because it sees a lot of long-term, bright possibility," he told a news conference.

"From our perspective, there is an incredible opportunity. There's clearly a lot of consumption in this country."

© BBC MMV

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Former Wal-Mart Exec Takes Helm at Seiyu

By HIROKO TABUCHI
Associated Press
December 15, 2005                  
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TOKYO -- A former Wal-Mart executive on Thursday took the helm at Japanese retailer Seiyu Ltd., which will become a subsidiary of the U.S. chain later this month as the world's largest retailer tries to grab a bigger share of Japan's lucrative but finicky retail market.

Seiyu shareholders approved the appointment of Ed Kolodzieski, Wal-Mart International's former senior vice president and chief operating officer, as Seiyu's new chief executive, the two companies said Thursday at a Tokyo news conference.

Tokyo-based Seiyu also said it would become a Wal-Mart subsidiary on Dec. 21, when the retail giant finishes acquiring 53.34 percent of Seiyu's shares through an investment of 67.5 billion yen ($585 million), announced last month.

The U.S. retailer's move was "an expression of Wal-Mart's confidence in Seiyu and the Japanese market," said Kolodzieski, a Seiyu board member since 2004. He replaces Noriyuki Watanabe, who remains Seiyu's chairman.

"I am joining a great company that has excellent associates and some unique and irreplaceable real estate," Kolodzieski said.

Since arriving in Japan in 2002, Wal-Mart Stores Inc. has been gradually raising its stake in Seiyu, the nation's fifth-largest chain with more than 400 supermarkets and department stores.

But Seiyu has since lost money, struggling to win over shoppers renowned for being both fickle and picky.

Last month, the retailer cut its profit forecast for the year through December, saying it expected a net loss of 13.5 billion yen ($117.4 million).

Kolodzieski said his main challenge is "to provide great merchandize at fabulous prices," at Seiyu stores, signaling his intention to tackle one problem Wal-Mart faces in Japan: It has not yet been able to offer the extremely low prices with which Wal-Mart built its brand in the United States.

Wal-Mart has also learned that it must adapt to Japanese tastes.

"The key to success is to understand the needs of customers here," Kolodzieski said, adding that he had already inspected Seiyu stores across the country to study the Japanese market.

The new chief executive officer, flanked by Watanabe and Wal-Mart Stores' Vice Chairman Michael Duke, did not give more details of a new strategy for the ailing retailer. But he said Wal-Mart will concentrate on existing Seiyu stores for now, rather than pursing further mergers.

Copyright 2005 Newsday Inc.

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WAL-MART'S PUBLIC IMAGE CAMPAIGN

MacNeil/Lehrer Productions
December 14 , 2005                      
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Wal-Mart, the world's largest retailer, rolled out a campaign to combat negative publicity and restore confidence in the chain's heavily criticized business practices.

SPOKESMAN: We've incorporated a wind turbine into our power needs --

PAUL SOLMAN: In Aurora, Colorado, a propeller helps power a highly publicized, brand-new, eco-friendly Wal-Mart, --

PAUL SOLMAN: This is like foam or something.

PAUL SOLMAN: -- which also recycles.

SPOKESMAN: We're using tires that have been recycled as the sidewalk itself.

PAUL SOLMAN: Plus signs powered entirely by solar cells; the store heated with the help of re-used frying oil; low-energy lights that shoppers trigger on and off when they walk by. It might seem to be evidence of a new, kinder, gentler Wal-Mart. Spokesperson Mona Williams says that's because the company is listening to its critics.

MONA WLLIAMS: We've talked to environmentalists, we've talked to NGOs; we've talked to people in neighborhoods. We've really reached out to say: What should we be doing differently? What can we do to be a better citizen? What can we do to be a better company, and we've listened to those folks, and that's why, I think, you're seeing a lot of the changes that you're seeing right now.

PAUL SOLMAN: Wal-Mart's better citizenship was on public display during Hurricane Katrina, when it was widely seen to have served local communities better than FEMA did.

SPOKESMAN: Socks, underwear, T-shirts, toothpaste, mouthwash, everything individually separated by pattern.

PAUL SOLMAN: Wal-Mart's come out for raising the minimum wage, underwrites PBS's Tavis Smiley Show and National Public Radio. Why all of this now? Well, years of criticism, the need to expand to more urban climbs and an uneasy Wall Street may explain the morphing of Wal-Mart. Its expansion plans, for instance, have run into more and more resistance of late. Its stock has drooped some 30 percent the past five years after soaring 700 percent in the previous five.

WORKER: Give me a W-A-L -

PAUL SOLMAN: And despite the usual gung-ho hosanna that ushered in the Aurora store, Wal-Mart's finding that, these days, it's not even easy being green.

SPOKESMAN: The majority of the back wall of this store is a product called solar wall.

PAUL SOLMAN: The Sierra Club said of Aurora: "One store out of thousands does not make for an environmental champion." Others dubbed the store part of the new Wal-Mart "charm offensive."

SPOKESPERSON: One, two, three.

SPOKESMAN: There we go.

GROUP: Yea! (Applause)

PAUL SOLMAN: And the same week this store debuted for the media and public, so did a national anti-Wal-Mart campaign, spearheaded by a film, "The High Cost of Low Prices."

SPOKESMAN: This movie represents an amazing grassroots effort to try and steer the national dialogue.

PAUL SOLMAN: The film has played at more than 7,000 neighborhood venues like this one and makes vivid the by-now familiar litany of charges: Wal-Mart destroys mom and pop shops and the main streets they anchor; it exploits workers, foreign and domestic, abuses illegal aliens.

And how did this Colorado audience, not far from Aurora, feel about Wal-Mart, post- screening?

CAROLE CORE: I hope the mainstream pick it up and the average American sees it and finally gets a clue and opens their eyes that just because they're getting cheap deals on toilet paper doesn't mean that it's helping our economy.

PAUL SOLMAN: The hottest charge of late is that Wal-Mart hurts the economy by fobbing off its poor employees onto Medicaid, rather than provide healthcare itself.

An internal memo, leaked to the New York Times, has fueled the fire. In it, Wal-Mart admits that: "Critics are correct. Wal-Mart has a significant percentage of associates and their children on public assistance," and says that Wal-Mart might attract a healthier, more productive work force by, among other things, trying to dissuade unhealthy people from coming to work at Wal-Mart.

Now in fact, the memo also included suggestions like in-store health clinics and a healthier employee diet, but overall it hardly put Wal-Mart's best face forward.

As a result, the memo, like the film, has become a key weapon in the "Wake-Up Wal-Mart" campaign.

SPOKESPERSON: This is an internal memo that was released to the New York Times and to me illustrates their lack of values and morality.

PAUL SOLMAN: In fact, says Wake-Up Wal-Mart's Paul Blank:

PAUL BLANK: If we allow the Wal-Mart business model to continue, then what's going to happen is other corporations are going to follow it. They're basically becoming a bulldozer paving the way to the bottom.

PAUL SOLMAN: Wal-Mart's response, of course, is that its model provides rock-bottom prices to less affluent and genuinely appreciative Americans.

GLENDA SCOTT: I love Wal-Mart. I mean I could open my purse, I have a receipt for every day. I'm in Wal-Mart every day.

SARAH WOODMAN: I'm for Wal-Mart, all for Wal-Mart. Wal-Mart's great.

PAUL SOLMAN: Why?

SARAH WOODMAN: Because it's cheaper prices.

PAUL SOLMAN: Backing up such statements is a new pro-Wal-Mart film, not bankrolled by the company, which features a town, consumers and employees who've all supposedly benefited from Wal-Mart, like Sharon Reese.

SHARON REESE: The first time I went to the dentist, actually got my teeth cleaned. I've never done that before, you know what I mean, and to actually be able to go to a doctor when I'm sick, right then, you know, and I don't have to wait six hours to be seen.

PAUL SOLMAN: Mona Williams has data to support this anecdote.

MONA WILLIAMS: We did our own surveys and found that before coming to work at Wal-Mart, 7 percent of our associates were on Medicaid or some other form of public assistance. After two years of employment with Wal-Mart, that number had dropped to 3 percent. So that's more than 50,000 people that we've pulled off the public assistance rolls.

PAUL SOLMAN: And Wal-Mart's health insurance numbers seem comparable to the retail sector in general. On the other hand, given all the negative publicity about Wal-Mart, and with its hope for future growth concentrated in the North, on the coasts, in the more urban, more liberal blue states, says union activist Paul Blank --

PAUL BLANK: If you look at the core issues, that make the blue states blue: Health care, economic security, no discrimination, those are the issues that this campaign is about and those are the issues that Wal-Mart is on the wrong side of, and that's why Wal-Mart is going to have a problem expanding.

PAUL SOLMAN: Pro, con, pro, con. The debate over Wal-Mart continues, even in its own stores. A woman giving out Doritos samples was a Wal-Mart skeptic.

OLDER LADY: I hope that Wal-Mart doesn't ace out all of the other wonderful grocery stores we have.

PAUL SOLMAN: But an elf promoting Keebler Crackers didn't understand why Wal-Mart was under attack.

PAUL SOLMAN: You don't get it?

PAUL SOLMAN: Wal-Mart itself, however, says the times are changing.

MONA WILLIAMS: We are light years ahead of where we were even two or three years ago. I think we have spent the last couple of years making sure that we have weeded out the so-called "bad apples," managers who would let cost pressures push them to do the wrong thing.

PAUL SOLMAN: But in that case, why is Wal-Mart still such a target? Perhaps because its size and success symbolize what worries so many these days: The inexorable, often inhuman march of the market system in the age of globalization.

"Is Wal-Mart villain or symbol?" we asked the maker of the anti-Wal-Mart film, Robert Greenwald.

ROBERT GREENWALD: I would say Wal-Mart is both. I would say Wal-Mart is the poster child for a series of corporations and they're the leader of the pack in many ways given their size and given their practices in terms of multinational corporations and the problems that they're creating.

PAUL SOLMAN: But what if Wal-Mart really is changing? Consider its response to Hurricane Katrina: Replenishing its own devastated stores, giving out water and other supplies free to the communities in which the Wal-Mart stores were based.

Katrina marked a turning point for CEO Lee Scott, according to Mona Williams, who says the boss asked his top executives:

MONA WILLIAMS: What if we were that good in every aspect of our business and also reaching out with social responsibility, what kind of company could we be? Could that take us to the next level?

PAUL SOLMAN: The next level of corporate responsibility that is. The fear of critics of course is that it's all for show. And that's why folks like Wake-Up Wal-Mart are still out in force -- to compel Wal-Mart to change for good -- even it's begun to change already.

Copyright ©2005 MacNeil/Lehrer Productions. All Rights Reserved.

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Wal-Mart Buys Brazil Stores for Expansion

By ALAN CLENDENNING
AP Business                          
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SAO PAULO, Brazil — Wal-Mart Stores Inc. boosted its presence in Latin America on Wednesday, buying 140 Brazilian hypermarkets, supermarkets and wholesale outlets from a Portuguese conglomerate.

The 635 million euros ($764 million) purchase from Sonae SGPS SA fits into Wal-Mart's strategy of rapid overseas growth, and executives with world's largest retailer said they want to expand more in Latin America and elsewhere outside the United States.

Herket and other Wal-Mart executives declined to identify other countries that Wal-Mart may target in Latin America, but said growth could come through construction of new stores or acquisitions of other retailers.

Wal-Mart also owns stores in Argentina, Mexico and Puerto Rico. The company in September bought a 33 percent stake in Costa Rica-based Central American Retail Holding Co., which owns 363 stores in Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua.

Wal-Mart's international sales and profitability has grown faster than in the United States. In the most recent quarter ending Oct. 31, the international segment accounted for 20 percent of Wal-Mart group sales, up 12 percent from a year before.

The company's quarterly operating income from international operations grew 14 percent year-on-year, more than double the 6 percent rate for the Wal-Mart Stores division that runs its flagship U.S. operations.

With the Brazil purchase, Wal-Mart strengthens its spot as the No. 3 retailer in Latin America's most populous country, and essentially bumps No. 4 Sonae off the chart.

Wal-Mart Brasil president Vicente Trius said the company isn't concerned about pushing its position higher. But analysts predicted the retailer will eventually surpass the market leader, Brazil's Companhia Brasileira de Distribuicao SA, or at least the second largest player, France's Carrefour SA.

"I don't think Wal-Mart's appetite will stop here; the company's focus is to be the top player or second in markets where they operate," said Alexandre Garcia, a retail analyst with the Agora Senior brokerage in Rio de Janeiro.

Wal-Mart last year purchased a Brazilian supermarket chain from Dutch retailer Royal Ahold NV for $300 million (250 million euros), giving Wal-Mart 120 stores in northeastern Brazil.

The deal with Sonae was slightly more expensive than the $700 million that analysts expected.

It gives Wal-Mart stores under four different names across Brazil's more populous south, and the company has no plans to change the names. Wal-Mart also gets four distribution centers, seven restaurants, three gas stations and a meat packing plant.

Wal-Mart will now have 295 stores in 17 of Brazil's 26 states, and plans to open another 15 Brazilian stores next year.

Patricia Edwards, a portfolio manager at Wentworth, Hauser & Violich in Seattle, Washington, said it makes sense for Wal-Mart to buy rather than build.

"It is really difficult for Wal-Mart to go into a new country and just build from the ground up," said Edwards, whose company manages $6.4 billion (5.32 billion euros) in assets and holds about 64,000 Wal-Mart shares. "They're doing it in China. But if you look at anywhere else they have gone into, they have always partnered with a local company of some sort."

Sonae, which earlier sold some of its Brazilian stores to Carrefour, said it was getting out of the retail business in Brazil in part because of high interest rates that have stifled growth and consumption in South America's largest economy.

But Herket said Wal-Mart executives aren't concerned about Brazil's benchmark Selic rate, which stands at 18.5 percent and has been kept high for years in a bid to control inflation and promote slow, sustainable growth.

"We feel very good about the stability of the economic environment in Brazil," he said.

Even if Brazil unexpectedly reverts to its past history of boom and bust economic cycles, "We've learned to operate in markets that have their peaks and valleys," Herket said. "If it were to happen, we would be able to manage it."

Wal-Mart shares were up 19 cents to close at $49.51 on the New York Stock Exchange. Sonae shares fell 1.3 percent on the Lisbon Stock Exchange.

Copyright 2005, The Associated Press.

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The Wal-Mart Question

December 14, 2005                         [back to top]

Liberal media watchdog group Fairness & Accuracy In Reporting (FAIR) has released a piece suggesting that the money Wal-Mart spends to advertise in news outlets may be buying more than ads. Peter Hart and Janine Jackson write:

Just how tough has media scrutiny of Wal-Mart really been? “You’ve heard the firestorm of criticism about the company, about wages, benefits, union-busting, about locking employees in, about making them work overtime without paying them for it,” ABC’s Charlie Gibson said in introducing a Good Morning America interview with CEO Lee Scott (1/13/05). But how much have most people really heard about these issues? The answer, Hart and Jackson suggest, is not enough, in part because of the Wal-Mart's advertising. As regular CBS News and CBSNews.com consumers know, Wal-Mart is a major CBS News advertiser – click on a video on the Web site, for example, and there's a good chance that you'll see a Wal-Mart ad. I asked Michael Sims, CBSNews.com's director of News and Operations, if the advertising impacts the site's editorial policy.

"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.

One would never expect a news director to say that advertising impacts editorial, of course. But Sims is right that CBSNews.com has run a number of negative stories about Wal-Mart. Last week, the site ran an Associate Press story in which critics claimed that Jesus wouldn't shop at Wal-Mart. In October, the site ran another AP story about a Wal-Mart heiress who returned her University of Southern California diploma over allegations that she paid her roommate $20,000 to do her homework. A March AP story posted on the site noted that Wal-Mart has agreed to pay $11 million to settle allegations it contracted cleaners that relied on illegal immigrants to clean its stores. And then there's "Wal-Mart Shuts Unionizing Store" and "Wal-Mart Settles Child Labor Cases," also from this year.

Other outlets, most notably the Los Angeles Times, which won a Pulitzer Prize for its 2003 Wal-Mart series, have run a number of negative stories about the company as well, despite the fact that Wal-Mart advertises with many of them. Kevin Ohannessian of Fast Company argues that "Wal-Mart is among the most negatively-covered big businesses out there."

There have been positive notes struck as well, of course. In January, for example, Charles Osgood interviewed Ben Stein on CBS' "Sunday Morning." Stein complained that the company gets too much bad press, declared his love for the company, and said "The truth is that Wal-Mart is a major blessing for most Americans who shop there and for the people who work there…When a Wal-Mart opens in a town…it's as if everyone in the town got a raise." More recently, the company got a lot of good press for its donations in the aftermath of Hurricane Katrina. From the Wall Street Journal: "After Hurricane Katrina, Wal-Mart gave away truckloads of products to victims -- distributing them more quickly and efficiently than any government agency…"

But I came across far more negative stories than positive stories when I searched Wal-Mart coverage. It's impossible to draw any definitive conclusions from this, of course, but it does suggest that Wal-Mart isn't buying much good press with its advertising dollars. FAIR focuses on a few stories it considers Wal-Mart "cheerleading," but even if one agrees with their analysis, there's no question that the sample is far from representative. The flip side of all this, of course, is that while it isn't hard to find negative stories about the company, the question one can never answer is how many more negative stories have been avoided because of Wal-Mart's ad spending.

It's been said about many companies that they've tried to buy good press with advertising. There's nothing inherently illegal about this, of course, but the press, which of course traffics in credibility, desperately wants to avoid the perception that it can be bought. No network executive, producer or editor worth his or her salt is ever going to send around a memo or email demanding more positive coverage for an advertiser; reporters would likely rebel against such a stark violation of the sanctity of the editorial process, and if the memo ever got out it would be disastrous from a public relations perspective.

As long as media outlets accept advertising, however, they will always be open to charges that they can be influenced. There will likely never be a smoking gun, but news is a business, and for all the vaunted separation of the news and editorial sides, it doesn't seem beyond the realm of possibility that somewhere along the line financial considerations could impact editorial product. It's impossible to discuss all this without sounding a bit conspiratorial, of course, but once might imagine a situation in which someone makes clear to a producer or editor how important an advertiser is to a media company. That producer or editor, consciously or otherwise, might then turn around and discourage – or simply fail to order – an investigative foray into, for example, that advertiser's labor practices. (And anyone who finds this scenario plausible could point to the fact that the most thorough examination of Wal-Mart on television appeared not on a network but on viewer-supported PBS.)

Generally, however, I have to think that, by virtue of their background, many national media reporters are prone to a negative view of Wal-Mart. Most live in cities, have relatively comfortable, well-paying jobs, and are less likely than most Americans to set foot in retailers like Wal-Mart. They're thus more open than someone who actually shops at Wal-Mart to the notion that the chain is a behemoth whose presence is destructive. Local media, of course, plays by different rules. For the simplest of economic reasons, the coverage in local media outlets tends to follow the prevailing opinion of the community, and so if a community wants a Wal-Mart or feels that it's integral to the economy, one shouldn't expect a three part investigative piece on the company's ills. That said, most of the local press I've come across about the company takes a fairly neutral tone.

There's also a challenge to covering Wal-Mart from a purely journalistic perspective. Criticism of the company – a typical complaint concerns the "corrosive effects that Wal-Mart wreaks upon the communities in which it operates and the men and women it employs" – hasn't really changed much over the years. It's difficult for reporters to cover stories that remain largely static, even if those stories are big ones. When there is a hook like the closing of a store for unionizing or child labor settlement, stories do get written. But as for the larger notion that "Wal-Mart is bad for America" – which is, of course, a debatable one – it's difficult for reporters to know where to start. (Unless, of course, they can tie it to a poll.)

I know I've covered a lot of ground here, without coming to much of a conclusion. I don't have a simple answer to the questions raised above. But in light of Wal-Mart's strong advertising presence within CBS News, I think it's important that we at least start asking questions. We'll keep examining the issues I've raised here. In the meantime, if you want to continue the debate, email us or post your thoughts below.

Posted by Brian Montopoli at 12:22 PM : December 14, 2005 Read more posts in CBS News Issues E-mail this story Printable version

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Comments

It is truly amusing to see CBS news trying to present itself as a critical evaluator of.....CBS news.

All chuckling over that aside, let's be honest here. No retail chain pays sales clerks terribly well. Good or bad, it's just the nature of the business, much like lower wages are the nature of the fast food business. And as fars as righteous indigation over the use and/or abuse of low wage workers and illegal aliens, one could just as easily focus one's rath on the countless upper class households where illegal aliens are employed as cheap domestic laborers.

The truth is that there's no conclusive evidence that Wal Mart is any more culpable in these areas than are any number of other major retailers, private citizens, restaraunteurs, etc. Sporadic incidents have been seized upon by liberal, anti-capitalist groups (as they so frequently tend to do) and recast in a context that implies some sort of widespread epidemic of horrible behavior.

I happen to have a relative who is an employee of Wal Mart, who started at the bottom level, and who has experienced none of the purported attrocities that one would think the company commits on an hourly basis based on many reports.

This is all about quasi-socialists trying to tear down the biggest gorilla in the free enterprise world out of spite, and nothing more.

Posted by jmyoungiii at 6:27 PM : December 16, 2005 + comment complaint

Wal-Mart cares about education policy because the Walton family is heavily invested in private coprorations who seek to replace public schools. Wal-Mart is also the second largest corporate funding nsource of the Republican Party and a large contributor to the think-tank foundations, such as the Cato Institute. To accurately measure Wal-Mart's effect on the trade deficit, imports by suppliers must be added to direct purchases. Who benefits more from our convoluted immigration policies than Wal-Mart? I am not sure that what is best for Wal-Mart is best for the country. I think their influence is understated and needs to be closely examined.

Posted by sanfelz at 1:50 PM : December 16, 2005 + comment complaint

Re: Trade Deficit; Fair points. I think that it's also worth noting that the trade deficit rose nearly 12% in September vs. last year. This is easily explainable, and has nothing to do with Wal-Mart. When crude oil (an import) is relatively expensive, our trade deficit goes up. When oil is relatively cheap, the deficit shrinks. So, regardless of the influence Wal-Mart has on the absolute trade deficit, it has very little influence on the change in the total deficit year to year. According to a Bloomberg published 7/1/05, Wal-Mart accounts for about 1/10th of the U.S. trade deficit with China, and China accounts for about 25% of the total trade deficit. Wal-Mart's contribution to the trade deficit is less then 3%. That's a huge number compared to almost all other companies, but considering Wal-Mart is the single largest retailer in America, this fact isn't all that surprising. I'm not entirely sure how (or why) Wal-Mart, as a company, would care about education policy. As for trade and environmental policy, there are plenty of individuals and institutions that believe (and have always believed) in similar positions to the ones Wal-Mart advocates. That's not to say that they're either right or wrong, only that they can't exactly be called extreme, and it's not particularly shocking that a for-profit company would advocate them.

Posted by JPMVision at 12:42 PM : December 16, 2005 + comment complaint

Thanks for the corrections on "budget deficit" when I should have noted as US trade deficit. As reported widely on 12-14-05, the US tarde deficit rose 4.4% in Oct. vs.LY. First 10 months of 2005 trade deficit is $598.3B vs $617.6B for all of 2004. And yes, Wal-Mart has a great influence on those numbers. More importantly though, Wal-Mart greatly influences federal policies. No-Child-Left-Behind directly reflect the views and funding of the Walton family. Trade policies and environmental policies directly reflect the wishes of Wal-Mart. Republican commentator Linda Chavez sounds like a Wal-Mart spokesperson. MSNBC did a in-depth report on Wal-Mart's busines but not its political influence. Long overdue.

Posted by sanfelz at 8:48 AM : December 16, 2005 + comment complaint

sanfelz writes: "Today's business news includes data on a record-high budget deficit. I have read elsewhere that the biggest single factor in this deficit is Wal-Mart's purchasing practices."

You're mixing up economic terms here. Wal-Mart's purchasing practices have no effect on the budget deficit. They have an impact on the trade deficit. As for being the biggest single factor in this deficit, I've heard the same said about Apple iPods. Either way, the difference is an important one. A perpetual annual budget deficit is obviously a bad thing, when there is no specific identifiable reason for it (i.e. natural disaster, constructing necessary infrastructure, etc.) A trade deficit (or negative balance of trade), on the other hand, can be a very good thing depending on what's causing it. Japan in the 90's and Germany today both have trade surpluses, but in neither scenario is this a "good" thing. Generally, when other countries see better investment opportunities in America than at home, they will invest in America. This, by definition, will create a trade deficit for America, and it is also very good. When trade deficits are caused by monetary deflation, on the other hand, that is obviously a bad thing (just to give one example. Some deficits are bad, and others are good. Reasonable people can disagree over what the current numbers mean, but it's important not to fall into the trap of thinking that a negative balance of trade is automatically a negative for the economy.

Posted by JPMVision at 4:42 PM : December 15, 2005 + comment complaint

you're right, geoffrey1986 -- good catch. My mistake.

Posted by bmontopoli at 2:05 PM : December 15, 2005 + comment complaint

Charles Osgood didn't interview Ben Stein. Stein recorded his own "opinion" piece. Osgood only introduced the segment.

Posted by geoffrey1986 at 10:22 AM : December 15, 2005 + comment complaint

In regard to "needing a hook" to cover the affect of Walmart on a local community:

There are plenty of human interest stories available. They can be pegged to any issues that affects a community. What happens to a town when there is suddenly no local hardware store?

Posted by annabanana-1 at 9:36 AM : December 15, 2005 + comment complaint

States should pass a minimum wage increase. Also, strict mandatory overtime wages (despite the President's objections). Wal-Mart would solve its problems with Employees if these Labor Laws were improved.

Posted by Antillo99 at 8:24 AM : December 15, 2005 + comment complaint

As a leader in business, Wal-Mart has also shown the way to Home Depot and other retailers to direct full-time employees to Medicaid because their wage scale cannot support a family. If your state has a Wal-Mart in it, there are Wal-Mart employees getting benefits from the state. Whether they were on Medicaid previously is information I cannot find. But the number of Wal-Mart employees needing state help is easy to find. I thought conservatives, liberals, Republicans, Democrats would find this deplorable.

Posted by sanfelz at 6:08 PM : December 14, 2005 + comment complaint

As one who RSS's HuffPo, I sense the "War On Wal-Mart" as an attempt by the union part of the Democratic base to find a flagpole issue for upcoming elections.

Some of the claims of the anti's appear to be inaccurate or misleading, but I suppose CBS pointing those out, even in the midst of a balanced investigative report, will bring on the heel-nippers. Oh well, Merry Christmas.

Oh, and I think the previous poster meant "balance of payments deficit." Providing a job for someone who was probably already Medicaid-eligible hardly seems evil.

Economics may be the "dismal science," but it isn't a simple science. I think it might be helpful to have more Democrats to shake up our current national situation, but I don't see this Wal-Mart thing as a good issue to win centrist voters.

Posted by Wintermute1 at 4:09 PM : December 14, 2005 + comment complaint

Today's business news includes data on a record-high budget deficit. I have read elsewhere that the biggest single factor in this deficit is Wal-Mart's purchasing practices. More troubling to me is that Wal-Mart full-time employees often have to use Medicaid services because the employees cannot afford to purchase health insurance. Ben Stein seems to be taking a rosy view. We are all subsidizing the employees of the largest retailer. I think media laziness trumps media corruption.

Posted by sanfelz at 2:59 PM : December 14, 2005 + comment complaint

Great, exhaustive reading. In an ironic manner, I believe that the anti-Wal-Mart bias clearly seen in the urban press balances out the local news cheerlelading.

The discussion about editorial content being influnced by an advertiser reminds me of an interview I did several years ago with a Contributing Editor at a major glossy. I was then-Editor at a consumer magazine and this contributing editor had written a biography of a major computer CEO (Did I cover all my bases?). He was convinced that his magazine didn't run an except of his book -- which may or may not have sold many more copies and drummed up interest -- because the CEO, let's call him Reeve Knobbs, who'se company was an advertiser in said glossy, let's call it "Barchester Towers," had somehow gotten to his editor.

Although this glossy doesn't want for advertising and there was never any concrete proof of shenanigans or secret meetings, the author's book, which was only marginally succesful, ended up being excerpted by a smaller glossy that is now out of business.

Posted by RonMwanga at 1:27 PM : December 14, 2005 + comment complaint

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Wal-Mart bringing superstores to Canada

CBC News
Wed, 14 Dec 2005           
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Wal-Mart is eyeing plans to bring up to three massive superstores to Ontario, according to a published report.

A Wal-Mart Canada spokesperson said that the company plans to open up to three superstores by early 2007. The company is seeking municipal approval for superstore sites in the east end of Toronto and London, the Globe and Mail reported Wednesday. The location of a potential third store was not specified.

Wal-Mart already carries some groceries at most of its outlets, but superstores are seen as a threat to Canada's existing grocery chains. In addition to the merchandise and dry groceries carried in regular Wal-Mart, the new superstores will also sell fresh produce, meat and bakery goods.

Wal-Mart superstores are almost twice as large as a regular Wal-Mart outlet. The Canadian superstores will be about 190,000 square feet, the Globe reported.

Copyright ©2005 Canadian Broadcasting Corporation - All Rights Reserved

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Fla. Wal-Mart Axes Manager Over Bias Issue

By MITCH STACY
Associated Press
Dec 14, 2005                        
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A Wal-Mart manager who called sheriff's deputies about a black businessman mistakenly suspected of trying to pass a bad check was fired for using "poor judgment," the store chain said Tuesday.

Wal-Mart said manager Mark Cornett violated company procedures when he called the law on Reginald Pitts, who had presented a $13,600 check to pay for holiday gift cards for his company's employees.

Pitts, 34, a human resources manager for GAF Materials Corp., said he suspects he was treated that way because he is black.

Wal-Mart spokeswoman Sarah Clark said Cornett tried to verify Pitts' check, but could not do so because a privacy block on GAF's account. However, she said Cornett should have returned the check to Pitts instead of calling sheriff's deputies.

Cornett was fired because of "poor judgment and poor customer service," she said.

Clark denied there was any racial profiling.

Wal-Mart apologized to Pitts for the Nov. 23 incident in suburban Brandon. But GAF decided to buy its employees gift cards from Target instead.

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Supermarkets brace for next Wal-Mart move

Discounter to launch supercentres in Canada that add fresh food to the mix

By MARINA STRAUSS
Globeandmail.com
Wednesday, December 14, 2005              
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Discounter Wal-Mart Canada Corp. will launch two or three massive superstores in the next year or so by bulking up on groceries and other items in a move that promises to transform the retailing landscape -- and squeeze supermarkets' businesses.

The advent of the Wal-Mart supercentre has been widely anticipated -- and feared -- in retailing circles for years as the world's largest merchant rapidly expanded its presence in Canada since arriving in 1994.

U.S. supermarkets have been devastated by the impact of parent Wal-Mart Stores Inc.'s supercentres, which combine full supermarkets with general merchandise. In Canada, grocers will feel the pinch, although they are better positioned to handle an onslaught because they already run discount divisions, industry observers say.

"This is a big deal for the supermarket industry as Wal-Mart appears to now be ready to fire a shot at the supermarket leaders," said Rick Pennycooke, president of retail development consultancy Lakeshore Group.

Mortgage Rates Compare national rates by lender: See Chart "Wal-Mart doesn't do things in a half-baked way . . . They're not going to do a one-off. It will impact everybody."

Industry insiders agreed. "They're a very strong company and they're doing very well with their supercentres in the U.S.," said Louise Wendling, who heads Costco Wholesale Canada Ltd.

"Whatever moves they're going to make, it's going to affect the market share of all players."

Wal-Mart spokesman Andrew Pelletier confirmed in an interview that it will roll out its first two or three supercentre-like stores in Ontario in late 2006 or early 2007.

The chain has yet to decide on future expansion, or whether to name them supercentres, as they are called elsewhere, he said.

While Wal-Mart already carries groceries at most of its 256 stores, the supercentres will also sell fresh produce and meats, delicatessen and bakery products, he said.

As well, it will add more apparel, electronics and home decor items to supercentres because consumers want more of this merchandise.

"We see this as an evolutionary approach," Mr. Pelletier said yesterday.

"It is very much a work in progress. It will be similar to supercentres in the U.S. We are just referring to them as expanded Wal-Mart stores" for now.

U.S. supercentres are almost twice as big as regular Wal-Mart stores. In Canada, the selling space will range to almost 190,000 square feet, while standard Wal-Marts are closer to 120,000 square feet, Mr. Pelletier said.

The company's key developer, First Pro Shopping Centres, has applied for municipal approvals for a superstore in east-end Toronto and in London, Ont. The latter store would be an expansion of an existing site.

Retailers have been bracing for the arrival of Wal-Mart's supercentres for years.

Loblaw Cos. Ltd., Canada's leading grocery chain, has been preparing by expanding its own superstores, which combine general merchandise and supermarket products.

The No. 2 and No. 3 grocers, Sobeys Inc. and Metro Inc., will feel the pain of the Wal-Mart supercentre the most, Mr. Pennycooke, the consultant, predicted. Loblaw may fare a little better.

Nevertheless, Loblaw has run into snags in developing new systems for its expansion. Its stock price has tumbled this year as profit slumped because of unexpected glitches and delays in its retooling. Shoppers have noticed the problems: Many haven't been able to find in-demand products on the store shelves.

Wal-Mart had originally planned to put one of its Sam's Club warehouse club stores on the Toronto site now slated for a supercentre, a city official said.

Indeed, Wal-Mart has been stalled in its expansion of Sam's Club, having opened only six of them since launching the first ones in the fall of 2003.

Industry watchers have considered that Sam's Club, which carries fresh foods, was the first step to Wal-Mart rolling out supercentres, giving the company the groundwork to move into a full selection of groceries.

"Everyone knows the Sam's Club program is halted," one source said. "They can't get the new ones working."

Some sources have suggested that Wal-Mart may convert its six existing Sam's Club stores to supercentres, although they would need to be reconfigured substantially.

Nevertheless, Mr. Pelletier insisted that Wal-Mart is committed to Sam's Club, and targeting them more to small-business customers looking to buy in bulk.

He denied that Wal-Mart plans to turn Sam's Club stores into supercentres.

Monique Dubord, vice-president of leasing at developer First Capital Realty Inc., said it's no big surprise that Wal-Mart is mapping out supercentres for Canada.

"Certainly it's not unexpected that Wal-Mart would be rolling out the food at some point," said Ms. Dubord, whose company specializes in supermarket-anchored shopping centres.

Wal-Mart has been adding more food to its namesake stores over the past few years, but they don't carry fresh produce or meat, or bakery goods.

And while Wal-Mart had no specific expansion plans for supercentres, retail insiders note that Wal-Mart's newest outlets call for a 45,000-square-foot expansion area -- presumably for a future supercentre.

In the United States, Wal-Mart has more than 1,700 supercentres at an average size of almost 190,000 square feet -- and is rapidly expanding the chain.

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Wal-Mart's Asda Plans Improved Food Offering to Take on Tesco

Bloomberg
Dec. 13                      
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Asda, Wal-Mart Stores Inc.'s U.K. supermarket business, plans to improve its fresh food offer and cut prices to win back customers from market leader Tesco Plc.

``Asda is currently operationally failing,'' Chief Executive Officer Andy Bond said today at a press conference in London. ``We need to close the price gap with Tesco Plc and become more innovative in our food offering.''

The Leeds, England-based company, which has missed all its quarterly profit and sales goals so far this year, has been slower than Tesco and J Sainsbury Plc to broaden its food ranges and introduce financial services such as life insurance. Bond, who become CEO in March, said today Asda's management has become bureaucratic and complacent.

Asda's share of the $202 billion U.K. grocery market fell to 16.6 percent in the three months ended Nov. 6 from 16.7 percent a year earlier, according to Taylor Nelson Sofres Plc. Bond cut 1,400 jobs in June and said he planned to use the savings to reduce store prices and win back market share.

Shares of Bentonville, Arkansas-based Wal-Mart have slid 7.8 percent this year, more than the 1.9 percent drop by Tesco, which has the largest share of the U.K. grocery market at 30.2 percent.

Tesco, located in Cheshunt, England, introduced its Tesco's Finest range to attract a broader range of customers in 1998, four years before Asda started selling its Extra Special goods. Tesco was six years ahead of Asda in introducing personal- finance products such as insurance and added an Internet grocery service two years earlier than Asda.

``The competition has caught up in terms of price,'' Bond said.

Achilles Heel

Bond said Asda will become more innovative in chilled ready-meals. ``Our Achilles heel has been sourcing and quality, especially on the meat and vegetables side,'' he said.

Asda will roll out more smaller sized stores, especially the Asda Living concept and it plans next year to trial one 8,000 square-foot discount store selling a broader range of own- label products. So far 10 new stores are planned for 2006.

Asda had sales of 14.4 billion pounds ($25 billion) in 2003, the most recent annual figure available. Tesco's were 31 billion pounds in the year that ended in February. Asda accounts for about 50 percent of Wal-Mart's international sales and 10 percent of the total, which was $285.2 billion in 2004.

Asda is searching for sites smaller than 10,000 square feet (940 square meters) so it can expand into parts of the country where it doesn't operate now. Tesco has been quicker at buying up convenience stores retailers in city centers to take advantage of time-short Britons who visit the outlets after work. Most of Asda's supermarkets are currently in out-of-town locations.

Tesco has 1,878 U.K. outlets ranging from supermarkets to convenience stores, compared with Asda's 274. Government curbs on developing so-called greenfield sites limit U.K. grocers' options for expansion.

Christmas is ``going to be good, not great,'' Bond said.

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Wal-Mart: Another hungry corporate monster

By Sarah Kubik
CAMPAIGN DIARY
Date Dec/13/2005                      
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Last week, the Sierra Student Coalition had their first public appearance as a recognized organization. We showed Robert Greenwald’s documentary, “Wal-Mart: The High Cost of Low Price.” It was an awesome turnout with positive feedback.

The documentary truly showed the inconsiderate minds behind the corporate rule and how brainwashed we are as consumers. I found it humorous when the movie mentioned how Wal-Mart "gives back" to the community. The company set up a “Critical Need” fund for their employees so that they can support coworkers in case of a catastrophe. In one year, the entire staff of underpaid hourly workers raised $5 million. Wal-Mart gave $6,000. However, they did give $3.2 million in political contributions in 2004.

After Sept. 11, the Walton family, who owns Wal-Mart, felt that extra security was needed, so they built an underground bunker fortified with barbed wire. I guess one should consider security when your family ranks among the top five wealthiest people in the world. Do they think they will ever build a Wal-Mart in Baghdad?

They sell the business plan to rural and urban communities to “help” their economy. The cities' governments give them thousands of dollars to open up shop. Nationwide, Wal-Mart has received subsides well over $1 billion. Why doesn't the government give that same monetary support to small businesses?

The company has a record of setting up in big cities to attract the large customer base, then moving just outside the city within a year to avoid paying the taxes on sales revenue. The company then gives small businesses in the community the opportunity to rebuild, but remember that the company essentially took them out of business to begin with.

Please Detroit — do not let them in. It is all a hoax. It will only add to the fire that has destroyed the city over the years.

There is 26,699,678 square feet of empty Wal-Mart box stores in the U.S. That’s enough to build 29, 666 classrooms. Detroit, you already know what happens to abandoned buildings. The city doesn’t need another inhumane company to use it, and then leave.

Wal-Mart won’t let their employees unionize. In fact, they spend millions to prevent their employees from organizing by using tactics such as cameras, flying corporate officials in and 24-hour anti-union hotlines — all just to make sure its employees don't have rights.

You won’t believe what Wal-Mart employees in Germany receive because they have national laws that protect workers. All Wal-Mart employees are unionized, they are paid a living wage, get 36 days of vacation a year, and most importantly they are covered by national health care. When will America's wall come down?

Wal-Mart encourages their low-wage employees to use state assistance for medical benefits, food stamps and subsidized housing. This cost taxpayers nearly $1.6 billion each year.

So as the story goes, they have a great business plan. This is the American Dream, folks, and we are living it at the expense of underpaid workers, wasted tax dollars and destruction of land.

The movie didn’t mention that one of the Walton granddaughters paid her roommate $20,000 to get her through college. She had to give the degree back and the roommate had to drop out. Thanks Waltons, you’re a true American family!

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Leaders of Faith Mark Holiday Season by Bashing
Wal-Mart

By Randy Hall
CNSNews.com
December 12, 2005                   
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(CNSNews.com) - Sixty-five religious leaders have joined union activists in asserting that the nation's largest retail chain should "change for the better" this holiday season, a move one union watchdog called a "cynical ploy" intended to "tarnish Wal-Mart's name in time for Christmas."

Leaders of faith representing over 1.3 million Americans have joined a group sponsored by the United Food and Commercial Workers union in a nationwide initiative to call on America's largest employer and its CEO, Leo Scott, to "change for the better" this holiday season, according to Paul Blank, campaign director for WakeUpWalMart.com.

As part of this effort, the leaders from a variety of religions signed a joint letter to Scott that stated: "The holiday season is a time to honor and remember the virtues of hope, love, joy, sharing, sacrifice and faith.

"During this holy season, we must ask ourselves - at what moral price do we accept the sins of exploitation and greed? Sins, it is sad to say, which are exemplified by one of America's largest and richest corporations, Wal-Mart."

The letter then accused the company of taking part in such "immoral business practices" as exploiting its workers and suppliers by paying employees poverty-level wages, breaking child labor laws and providing poor health care coverage for workers and their families.

"It is hard to imagine why Wal-Mart would consciously choose to make 1.3 million workers suffer in the name of 'low prices,' a suffering we can no longer let stand," the religious leaders added.

The group then invoked the Christmas season by stating that "Jesus would not embrace Wal-Mart's values of greed and profits at any cost, particularly when children suffer as a result of those misguided values.

"Those of us who are Jewish, Muslim or Buddhist also have scriptures that remind us that God is just and God's servants must practice justice in all of our words and deeds," the letter continued.

"As we prepare to celebrate our own holiday traditions, we also ask ourselves: Is it right to shop at Wal-Mart? Would our God want us to support Wal-Mart's values and actions with our dollars?

"It is within your power to become a truly responsible, ethical and righteous company," the letter concluded. "In the end, there is no better present Wal-Mart could give to its workers, their families and America than to change for the better this holiday season."

In addition, WakeUpWalMart.com is airing a 30-second TV advertisement in six southern states to highlight the corporation's moral failures and raise the question "Should People of Faith Shop at Wal-Mart?" this holiday season.

"It is our sincere hope Wal-Mart will choose the higher road and become a moral example that all people of faith can embrace proudly," Blank said.

The corporation reacted swiftly to the charges.

"Surely, many Americans are deeply offended that union leadership would use religion as just another tactic in the negative attack campaign they're waging against a company that donates more money to good works than any other company in America," Wal-Mart spokesman Dan Fogleman told Cybercast News Service.

"With all the news reports of manufacturers laying off tens of thousands of skilled union workers, we hoped the union leadership would show more compassion for its members than spending its member dues attacking a company that creates 100,000 jobs a year," Fogleman added.

Regarding the letter, Fogleman said that the religious leaders involved "have unfortunately been misled. We know they clearly seek the truth and are in search of the real facts."

According to Fogleman, those facts include Wal-Mart's "$200 million in charitable giving this year, and we save the average American family $2,300 per household." In addition, he noted that the company is "making positive change with new health care programs where we've signed up more than 70,000 associates and 30,000 of their family members.

"Wal-Mart will continue to do those things we believe are right for our customers, our associates and our communities: helping people put food on their table and clothes on their backs, providing good benefits and career opportunities and being a good citizen in the towns where we serve," he added.

Blank was unimpressed with the company's response.

"Rather than address the genuine moral concerns raised by 65 leaders of faith," Blank said in a press release, the corporation "chose to ignore their concerns, insult them, question their sincerity and cite manufacturing job losses the company has helped to create.

"We can only hope that someday soon, Lee Scott will finally -- finally -- do what is right for his workers, their families and America," Blank added.

However, Joseph de Feo, editor of Foundation Watch and Organization Trends for the Capital Research Center, told Cybercast News Service he considers the WakeUpWalMart.com effort "a cynical ploy" on the part of the United Food and Commercial Workers to "tarnish Wal-Mart's name in time for Christmas in an effort to pressure Wal-Mart into unionization.

"It's hard to say who comes out of it looking worse: the unions who will stop at nothing or the religious figures who seem to think that Jesus would have been a member of Teamsters Local 303," de Feo added.

Catholic League President Bill Donohue told Cybercast News Service that he considered the leaders who signed the letter to Wal-Mart "the enemy of the poor" because "Wal-Mart has provided over a million people with jobs, all of whom have voluntarily accepted these wages and the conditions of employment.

"Wal-Mart employs people of all races, religions and ethnic groups," Donohue added. "I'm not sure that any of the 65 religious leaders has ever created a single job for anyone in their entire lives."

Donohue noted that he'd "had a problem with Wal-Mart last month," when the company received criticism for replacing the word "Christmas" with "holiday" in all its internal and external promotions. "I did call for a boycott because I felt they didn't handle things right with regard to Christians.

"However, I've also credited them publicly for doing the right thing" by issuing an apology for insulting Christians and revising their policies and website. Donohue complimented the company for "making the right decisions and putting that behind them."

Regarding the current situation, Donohue stated that "what this is about is the union-driven, left-wing, all-out front on Wal-Mart, which is being used as the prototypical capitalist corporation."

Donohue was just as outspoken in recommending how people of faith should respond to the WakeUpWalMart.com campaign. "I hope that all Christians patronize Wal-Mart this season and reject out of hand the left-wing agenda, which is basically anti-capitalism using Wal-Mart as a whipping boy this Christmas season," he said.

Copyright 1998-2006 Cybercast News Service

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Wal-Mart planning $12 million Hartford supercenter

Pete Millard
The Business Journal of Milwaukee
December 12, 2005                                
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Wal-Mart is planning to build a $12 million supercenter in Hartford on Highway 60.

The Bentonville, Ark.-based retailer has received preliminary approval from the Hartford plan commission for a 184,000-square-foot building, which would be near the city's downtown, said Justin Drew, a Hartford city planner.

Wal-Mart has hired McClure Engineering Associates Inc., Rockford, Ill., to develop a traffic plan to ease congestion on Highway 60 after the building is completed. The Wisconsin Department of Transportation recommended that Wal-Mart build a roundabout near its main entrance or pay for traffic lights. The company has decided to build an intersection with traffic lights, said Drew.

The city of Hartford is also finalizing plans to annex the 25-acre site from the town of Hartford before construction can begin.

Hartford city officials expect the annexation proceedings to be completed before the end of March. Construction of the new supercenter will begin in the summer of 2006.

The Hartford Wal-Mart supercenter will include a grocery store and general merchandise department under one roof. The supercenter also includes a vision center, automobile tire and lubrication center and one-hour photo processing shop.

Wal-Mart currently operates 42 supercenters in Wisconsin, including stores in New Berlin, Pewaukee, West Bend and Milwaukee. In addition to the supercenters, Wal-Mart operates 35 discount stores, 11 Sam's Clubs and two distribution centers in Wisconsin.

© 2005 American City Business Journals Inc.

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Children protest outside Wal-Mart Sweatshop labor allegations cited

By Stephanie V. Siek
Globe Staff
December 12, 2005          
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FRAMINGHAM -- A group of children protesting Wal-Mart's alleged use of sweatshop labor was asked to leave the store property yesterday after trying to present a store manager with a letter detailing its concerns.

''Don't make me ask the police to make them leave," said a Wal-Mart employee, identified by her nametag as Donna, as the group stood outside the store entrance.

The children and their escorts refused to leave until she or an assistant manager who was with her agreed to take the letter and send it to the company's chief executive officer, H. Lee Scott Jr. The employee went inside; a Framingham police car pulled up later.

An officer directed the protesters to leave the Wal-Mart property. They complied peacefully.

Wal-Mart employees declined the letter, but gave the group a telephone number and an address.

Sara Goldstein of Cambridge, 10, who had helped write the letter, said she never considered walking away without making an effort to give it to management.

''We weren't here to offer it to them, we were here to give it to them," she said.

The group was made up primarily of members of the Boston Workmen's Circle fifth-grade Jewish Sunday school class, with their parents and older and younger children. The principal, Mitchell Silver, said they had been learning about sweatshops and labor-rights issues as part of their lessons on the history of Jewish people in the United States.

About 150 people had gathered at the corner of the store's access road and Route 9. Some of the children held handmade posterboard signs that were bigger than they were. They chanted slogans, including, ''Come on Wal-Mart, don't delay, do what's right this holiday."

''This is the biggest and richest company in the world, and they're using sweatshops," said Owen Weitzman, a 10-year-old from Newton, as he held a sign reading, ''Stop Sweatshops . . . Give workers living wages. Don't hide under Bushes" and depicting a smiley face with fangs. ''I hope over a more longer period of time that sweatshops don't exist."

Lucian Cascino, a 10-year-old from Jamaica Plain, said that the children could have mailed the letter, but pairing it with a protest helped to ''make our point more important."

''It's not that we don't like Wal-Mart. We don't like what they do," he said. ''Basically, we're just here to get the message out: Stop shopping at Wal-Mart until they stop using sweatshop labor."

Bill Wertz, a company spokesman, said that it is not Wal-Mart's policy to sell products made in sweatshops. Wertz said the store is ''a target of a major campaign by union-based organizations to tarnish our reputation."

''We have a very active program in place to inspect factories and try to make sure that our standards are maintained. If poor workplace conditions exist, it is without our knowledge or approval," said Wertz. ''Wal-Mart has no factories of its own, but we do require our suppliers to follow a very strict code or set of standards."

Stephanie V. Siek can be reached via e-mail at ssiek@globe.com .

© Copyright 2005 The New York Times Company

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Wal-Mart CEO Scott gives another PR speech, but cannot make secret management memo disappear

By union-network.org
12-11-05                               
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Wal-Mart's CEO Lee H. Scott continues his efforts to paint Wal-Mart as a big benefactor for American consumers, and his own workers. But he fails to convince. The top secret memo written by his vice president Susan Chambers and unveiled by The New York Times just does not go away. In this memo, the company's greed and moral corruption very concretely laid in the open.

Yesterday, Scott was in Kansas where he spoke to students at Wichita State University, and other listeners. He tried to convince his listeners that Wal-Mart is good for the consumers and that it cannot raise its low wages without raising prices - or cutting shareholder profits, which they would not accept, he very honestly added.

What Scott did not say was that a consumer poll commissioned by WakeUpWalMart.com earlier this week shows that the world's largest retailer is not successful in its propaganda campaign. The number of US consumers who believe that Wal-Mart is more negative than positive is already larger than those who are favourable, and the critical population is steadily growing.

Secret memo admits and supports greedy and discriminating employer behaviour

Ms Chambers' secret memo is surely one of the factors behind this trend, as is the UFCW WakeUpWalMart.com campaign itself. In her memo to her management colleagues, she admitted that Wal-Mart's health care is in trouble:

"...our critics are correct in some of their observations. Specifically, our coverage is expensive for low-income families, and Wal-Mart has a significant percentage of associates and their children on public assistance."

The Wal-Mart vice president also suggests that the company should not hire people who could be unhealthy or obese. So much about a company that has made believe that it provides jobs for hundreds of thousands Americans, who would otherwise be disadvantaged at the labour market.

Wal-Mart's new health care initiative is the old product in a new package

In Wichita, Mr Scott actually touched on the health insurance problem, advertising a new initiative that the company has launched last Monday. This is the old product in a new package, says WakeUpWalMart.com in its first comment. It would increase health insurance coverage among Wal-Mart's workers by a meagre 2 per cent per year, which means that they would have to wait until year 2017 before the company would have reached the national average when it comes to healthcare coverage by large employers.

In the memo, Wal-Mart revealed that 46 percent of the children of Wal-Mart employees are either uninsured or on taxpayer funded public health care programs. No wonder Wal-Mart so vehemently opposes legislators’ efforts to expose the truth about the true cost of the Wal-Mart economy. It is inexcusable and unconscionable for a company, with 10 billion dollars in profits, to know that one out of every two of their employees’ children has no health care, or is forced to rely on our public safety net, and that the employer does nothing about it.

It is obvious that Wal-Mart continues to be something of an Emperor Without Clothes, such as the real emperor who rode naked through his town in the old children's storybook. The massive investments in public relations do not really work, and why should they work if the story itself is not right. Not even Wal-Mart with its enormous resources can turn black into white, so no wonder that consumer confidence is eroding and the patience within important parts of the global investor community is growing thin.

Wal-Mart tilts German playing field in its favour through social dumping at home

But it is not only consumers, investors and Wal-Mart workers who have a reason to be concerned over Wal-Mart's behaviour, and the concept of walmartization that the retail giant is spreading. Also serious retailers are increasingly at risk. Look at Germany, where Wal-Mart finances its aggressive price wars through social dumping at home in the United States.

When Mr Scott says that better conditions for the workers would mean higher prices and cuts in shareholder returns, he forgets to mention that it would make it more difficult for the company to fight against its competitors with unfair weapons. Wal-Mart is now contributing to the downward pressure on collective agreement provisions in Germany, already put in play by the commerce employers, to an extent that basic values of social peace and stability are being endangered. At the end of the day, neither European retailing, nor the societies as a whole, will benefit from Wal-Mart's social dumping approaches.

Brutal repression when workers try to defend their rights

This is a company which not only denies its workers the wages and employment conditions that their colleagues who work for organised employers earn. As we have seen earlier this year in Jonquière, Canada, all attempts by the Wal-Mart workers to ask for their rights are brutally crushed. Here, numerous families were coldly thrown out into unemployment and bereaved of their means to make a living just because they wanted UNI Commerce affiliate UFCW to negotiate a normal Canadian collective agreement for them.

It is indeed time for Wal-Mart to wake up and change. Like the consumer poll shows, public relation campaigns - however ambitious they are - will not do the job. There has to be a real change. The global union movement through UNI keeps a door open for the company, as was illustrated by the offer made at the Chicago World Congress to meet and to see how a way forward could be found. The offer is still valid, and at the end of the day, cooperating with the unions both globally and at home is the only way.

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Advocacy group hits Wal-Mart on practices

By Nathan Hurst,
Globe
12/11/05                   
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Wal-Mart may be enjoying the fruits of another gift-giving season, but it's been no holiday for the company as one political action group takes aim at the discount giant by criticizing many of its labor practices.

WakeUpWalMart.com charges that the nation's largest employer pays its workers low wages and offers poor healthcare coverage, and demands Wal-Mart change its policies.

That will require a massive effort from consumers, said Paul Blank, campaign coordinator for the Washington, D.C.-based advocacy group. Since the group formed in April, it has enlisted support from over 140,000 consumers.

It has also meant a major media blitz of rebuttals from Wal-Mart, starting with walmartfacts.com, a website that counters many of WakeUpWalMart.com's claims, and extolls how the company has improved the lives of its workers.

Sarah Clark, a spokeswoman for Wal-Mart, said that leafleting and protesting outside store locations during so-called Black Friday, the start of the holiday shopping season, by members of WakeUpWalMart.com was nothing more than a publicity stunt.

"Our company provides solid, competitive wages for the retail industry," Clark said. "Union leadership is wasting thousands of dollars on ads against us, while we have created 100,000 jobs this year alone."

WakeUpWalMart.com's biggest focus is pushing the company to provide a living wage and affordable healthcare benefits for its nearly 1.6 million employees worldwide, Blank said.

He said that with such a large number of employees, it only makes sense for his organization to go after Wal-Mart and its labor practices exclusively, instead of trying to pin down other big box retailers.

Clark, however, asserts that her company has led the way in creating a positive work environment in the retail sector by providing decent wages and expanded healthcare benefits. One of the company's largest expansions in affordable healthcare coverage for employees is set to go in effect beginning next month, according to the company.

And while a recent Zogby poll shows 38 percent of Americans now hold an unfavorable view of Wal-Mart (compared with only 13 percent for rival Target), she said her company is expecting a better-than-ever Christmas season.

Nathan Hurst can be reached at nhurst@globe.com

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Religious Organization Boycotts Wal-Mart

Andrea Moore
All Headline News
December 10, 2005                 
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New York, New York (AHN) - According to union-backed critics of Wal-Mart Stores, WakeUpWalMart.com has unveiled a religious-themed campaign asking shoppers whether God wants them to buy things from the retail giant. Wal-Mart workers are not allowed to join or organize unions.

The group is funded by the United Food and Commercial Workers union which released a letter signed by 65 clergy and religious members and launched a TV ad. The group says Wal-Mart harms families and communities due to their policies including wages and health benefits.

The 30-second ad, which starts with a picture of a Bible, begins Friday in Alabama, Arkansas, Georgia, Kentucky Oklahoma and Texas.

The letter from religious leaders says Jesus would not embrace Wal-Mart's values of greed and profits at any cost.

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Lowry repeated misleading Wal-Mart health care defense

mediamatters.org                   [back to top]

In an effort to refute claims made in the documentary, Wal-Mart: The High Cost of Low Price, argued that Wal-Mart is not "a welfare queen," repeating the misleading claim that "only about 5 percent of Wal-Mart employees are on Medicaid, the same proportion as other retailers." Lowry did not note that an internal Wal-Mart memo acknowledges that 27 percent of children of Wal-Mart employees are enrolled in Medicaid or the State Children's Health Insurance Program (SCHIP). According to researchers at the University of California-Berkeley's Center for Labor Research and Education, that figure is significantly greater than the percentage for all large retailers, as is the total percentage of children of Wal-Mart employees who either are on Medicaid or SCHIP or are uninsured.

From Lowry's December 6 column:

Although The High Cost attacks Wal-Mart as a welfare queen, only about 5 percent of Wal-Mart employees are on Medicaid, the same proportion as other retailers. [New York University visiting scholar Jason] Furman points out [in a report titled, Wal-Mart: A Progressive Success Story]that a Wal-Mart worker who has to decide whether to buy the company's family insurance policy at a cost of $1,800 annually or take Medicaid coverage instead is wise to go on Medicaid. "The beneficiary of choosing Medicaid is the worker," Furman writes, "not Wal-Mart."

Like Washington Post columnist Sebastian Mallaby and New York Times columnist John Tierney, who have offered similar misleading defenses of Wal-Mart, Lowry based his column largely on Furman's paper. (Mallaby and Tierney apparently relied on a preliminary version of Furman's paper dated November 14; Furman released a revised version dated November 28.) In his paper on Wal-Mart, Furman did state that "[i]n total, ... 5 percent of Wal-Mart employees are on Medicaid, which is similar to the percentage for other large retailers and is comparable to the national average of 4 percent." Furman's source for this comparison was an internal memo written by M. Susan Chambers, Wal-Mart's executive vice president for benefits. The New York Times reported on the memo in an October 26 article.

But in his column, Lowry omitted a different figure that Furman included in the revised, November 28, version of his paper: Citing the Chambers memo, Furman noted that 27 percent of the children of Wal-Mart employees are enrolled in Medicaid or SCHIP.* According to the memo, the national average for all employers is 22 percent. Chambers's memo further stated that "[i]n total, 46 percent of [Wal-Mart] Associates' children are either on Medicaid [or SCHIP] or are uninsured" -- a fact not noted by either Furman or Lowry.

In a supporting exhibit, Chambers's memo claimed that 36 percent of all retail employees' children are on Medicaid or SCHIP -- a figure that exceeds Wal-Mart's 27 percent. Citing the memo, Furman repeated these figures.

However, as Media Matters for America has noted, an October 26 paper by researchers at UC-Berkeley's Center for Labor Research and Education presents a very different conclusion. Using data from the 2005 Current Population Survey, the UC-Berkeley researchers "analyzed the difference between Wal-Mart's reported numbers and those for large retailers in general (defined as those with 1,000 or more workers)." They found that "22% of children of employees of large retailers are enrolled in Medicaid/SCHIP, compared to 27% reported by Wal-Mart for their employees' children." In contrast to Wal-Mart's claim, the UC-Berkeley researchers reported that only 22.7 percent of children of all retail employees are enrolled in Medicaid or SCHIP. Additionally, they noted, "While 46% of the children of Wal-Mart workers are either uninsured or on Medicaid/SCHIP, the comparable figure for children of all large retail workers is 29%."

* A previous Media Matters item referring to Mallaby's November 28 column and Tierney's November 29 column (subscription required) stated: "Furman, Mallaby, and Tierney all failed to reveal that in that same paragraph of the Chambers memo [noting that 5 percent of Wal-Mart employees are enrolled in Medicaid], Chambers acknowledged that children of Wal-Mart employees receive Medicaid or SCHIP at a significantly higher rate than the national employer average." Mallaby and Tierney's columns apparently cited the November 14 preliminary version of Furman's paper, which did not include data on the percentage of Wal-Mart employees' children enrolled in Medicaid or SCHIP. The November 28 version of Furman's paper does provide this data.

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A U.S. view: Wal-Mart and U.S. capitalism

by Keith Gottschalk
December 9, 2005  
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In my little town I grew up believing God keeps his eye on us all And he used to lean upon me As I pledged allegiance to the wall Lord I recall My little town (Simon and Garfunkel, 1975)

My little town is about to be eaten by a new Wal-Mart.

This isn't big news anywhere other than in Chardon (population around 5,600), nestled in the snowbound heights east of Cleveland.

To the people of the town I grew up in, it's been a long time coming. My mother, who still lives there, and her neighbours, fought Wal-Mart, playing David to the corporate Goliath for several years, winning several skirmishes, but losing in the end.

I thought about this as I watched the new documentary Wal-Mart, The High Cost of Low Price which is making the rounds of the U.S. and Canada.

I knew I was in for a rough time when the first vignette in the film told the tale of when Wal-Mart came to Middlefield, Ohio.

Middlefield, a quaint Amish community where time sometimes seems to have stopped, is 10 miles from Chardon. The segment, highlighting the desperate struggle of a longtime mom and pop hardware store to keep afloat, broke my heart.

The family store didn't make it. And now the beast moves to the other side of Geauga County to spread its particular brand of ruthless consumerism to the town that will always be home to me.

I was there a few months ago, and saw the behemoth rising from an open field on the edge of town, by a road that will soon be overwhelmed with traffic needing major improvements the taxpayers will no doubt be stuck paying for.

I knew what was about to happen. But the tableau that will play out is, of course, more than an American phenomenon.

I wish the filmmakers had included in the main film their segment about Jonquière, Quebec, where Wal-Mart closed down a successful store for the unpardonable sin of unionizing, instead of in the bonus DVD segment.

A recent Radio Canada exposé on the French language program Zone Libre recounted that Wal-Mart security spied on union organizers and followed their movements with video cameras, a harassment tactic covered in the American documentary as well.

As reported by the CCN/Matthews Service, the Zone Libre program also revealed that 10-14 year-old children were working in two garment factories in Bangladesh making clothes for Wal-Mart of Canada.

According to Catherine Vaillancourt-Laflamme of the Quebec Coalition Against Sweatshops, Wal-Mart has reacted to the exposé by announcing it is running from the situation rather than helping to eliminate the future use of child labour at the factories and ensuring that children currently working there have other alternatives.

“Cutting and running is the absolute worst possible response to reports of child labour or other workers' rights abuses,” Vaillancourt-Laflamme said.

It's just a taste of what it's like to work for Wal-Mart at home and abroad, an experience also covered by author Barbara Ehrenreich in her book Nickle and Dimed: On (Not) Getting By in America a few years ago. The degradation of the world's natural resources by the Wal-Mart system is also covered in some detail, in the documentary.

Exploitation of cheap overseas labour makes the cheap goods sold at Wal-Mart stores in the U.S. and Canada possible. But, of course, the damage continuum travels from Bangladesh through Main Street.

In the U.S. documentary, former Wal-Mart managers tell how they used to go to the Main Street business district of the towns in which they were opening a new store and make bets on how long it would take for this or that family-owned business to go down.

So I decided to take a nostalgic trip down Chardon's very own Main Street to take a long last look before it dies. You can too — right here.

Some of these quaint New England style stores and storefronts have been there since I was a six-year-old buying a Mad Magazine at Lehman's Pharmacy. I wonder how some of these may look vacant and boarded up. They cannot hope to compete with the behemoth on the edge of town.

Thankfully, it's not all doom and gloom in the documentary: Wal-Mart has been turned away in towns scattered across the United States. In Germany, Wal-Mart, opposed by strong national laws that don't exist in the United States, had to make their peace with the unions. In Quebec, the news is not altogether bleak either — the store in St-Hyacinthe stands unionized, an affront to the Wal-Mart way.

But for most communities, the damage has been done, or in the case of my little town, about to be done.

There are two additional things that need to be mentioned here.

First, is that any demonizing of Wal-Mart shoppers misses the mark and is unfair. My mum, who fought the Wal-Mart, must now regretfully look forward to shopping there. On a pension and with medical bills piling up, she's no different from many people struggling to make ends meet in the neo-con “new economy.”

For them, the $20-40 difference in a week's groceries for a family of four can be the make-or-break for their family budgets. They have no choice but to go where they can stretch their dollar the farthest.

So, second point, let's understand the real enemy here. And no, it's not even Wal-Mart, per se. After all, what did they do? Within American style capitalism, they merely took that system to its logical extension. The company simply went all the way — cheapest labour, cheapest costs, cheapest merchandise, all marketed ruthlessly without the slightest consideration of the people or communities that would be adversely affected.

In short, Wal-Mart is the logical conclusion of American style capitalism triumphant.

And in all discussions concerning Wal-Mart, that's where the arguments stop short. We won't go there. But we must. If we're going to even consider building a new humane world for ourselves and our children, we have to examine the way our system does business — not just Wal-Mart, the poster child for the “at-all-costs” movement, but the entire bloated, powerful corporate system that makes citizens serfs and even Prime Ministers' knees bend.

Our common humanity is not served by allowing this rapacious system that demeans honest labour and the public commons to such a degree that even our sustainability on this small spinning planet becomes an open question.

Many of our élite thinkers view questioning of capitalism/worldwide free markets as a closed issue. But around the world and up our street we see that this discussion cannot be closed. Simply because we are told that our free-trade world economy is the triumph of human ingenuity doesn't mean, in the long run, it won't ruin us. We can do even better than a system that holds the world's population and its resources hostage as “human capital” for the benefit of a shrinking pool of the mega-rich.

In Bangladesh, Jonquière or little Chardon, Ohio, the endgame is the same.

Keith Gottschalk has written for daily publications in the Midwest U.S. and was formerly a radio talk show host in Illinois. He frequents babble as the Américain Égalitaire

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Wal-Mart Critics: Where Would Jesus Shop?

By MARCUS KABEL
AP Business 
Dec 9, 12:13 AM EST                 
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W.W.J.S. (AP) -- Where would Jesus shop? According to union-backed critics of Wal-Mart Stores Inc., not at the world's largest retailer. WakeUpWalMart.com on Thursday unveiled a religious-themed campaign Thursday asking shoppers whether God wants them to buy things from the Bentonville, Ark.-based company.

The group, funded by the United Food and Commercial Workers union, launched a TV ad and released a letter signed by 65 clergy members and religious figures. The group says Wal-Mart's policy over wages, health benefits and other issues harm families and communities.

Wal-Mart accused the group of using union dues to exploit religion and said it would give nearly $200 million in cash contributions to charities this year.

The 30-second TV spot, starting Friday in Alabama, Arkansas, Georgia, Kentucky, Oklahoma and Texas, is part of the latest seasonal-themed campaign against Wal-Mart. The TV ad starts with a picture of a Bible-like tome and an off-screen narrator who says, "Our faith teaches us 'Do unto others as you would have them do unto you.'

"If these are our values, then ask yourself: should people of faith shop at Wal-Mart this holiday season?"

Wal-Mart Chief Executive Lee Scott responded within hours with his own letter laying out what he called Wal-Mart's positive contributions - saving working families money, providing jobs and supporting charities.

"For that reason, we will not be deterred from our mission, despite misleading statements from paid critics whose motives are less than pure," Scott wrote.

"Wal-Mart will continue to do those things that we believe are right for our customers, associates and communities: helping people put food on the table and clothes on their backs; providing good benefits, providing career opportunity, and being a good citizen in the towns we serve," Scott added.

The letter from clergy members urged Wal-Mart to change its business practices.

"Jesus would not embrace Wal-Mart's values of greed and profits at any cost, particularly when children suffer as a result of those misguided values," the letter said.

WakeUpWalMart said it recruited the clergy members, including Rev. Jesse Jackson, from a variety of faiths through its activists, who asked if they would be interested in signing the letter.

The group also plans candlelight vigils at selected Wal-Mart's in 19 states.

On the Net:

WakeUpWalMart: http://www.wakeupwalmart.com

Wal-Mart Stores Inc.: http://www.wal-martfacts.com

© 2005 The Associated Press. All rights reserved.

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Wal-Mart Runs Ads After Publishers Complain

By MARCUS KABEL
AP Business 
Dec 8, 2:08 PM EST                    
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SPRINGFIELD, Mo. (AP) -- Wal-Mart Stores Inc. placed full-page advertisements in 336 Midwestern newspapers after publishers nationally complained they are ignored by the world's largest retailer. The move comes at a time when the company is trying to address accusations it treats workers poorly and drives local shops out of businesses.

The ads, which ran in smaller papers in Missouri and Oklahoma between Nov. 30 and Dec. 6, were a test for a possible change in newspaper advertising policy at Wal-Mart, which publishers say has ignored their dailies and weeklies for years.

"I think it is a good first step. They are such a big economic force in our communities and were not participating in those papers," said Mike Buffington, past president of the National Newspaper Association and editor and co-publisher of the Jackson (Ga.) Herald.

Consideration of an advertising shift comes as the retailer repositions itself on several fronts - particularly community relations. The retailer regularly faces criticism, lawsuits and organized attacks from labor union-backed campaign groups, making it more difficult to open new stores and grow.

Retail and grocery store ads together account for anywhere from 60 percent to 80 percent of revenues for community newspapers, said Brian Steffens, the executive director of the National Newspaper Association.

Grocery stores purchase the bulk of those that advertising, with local grocers often placing full-page ads several times a week. Wal-Mart has grown in recent years to be the nation's largest seller of groceries with the expansion of its supercenter store format, but it generally has not taken out weekly ads to showcase its grocery prices in local newspapers.

"If one local grocery store goes out, a community newspaper loses at a minimum one or two full-page ads or inserts a week," Steffens said.

Wal-Mart said it would look first at whether the new local ads increased sales and traffic at 218 stores in those newspapers' territories. "If there is a significant return, we would consider incorporating the local papers into our overall ad strategy," Wal-Mart spokeswoman Mona Williams said.

Williams said Wal-Mart had traditionally not advertised locally because it had strong customer traffic anyway. Its practice of "every day low prices" also means it does not need to advertise sales and individual items like many other retailers do.

Community relations may also play a role in deciding whether to change the advertising practice, Williams said.

"The question is also whether to advertise to support the local newspaper and generate good will from that. These are probably good, non-traditional reasons to advertise locally and considerations we will also factor in once we have the market test results," she said.

The NNA says it worked out the ad test in talks with Wal-Mart executives after Buffington wrote an open letter in January that accused Wal-Mart Chief Executive Lee Scott of ignoring the association's 2,500 members.

"Wal-Mart built its foundation of stores in many of our rural and suburban communities, the places where I, and many of my fellow publishers, operate newspapers," Buffington wrote in the letter posted on the NNA's Web site, http://www.nna.org

"Yet community newspapers across the nation are all but invisible to Wal-Mart - unless the company is looking for some free PR in our pages. Wal-Mart has a fairly standard policy of doing little to no local newspaper advertising," he wrote.

The letter came after Wal-Mart at the start of the year placed full-page ads in major metropolitan dailies defending itself against criticism, then had a public relations firm approach local papers, hoping to place news stories on Wal-Mart's views.

In the spring, the NNA surveyed its members on their relations with Wal-Mart.

Of those that responded, 81 percent said they had a Wal-Mart store in their circulation area. And, of those, 62 percent said Wal-Mart had a negative impact on the community, 25 percent said neutral and 13 percent said it was a positive effect.

The results were similar when asked how Wal-Mart affected the newspapers, with 67 percent saying negative and 4 percent answering positive.

Nearly 60 percent said Wal-Mart never advertised in their papers, but about 80 percent said Wal-Mart sometimes or often asked for publicity, such as pictures in the paper of Wal-Mart presenting a charity check. The NNA did not list its methodology for poll.

Neither the NNA nor Wal-Mart were willing to discuss how much the ads cost.

As a rule, ads printed in the paper make more money for the publisher than inserts, which Wal-Mart has tended to use in the past on the few occasions it did advertise. Inserts require more labor to put into a paper and are usually printed elsewhere, rather than on the newspaper's own presses, so the paper cannot charge for its printing costs.

Wal-Mart last December ran a brief newspaper ad campaign in an effort to boost lackluster pre-Christmas sales. Those advertisements featured toys and electronics on which the retailer cut prices a week into the holiday shopping season.

© 2005 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed. Learn more about our Privacy Policy.

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Wal-Mart to locate in Jiujiang

Asia Pusle
Updated: 2005-12-06 11:41             
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Fanhua Property has decided to build a logistics base covering an area of 2.33 hectares in Jiujiang City, located in east China's Jiangxi Province. Industry insiders are of the opinion that US retail giant Wal-Mart will possibly become the operator of this project.

Wal-Mart is turning to leasing for its projects in China. Four companies including Wanda Group and Fanhua Property are Wal-Mart's long-term cooperative partners in the country.

Industry insiders also noted that senior officials from Wal-Mart have conducted surveys in Jiujiang and Jingdezhen cities in Jiangxi since the first half of this year. Once the logistics base is built by Fanhua Property, Wal-Mart will possibly lease the buildings for its operation in Jiujiang

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Wal-Mart Movie: A Wavering Thumbs-Up

By S.J. Caplan
12/05/2005                   
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Instead of the typical family battles over light meat versus dark or predictions on who would win the football games, our Thanksgiving pre-dinner conversation revolved around the new Wal-Mart (NYSE:WMT) documentary.

Wal-Mart: The High Cost of Low Price is the feature-length documentary produced by Brave New Films, whose other works include Outfoxed: Rupert Murdoch's War on Journalism and Uncovered: The War on Iraq. This latest documentary purports to "uncover a retail giant's assault on families and American values." Okey-dokey. I guess we know where this one's heading.

The film opened officially in selected theaters on Nov. 4, and it went nationwide the week of Nov. 13 through a network of free screenings. Anyone can participate in this ongoing non-traditional release strategy by signing up at online at Walmartmovie.com and ponying up $12.95 to purchase a film copy. If you don't want to part with your cash, you'll be able to scroll through a listing of screenings throughout the world (!) and see whether any neighbors or organizations in your locale are hosting an event.

The movie itself is humorless but eye-opening. Letting affected individuals tell their personal stories, it reels off a litany of alleged bad behavior by Wal-Mart. The criticisms range from the oft-recited complaint of new Wal-Marts pushing out local small businesses to charges of discrimination, union busting, exorbitant health insurance costs, and encouragement of employees to turn to the government for financial assistance. Even the most ardent Wal-Mart supporter may be surprised to learn that the company considers 28-hour work weeks to constitute full employment, even though that equates to an approximately $13,000 annual salary.

In my opinion, as long as the film disseminates accurate information, then that alone is valuable. But before you unload on me, I'll admit that this is where things get tricky. I think the film's weakness lies in its inability to assess the credibility of the former employees and other affected parties who may have their own biased axes to grind. In addition, although the producers invited Wal-Mart's CEO, H. Lee Scott, to be interviewed, his refusal almost leaves an impression of the company as a hapless target.

Nevertheless, the facts and statistics cited in the film are bold and unnerving. Do your own homework to see where you think the truth lies. For their part, the film's producers document their citation of statistics in a page of their website that they titled "facts." The site also includes links to Wal-Mart's response, including an alleged script sent to every store manager to respond to the film. Then, do even more reading by going to Wal-Mart's own "Good Works" site, walmartfoundation.org, and see how the company presents itself.

Here are some of the topics I tried to toss around with my family during Thanksgiving: Should there be any constraints on a corporation's effort to maximize shareholder value if that corporation operates within the law? Does that answer change if the corporation receives significant governmental subsidies? Is it fair to view a corporation as a provider of a social safety net? Should we mind if a corporation applies strong leverage over its supply chain if it can ultimately deliver inexpensive items to benefit the consumer? Is the death of Main Street an unfortunate but inevitable effect of successful giant retailers?

My family was mildly interested in discussing these questions. Their comments ranged from those of city dwellers offering that they never shopped there anyway to Great Grandma Frieda declaring that everyone should note the many employment opportunities that the company provides. No serious discussion of the issues ensued. Ultimately, I think they just wanted to sit down for dinner.

So what is the answer to the so-called "problem of Wal-Mart"? Producer/director Robert Greenwald says that "the film cannot and should not answer that. The film shines a light on the problem, connects the dots, makes what is abstract personal, and tells a story. The film is not the solution; that comes from the good people around the country who use the power of democracy to exercise their opinions, views, and activism in numerous ways. Wal-Mart is a big corporate problem. It will not be fixed by one film or one action, but the film will be a step toward the vital debate, discussion, and actions we need to begin to get the problem front and center."

I'm not a Wal-Mart shareholder -- not because of ethical considerations but simply because I've just never allocated a significant portion of my portfolio to retail stocks. I don't shop there more than once or twice a year, either, because our local store tends to be a mess and the parking lot overcrowded. So this movie will not really change my investing or shopping patterns, but it does challenge me to reflect on the issues it raised. For that reason, I deem the movie a success: It piqued my interest and made me more interested in the debate.

But will it really engage others who are not already predisposed to viewing it? With its limited distribution and left-wing branding, it can be easy to dismiss without being seen. Judging from Wal-Mart's strong November same-store sales figure -- up 4.3%, topping the overall 3.7% gain for retailers -- the film has had little immediate impact on its core consumers so far. Whether it will spark increased public outcry or shareholder activism in the future remains to be seen.

Fool contributor S.J. Caplan still has to put away all the dishes from her Thanksgiving festivities. She does not own any companies mentioned in this article. Feel free to contact her to suggest other ways to antagonize guests at next year's dinner.

The Motley Fool is dedicated to Educating, Amusing, and Enriching all visitors to their website at http://www.fool.com/index.htm?ref=Yo.

You can become a registered Fool for Free: http://www.fool.com/community/register/Register.asp?source=foolemail&ref=Yo

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What To Do About Wal-Mart

Stacy Mitchell
December 05, 2005              
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Stacy Mitchell is a senior researcher with the New Rules Project , a program of the Institute for Local Self-Reliance. She has advised dozens of communities on policies and strategies to counter corporate retail expansion and build a sustainable, high-road local economy.

As the company's misdeeds pile up in the public consciousness, it can be tempting to define the problem of Wal-Mart as one of a bad apple—a rogue company gone awry in an otherwise sound economic system.

Wal-Mart has indeed attained a scale that puts it in a category all its own, and there's no question that it is leading a race to the bottom. But others are running that race too. Target's wages are as poor and its health benefits as out of reach. Home Depot and Lowe's have crushed thousands of independent hardware stores. Best Buy has its main sourcing office Shanghai, where it relies on the same dismal factories.

It would be more accurate to view Wal-Mart not as a bad apple, but as the crowning achievement of an economic and political system that has greatly enlarged the power of global corporations and trampled core American values—namely small business, community, local democracy and work.

Rather than campaigning to convince one company to change its ways, we would do better to focus our energies on changing the underlying policies that created this monster—and will continue to create others. This is an opportunity to build a broad political movement aimed at reasserting those core American value. Here's how:

1. Bring Back Trust-Busting

There was a time not long ago when Americans believed concentrated market power was not only a threat to consumers, but also to democracy, and that a truly competitive economy was one in which there were many competitors.

This robust notion of antitrust has given way, within the courts and enforcement agencies, to a view of antitrust that largely discounts the dangers of concentrated market power and instead focuses narrowly on the benefits of economies of scale. The view that now dominates antitrust jurisprudence essentially holds that anything that may yield efficiencies and thus the possibility of lower prices in the short term is acceptable—regardless of how great the concentration of power or the long-term consequences.

Two years ago, when Wal-Mart priced much of its toy department at or below cost to destroy Toys R Us, it provided a large-scale demonstration of a tactic that many small businesses contend the company has been employing in a more localized fashion for years. Predatory pricing benefits consumers through lower prices in the short term, but ultimately reduces competition.

Another concern is the power global retailers have over suppliers. Borders and Barnes & Noble are now bigger than the top 10 publishers combined. Home Depot and Lowe's, which were barely a blip on the radar 20 years ago, now command half of all sales of hardware and building supplies. As gatekeepers, they have extraordinary power to exact favorable terms from manufacturers—which may not be extended to smaller competing retailers—and to lock out some producers entirely.

We need to step up investigation and enforcement of predatory pricing violations and the illegal exercise of buyer power. Unfortunately, the Bush administration appears headed in the other direction. Its Antitrust Modernization Commission is weighing the repeal of the Robinson-Patman Act, a key law for checking the power of giant retailers.

Perhaps it is also time to think about imposing a cap on the market share that any one company is allowed to attain. Wal-Mart now has 30 percent of the market for groceries and basic household goods in some major metros, such as Dallas-Fort Worth, and an even greater share in many small towns.

2. Expand Community Control Over Development

Cities already have the authority to set limits and impose standards on retail development. Some are now leading the way by requiring retail projects to pass an economic impact analysis to gain approval, and restricting the size and location of new stores, which is crucial to preventing companies like Wal-Mart from overwhelming local economies.

But there are major hurdles. One is the lingering belief among many local officials that these big stores are good for local economies. Papers that came out of a recent Wal-Mart-funded conference and a number of earlier studies have reached a range of conclusions about Wal-Mart's effect on local economies, spanning from significant negative impacts to modest benefits.

But what's striking is the vast gap between the findings of even the most favorable studies and the economic Shangri-La that this company and other big-box retailers have been peddling to local officials.

Even for those communities shrewd enough not to buy the job-and-tax myths, there still remains the fear of being hit with an unfounded, but expensive, lawsuit brought by the world's biggest corporation or an extremely well-funded ballot initiative that grassroots groups lack the resources to effectively counter. (Wal-Mart, Home Depot, Lowe's and others have all been involved in zoning-related ballot initiatives, sometimes spending upward of $100 per voter.)

Some cities have land use policies that have not been updated for years and afford insufficient protections—much to the surprise of residents who suddenly find one of these giants on their doorstep. Earlier this year, Wal-Mart CEO Lee Scott directed executives to speed up construction of new stores in anticipation of more cities revising their rules on retail development.

States could bolster local democracy against corporate power by passing laws that automatically make large retail projects a conditional use—subject to added scrutiny, including an independent economic impact analysis and a public hearing and a vote by the city council. States should also look into adopting protections for cities that face intimidation lawsuits brought against valid land use policies, and they should outlaw corporate spending on ballot initiatives.

3. Support Small Business Creation

We've lost tens of thousands of independent businesses over the last decade and, with them, an important part of the fabric of American life. Small businesses contribute significantly to the vitality of local economies. They nurture social capital, disperse wealth and vest decision-making in local communities rather than corporate headquarters. They are the means by which generations of families have pulled themselves into the middle class.

But small businesses have long been on the losing end of government policy. Local and state governments have spent billions subsidizing the construction of big-box stores. Nearly half the states have corporate income tax policies that give significant advantages to national chains. Local zoning boards routinely bend and break the rules to accommodate big retailers, while telling small businesses that it's their own problem if they cannot "compete."

What might our economy look like if we reversed these policies? What might happen if we redirected all those corporate subsidies to small business development? We could set up business incubators, training programs and revolving loan funds. What if we stopped creating tax increment financing zones to support Wal-Mart and instead established Independent Business Investment Zones, as some in Austin, Texas, are calling for? What if our land use and transportation policies no longer fueled big-box sprawl but fostered small businesses embedded in neighborhoods and town centers, so we could once again walk to the store?

4. Value Work

In a country that supposedly values work, it's a disgrace that so many people put in a full 40 hours or more every week and still cannot make ends meet, especially when the remedies are so clear: a legitimate minimum wage, universal health care and protection for the right to organize and have a voice on the job.

It's heartbreaking to read the testimony that has come out of the various lawsuits charging Wal-Mart, Home Depot and other chains of deleting hours from employees' timecards. This is dramatic evidence that, here in the land of the free, thousands of people feel they cannot stand up for the basic right to be paid for their work without facing retaliation or job loss.

This fear is the direct consequence of policies that have made it harder for workers to form unions and dramatically tipped the balance of power in the workplace. It's high time we tipped it back.

Wal-Mart is a powerful rallying point, but we should not lose sight of the big picture—if for no other reason than it will make it all that much harder to tackle Wal-Mart itself. To the extent that liberals in New York and other cities continue to flirt with Target while shunning Wal-Mart, we are vulnerable to letting the other side portray this as just another volley in the culture wars—our problem with Wal-Mart seemingly based on nothing more than its lack of style and association with southern states and country music.

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Bicycle Defect Case Begins Against Wal-Mart, Dynacraft

12-05-05 01:04 PM EST               [back to top]

SAN RAFAEL, Calif. (AP)--A group of boys who were injured while riding bicycles they claim were defective are suing retail giant Wal-Mart Stores Inc. ( WMT) and the company that imported the bicycles from China.

The suit claims Wal-Mart and San Rafael, Calif.-based Dynacraft BSC Inc. conspired to hide defects in a key bicycle part even after injuries were reported.

The trial began Monday in Marin County Superior Court.

The suit centers on the so-called quick-release devices attached to the bicycles' front wheels, which are designed to allow the wheels to be easily removed for maintenance.

The nine boys, ages 7 to 13, claim they smashed their faces onto pavement after the part malfunctioned and the front wheels came loose while they were riding.

The suit also names insurance administrator Carl Warren & Co., which investigated complaints for the importer, for allegedly conspiring to cover up the defects.

"Consumers in America deserve to be able to rely on the safety of products they buy for their children," said Mark Webb, a San Francisco lawyer representing the plaintiffs.

Wal-Mart said the bicycles in question - mostly Next Ultra Shock and Next Shock Zone mountain bikes - are safe as long as they are "properly used," and that the bikes' quick-release component has never been the subject of a recall or safety citation.

"Our view of the facts is substantially different from the plaintiffs'," said Wal-Mart spokesman Marty Heires.

Fletcher Alford, an attorney representing Dynacraft as well as Carl Warren & Co., said the claims are without merit. He declined to comment further.

The U.S. Consumer Product Safety Commission is investigating the allegations, said agency spokesman Scott Wolfson.

Copyright (C) 2005 Dow Jones & Company, Inc. All Rights

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Wal-Mart: The Whole Story

The Washington Post Company
Saturday, December 3, 2005              
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No doubt Wal-Mart has contributed to low prices for consumers, as Sebastian Mallaby noted in his Nov. 28 column, "Progressive Wal-Mart. Really." But that is only part of the story.

For all the reductions in prices that Wal-Mart generates for consumers, the company's business practices, such as leaving more than half of its employees not covered by its health insurance plan, also contribute to real reductions in the purchasing power of its employees. And when many companies follow Wal-Mart's lead, as they must, millions of Americans are left with declining real wages and rising debt -- exactly what is happening in today's economy. If Henry Ford wanted his workers to be rich enough to buy his cars, Wal-Mart is leading us to an economy in which its employees are barely able to shop at Wal-Mart. No one should welcome this.

Wal-Mart could distribute more of its billions of dollars in profits to its workers without even raising prices. Or Wal-Mart could raise prices marginally but, in so doing, help hundreds of thousands of Americans move from being debtors to savers. Either way, America would be better off. But these results will occur only if Congress raises the minimum wage, which Wal-Mart now opportunistically supports, and gives workers an effective right to join a union, which Wal-Mart clearly does not.

-- Christian E. Weller

Washington

The writer is a senior economist at the Center for American Progress .

I'd like to pay less for my Washington Post. I suggest that The Post reduce subscription rates by cutting salaries for your staff, especially writers and columnists. A 50 percent reduction ought to help a lot. While you are at it, make them pay for a big chunk of their health insurance, maybe 80 percent, instead of whatever they are paying now. By the way, none of this will apply to management or the shareholders.

Sebastian Mallaby can offset the reduction in his take-home pay by shopping at Wal-Mart.

Oh, did I mention his newspaper will cost less?

-- Bob Bailey

Silver Spring

Sebastian Mallaby's column referred in passing to a New York University academic who "advised John 'Benedict Arnold' Kerry in the 2004 campaign." It doesn't matter to me if the target is John Kerry, George Bush or the Easter Bunny. A gratuitous and insulting statement, made completely out of context and with no explanation by the writer, in a paper committed to elevating the public dialogue, adds up to a loss of credibility.

-- Barak Rosenbloom

Seattle

Wal-Mart's low prices drive down not only its own workers' wages and benefits but also the wages and benefits offered to other companies' workers.

Even if we assume that Wal-Mart provides lower costs for the average consumer, those lower costs don't come without a price -- lower wages and fewer benefits for the workers who produce the goods Wal-Mart sells, and eliminating the jobs of others. So isn't it all a bit like borrowing from Peter to pay Paul?

Many of those who are helped out by Wal-Mart's prices are workers whose jobs went to China, workers who lost their health insurance because their employer couldn't keep up with the Wal-Marts of the world or workers who can no longer make ends meet on the wages offered them (e.g., farmworkers in Southern California).

Where does Sebastian Mallaby think the company's savings come from, anyway? Wal-Mart's business model draws blood.

-- Nicholas J. Levintow

Silver Spring

© 2005 The Washington Post Company

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Who's afraid of Wal-Mart?

Surajeet Das Gupta 
New Delhi Business Standard
December 3, 2005                                            
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Big Bazaar is empowering its vendors, Shoppers' Stop is getting into hypermarkets, Subhiksha is going it sans frills as they all gear up to the potential challenge of Wal-Mart.

7:00 pm, Lucky General Store, Mayur Vihar, Delhi. Three delivery boys are packing grocery bags with orders from the neighbourhood condominiums. A loaf of bread and two packets of soup for Mrs Verma on the third floor; urad dal and a packet of salt for Shanti bai who cooks on the seventh floor; six bottles of soda for Sharmaji who’s having a party; a chocolate pastry for Neha whose mother is working late again...

6:00 pm, Sahara Mall, Gurgaon. There’s a serpentine queue of cars waiting to park, so people can get inside to Big Bazaar, where offers and discounts and promotions have something for everyone. Buy a kilo of rice, get another kilo free; get three packs of juice for the price of two; pay Rs 100 for a T-shirt, get the second T-shirt free. There’s pandemonium and chaos. At the payment counters, the queues resemble those outside...

Wal-Mart, anyone? The threat of the giant retailer moving into India and destroying the domestic retail biz (worth Rs 350 billion and growing at 30 per cent annually) has been sounded often enough, but no one seems overly bothered yet. At least on the face of it.

The neighbourhood kirana shop owner is too far removed from the logistics of what is clearly big business, and he isn’t worrying for now. But the big, young boys of India’s juvenile retail industry are certainly looking out for Wal-Mart and its like, and even taking a leaf out of its retail model, even though Kishore Biyani accuses it of being “too much of a mechanical model”.

Biyani should know. The head of Pantaloon Retail and the undisputed king of retail in India has read every book written on the legendary Sam Walton. Like him, he’s big on volumes, operates on wafer-thin margins, and is all set to offer a tough fight when Wal-Mart does finally move in.

Buoyed by its success in China, Wal-Mart is now hot on India, the world’s fourth-largest retail market. Any wonder that,when its international CEO John Menzer came lobbying for foreign direct investment in retail in India, he first knocked at Prime Minister Manmohan Singh’s door.

For now that door is still closed, but the government is keen to open up the sector in phases, and the first phase might be any time soon. When that happens, not just Wal-Mart but other chains like Carrefour, Tesco and Home Depot will in all probability make a beeline for India’s cash-and-carry.

Till then, it’s easy to underestimate the Wal-Mart juggernaut. The world’s largest company has 3,000 stores across the US, UK, China, Japan and Mexico, and one new store opens every day on average. Its sales, at $285 billion, almost equal the size of the whole of the retail market in India.

And it uses that scale to leverage its muscle power with its vendors and keep competitors at bay.

In comparison, the country’s largest player, Pantaloon Retail will probably do sales of Rs 2,000 crore this year, spread over 2.5 million sq ft of store space across 23 cities — far, far ahead of its rivals in India, but chicken-feed when compared with Wal-Mart. The question then: how will Biyani fend off Wal-Mart and Co when they come looking for a bite of India’s booming retail trade?

“We have a window of opportunity and the first-mover advantage for the next two-three years,” Biyani contests. “The battle with Wal-Mart is not about money, or low prices, but for the mind space of customers.” He’s certainly pulling out all stops to ensure that advantage stays with him.

“Our strength is that we understand the Indian customer better than Wal-Mart, that they will probably repeat the same mistakes that we made earlier.” He’s just a little bit cocky, but then Biyani has learnt some of his moves from Wal-Mart itself.

He’s operating on building scale, creating a strong vendor and sourcing network, and improving efficiencies in inventory and stock turns. In an aggressive bid to command the market, he is on a massive expansion spree — 10 million sq ft of store space by 2008 and sales of Rs 8,000 crore in that year. Big Bazaar, his flagship store, will increase from the current 23 to 55 cities.

To that end, he has already tied up for 8.5 million sq ft of additional space, insulating himself against Wal-Mart, which will have to pay higher rent for similar space. To guard himself against possible property lease hikes, Biyani has set up two real estate funds with a corpus of Rs 1,800 crore to develop retail malls across the country.

“Wherever we went as anchor stores,” he rationalises, “the rental of the mall went up but we did not benefit from the upside, though the property owner did. Now, through developing malls, we will grab that advantage.”

For this massive expansion, Biyani needs to infuse Rs 1,200 crore into the system. To fund at least the first phase of this expansion, a rights issue of Rs 225 crore is on the anvil — enough, he says, to see him through the next two years.

Conscious of Wal-Mart’s (or Carrefour’s) legendary sourcing prowess across the globe — buy in huge volumes, sometimes the entire production of a plant, at low cost and pass the benefit on to the customers — Biyani is reformulating his strategy.

For one, he will create 30-40 anchor vendors, each of whom will have to build scale with turnovers of over Rs 100 crore. To support them, Biyani has floated a consumer fund to raise Rs 1,800 crore to invest as equity in each of these companies.

He is also pushing smaller vendors (he has over 1,200) to reach economical turnover sizes by expanding their capacities so that they can generate turnovers of Rs 5-6 crore with a growth of 40 per cent annually. And he has already tied up with some large vendors (for instance, Pepsi) to supply him with agricultural produce.

Unlike global majors, he believes in a partnership vendor model where economies of scale will drive efficiencies and keep costs down. Most global giants, on the other hand, squeeze vendor margins by using volume orders as bait.

Biyani-watchers say the other advantage is his flexibility to adapt and change unlike, say, Wal-Mart which has a standardised international format. Argues Bala Deshpande, director, ICICI Ventures (which had earlier invested in Pantaloon): “His model is flexible. His is not a standardised product format like the global companies.”

Biyani will acknowledge the superiority of Wal-Mart where inventory management is concerned. He’d like to have all his vendors online, just as Wal-Mart does, and is investing Rs 100 crore over the next three years on IT infrastructure.

This will help the company narrow the gap on stock turns. And like his global challengers, he’s likely to leverage international sourcing for products in home and furniture due to the unavailability of appropriate vendors in the country (unlike in foods and clothing, where India has world-class suppliers).

He’s looking to China and some South-east Asian countries for selective product sourcing, but it remains to be seen whether he can match Wal-Mart’s ability to squeeze prices. Then there’s Wal-Mart’s legendary capacity to command margins at 10 per cent more than those Indian retailers get from FMCG companies. Biyani isn’t pessimistic, though, smiling mysteriously to say he still has a few more aces up his sleeve.

While Big Bazaar commands much of the market in north, west and east India, in the south, Chennai-based Subhiksha (turnover Rs 330 crore) has debunked the big store format. Its mantra: small stores, low investment, large scale of operations.

Luxuries like air-conditioning are abjured, and average store sizes never exceed 1,500 sq ft. If that sounds like your neighbourhood kirana, think again — Subhiksha is on a three-fold expansion drive and is aiming to have at least 450 stores over the next six-nine months that include newer areas like Andhra Pradesh, Gujarat, Karnataka, Pune-Mumbai and Delhi.

Subhiksha’s managing director S Subramanian is counting on a combination of scale, no-frills and small retail size with a dependence on one category of goods to take the edge off the global challenge, should Wal-Mart come up in the neighbourhood some time soon.

His advantage, he says, is the store focus on foods and grocery (which constitute 85 per cent of his sales) where convenience is key. If the international Wal-Mart format is anything to go by, it will expect you to drive 15-20 km out of the city on indifferent, traffic-dense roads to pick up your daily needs.

Contrast that with Subhiksha’s neighbourhood appeal, and you know why Subramanian is confident of what he’s pulling off. “Indian consumers are happy with the convenience of the kirana shop,” he says. “What we bring in is low prices. Food and grocery buying is not ambience-driven.” And he’s guaranteeing prices 9.5 per cent cheaper than the MRP on average, something the big boys with their large infrastructure costs can hardly replicate.

Nor is Subhiksha convinced of the price squeezing capabilities of these global giants. “Indian food companies like ITC or Dabur get no global volumes from Wal-Mart,” he says; “they’re not likely to succumb to pressure from them.”

He points out that for Wal-Mart or Carrefour, groceries and food form only part of their turnover (between 25-50 per cent), with most of the lower pricing offered on home products, clothing and kitchenware that are globally sourced. Since food items have to be locally sourced, the global companies might not, in effect, have any advantage over local retail.

Even so, Subhiksha is tweaking its model to align itself to global discount models (for global companies like Tesco that have a large grocery and food volume, 45 per cent of their turnover is from private labels).

That is what Subramanian is now undertaking, tying up with vendors to create products ranging from toilet cleaners to noodles. He expects private labeling to constitute up to 25 per cent of his turnover within 12 months of its launch. The reason is simple: margins on private labels are three times higher than those that FMCG companies offer.

Mumbai-based Piramyd Retail has a different take on the Wal-Mart challenge based on customer behaviour that shows a preference for buying from the neighbourhood.

While customers buy up to 60 per cent of their grocery and food from hypermarkets, the rest is bought from the local kirana store. To ensure it has fingers in both pies, Pyramid is working on a two-store format: True Mart department store (6,000 sq ft), and True Mart Daily convenience store right next to your home (1,500-2,000 sq ft) complete with home-delivery.

“We are not positioning ourselves as a discount store,” says Krish Iyer, managing director, Piramyd, “but someone who provides customer convenience in service for which, unlike Wal-Mart, you don’t have to travel to the outskirts of the city.”

If the Indian retail market isn’t going to be a cakewalk for Wal-Mart and its ilk, it could be because the home-grown giants have their own strategies in place. The Tata Group’s Trent (turnover Rs 245 crore), for instance, has its popular Westside stores chiefly for clothes and home accessories, and has now made an entry into hypermarkets with Star India Bazaar.

The RPG Group has the Food World supermarket, Music World, Spencer’s and Health and Globe as part of its national footprints. And the Rs 530 crore, Raheja-promoted Shoppers’ Stop lifestyle store is getting into hypermarkets too. “Our costs of setting up a new store are 30 per cent lower than those of the global giants,” says managing director B S Nagesh, “because they bring in their international designers, equipment and even the racks.”

There’s another disadvantage Wal-Mart will face in India — its strict adherence to child labour laws to which its vendors must comply. “The only way they can finish us is through predatory pricing for the next few years. But their advantage in buying cheap will be neutralised by their high cost of investment. Also, while it is possible to have large spaces in global markets because there are many varieties available there, this might not be the case in India. So while you can have 5,000 sq ft for meats in the US, you cannot have more than 500 sq ft in India as we don’t have that variety.”

More importantly, in the lifestyle space, international stores work on mark-ups of as high as 3-5 times, compared to 1-1.5 times in India. So even if global lifestyle retailers reduce their mark-ups in India, it will still be difficult for them to come down to Indian levels.

Shoppers’ Stop is hoping to increase its share of turnover from private labels from 20 per cent to 25 per cent. It is also pushing the button on its loyalty programmes — already, 60 per cent of its sales are from repeat buyers against the Indian average of 30 per cent.

The group is also moving into the hypermarket space, building on the strategy of its competitor with 1,00,000 sq ft instead of the Indian averagesize of 40,000 sq ft. But more than that, Nagesh predicts Wal-Mart and Co will have the same bottlenecks that their Indian counterparts suffer — “bad roads, slow movement of trucks”.

Eventually, too, there’s the question of money. “Will our shareholders allow us to invest Rs 100 crore in supply chain management, or would they prefer us to open more stores?” asks Nagesh.

For their global competitors, such small stakes are hardly worthy of debate: “They can put in that kind of money without batting an eyelid,” says Nagesh.

When Wal-Mart, Carrefour or any of the others will be allowed in and with what equity holding is still unclear. But despite the Left’s resistance, foreign investment in retail will not remain shut for much longer.

When that happens, India’s home grown industry will have to fight back. Some will survive, some will sell, others will close down. Let’s hope Wal-Mart won’t be among them

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City council in Detroit suburb votes to bar 24-hour operation for Wal-Mart

[back to top]

LIVONIA, Mich. (AP) - The city council in the Detroit suburb of Livonia voted unanimously to bar a planned Wal-Mart from being open 24 hours a day.

Developers of the proposed 18,950-square-metre store said they were disappointed at the vote Wednesday night to limit store hours to 6 a.m. to midnight.

"We've worked for years to produce a plan that is satisfactory to the citizens ... officials and staff," developer Robert Schostak said. "We're back to square one. It's not done yet."

More than 80 residents attended the meeting, and some applauded when the council voted.

© The Canadian Press, 2005

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Wal-Mart Subpoenaed by Federal Grand Jury

From Bloomberg News
Los Angeles Times
December 3, 2005                 
[back to top]

Wal-Mart Stores Inc. has received a subpoena from a U.S. grand jury in Los Angeles probing the company's handling of hazardous waste, according to a filing with the Securities and Exchange Commission.

Wal-Mart said the California Department of Toxic Substances Control requested similar information about two distribution facilities.

Authorities in Nevada also are looking into the matter, the retailer said.

In addition Wal-Mart said district attorneys in Orange and Solano counties claimed that the company improperly disposed of pesticides in separate incidents. Wal-Mart is negotiating a resolution of both matters, it said.

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Wal-Mart's bid to obtain limited banking powers worries lenders

Tamarind Phinisee
San Antonio Business Journal
December 2, 2005                            
[back to top]

Banking and consumer groups say commercial entities that seek to venture into the lending business pose a threat to the financial-services industry.

The red flag on that concern went up again when retail giant Wal-Mart filed an application in July in Utah and with the Federal Deposit Insurance Corp. (FDIC) to establish a limited purpose bank known as an industrial loan company (ILC).

Now opponents of Wal-Mart's move are waiting to see whether regulators will approve Wal-Mart's ILC application.

This isn't the first time Wal-Mart has looked at obtaining banking powers.

Three years ago, in 2002, it tried unsuccessfully to purchase an ILC in California. The year before that, it failed to get approval from the Office of Thrift Supervision to partner with the Canadian Toronto-Dominion bank.

Wal-Mart officials say they are only interested in saving the millions of dollars in debit, credit and electronic-funds transfer fees the company pays annually to banks to handle those services.

"I think all we're trying to do is save money on transaction fees by operating our own ILC. This is something that a number of companies do, including Target," says Wal-Mart spokesman Marty Heires. "We just want to do what others before us have been allowed to do and only do that on a very narrow basis."

The money saved by Wal-Mart operating its own ILC, Heires says, could be passed on to customers in the form of lower prices. Furthermore, he says the company has no plans at this time to establish lending branches and that the ILC's only customer will be Wal-Mart.

Right now Wal-Mart has bank branches -- operated by third-party lenders -- in 1,100 of its stores and agreements for 300 more.

Concerns raised Jimmy Allen, executive vice president of Broadway National Bank's retail banking division, says what most financial institutions are afraid of is the new territory that Wal-Mart would be able to venture into.

"If I had that charter and the ability to collapse the banks into it, I would," Allen says.

Allen says if Wal-Mart did go into banking, it likely would offer the same types of services that other financial institutions offer: traditional checking and savings products, mortgage loans, etc.

The key difference would be in pricing, he says, referring to Wal-Mart's motto: "Low prices everyday."

"But, I'm not sure that the general consumer is there yet, at least as it relates to their banking and investment products," he says.

Steve Scurlock, executive vice president for the Austin-based Independent Bankers Association of Texas, says giving Wal-Mart banking powers would be a "recipe for disaster."

"It distorts the marketplace, creates additional risk in the system and has the potential to negatively impact the availability of financial services to consumers in various markets," Scurlock says.

Travis Plunkett, legislative director for Consumer Federation of America, agrees.

"The principal of it is, it is almost always never a good idea to allow ... the nation's largest retail company to set up in banking even if they say it is not to get involved in banking," Plunkett says.

Intents and appearances Industrial loan companies, Scurlock says, began as a vehicle for commercial financial firms like Merrill Lynch, American Express and Morgan Stanley to engage in limited banking activities.

Over the years, the ILC charter has expanded to other industry sectors, such as retail. ILC's are insured through the FDIC.

"The troublesome area for us is the commercial ownership aspect and the ability (for ILCs) to branch across state lines," Scurlock says.

Today, ILCs are chartered and operate in several states, which include Utah, California, Colorado, Nevada, Hawaii, Indiana and Minnesota, although some 17 states allow ILCs to branch into their territories.

ILCs are regulated by the states in which they are chartered and the FDIC.

Ed Mierzwinski, consumer program director for the New York-based Public Interest Research Group, says the FDIC's limited regulatory authority over ILCs is not enough to ensure that the practices of a parent company "are not risking the deposit insurance system and not placing the taxpayers at risk."

David Barr, spokesman for the FDIC, disagrees. He says the agency has the ability to examine the operations of the parent company that are directly linked to the ILC.

"We feel that we have adequate supervisory tools to oversee ILCs and their parent companies under the current regulatory process," Barr says.

The FDIC expects to make a decision on Wal-Mart's application in about 200 to 300 days, or by early to mid-2006.

© 2005 American City Business Journals Inc.

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Wal-Mart Denies Spying On Union Sympathizers In Quebec

12-02-05 04:28          [back to top]

MONTREAL (AP)--Wal-Mart Canada on Friday denied it hired private security guards to spy on employees who supported a drive to unionize workers at one of its stores in Quebec.

Radio-Canada, CBC's French-language service, was to air a documentary later Friday in which security guards say they had been hired around the time Wal-Mart decided to close the store in Jonquiere, about 250 kilometers north of Quebec City.

Wal-Mart Stores Inc. (WMT), the world's largest retailer, cited financial reasons for the closing. Union activists had claimed the Arkansas-based company was shutting them down because they nearly won the first-ever union contract from the retailer.

The closure announcement provoked angry demonstrations and bomb threats were called in against the two Canadian Wal-Mart stores in Quebec.

Wal-Mart closed the store in April, not long after the 200 workers received union accreditation, but before they could sign a collective agreement.

According to excerpts from the TV documentary, union leaders and workers sympathetic to the drive were targeted by undercover security guards. Spying on union leaders or sympathizers is illegal under the Quebec Labor Code.

One former guard said he patrolled the store in civilian clothes, watching employees. Another said the store's surveillance cameras were used to follow certain employees.

The guards said their tasks didn't correspond to the normal duties of security.

Wal-Mart Canada President and CEO Mario Pilozzi denied the allegations.

"No, we wouldn't tolerate the situation you mentioned," Pilozzi told Radio- Canada. "No idea about what you're talking about."

Andrew Pelletier, a spokesman for Wal-Mart Canada headquarters in Mississauga, just outside of Toronto, also denied the allegations.

"There was absolutely no spying done; we would not support that," he told The Associated Press, adding private security guards were hired to protect its customers and employees. "Prior to the closure of that store, there was a volatile situation with the union and we wanted to make sure that safety and security were respected."

Copyright (C) 2005 Dow Jones & Company, Inc. All Rights Reserved

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Wal-Mart Gets Subpoena In Calif On Hazardous Waste

By Tony Cooke,
Dow Jones Newswires
12-02-05 05:54 PM EST             
[back to top]

WASHINGTON -(Dow Jones)- Wal-Mart Stores Inc. (WMT) on Friday disclosed that it has received a grand jury subpoena for documents related to the company's handling of merchandise containing hazardous materials.

The company said in a filing with the Securities and Exchange Commission that it received the subpoena from the U.S. Attorney's Office in Los Angeles on Nov. 8.

The grand jury is "seeking documents and information relating to the Company's receipt, transportation, handling, identification, recycling, treatment, storage and disposal of certain merchandise that constitutes hazardous materials or hazardous waste."

Wal-Mart said it also has received administrative document requests from the California Department of Toxic Substances Control requesting similar documents and information regarding two distribution facilities.

Local California authorities and the state of Nevada also have initiated investigations into the company's handling of hazardous materials, Wal-Mart said.

Wal-Mart said it is cooperating fully with the inquiries.

-By Tony Cooke, Dow Jones Newswires

Copyright (C) 2005 Dow Jones & Company, Inc. All Rights Reserved.

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Majority Says Wal-Mart Bad for America: Poll

by Emily Kaiser
Reuters
Friday, December 2, 2005                  
[back to top]

CHICAGO - Some 56 percent of U.S. consumers think Wal-Mart Stores Inc. is bad for America, according to a Zogby International poll released on Thursday by one of the retailer's most vocal critics.

The national poll -- commissioned by WakeUpWalMart.com, a union-funded group that has been pressuring Wal-Mart to raise employee wages and benefits -- surveyed 1,012 randomly chosen adults on their attitudes toward the world biggest retailer.

Respondents were asked to choose which of two statements more closely fit their personal opinions.

The majority, or 56 percent, picked: "I believe that Wal-Mart is bad for America. It may provide low prices, but these prices come with a high moral and economic cost for consumers." Thirty-nine percent agreed that "Wal-Mart is good for America. It provides low prices and saves consumers money every day."

Wal-Mart questioned the timing of the poll, which was conducted from November 15 to 18 -- a week when many of the retailer's critics organized events to highlight their concerns about the company, and screened a widely publicized documentary that cast Wal-Mart in a negative light.

"This poll is another way for them (WakeUpWalMart) to reach out for something to try to validate their efforts because they don't have anything else to hang their hat on," Wal-Mart spokeswoman Sarah Clark said.

The poll was released on the same day that Wal-Mart reported a 4.3 percent increase in November sales at its U.S. stores open at least a year -- a key retail measure known as same-store sales. Wal-Mart has about 3,700 U.S. stores and 2,400 international locations, and is expected to generate more than $300 billion in revenues in the current fiscal year.

Wal-Mart, the largest U.S. private-sector employer, faces intense pressure at home from unions, environmental groups and others who say the company pays poverty-level wages, offers poor health-care benefits and gobbles up green space with its massive big-box stores.

At the same time, Wal-Mart is defending a record-large class-action lawsuit that charges it with discriminating against women in pay and promotions.

Wal-Mart denies those claims, and points out that it often receives thousands of applications for a few hundred jobs when it opens new stores.

Wal-Mart, which hired a team of public relations experts to help polish its image, said critics' efforts to discredit the company have had little success, judging from the more than 100 million U.S. customers who shop its stores every week.

But WakeUpWalMart lauded the poll as evidence that consumers are increasingly aware of the concerns the group has worked to spotlight.

"Despite two high-priced image make-overs, Wal-Mart's public image is in a tailspin," Paul Blank, campaign director for WakeUpWalMart, said in a statement.

The Zogby poll also questioned consumers on whether they thought that Wal-Mart was becoming too powerful an economic force in America. Some 33 percent were very concerned, while 20 percent said they were not at all concerned.

Thirty-three percent strongly agreed that Wal-Mart was a retail monopoly that threatened the future health of the U.S. economy, but 35 percent did not agree at all.

© 2005 Reuters Ltd

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Wal-Mart hired security guards to spy on Quebec employees

CBC investigation
Fri, 02 Dec 2005             
[back to top]

CBC News Employees at a Quebec Wal-Mart store that closed after a successful union drive were spied upon by undercover security guards, according to an investigation by Radio-Canada.

Wal-Mart had taken out full-page ads in several Quebec newspapers early in 2005 telling its employees they were the "cornerstone" of the company. (CP photo) Guards told journalists at CBC's French-language service that Wal-Mart had hired them to spy on employees at the store in Jonquière, 200 kilometres north of Quebec City, early in 2005. It corresponded to the time the world's largest retailer announced the store would close for financial reasons.

FROM FEB. 14, 2005: Wal-Mart to close unionized Quebec store

A documentary on the subject was broadcast Dec. 2 on the program Zone Libre. In it, the guards say their surveillance targeted union leaders and workers sympathetic to the drive.

One former guard said he patrolled the store in civilian clothes, watching employees. Another agent said the store's surveillance cameras were used to follow certain workers.

Wal-Mart Canada president and CEO Mario Pilozzi denied the allegations.

"No, we wouldn't tolerate the situation you mentioned," Pilozzi told Radio-Canada. "No idea about what you're talking about."

Spying on union leaders or sympathizers is illegal under the Quebec Labour Code.

In August 2004, the United Food And Commercial Workers succeeded in a drive to unionize the store's 200 workers. But a contract was never signed. The store closed in April.

A second Wal-Mart in Saint-Hyacinthe, Quebec, won union certification in January 2005.

In February, Wal-Mart was chastised by the Quebec Labour Relations Board for attempting to intimidate workers who wanted to form a union at a third Quebec store in Sainte-Foy, just outside Quebec City.

Wal-Mart has 235 stores in Canada, employing more than 60,000 people.

Copyright ©2005 Canadian Broadcasting Corporation - All Rights Reserved

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Union workers at Que. Wal-Mart outlet to appeal decision to throw out lawsuit

Canadian Press
Friday December 2, 2005               
[back to top]

MONTREAL (CP) - Unionized workers at a Wal-Mart store in Jonquiere, Que., that closed in April will appeal a Superior Court decision that threw out their class-action lawsuit seeking damages for wrongful dismissal.

The workers say Superior Court Judge Marc Beaudoin erred when he ruled in early November that the dispute with the retail giant was the exclusive jurisdiction of Quebec's labour board.

According to the workers' lawyer, Gilles Gareau, the conflict stems from a "violation of fundamental rights" protected by Quebec's charter of rights and freedoms.

The Jonquiere store was the first Wal-Mart outlet in North America to organize a successful union drive. Wal-Mart closed the store, citing financial reasons, before a collective agreement with the union could be reached.

The 182 workers are seeking $20,000 in damages.

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Wal-Mart apologizes for bad check accusation

The Associated Press                   [back to top]

TAMPA (AP) — Wal-Mart apologized to a black man who was falsely accused of trying to pass a bad check when he went to buy thousands of dollars' worth of holiday gift cards for employees of his manufacturing company. "I keep going over and over the incident in my mind. I cannot come up with any possible reason why I was treated like this except that I am black," said Reginald Pitts.

Employees of a Wal-Mart Supercenter called sheriff's deputies last week to arrest Pitts after he handed over a $13,600 check to pay for 520 gift cards for employees at roofing supplier GAF Materials Corp., where Pitts is a human resources manager.

Wal-Mart spokeswoman Sharon Weber said Friday that the company does not tolerate discrimination. "We probably could have handled it better, but I won't know until we complete the investigation," Weber said.

Pitts said that when he went to the store last week to pick up the preprinted cards, store managers stalled for about two hours while he waited. He had handed over his business card, his driver's license and phone numbers to GAF's bank. His accounting supervisor assured them over the phone that GAF was good for the check.

Later, two Hillsborough County sheriff's deputies appeared. One grabbed Pitts by the arm. He objected to the rough handling and asked if he was being arrested.

"We need to talk with you about this forged check that you brought in here," Pitts quoted one as deputy saying. The deputy said later Wal-Mart had called and reported that Pitts had committed a felony.

A short time later deputies, determined there were no grounds for a criminal charge.

Pitts' company decided to buy its gift cards from Target.

Copyright 2005 The Associated Press. All rights reserved. 

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Wal-Mart, Critics Spar Over Co. Stature

By MARCUS KABEL
AP Business Writer                  
[back to top]

BERRYVILLE, Ark. (AP) -- Nancy McShane abruptly quit shopping at Wal-Mart in March after her turkey-farming relatives complained about undue price pressure from the world's largest retailer. But James Butler says the convenience and low prices outweigh any complaints.

Depending on who you ask, Americans are either sticking with Wal-Mart because of its prices and policies or turning against it amid allegations by unions and others that the company is bad for workers, the environment and communities.

The discount retailer and its critics pushed competing data to buttress both sides of the argument. According to a poll released Thursday by Wake Up Wal-Mart, an anti-Wal-Mart group launched this year by the United Food and Commercial Workers union, more Americans have an unfavorable view of Wal-Mart today than at the start of the year.

The poll showed that a majority, 58 percent, viewed Wal-Mart favorably, but the figure was down from 76 percent in January. Wake Up Wal-Mart said that was proof that its message against the company's low-price business model is hitting its intended target - the average Wal-Mart shopper.

"It would be hard for anyone to believe that a poll paid for by the UFCW was more accurate than the fact that our estimated November store sales were up 4.3 percent and that 10 million people shopped at our stores during the first six hours of sales last Friday," Wal-Mart spokeswoman Sarah Clark said.

But Paul Blank, campaign director at Wake Up Wal-Mart, said, "What this polling indicates is that Wal-Mart's reputation is in a tailspin." He said changes in behavior would follow if consumer's opinions about Wal-Mart continue to fall.

Wal-Mart said the survey was questionable and argued that November sales and an onslaught of holiday shoppers the day after Thanksgiving showed it remained popular.

Figures released Thursday showed that sales at Wal-Mart stores open at least a year rose 3.8 percent in November when compared to November 2004 - close to analysts' expectations of 4 percent. Same-store sales are considered the best indicator of a retailer's health.

Latest News Advocacy Groups Try to Influence Shoppers Target, Wal-Mart Dec. Sales to Meet Views

Retailers Face Quiet Time for Holidays

Retail analyst Don Gher said Wal-Mart's monthly sales growth did not suggest that shoppers were staying away amid a slew of attacks by groups alleging that Wal-Mart's low prices come at the cost of poor treatment for its workers, suppliers and communities.

"At this point the sales numbers wouldn't seem to indicate a backlash," said Gher of Coldstream Capital Management in Bellevue, Wash. The company has Wal-Mart stock as part of the roughly $900 million in assets it manages.

McShane, a Springfield, Mo., housewife, once spent $600 to $700 a month at Wal-Mart - relying on the world's largest retailer for everything from groceries to oil changes.

"We cut off Wal-Mart cold turkey. Now I'm preaching it to other people," McShane said.

Butler, a chicken plant worker from Alpena, said complaints that Wal-Mart is bad for America won't stop him from shopping there.

"It doesn't change my mind. It's just a convenience. And anywhere else costs more," Butler said outside the Berryville Wal-Mart Supercenter where he had just purchased batteries.

The Wake Up Wal-Mart figures came from two national telephone surveys of about 1,000 adults in January and November. The January 15-20 poll by Lake, Snell & Perry had a margin of error of 3.1 percentage points, and the November poll by Zogby had a margin of error of 3.2 percentage points.

The number of people who said they viewed Wal-Mart very favorably or somewhat favorably fell 18 percentage points to 58 percent while the number who answered that their view was very or somewhat unfavorable increased by the same amount to 38 percent.

The group said attitudes were starting to change shopping practices. Asked how often they plan to shop at Wal-Mart in the next month, the number who said they would not go at all rose 8 percentage points to 28 percent. The largest group, those who planned to shop there once or twice, fell 7 points to 32 percent.

Clark said Wal-Mart does its own internal tracking of consumer sentiment, but declined to release that data. She said the questions were not the same as Wake Up Wal-Mart's poll so they wouldn't be comparable.

© 2005 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed. Learn more about our Privacy Policy.

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Wal-Mart is labelled 'bad for US'

Story from BBC NEWS
Published: 2005/12/01 21:57:51 GMT              
[back to top]

Retail giant Wal-Mart is "bad for America", according to a poll carried out on behalf of a group campaigning against the store. The poll, conducted by Zogby for a union-led group called WakeUpWalMart, asked 1,012 people across the US about their attitudes to Wal-Mart.

Of the respondents, 59% said they agreed with the statement that "Wal-Mart is bad for America".

Wal-Mart retorted that its opponents were clutching at straws.

"This poll is another way for them to reach out for something to try to validate their efforts, because they don't have anything else to hang their hat on," a spokeswoman told Reuters.

Despite the clear majority on its "good or bad" question, the survey found other views were more mixed.

A third of respondents said that they were "very concerned" that the firm could be too powerful an economic force in the US, against 20% who said they were not concerned.

And while 33% said it was a retail monopoly, 35% said that it was not.

Stormy weather

The poll came as Wal-Mart, which has 3,700 US outlets and another 2,400 around the world, reported a rise in same-store sales of 4.3% in November.

The massive chain has run into publicity problems in recent months, including a huge class-action lawsuit which accuses it of discriminating against women over pay and promotions.

THE BIG WAL-MART QUESTION Zogby asked respondents which of these two statements, if any, they agreed with: "I believe that Wal-Mart is bad for America. It may provide low prices, but these prices come with a high moral and economic cost for consumers." Or: "Wal-Mart is good for America. It provides low prices and saves consumers money every day."

It also faces criticism from groups such as WakeUpWalMart that it is damaging the environment - and that its famously low prices derive from rock-bottom wages and benefits.

Although Wal-Mart denies this kind of accusation, it has nonetheless recently declared its intention to become more environmentally friendly.

In a speech to analysts, chief executive Lee Scott said it hoped to cut energy use by 30% and improve the fuel efficiency of its delivery fleet.

Mr Scott also called for a rise in the minimum wage - stuck for almost a decade at $5.15 - although he said Wal-Mart itself did not need to raise pay, which averages $9.37 an hour.

"We can see first-hand at Wal-Mart how many of our customers are struggling to get by," he said.

© BBC MMV

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City Council Votes to Bar 24-Hour Wal-Mart

City Council in Detroit Suburb Votes to Bar 24-Hour Operation for Wal-Mart

The Associated Press           [back to top]

LIVONIA, Mich. - The city council in this Detroit suburb voted unanimously to bar a planned Wal-Mart from being open 24 hours a day.

Developers of the proposed 204,000-square-foot store said they were disappointed at the vote Wednesday night to limit store hours to 6 a.m. to midnight.

"We've worked for years to produce a plan that is satisfactory to the citizens ... officials and staff," developer Robert Schostak said. "We're back to square one. It's not done yet."

More than 80 residents attended the meeting, and some applauded when the council voted.

Wal-Mart Stores Inc. real estate official David Ewing declined to say what the Bentonville, Ark.-based retailer would do now.

"Everything is under review at the moment," he said.

Opponents of the store said its size and proximity to a 127,000-square-foot Target store would bring congestion and crime.

"We're happy, very pleased," said Michelle Larson, spokeswoman for the group fighting a 24-hour operation.

On the Net:

Wal-Mart Stores Inc.: http://www.walmart.com

Copyright 2005 The Associated Press. All rights reserved.

Copyright © 2005 ABC News Internet Ventures

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Americans split over Wal-Mart Polls

conducted by anti-Wal-Mart group, show most have favorable view

MSNBC.com
The Associated Press
Dec. 1, 2005         
            [back to top]

BERRYVILLE, Ark. - Nancy McShane abruptly quit shopping at Wal-Mart in March after her turkey-farming relatives complained about undue price pressure from the world’s largest retailer. But James Butler says the convenience and low prices outweigh any complaints.

Depending on who you ask, Americans are either sticking with Wal-Mart because of its prices and policies or turning against it amid allegations by unions and others that the company is bad for workers, the environment and communities.

The discount retailer and its critics pushed competing data to buttress both sides of the argument. According to a poll released Thursday by Wake Up Wal-Mart, an anti-Wal-Mart group launched this year by the United Food and Commercial Workers union, more Americans have an unfavorable view of Wal-Mart today than at the start of the year.

The poll showed that a majority, 58 percent, viewed Wal-Mart favorably, but the figure was down from 76 percent in January. Wake Up Wal-Mart said that was proof that its message against the company’s low-price business model is hitting its intended target — the average Wal-Mart shopper.

“It would be hard for anyone to believe that a poll paid for by the UFCW was more accurate than the fact that our estimated November store sales were up 4.3 percent and that 10 million people shopped at our stores during the first six hours of sales last Friday,” Wal-Mart spokeswoman Sarah Clark said.

But Paul Blank, campaign director at Wake Up Wal-Mart, said, “What this polling indicates is that Wal-Mart’s reputation is in a tailspin.” He said changes in behavior would follow if consumer’s opinions about Wal-Mart continue to fall.

Wal-Mart said the survey was questionable and argued that November sales and an onslaught of holiday shoppers the day after Thanksgiving showed it remained popular.

Figures released Thursday showed that sales at Wal-Mart stores open at least a year rose 3.8 percent in November when compared to November 2004 — close to analysts’ expectations of 4 percent. Same-store sales are considered the best indicator of a retailer’s health.

Retail analyst Don Gher said Wal-Mart’s monthly sales growth did not suggest that shoppers were staying away amid a slew of attacks by groups alleging that Wal-Mart’s low prices come at the cost of poor treatment for its workers, suppliers and communities.

“At this point the sales numbers wouldn’t seem to indicate a backlash,” said Gher of Coldstream Capital Management in Bellevue, Wash. The company has Wal-Mart stock as part of the roughly $900 million in assets it manages.

McShane, a Springfield, Mo., housewife, once spent $600 to $700 a month at Wal-Mart — relying on the world’s largest retailer for everything from groceries to oil changes.

“We cut off Wal-Mart cold turkey. Now I’m preaching it to other people,” McShane said.

Butler, a chicken plant worker from Alpena, said complaints that Wal-Mart is bad for America won’t stop him from shopping there.

“It doesn’t change my mind. It’s just a convenience. And anywhere else costs more,” Butler said outside the Berryville Wal-Mart Supercenter where he had just purchased batteries.

The Wake Up Wal-Mart figures came from two national telephone surveys of about 1,000 adults in January and November. The January 15-20 poll by Lake, Snell & Perry had a margin of error of 3.1 percentage points, and the November poll by Zogby had a margin of error of 3.2 percentage points.

The number of people who said they viewed Wal-Mart very favorably or somewhat favorably fell 18 percentage points to 58 percent while the number who answered that their view was very or somewhat unfavorable increased by the same amount to 38 percent.

The group said attitudes were starting to change shopping practices. Asked how often they plan to shop at Wal-Mart in the next month, the number who said they would not go at all rose 8 percentage points to 28 percent. The largest group, those who planned to shop there once or twice, fell 7 points to 32 percent.

Clark said Wal-Mart does its own internal tracking of consumer sentiment, but declined to release that data. She said the questions were not the same as Wake Up Wal-Mart’s poll so they wouldn’t be comparable.

© 2005 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

© 2005 MSNBC.com

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This Season, Close Your Wallet to Wal-Mart

[back to top]

I pledge not to shop at Wal-Mart. And I promise to tell all my friends, "Close your wallet to Wal-Mart this holiday season!"

Wal-Mart engages in some of the worst labor practices in the country: paying its employees substandard wages, forcing unpaid overtime on its workers and refusing to provide affordable health insurance. Sure, it's cheap to shop at Wal-Mart, but at what cost? Wal-Mart brings you its rock bottom prices by underpaying employees and forcing its suppliers to do the same. And when big box Wal-Mart comes to town, local merchants who treat their employees better can't compete and are forced out of business.

Take the pledge and tell Wal-Mart that until it changes its ways, you will take your holiday shopping to other stores and will urge your friends and family to do the same.

Enter your name and e-mail address at right to add your name to the petition which appears below.

Signatures: 5,472 Goal: 50,000 signatures Deadline: December 31, 2005

First name: Last name: E-mail address:

Privacy Policy: WorkingForChange/Working Assets does not sell, trade or release your e-mail address to others. We may send you information in the future about Working Assets by e-mail or by post.

Dear H. Lee Scott Jr.,

This holiday season, I pledge not to shop at Wal-Mart and to ask my friends and families not to buy me gifts from Wal-Mart until the chain: Pays its workers a living wage Provides affordable health insurance to its employees Stops discriminating against women Stops attacking employees who want to be represented by a union Ceases forcing unpaid overtime on its employees Stops pressuring suppliers to lower their labor costs.

Signed,

(your name here)

[This petition will be delivered to Wal-Mart CEO H. Lee Scott Jr.]

http://www.workingforchange.com/activism/petition.cfm?itemid=19943&ms=wfct51

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Is Wal-Mart Really Going Green?

By Liza Featherstone,
Grist Magazine
Posted November 30, 2005.             
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It was easy for Wal-Mart's critics to laugh this past spring when CEO Lee Scott proudly announced that he drove a Lexus hybrid. For Scott to expect praise for his consumer choices given the abysmal record of his massive company -- which has repeatedly violated the Clean Water Act while contributing to sprawl, air pollution, and a host of other serious problems -- seemed to insult public intelligence. It also seemed a strange maneuver for a man heading a company known for shunning environmental concerns. Indeed, in Robert Greenwald's new film, Wal-Mart: The High Cost of Low Price, one veteran activist says she has never encountered a company as unresponsive as Wal-Mart.

But since then, Scott's green inclinations seem to have grown. In late October, he unveiled plans to hold Wal-Mart's suppliers to higher environmental standards and to begin selling clothing made from organic cotton. Just four days later, in a speech to employees, he outlined his goals for being a "good steward" to the environment. Scott plans to increase fuel efficiency in the company's truck fleet -- one of the largest in the world -- by 25 percent over the next three years, and to double fuel efficiency over the next decade from 6.5 to 13 miles per gallon. He promised to cut energy use at new stores by 30 percent and reduce greenhouse-gas emissions at the more than 5,000 existing stores, warehouse clubs, and distribution centers by 20 percent over the next eight years. He also said the company would offer cheaper health insurance to its employees, and called upon the government to raise the minimum wage.

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Wal-Mart loses 'philosophical argument' with Apple CEO Steve Jobs, gains top-selling iPod

Tuesday, November 29, 2005                  [back to top]

"Wal-Mart Stores Inc. said its sales on Saturday were slightly weaker than those posted during the post-Thanksgiving 'Black Friday' kickoff to the holiday season," James Covert reports for Dow Jones. "Sales on Saturday were 'OK,' but saw 'a slight drop in the slope' from Friday's levels, Wal-Mart Senior Vice President and Treasurer Jay Fitzsimmons told investors Tuesday at a conference hosted by J.P. Morgan & Co. that was made available by Webcast. But the day-over-day decline partly reflected the fact that last year's Black Friday was disappointing, Fitzsimmons said. Sales for this year's post-Thanksgiving weekend overall were better than in 2004, he said."

"He noted that Apple Computer Inc.'s iPod digital music players were among the items conspicuously absent from Wal-Mart's shelves last year. The reason was that Wal-Mart was in a 'philosophical argument' with Apple Chief Executive Steve Jobs over whether the iPod player should play music from more varied sources, Fitzsimmons said," Covert reports. "'He won, we lost. Now we have Nanos in the stores,' Fitzsimmons said, referring to the latest, smallest version of the iPod."

MacDailyNews Take: The "philosophical argument" goes like this: iPods can't play music from our Windows-only-Mac-users-be-damned Wal-Mart online music store, so we're not going to sell iPods. We'll sell other brands. Result? Wal-Mart didn't sell much of anything. Virtually nobody bought the also-ran players and since virtually everybody with a portable music player owned an iPod, nobody bought from Wal-Mart's - or any other outfits' - ghettoized online music stores. So, rather than continuing to leave money on the table on both hardware and content, Wal-Mart revised their "philosophy" (back to the familiar "make money hand over fist" mantra) and decided they'd damn well better carry Apple iPods even if their own online music store doesn't sell iPod-compatible music files. Apple's iTunes Music Store, of course, sells iPod-compatible music and serves both Mac and Windows users, which is why it dominates the market so effectively

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Chapters Take Action on Wal-Mart This Holiday Season

National Organization for Women
November 28, 2005                              
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Sarasota-Manatee (FL) NOW held a protest at their local Wal-Mart store. On the day after Thanksgiving the holiday shopping season shifted into high gear, and NOW activists were there to help consumers make educated decisions about where to buy their gifts. NOW's ongoing campaign to highlight Wal-Mart's treatment of women and workers becomes even more crucial in the busy shopping weeks ahead.

On Nov. 25, NOW kicked off a holiday season of protest and education around Wal-Mart. More than 50 chapters throughout the country have plans to hold Wal-Mart actions over the holiday season. Several chapters held viewings of the film "The High Cost of Low Price," which exposes Wal-Mart's hurtful and underhanded business practices. Pennsylvania's Adams County NOW hosted 120 people at a showing, and Albany, N.Y. NOW screened the film to more than 200 people. You can find a screening near you or purchase the film online.

Activists protest at a Wal-Mart store in Western Massachusetts. Many other chapters have planned protests at local Wal-Mart stores to educate consumers this holiday season. NOW activists braved the cold to protest outside Wal-Mart stores in Illinois, Massachusetts and Utah, among other places.

Still others have gotten involved in local legislative efforts to stop the development of Wal-Mart stores in their local community. In coalition with labor organizations and other community groups, Central Ohio NOW presented a resolution to the city council to stop big box stores from taking over the community.

Actions are also planned in Arkansas, California, Maryland, Michigan, Ohio, Tennessee, Utah and Washington, and many more states have plans in the works!

NOW chapters throughout the country are encouraged to continue showing "The High Cost of Low Price" and organize demonstrations at local Wal-Mart stores. We have produced a toolkit for NOW chapters and activists that can be found on the Chapters Only section of the NOW Web site.

Send updates and photos from your local screenings and actions to Lisa Weiner-Mahfuz at lesbian.rights@now.org.

Copyright 1995-2005, All rights reserved. Permission granted for non-commercial use. National Organization for Women

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PUSHING THE PARTY LINE AT WAL-MART

By Labor Desk
November 28, 2005                   
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The Labor Desk provides information, news releases, and announcements obtained from communication and public relations offices.

Store Managers Given Scripted Response to Documentary

Robert Greenwald's documentary "Wal-Mart: The High Cost of Low Price," has the company scrambling to make sure all employees know the “right response” to the film. A two-page "script" has been given to store managers with instructions to read it to workers, along with a warning that critics are out to get them. The documentary focuses on Wal-Mart's negative impact on workers, communities and small businesses.

The documentary has received generally positive reviews from film critics since its premiere as part of “Higher Expectations Week,” a series of anti-Wal-Mart activities held across the country November 13-19. The film opened nationwide just in time for the official start of the holiday shopping season.

Greenwald told the Los Angeles Times that he was surprised Wal-Mart would go to the trouble, especially after previously releasing a 10-page media kit attacking the film.

In an interview with the newspaper, Greenwald said, "The fact that they would call a meeting to tell their employees how to respond struck me as somewhere between brainwashing and foolishness. People see a movie and decide what they're going to think."

Source: Teamsters

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CAPITALISM KILLS: Wal-Mart and Amerada Hess

By Thomas Riggins
11-28-05, 8:54 am                      
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The free enterprise system, AKA the free market, AKA capitalism, is an economic system, as we all know, that is dedicated to maximizing profits at any cost. Neither ethics, morality, honor, the environment, nor human life itself will be spared by this system and its quest to put profits before people (and everything else). Here are some more case studies of the system at work. The previous three case studies in this series can be found here.

CASE 4. One of the duties of the Labor Department is to protect children from exploitation by American corporations. We know from history that the business class will ruthlessly seize upon children to exploit every last cent they can out of them in order to increase their corporate wealth. The Bushites represent the business class to exclusion of almost every other segment of society. So you can expect these ultra-right Republicans, with the President in the forefront hypocritically masking his greed behind the pieties of a "born again" Christian, to see to it that no child is left behind unexploited.

A perfect example is revealed in the New York Times for 11-1-05: "Labor Dept. Is Rebuked Over Pact With Wal-Mart: Agreement Addressed Child Labor Rules," by Steven Greenhouse.

Wal-Mart is famous for violating labor laws. The article quotes Representative George Miller (Dem Calif.) who says, "The Bush Labor Department chose to do an unprecedented favor for Wal-Mart, despite the fact it is well known for violating labor laws. The sweetheart deal put Wal-Mart employees at risk, undermined government effectiveness, and further undermined public confidence that the government is acting on its behalf."

So, what is all this about? The Labor Department found 85 violations of the child labor law (for children 17 and younger) in Wal-Mart stores in Arkansas, New Hampshire and Connecticut. Wal-Mart, among other things, was having the children work with dangerous machinery such as cardboard balers and chain saws.

Wal-Mart had to settle with the Feds -- not the Feds of old, who were not so hot themselves, but the new Bush Feds. It seems that there is a big Republican donor at Wal-Mart and the donor's interests, not those of the children, are what the Labor Department wants to protect. Here is what they did. 1. Wal-Mart paid a cosmetic fine of $135,540 (peanuts for this multibillion dollar corporate criminal). 2. The Labor Department agreed to give the company 15 days advance notice before they inspect again! It is not likely they will find future violations. 3. Even if Wal-Mart is too stupid to clean up its act in the 15 days before the "inspection" and they get caught violating the law, there will be no citations or fines if they clean up their act in the next 10 days. 4. It gets better! This settlement agreement was largely written by Wal-Mart's own lawyers and the Labor Department left its "own legal division out of the settlement process." Sweet! And finally, 5. The Labor Department agreed to "to let Wal-Mart jointly develop news releases" with it about the violations and the settlement.

The foxes are indeed watching the hen house.

CASE 5. This is from the "Metro Briefing" in the New York Times of 11-23-05 ("Oil Company Settles Gouging Complaint") Acting under the maxim that it is an ill wind that blows nobody any good, certain oil companies seemingly could not resist breaking the law in order to price gouge and make extra profits from the human tragedy of Hurricane Katrina. They wouldn't be capitalist corporations if they didn't follow their own version of 'seize the day.'

So what did they do? This story is only about one state, New Jersey (but don't think this behavior was not more widespread). New Jersey accused Amerada Hess of gouging "drivers with higher gas prices" due to the storm. Hess and others (Motiva/Shell, Sunoco, and independent sellers) were charged with having "artificially inflated prices and increased prices more than once every 24 hours, the state limit." It is evidently okay to do this once every 24 hours but not more than once. Anyway – it’s stealing.

The result? Hess, which of course admitted no wrongdoing, agreed to pay the state $372,391 for its court costs. Some of this will go to the poor. Hess also agreed to obey the law in the future -- big of them. The capitalist state is appeased. Why doesn't Hess have to turn over all the money it gouged to a fund to help the poor? No, it gets to keep its ill-gotten profits. You only end up on Riker's Island for petty-theft it seems (Hess is NYC-based). Cases against the other culprits are still pending. If the Hess settlement is any indication, we can affirm that crime (corporate crime, that is) pays.

--Thomas Riggins is the book review editor of Political Affairs and can be reached at pabooks@politicalaffairs.net.

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Use of force at issue in Wal-Mart case

A grand jury will decide if the retail giant was justified in acting against shoplifting suspect

By ROBERT CROWE
Houston Chronicle
Nov. 27, 2005, 4:44AM                      
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The father of a shoplifting suspect who died while struggling with Wal-Mart employees wasn't shocked when officials ruled the death a homicide.

Now, H.C. Driver and other family members are hoping that the people responsible for Stacy Clay Driver's death will be brought to justice.

"Something like that isn't supposed to happen, especially in this country," the father said. "I have believed up to now in the justice system, and I hope it continues to work."

Also, the Driver family has filed a lawsuit seeking unspecified damages against Wal-Mart.

Stacy Driver suffocated Aug. 7 while struggling with Wal-Mart employees who suspected him of shoplifting from an Atascocita store.

The Harris County Medical Examiner's Office ruled Driver's death was caused primarily by asphyxia because of neck and chest compression. A secondary cause was hyperthermia with methamphetamine toxicity.

A Harris County prosecutor is expected to present to a grand jury the findings of a sheriff's office investigation into Driver's death.

The Driver family's lawyer, Jim Lindeman, hopes that — if an indictment is handed down — a criminal jury would be sympathetic even though Driver had illegal drugs in his system and prior records of shoplifting and assault.

District Attorney Chuck Rosenthal said a homicide ruling doesn't necessarily mean a crime has been committed. He said the grand jury will have to determine whether deadly force was justifiable.

Wal-Mart has declined to discuss its policy on use of force or whether the employees involved in Driver's death have been disciplined.

"This was an unfortunate event. ... It was very difficult on the Driver family and also on our associates," said Wal-Mart spokesman Marty Heires. "We don't normally discuss our policies ... but (Wal-Mart employees) receive appropriate training."

Driver's death is among at least 30 similar deaths of unarmed shoplifting suspects across the country during the past 15 years. The suspects were either shot and killed, or they suffocated in struggles with "loss-prevention" employees or security guards, according to a Houston Chronicle analysis of a major news database.

At least two were at Wal-Mart stores, which use employees trained to look for shoplifters and other thieves. Other stores where deaths occurred include two national drugstore chains and Dillard's. In many cases in which homicide was ruled as the cause of death, charges weren't filed or eventually were dropped.

A parking lot struggle In the Houston case, Driver, 30, of Cleveland, was accused of fleeing the store at 6626 East FM 1960 in Atascocita with a stolen gift card worth $94. Witnesses said Wal-Mart employees chased him into the store parking lot and wrestled him to the ground before pinning and handcuffing the shirtless man face-down with hands behind his back. During a struggle that lasted up to 30 minutes, according to some witnesses, Driver begged employees to let him up and call an ambulance, said witness Charles Portz, a Houston lawyer.

"A shoplifter is a thief, no question, but the penalty for that is not the death penalty," said John H. Christman, a retail-security expert.

Driver's widow, Wendy, 27, said Stacy Driver was obtaining his pilot's license and also embarking on a career as a master carpenter. They have a 5-month-old son, Ashton.

"They took my baby's daddy away from me," she said. "They had no right to do that."

Meanwhile, H.C. Driver has joined some security experts in calling for a revision of use-of-force laws and better training for security guards and "loss-prevention" employees, whose use-of-force training is determined by retail chains.

The father says the country's largest retailer should be required to demonstrate that its loss-prevention employees meet some minimum training standard, especially when millions of Americans enter its stores regularly.

The Chronicle has obtained a portion of Wal-Mart's "Shoplifting Apprehension" policy. It states loss-prevention employees can use "reasonable force," but safety must always be foremost on the employee's mind.

"If the situation becomes violent or is deemed potentially dangerous, you should allow the shoplifter to leave the premise," the policy states.

When asked to verify the contents of the Wal-Mart policy, Heires declined, citing the pending investigation.

Christman said retail loss-prevention employees are not licensed law enforcement officers, so they should not be able to use a degree of force that could cause serious injury or death.

After three shoplifting suspects in the Detroit area were killed in similar incidents in 2001, the Michigan Legislature passed laws increasing minimum training standards for security guards and requiring concealed-weapon permits for armed guards. The law also prohibits felons from working as security guards.

"Our position in Michigan was that security guards were to observe and report, and that's it," said lobbyist Phil Hoffman, a former Michigan state senator who sponsored the 2001 legislation. "We wanted security guards to leave the apprehension to law enforcement."

Chris McGoey, a California-based retail-security consultant, opposes the concept of state-mandated policies.

"The industry should enact policies themselves," he said.

In another Wal-Mart case, a man died in September 2001 after employees in Las Vegas chased him off store property and into a neighborhood. Jan M. Burstein, 29, of Leawood, Kan., died in custody of employees who had pinned him face-down on the ground with his arms behind his back.

The Las Vegas-area coroner pronounced Burstein's death a homicide, but no charges were filed because, according to the Clark County District Attorney's Office, the store employees had not broken any laws. Burstein's father declined to comment, citing legal reasons.

Other confrontations The use of off-duty law enforcement officers as security guards at retail stores is not always a panacea.

Off-duty officers ostensibly have the most rigorous professional training to work as security guards. But at least six people, including four in Texas, have died at Dillard's stores — where armed, off-duty law enforcement officers are employed — after confrontations with security guards. Julie Bull, a Dillard's spokeswoman, declined to comment. Dillard's has been sued and widely criticized for the deaths and other actions by its security guards.

In the most recent incident involving the store, on May 8, 2004, an off-duty Harris County deputy shot at shoplifting suspect Robert Barkley, 36, outside the Dillard's at Deerbrook Mall.

The deputy chased Barkley into the parking lot, where he fired rounds at the driver's-side window of Barkley's car. Barkley was wounded in the face and hand. Deputy William Wilkinson said he was trying to defend himself when Berkley drove his car toward him. Barkley, like Driver, had a previous shoplifting arrest and assault charge.

robert.crowe@chron.com

HoustonChronicle.com

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Battling Wal-Mart

by Neal Peirce
the Oregonian
Sunday, November 27, 2005            
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The Wal-Mart Watch campaign, a labor-environmental group highly critical of America's mega-mega retailer, recently launched more than 1,000 events nationwide for its "Higher Expectations Week."

"Wal-Mart: The High Cost of Low Price," a scathing documentary by independent filmmaker Robert Greenwald with a focus on Wal-Mart's business tactics and treatment of workers, began to play to audiences across the country.

Wal-Mart is fighting its critics with waves of television ads celebrating happy workers and the company's gifts to local charities.

But the action goes much further. Across state capitals, legislators are into spirited debates over whether Wal-Mart should be forced to pay adequate health benefits or leave it to the states to subsidize its low-paid workers through Medicaid and other public benefits.

Scene of the biggest current fight: Maryland, where Gov. Robert Ehrlich vetoed a measure to require any company with more than 10,000 workers -- only Wal-Mart qualifies -- to spend at least 8 percent of payroll on health benefits. Or, alternatively, to contribute significantly to the state's health insurance program.

An override vote on Ehrlich's veto is set for January. Wal-Mart has deployed at least a dozen lobbyists to Annapolis, offering goodies such as a $10,000 gift to underwrite a conference of black legislators.

In one sense, all of this is predictable: With annual sales of $288 billion and 1.6 million employees, Wal-Mart is now the world's biggest corporation. Its footprint on American communities and retailing is so vast that some opposition to its tactics is virtually inevitable.

Current debates about proposed Wal-Mart stores in Cornelius, Gresham and Beaverton -- with the typical protests by many local citizens and smaller retailers -- are par for the course. Usually Wal-Mart wins, though not always; it has experienced some dramatic rejections.

But something even bigger seems to be happening. Wal-Mart has become the poster child for an era of unfettered globalized corporate operations -- "a destabilizing business model, a dangerous detriment to America's local and national economies and to the middle class," in the words of critic Leo Hindery Jr. He's former CEO of the telecom carrier Global Crossing and an active figure in Democratic Party politics.

At a recent Washington conference organized by the Center for American Progress, Hindery noted that as recently as 1992 (the year of Wal-Mart founder Sam Walton's death), the Business Roundtable of top business leaders was saying that corporations had a major responsibility not just to stockholders but to their employees, society at large, and the nation's economy.

But now, Hindery says the Business Roundtable -- and most of the corporate world -- focuses almost exclusively on profits for stockholders.

Wal-Mart leads and embodies the trend in three ways, he says:

The "clobbering" of Main Streets when Wal-Mart moves to one of its usual edge-of-town locations.

"The miserable wage and benefits package offered by Sam Walton's creation."

Wal-Mart's buying strategy, focused on cheaply produced foreign goods, a total reversal of Walton's "Buy America" advocacy.

The reply of economists friendly to Wal-Mart is based, like the company's promotions, almost exclusively on low prices and efficiency. According to a Wal-Mart-commissioned study by Global Insight, a respected economic-forecasting firm, low Wal-Mart prices saved consumers $263 billion last year.

Wal-Mart defenders say that's "progressive" because the benefits flow principally to low-income families who shop at discount stores.

But the real choice, says Harry Holzer, former chief economist for the U.S. Labor Department, is between "lower-road" employer strategies focused, such as Wal-Mart, on low wages regardless of high employee turnover, versus a "higher-road" strategy by employers focused on higher worker productivity that's supported by higher wages and benefits as well as training and promotion ladders.

Mass-retailer Costco, which competes directly with Wal-Mart's Sam's Club warehouse chain, has emerged as the high-road model. While Wal-Mart fights aggressively to stop any union organizing whatever, Costco has agreements with the Teamsters for 16 percent of its employees and has extended most of the benefits to its entire workforce.

A BusinessWeek analysis shows Costco's average hourly wage is $15.97, far above the Wal-Mart (Sam's Club) $11.52 figure, even excluding the 25 percent of Wal-Mart workers who are low-paid part-timers.

The yearly employer contributions to health care -- Costco, $5,735; Wal-Mart, $3,500. Of Costco employees, 82 percent are covered by the health plan; Wal-Mart, 47 percent. Employee turnover at Wal-Mart is three times higher than Costco's.

And then comes the clincher, suggesting the low-road approach may not be so clever after all: Costco's profit per employee is $13,647; Wal-Mart's, $11,039.

Paying good wages and benefits, says Costco CEO Jim Sinegal, "is not altruistic; this is good business."

Still, if history is any measure, it will take energetic union organizing to force Wal-Mart to shift tactics -- perhaps a replay of 1937, when a courageous Detroit sit-in strike by young women at Woolworth's, the dominant retailer of the day, sparked a string of nationwide victories and substantial pay increases.

Wal-Mart Watch, though it was founded by Andy Stern, head of the Service Workers International, isn't quite ready to leap into an organizing fight. But if and when it's ready, look for a struggling that shapes America's entire economy and character for the century.

© 2005 The Oregonian

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Wal-Mart Critics Have Clashing Objectives

By Randy Hall
CNSNews.com
November 25, 2005              
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(CNSNews.com) - While one of Wal-Mart's critics is calling for people to buy nothing from the world's biggest retailer on the day after Thanksgiving, another critic hopes shoppers will flood the stores on "Black Friday" so that they can receive parking lot flyers criticizing Wal-Mart's pricing practices.

A group known as Adbusters has declared Friday, Nov. 25, "Buy Nothing Day." People around the world are urged not to participate "in the doomsday economy, the marketing mind-games and the frantic consumer-binge that's become our culture."

Instead of purchasing holiday gifts, individuals should "make a small choice not to shop," according to the website operated by Adbusters, which is based in Vancouver, British Columbia, Canada. "We shrink our footprint and gain some calm. Together, we say: Enough is enough," according to the website.

On "Buy Nothing Day," people are urged to "target the corporate bully" by pushing empty shopping carts up and down Wal-Mart aisles all day; buying merchandise, returning it for a refund and repeating the cycle over and over; or setting up booths outside stores where shoppers are encouraged to cut up their credit cards.

Adbusters describes itself as "a global network of artists, activists, writers, pranksters, students, educators and entrepreneurs who want to advance the new social activist movement of the information age.

"Our aim," the group asserts, "is to topple existing power structures and forge a major shift in the way we will live in the 21st century."

Also on Friday, supporters of WakeUpWalMart.com will distribute more than 1 million "Wal-Mart Consumer Alert" flyers in 36 states and 102 cities in an attempt to convince customers that the stores may be cheating them at the cash register.

As Cybercast News Service previously reported, two newly released studies show Wal-Mart failed to meet federal standards for pricing accuracy in California, Illinois, Michigan and Indiana.

But the studies were funded by the United Food and Commercial Workers International Union, the same organization that is sponsoring WakeUpWalMart.com and seeks to unionize workers of the retail chain. This fact was not lost on Wal-Mart spokeswoman Sarah Clark.

"It is no surprise that these studies, which are union-funded, are being released at the start of our holiday sales period," Clark said. "If something is not right, we will fix it. However, we do not know at this point if the studies are valid."

One organization not planning any activities against Wal-Mart on "Black Friday" is Wal-Mart Watch, apparently intent on resting after more than 400 organizations from around the country hosted more than 1,200 events in all 50 states and the District of Columbia for "Higher Expectations Week," Nov. 13-19.

In a press release on its website, Wal-Mart Watch claims that its week-long series of events, which ranged from religious sermons to movie screenings to legislative town hall meetings, "exceeded expectations.

"In contrast, Wal-Mart continued along its familiar path of labor violations, low quarterly earnings and public relations gaffes" as the company "staggers" into the holiday shopping season, Wal-Mart Watch alleged.

However, Wal-Mart Stores, Inc. announced on Nov. 15 that the corporation's profits increased 4 percent, a figure that was in line with what analysts expected. The retailer also began its holiday advertising on Nov. 1, the earliest start in company history.

Wal-Mart, the world's number one retailer, has its own plans for "Black Friday." The company for the first time has promised to match any price featured in a local competitor's print advertisement if it has the identical product in stock. As usual, all stores will open early at 5 a.m., and a number of online specials will be available at Walmart.com.

"During this crucial period, our customers expect Wal-Mart to offer them the best value in the marketplace," said Chief Marketing Officer John Fleming. "This means that they trust us to have not only the lowest prices, but also the best selection of quality items that are relevant to their needs and the easiest, most convenient shopping experience.

"Our goal at Wal-Mart is to give our customers the best value they can find anywhere," Fleming added. "We're keeping that promise this week and throughout this holiday season."

Copyright 1998-2006 Cybercast News Service

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Wal-mart Consumer Complaints

offtheshelf.us/retail//wal-mart/
November 25, 2005
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In this section we discuss Wal-mart business practices and how their policies impact their consumers. Not all Wal-mart shoppers are happy ones.

Walmart Shopping Days Over

Posted: November 25, 2005

Attention Wal-Mart Shoppers Paying the Price at Wal-mart One Nation Under Wal-Mart Wal-Mart Watch Against the Wal Stone Silent on Abuses Merchant of Shame Labor Abuses Hidden Costs Page of Shame Wal-Mart vs. America Frontline Report The Wal-Mart Sweatshop Wal-Mart and Sweatshops The USA Sell-Out I think that my Walmart shopping days may be over. Customer service is lousy, you can't just stop in for a few items to save a bit of money and get in and out of the Dixon, Il or Sterling, Il stores. The checkout lines have at least a 10-minute wait. Is there a shortage on cashiers or what?

I have tried those self-checkout lines and that is a big joke! It is difficult to get your item scanned and trying to understand the screen is very frustrating. Asking for help is asking for punishment for being stupid to the system.

Then when I finally get to the real live clerk she says, "You don't look like you feel very well." Is this standard practice for Walmart cashiers to make comments to customers about the way they look?

I have had to drive back to the Dixon, Illinois store twice now to pick up items that were left at the checkout because the cashier didn't put them in my cart and I didn't realize this until I drove home.

I just can't do this anymore. I guess I will go to several stores to get what I need, spend a little more, drive a little more, but get a real person who treats me better than I have been treated at Walmart in a very long time. What has happened to Walmart, shopping there used to be a pleasure, now it is a nightmare.

Robin Warrenfeltz, Franklin Grove, Il.

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Shoplifting: No Tolerance Policy Posted: November 25, 2005

Beware...Wal-mart has a No Tolerance Policy when it comes to Shoplifting or Human Error.

A few weeks ago a family member failed to put a small bottle of laxative/fiber pills (cost under $5.00) on the belt for the cashier to scan along with the other grocery items. Walmart's well trained security guards knew exactly what to do in this type of circumstance. They saw it happen...they lurked and waited as they must not approach the customer until he leaves store...they move in for the kill ...Another one under their belt...they caught a shoplifter.

From that point on it is a no mercy policy.

If you are a Walmart shopper...pay attention to what you do in their store and to what you don't do!

Walmart is a well oiled giant with its own giant legal department. Any type of human error as described above will be treated as Shoplifing...you will be arrested...you will go to criminal court.

In court you will receive two options...hire a lawyer to defend yourself or plead guilty, pay the $400 penalty and agree to house arrest and after all this...a shoplifting charge won't go on your record. Option #1 seems unaffordable and so usually they get the $400...they did from us.

Oh Wait...the saga continues. A week or so later, the letter arrives. A Civil Penalty Demand Letter from the super giant.

What? $400 is not enough?

They want an additional $200 mailed to them so that they now won't prosecute you in Civil Court also...and believe me...the letter is intimidating. The Giant threatens a lawsuit that will include Wal-mart's attorney fees and court costs. Once again...seems like an unaffordable risk. Think of the typical Wal-mart customer...they know this. And on the telephone with their legal department you will be reassured you cannot make this go away.

In summary, It cost our family $600 for a bottle of laxative/fiber pills that retailed for less that $5.00. The only consolation we have is that is the last penny our family will ever have to spend in Walmart.

BJ in Meridian, MS Tuesday, October 25 at 07:58 am

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Deceptive Practices Posted: November 25, 2005

Dear Annette:

Several times a year, after buying many items at Wal-Mart (and being distracted by my young child) I have found small items on the receipt that I did not purchase. Items such as; a 20 ounce ice tea for $0.98 (this has happened twice). I have also found that I have been overcharged for items.

It is difficult to watch the prices as they are being rung up, when I have purchased many items and I have to load them in the cart myself. I wonder just how many people they do this to each year and how many millions of dollars they make charging customers for items they never intended to purchase? When you shop at a Wal-mart 30 miles away, it is hard to justify going back to the store for a dollar or two and I think they know that.

David

Dear David,

Thanks for your comments.

I personally make it habit never to leave a store without first checking my receipt. While I've never been charged for items I did not place in my shopping cart, I find that I am overcharged for items about 50% of the time.

If you make it a habit to always stop a moment and really look over your receipt, you can save yourself a great deal of time and frustration. Let them see you do it.

Most people don't realize that then entire checkout area is almost always under close survellance by store security personnel and at the very least is being taped for review later. If they know that customers are checking their receipts they will be less likely to resort to overcharing their patrons.

My family did some shopping last night and I found the most of the stores are using tricky tactics this time of year. A local Wal-mart had sale prices posted on the wall above the wrong item. I wasted 30 minutes of my time trying to get my "overcharge" refunded, even though I checked the tag, I had still ended up purchasing the wrong item. This is a comment practice during the holidays.

Even though stores will be packed and shoppers frazzled, please take the time to check your receipt before you leave the store. The time you save will be your own!

~Annette

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The Wall in Wal-mart Posted: October 16, 2005

Dear Annette:

I am at the receiving end of a $44 overcharge by Wal-mart Vision Center at the Commerce Township store.

I had an eyeglass exam and a contact lens exam done at this store about a month ago. My insurer covers both exams after a $5 copay, which is my responsibility. At the register, after the exam, the Wal-mart Assistant told me that her computer showed that only one exam was covered under the policy, not both. Therefore, I had to pay the $49 retail price for the eyeglass exam. Ten days ago, I received the Explanation of Benefit Statement (EOB) from my insurer that corroborated that my copay should have been a total of $5 for both exams.

I took the EOB and the receipt to the Walmart Vision Center at Commerce Township for a refund. The assistant at the counter said that she could not help me that day, since the manager of the Vision Center was not working that day. She took a copy of my EOB and asked that I call the following day.

That, I did only to be told that the manager was in a meeting and she will call me back ASAP. Of course, no one called.

I waited and called again the following morning since I was told that the manager is more accessible in the morning. She was not there, her assistant took down my message so that the manager could return my call... yada yada yada.

The sun rose and set on Orchard Lake that day too without a call return from "the manager."

So, I called the Walmart Customer Service desk the following day. The phone "greeter" started to squeak a little after the initial affable tone when I conveyed the issue with the dismally irresponsive service from the Vision Center. When he started to hint at my possible lack of awareness of my vision benefits I had to slip a little secret in -- it should not matter; but, it probably does -- that my insurer is also my employer.

That seemed to work as he understood the issue right away and admitted that he could not gurantee as to how long it would take for (what now became) "a manager" to resolve my issue with the overcharge and the refund. Nonetheless, that someone will call.

The Vision Center manager called within two hours saying that she will take care of the refund, no problem. It has been two days since the promise. Today I received a message on my home phone from the manager who went on to state that it is beyond her control to refund the $44 as a over the counter refund. It will have to be handled by the Walmart District Office and er, unspoken but, it could take some more time before I could get my money back.

I know that I will recoup the money. But, buyers of the Vision Center beware of the Wall in that Mart!!! Interesting that this Wal-mart represented anything but what is in the name of the township where it is located.

A great website, BTW!!!

Sincerely, Ty

Dear Ty,

Thank you, I'm so glad you are enjoying this website. I have to say it's been a challenge to answer some of the inquiries I've received and a pleasure being able to assist you all.

Anytime you have an insurance issue and you even suspect that you are in the right, always have the provider call and verify your coverage before making payment beyond your co-pay. It's always easier to get the charges correct right from the start than to get an overcharge corrected. It should also be noted that providers who fail to accurately follow the terms of their contracts, can be suspended or terminated for breach of contract by the insurance company. Since insurance is the primary source of income for many of these companies, this is a really bad move for them.

Thanks for sharing your story. ~Annette

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Michigan: Right To Work State Posted: October 14, 2005

Our local Wal-Mart store overcharged an employee shopping on her off the clock time and was told store employees were not eligible for the 10X rebate. Is this correct?

This is not true, there is no exemption in the law for employees. Just remember that Michigan is a right to work state. They can fire her for no reason at all or for any reason and I can tell you from experience that it's hard to fight.

I was working for Subway and said Merry Christmas to some customers. I was later pulled aside and told that I wasn't allowed to wish customers a Merry Christmas, so I called Subway's Corporate office for clarification and was informed that that was not Subway's policy but the owners policy.

The next day I went into work and was terminated. Of course I couldn't get an attorney to help me fight my wrongful termination and when I called the Michigan Department of Labor - Wage, Labor and Hour division, I was told that they could fire me because I was an at-will employee and there was nothing I could do about it.

Simply put she needs to weigh her job against what the law allows and if she can live with her decision.

Thanks for asking, ~Annette

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Wal-mart Refund Policy Posted: October 6, 2005

I went into Wal-mart yesterday in Michigan. I purchased two sets of different items. One of each of the items rang up wrong. When I returned to the courtesy desk, she refunded my $1.98. As I stood there, I asked if this has anything to do with the Michigan Scanning Law. She almost growled at me and said "yeah". For some reason she needed to see my ID, which I had already taken out to the car.

As she did the paperwork I went to get my ID. She then gave me $5.00. I said I don't get it for the two different items. She said no you only get one $5.00 per receipt. I work in retail, I went to work today and asked if that was true. They of course said no, you get it for each different item.

Please let me know who is right.

Thank you, Patty

Dear Patty,

The law does not require you to provide the store with any identification what-so-ever. This is a store policy, one that you can legally refuse.

As for your other issue. According to Section 445.360a(2) you have cause to bring legal action against Wal-mart. The choice is yours, you may either return to the store with your receipt (within 30-days) or bring a legal case against Walmart for violating Michigan Law, which states:

If the loss is suffered by 1 buyer within 1 transaction on 2 or more identical items, the amount to be tendered by the seller shall be the difference on each item, plus an amount equal to 10 times the difference on a single item but which is not less than $1.00 and not more than $5.00. If the seller does not tender this amount, the buyer may bring or join in an action as provided in section 10(2).

Thanks for writing, ~Annette

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Epping criticized for blocking 24-hour shopping at Wal-Mart

November 24, 2005                     [back to top]

EPPING, N.H. --A state representative says the town's decision to block 24-hour holiday shopping at a Wal-Mart superstore amounts to extortion.

Earlier this year, the retail giant recently turned down the town's request to help pay the salary of an additional police officer. Two weeks ago, the town turned down Wal-Mart's request for extended holiday hours.

"That's almost blackmail," said Rep. Ron Nowe, R-Epping. "It sounds almost as if they are saying, 'If you want us to cover your store 24 hours a day, you have to pay extra, over and above the taxes you already pay.' Well, that sounds a little bit like extortion."

Town officials say police calls to Wal-Mart for shoplifting, domestic assault and check fraud have strained their six patrolmen, and they can't afford to respond around the clock without more resources. They have logged more than 250 calls to the store this year -- approximately one in 25 police responses.

"This year, we put a request for Wal-Mart and Lowe's ... to share the cost of subsidizing one full-time officer and benefits -- that's about $70,000," said Kim Sullivan, who chairs the board of selectmen. Lowe's is still considering the request, but Wal-Mart declined.

"But how can it be blackmail?" Sullivan said. "We asked them for something extra and they said no. Then they asked us for something extra and we said no."

Zoning Board vice-chairman and Budget Committee member Ron LaChance said Wal-Mart already pays $262,000 in property taxes and that should cover the increased need for policing.

"I think they're being penalized," LaChance said.

But other town officials said that money goes into the town's general fund to reduce local property taxes, not toward extra patrolmen.

Other town residents said Wal-Mart has been a good neighbor, donating money to area health care facilities, scout troops, the schools, the library and the town police and fire departments. A Wal-Mart spokeswoman said the store had donated more than $60,000.

"They do enough to balance the slate in this town ... and the more money they make, the more generous they can be with Epping and other communities," said Tom Sutliffe, head of Epping Residents for Principled Government.

Town officials said they envy a deal in Plaistow, where Wal-Mart, Home Depot and other stores pay the salary of one full-time officer.

Plaistow police Chief Stephen Savage said mandatory funding for the position was part of the deed for stores at Pentucket Plaza Mall, and all the tenants contribute. Before Wal-Mart arrived in the early 1990s, the position was funded by Ames and Purity Supreme, among others.

"We negotiated a deal that actually pre-dates Wal-Mart," Savage said. "We realized we had to look beyond the horizon."

Information from: New Hampshire Union Leader, http://www.theunionleader.com

© Copyright 2005 The New York Times Company

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Angry Women Are Watching Wal-Mart

by Martha Burk
MinutemanMedia.org
Wednesday, November 23, 2005                
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Though we’re already seeing a few Santa Claus displays going up, Americans usually wait until the after Thanksgiving to indulge in the annual holiday shopping binge. This year there will be an added element to the pre-Thanksgiving run-up. Wal-Mart Watch, a group dedicated to better working conditions, fair pay, and responsible business practices, kicked off what it called “Higher Expectations Week” from November 13 to 19. The week highlighted the various business practices of the world’s largest retailer and the largest employer in the U.S. – Wal-Mart.

One activity was the showing of a new film by Robert Greenwald titled “Wal-Mart, The High Cost of Low Prices.” The movie was shown in hundreds of churches and other free public venues to highlight the company’s impact on communities and taxpayers. For example, just 47 percent of Wal-Mart employees are covered by the company health plan, in contrast to 68 percent of workers in comparable companies. That pushes many of Wal-Mart’s “associates,” as the company calls its workers, onto public health assistance, forcing taxpayers to foot the bill. Wal-Mart management is worried enough to release their own film in rebuttal, and hire ex-political spin-doctors to tout the company’s good side.

The National Council of Women’s Organizations has joined the awareness campaign, and for good reason. Most people don’t know that the majority of the working poor (who make below $9.04 per hour) are adult women, and Wal-Mart is responsible for a bunch of them. They’re also mostly white (58 percent) and mostly high school educated or higher (77 percent). The company’s higher-than-average employee share of health premiums is the reason many workers can’t afford to buy into the plan.

Health care isn’t the only way Wal-Mart squeezes females. Women are suing the firm for sex discrimination in pay and promotion, and a California judge has ruled they can move forward as a class. That means the women with various claims won’t have to go it alone (each with a separate lawyer and separate expenses) against Wal-Mart’s legal firepower, surely as formidable as its retailing expertise. The company is appealing, of course, but if women can prove a “pattern and practice” of discrimination, back pay and promotions could be due, and the company might have to mend its gender-biased ways.

Wal-Mart has even made anti-woman statements in the culture wars through products it chooses to sell, and those it chooses not to sell. Ten years ago, it pulled T-shirts that read, “Some Day a Woman Will Be President,” featuring Margaret from “Dennis the Menace.” Wal-Mart called the shirts “offensive” and “against Wal-Mart’s family values.” But it continues to sell violent video games such as the Grand Theft Auto series, where players get points for having sex with a prostitute and garner even higher scores for killing her to avoid payment.

U.S. women aren’t the only ones suffering from Wal-Mart’s business practices. According to Wal-Mart Watch, the company’s "Buy America" plan is long gone. Seventy percent of Wal-Mart’s merchandise is from China, a major source of female sweatshop labor.

Women are not only the majority of Wal-Mart’s workers; they’re the majority of its customers. Advocates are hoping to make them more-aware consumers, so that public pressure from customers shopping elsewhere will force the company to spend less on public relations advertising and more on higher wages and health coverage. Of course, Wal-Mart is entitled to a fair profit, as are all businesses. But the key word is fair. Most people are no doubt willing to pay a penny more for holiday goods if it means health care and a living wage for their neighbors. The five members of the Walton family hold positions four through eight on “Fortune’s” list of the 400 richest Americans, with the Waltons alone having assets of $102.5 billion. If they gave up just one cent on the dollar of that in the form of higher wages for their workers, it would be enough to provide affordable health care – fair indeed.

Martha Burk is author of “Cult of Power: Sex Discrimination in Corporate America and What Can Be Done About It,” released this spring from Scribner.

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Gov. won't contest keeping Wal-Marts closed on Thanksgiving

November 23, 2005                           [back to top]

BOSTON --Wal-Mart should be able to do business in Massachusetts on Thanksgiving Day, Gov. Mitt Romney said Wednesday, but he won't contest Attorney General Tom Reilly's decision to enforce a law requiring businesses to close on the holiday.

"I wouldn't have any problem with stores being open," the governor said before serving up turkey at a Goodwill Industries job-training center. "But if that's the way the laws are written, why that's what we have to follow."

A top lieutenant to Reilly, a Democrat running for governor next year, advised Wal-Mart's local counsel in a letter Tuesday that state law prohibits stores from opening on Thanksgiving and Christmas.

"The attorney general has to interpret the law as he understands it, and I don't have any bone to pick with him on his interpretation of the law," said Romney, a Republican who has promised a decision this fall on whether he'll seek re-election.

A spokeswoman at company headquarters in Bentonville, Ark., said the four dozen Wal-Mart and Sam's Club stores in Massachusetts would be closed on Thursday, but she did not say whether that was a change of plans. Wal-Mart employs more than 11,000 people in the state.

The law enforced by Reilly is part of the Massachusetts Blue Laws, some of which date to Puritan times and restrict the sale of liquor during religious observances, among other things.

Wal-Mart, the world's largest retailer, has become a target of politicians in recent years over its labor practices and policies for providing health insurance.

Last week, Reilly's office told the Whole Foods supermarkets chain it could not stay open on Thanksgiving after a competitor complained.

© Copyright 2005 The New York Times Company

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Wal-Mart, Target ready for holiday sales battle

Retail giants set to go head to head from Friday onwards

The Associated Press
Nov. 23, 2005
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The slim tunics and velvet blazers on Wal-Mart’s clothing racks this holiday season are more than the latest trendy fashions — they’re a sign that the intense competition between the world’s largest retailer and its upscale discount rival is ratcheting higher.

There are other indications that Target Corp. has put pressure on Wal-Mart Stores Inc. Hoping to get customers shopping earlier, Wal-Mart will open its doors at 5 a.m. Friday, the official start of the holiday shopping season; that’s an hour earlier than during past holiday seasons. It’s also promising to match competitors’ prices on specific merchandise that day.

“This is the most aggressive Wal-Mart I have seen in 10 years,” said C. Britt Beemer, chairman of America’s Research Group, based in Charleston, S.C. “Target is definitely going to have to be more promotional. It needs to respond.”

Wal-Mart stumbled last holiday season when its discounts weren’t big enough to satisfy customers and its stores lacked must-have items including iPod music players. So far this year, it looks like Wal-Mart has gained ground — this time it’s Target that’s been less generous with discounts, charging more on toys than Wal-Mart and Toys R Us Inc., according to Sean McGowan, an analyst at Harris Nesbitt. And Wal-Mart began promoting holiday merchandise a week earlier than Target.

Wal-Mart’s more aggressive marketing may already have stolen some business from Target, which warned that sales from stores open at least a year, known as same-store sales, are tracking well below its 4 percent to 6 percent growth forecast for November. Same-store sales are considered a strong indicator of a retailer’s health. Wal-Mart has held to its November sales growth forecast of 3 percent to 5 percent.

“Overall, things are changing,” said Gail Lavielle, a Wal-Mart spokeswoman. “We have to be relevant to a broad range of customers. Price is important, but we are also concerned with value. Value is not just price. It is assortment and convenience.”

The early positive signs from Wal-Mart are a welcome turn for the retailer, which has been under increasing criticism for how it treats its workers. But Target appears to be unfazed.

“We feel we will be absolutely competitive with Wal-Mart and the rest of our competitors,” said Lena Michaud, a Target spokeswoman. “Our marketing is just starting.”

Target, whose stores will open at 6 a.m. on Friday, is reprising one of last year’s marketing gimmicks, a wakeup call to shoppers that they can arrange in advance. This year, it’s also adding tuck-in calls, which customers receive the night before the big shopping day.

Target’s early stumble is surprising since the retailer has enjoyed a robust 6.2 percent increase in same-store sales so far this fiscal year, surpassing Wal-Mart’s modest 3.6 percent gain. Target, the No. 2 discounter whose affordable but trendy fashions appeal to a higher-income shopper, has been less vulnerable than Wal-Mart to economic woes such as higher energy prices; Wal-Mart’s core customer is from the lower-income brackets.

But Target faces tough competition from Wal-Mart on more than just price. Wal-Mart has sharpened its merchandise selections in hopes of reaching out to its more style-conscious customers who’ll go to Wal-Mart for food and basics, but avoid the fashion and home furnishings departments. One new attraction is Wal-Mart’s new brand called Metro 7, which offers such designs as low-priced velvet jackets and camisole tops. Shoppers will also see more luxurious linens and a broader array of consumer electronics items that includes higher-end plasma TVs and digital cameras.

Wal-Mart is using its Web site, walmart.com, which sells exclusive, higher-priced products, to reach out to its more affluent shoppers. At the high end, there are $9,988 diamond rings and $1,200 flat-screen TVs with built-in DVD players, but there are also cutting-edge affordable gadgets like $100 pink cube-shaped MP3 players.

Shoppers have noticed the changes.

“They’re getting better,” said Maribel Santiago, shopping at a Wal-Mart supercenter in Wallingford, Conn.

Still, plenty of consumers still look to Target as the place to get cool merchandise. While Wal-Mart has made improvements in its women’s fashions and electronics selection, its home furnishings and men’s apparel still lack excitement, according to Bob Buchanan, a retail analyst at St. Louis-based A.G. Edwards.

“They (Target) represent the fashion and where it is going toward now, more than Wal-Mart,” said shopper Tamara Koch at the Target store in Durham, N.C.

Moreover, Wal-Mart struggles with poor customer service and stores, particularly its older ones, that look tired and unkempt. Target’s stores are brighter and easier to shop.

Judy Klopp, of New Britain, Conn., said of Target employees, “if you’re looking for something, they’ll take you to the right spot. I can’t stand Wal-Mart. You stand in line too long to check out. It’s not clean at all.”

Analysts are also watching to see if ongoing negative publicity about Wal-Mart could turn shoppers away this holiday season. The company has long been criticized for its employment policies, including its wages and health care coverage. Last month, an internal memo, written by a company benefits executive and obtained by an anti-Wal-Mart group called Wal-Mart Watch stirred controversy because it suggested ways to cut soaring medical costs by discouraging unhealthy job applicants.

What could make things worse is a scathing documentary called “Wal-Mart: The High Cost of Low Prices,” which went to a week of screenings in mid-month at 7,000 locations including churches, homes and libraries across the country organized by Wal-Mart critics.

Some consumers said the publicity has influenced where they shop.

“I never go to Wal-Mart,” said Vivian Naimoli of Meriden, Conn., shopping at a local Target. “I just don’t like their philosophy. They seem to put a lot of small guys out of business.”

Wal-Mart had some more bad news recently. According to two union-commissioned university studies, the retailer charged the wrong price to shoppers in California and the Midwest at a rate that exceeds those set by federal guidelines.

Wal-Mart is hoping its changing product mix and lower prices will overcome the negative publicity.

“We hope if we take care of our customers by giving them the best value in the marketplace, they will continue to come to us as a primary destination,” said Lavielle. “We don’t think they will be disappointed.”

© 2005 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

© 2005 MSNBC.com

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Back to Basics at Wal-Mart: Spare No Rivals

By MICHAEL BARBARO
November 23, 2005
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Kind and gentle didn't work for Wal-Mart last holiday - so now it's giving the cutthroat approach another try.

The nation's largest retailer, which stumbled after offering higher prices to spare already-weakened competitors - and its image - in 2004, will return to its old self on Friday with a campaign to match rivals' advertised discounts on the day-after Thanksgiving.

Wal-Mart's strategy - to lure shoppers away from its competitors' so-called doorbuster deals, offered from 6 a.m. to 11 a.m. - is highly unusual, retail analysts said, and could change the competitive landscape on one of the busiest shopping days of the year.

"We have seen these types of promotions before, but never on Black Friday," said Michael Gatti, executive vice president of the Retail Advertising and Marketing Association, using the industry nickname for the day after Thanksgiving, when stores traditionally turn a profit for the year. "It definitely makes a strong statement."

But competitors say they are largely immune to the attack because the vast majority of doorbusters are exclusive to their stores. The plan, they say, could create a world of frustration for shoppers who show up at Wal-Mart at dawn Friday waving circulars from Best Buy, Target and Staples.

"You can't match what you don't have," said Kathleen Waugh, a spokeswoman for Toys "R" Us, which said 80 percent of the discounts it will offer on Friday morning are for merchandise that cannot be found at Wal-Mart.

Gail Lavielle, a Wal-Mart spokeswoman, estimated that the retailer carries 25 to 30 percent of the products its competitors will discount on Friday.

According to early copies of Black Friday circulars, which are posted on unauthorized Web sites, the overlapping merchandise will include a Leapfrog Leapstart Learning Table (at Toys "R" Us on Friday for $19.99); a Magnavox 42-inch plasma television (at Best Buy for $1,499) and an HP PS 8450 printer (at Staples for $99.98).

But plenty of other deals will be impossible to match, like an I/O Magic 16x DVD Burner (for $19.99 at Circuit City); a Plantronics M2500 Bluetooth Headset (at Radio Shack for $9.99); and the Kisses Fondue Set (at J. C. Penney for $8.88).

Analysts said Wal-Mart's strategy posed a two-part threat to competitors: it could steal business on Friday, the biggest shopping day of the year, and perhaps more important, it could create a perception throughout the season that Wal-Mart was offering better deals.

"Black Friday is about sending a message," said Jeff Stinson, a retail analyst at FTN Midwest Research. "It is about establishing a reputation for the rest of the holidays."

That is a lesson Wal-Mart learned the hard way last year, when the retailer refrained from its deepest discounts, only to find itself undercut by competitors, forcing the chain to slash prices on popular products like Elmo after Thanksgiving.

It was a mistake that Wal-Mart's chief executive, H. Lee Scott Jr., vowed the chain would not repeat this year. Wal-Mart began its holiday marketing on Nov. 1, two weeks earlier than in 2004, polished its TV advertising - which for the first time features celebrities like Garth Brooks - and will begin selling doorbusters an hour earlier on Friday, at 5 a.m.

Mr. Scott said the 2004 prices were guided, in part, by Wal-Mart's desire to be seen as a "gentler" company, after it waged a bruising price war with chains like Toys "R" Us and KB Toys in 2003. "I would rather be accused of driving people out of business than getting fired because we don't have any sales," he said in an interview before the price-matching strategy was announced.

Wal-Mart has offered to match prices from competitors for years, but this is the first time it will aggressively encourage shoppers to bring in its rivals' circulars and obtain discounts on a single day.

The discount chain, which did not mention the price matching on its circulars for Friday, plans to advertise the campaign heavily on television and in newspapers over the next two days. "We are actively going after this," said Ms. Lavielle, the Wal-Mart spokeswoman.

The retailer will match prices only on products advertised in a local competitor's printed circulars for Nov. 25. Competing doorbuster prices will be matched only from 5 a.m. until 11 a.m., to discourage consumers from shopping elsewhere before heading to a local Wal-Mart on Friday.

Ernest Speranza, the chief marketing officer at KB Toys, a chain that filed for bankruptcy last year in part because its prices were undercut by Wal-Mart, said the new campaign was "very defensive" and could backfire.

"It goes against their logo of low prices always," he said. "If you are telling me you have low prices always, now what does it mean, that you have low prices some of the time and when a competitor beats you, you will match it?"

Mr. Speranza, a former Toys "R" Us executive, said that when Toys "R" Us tried promoting price matching to build a reputation for low prices, consumers largely rejected the campaign. "They said, 'It is telling us prices aren't so low' " after all, he recalled.

KB Toys, Mr. Speranza added, is not worried about Wal-Mart's strategy because many of its doorbusters cannot be found at Wal-Mart.

Dave Perron, executive vice president for merchandising at Staples, said the overlap between products his chain plans to discount Friday and those Wal-Mart carries "is not a meaningful part of the business," adding, "We are well positioned."

The big question, executives and analysts said, is whether consumers will bother flipping through circulars over the next two days looking for deals they can match up with a product at Wal-Mart, rather than just show up at 6 a.m. for the deal that captures their imagination.

In a nation full of bargain hunters, one thing is clear, said Mr. Stinson, the analyst: "People will compare those circulars."

Copyright 2005 The New York Times Company 

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Wal-Mart in mess over cleaning crews

Bloomberg News
New York Daily News
Wednesday, November 23rd, 2005                
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Wal-Mart was accused in a lawsuit of knowingly hiring companies that employed illegal immigrants to clean Wal-Mart stores and telling one vendor to hide the arrangement. Lawyers for a group of immigrant janitors suing Wal-Mart made the claims in an amended complaint filed in federal court in New Jersey yesterday.

"Wal-Mart senior managers instructed and encouraged contractors to create a Web of alter ego companies that permitted Wal-Mart to continue to do business with the principals and allowed the migrant hiring scheme to flourish despite repeated law enforcement actions," the complaint says.

The claims are based in part on records, unsealed this month by a federal judge in Arkansas, from a U.S. investigation of cleaning contractors hired by Wal-Mart.

The retailer settled the probe in March by agreeing to pay $11 million and to improve oversight of contractors.

"No company senior official had any direct knowledge that undocumented workers were working in our stores," Wal-Mart said in a statement.

The complaint claims that after a 1997 raid by federal agents on Wal-Mart stores in the St. Louis area, Wal-Mart vice president Leroy Schuetts told the owner of one contracting firm, Christopher Walters, to set up different front companies to supply illegal immigrant workers to clean stores.

Schuetts, 60, said the arrangement would permit Wal-Mart to fire any company caught using illegal labor and then hire illegal workers through one of the other companies, according to the complaint.

His superior at Wal-Mart knew of the arrangement, according to the complaint.

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Wal-Mart will pitch again to erect store in Vancouver

Jason Kirby
Financial Post
Tuesday, November 22, 2005                    
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VANCOUVER - With a new, business-friendly mayor set to take office in Vancouver, Wal-Mart Stores Inc. will revive its bid to erect a big-box store in the city at the same time as business leaders draw up a list of other issues they say new Mayor Sam Sullivan must urgently deal with.

"We're looking forward to reapplying," said Wal-Mart Canada spokesman Kevin Groh, who added the company plans to file its application next June.

Vancouver's city council rejected a bid last summer by Wal-Mart to build the store, despite the fact it met all development guidelines. Mr. Sullivan was one of three councillors to vote in favour.

On Saturday he was elected mayor in a tight race against fellow councilor Jim Green, who voted against the Wal-Mart proposal.

"It was well said by Sam Sullivan that Vancouver wanted a government that makes decisions by policy and not politics," said Mr. Groh. "Certainly, we feel the last application was decided by politics and not policy."

Business leaders across the city hailed Mr. Sullivan's victory, expressing the hope he will breed a more stable investment climate.

Mark Startup, president and chief executive of BC Retail, the provincial retail trade association, called for action to lower business taxes.

In Vancouver, the property tax rate for commercial buildings is six times higher than that paid by residential property owners. That ratio is the highest of any municipality in Greater Vancouver and has made it difficult for downtown businesses to compete. It has also exacerbated the hollowing out of Vancouver, with companies fleeing to surrounding regions.

"All the councillors are very aware of the problem," said Mr. Startup. "We're looking for some vision from this council that shows stability and common sense."

Meanwhile, John Winter, president and CEO of the British Columbia Chamber of Commerce, said the new council must also deal with Vancouver's congested roads and poor transportation systems.

"There's been a huge cost to the economy to have traffic idling," he said.

Mr. Sullivan, a paraplegic since a skiing accident in 1979, spent much of the race deflecting criticism over an odd episode from his past when he funded a prostitute's heroin habit.

Mr. Green -- a U.S. draft dodger who sued a transvestite for libel partway through his campaign -- had said Mr. Sullivan would make an ineffective mayor. He also accused him of planning to cancel a proposed development on the site of an old Woodward's department store that has sat empty in the drug-addled downtown east side for more than a decade.

Mr. Sullivan has pledged to follow through on the Woodward's project, which will include affordable housing alongside regular housing, as well as educational and office space and retail shops.

But Mr. Sullivan has vowed to alter plans for another development project supported by the former council. Under the original plans for Southeast False Creek, a former industrial area that will house the 2010 Olympic athlete's village, the city would dip into a development fund for $50-million to subsidize more affordable housing and social services at the site.

Mr. Sullivan has said he will limit affordable housing to 20% at the site, and make the rest market-priced housing in line with his plan to see development projects offer a financial return to the city.

Meanwhile, business community remains cautious. "This is a good day for Vancouver all around but I don't want to be too presumptuous," Mr. Winter said. "The new council must be judged by its actions, not by what they say."

© National Post 2005

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Wal-Mart's Upper-Crust Snobbery

By Rick Aristotle Munarriz
(TMFBreakerRick)
11/22/2005                        
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If one is to believe the best-seller sorting feature at Walmart.com, the most popular engagement ring Wal-Mart's (NYSE: WMT) namesake website is a 2-carat round solitaire diamond ring that will set your bended knee back to the tune of $5,488. If you have $7,642 burning a hole in your pocket, you can swap that for a new 60-inch plasma TV at Walmart.com.

What's the deal with Wal-Mart's website? Those who associate the chain with bargain-priced staples may be floored by the array of pricey sleigh beds and leather recliners that are available only through the company's online store.

But because a website can span the wired globe, it makes perfect sense for Wal-Mart to take some big-ticket chances in the electronic realm. That 2-carat engagement ring would likely collect cobwebs at a bricks-and-mortar store. Online, where every competitor is a single click away, Wal-Mart can afford to take chances if it can offer the same offline values to an online audience.

A $5,488 engagement ring at Wal-Mart may seem like a reach. Just consider this: Original Rule Breakers stock pick Blue Nile(Nasdaq: NILE) knows all about the proposal process -- it has sold well more than 50,000 engagement rings during its dot-com tenure. However, the high-end jeweler's average order is for a mere $1,300. So what's next, Wal-Mart? Segways? Jewel-encrusted brassieres?

Even though it's unlikely that Wal-Mart would take the same kind of chances in the bricks-and-mortar world, it probably wouldn't mind upgrading its discounting image. Target(NYSE: TGT) has been able to propel its "cheap chic" approach to attract a more upscale clientele than one would expect from the country's second-leading discount department store chain. Target claims that 43% of its shoppers have college degrees with a reasonably robust median household income of $55,000 a year. Think that Wal-Mart or Sears Holdings' (Nasdaq: SHLD) Kmart wouldn't want a piece of that action?

Giving it the old college try certainly couldn't hurt. The Internet has been conducive to big-ticket merchandise, after all. The largest category by sales volume at eBay(Nasdaq: EBAY) has been automobiles. Amazon.com(Nasdaq: AMZN) was one of the first Segway retailers, and if you're a Burning Man fan, Jeff Bezos' online empire will sell you a Badonkadonk land cruiser for $20,000. Yet those two Stock Advisor-recommended companies haven't lost the bargain hunters with their high-end offerings. Nor is Wal-Mart likely to lose its audience. It's not as if anyone is going to confuse Wal-Mart with Hammacher Schlemmer or Tiffany(NYSE: TIF) just because it stocks a few pricey items in its virtual storefront.

Going pricey is the right thing to do, even if it starts with a $5,488 investment in an eventual "I do."

Come back tomorrow, when Seth Jayson and John Reeves tackle both sides of the Wal-Mart story in this week's holiday-fueled edition of Dueling Fools.

Blue Nile has also been recommended by theMotley Fool Hidden Gemsnewsletter team.

Longtime Fool contributor Rick Munarriz has probably spent more at Wal-Mart's online store than at its offline empire in recent years. He does not own shares in any of the companies mentioned in this story. The Fool has a disclosure policy. He is also part of theRule Breakersnewsletter research team, seeking out tomorrow's ultimate growth stocks a day early.

Legal Information. ©1995-2005 The Motley Fool. All rights reserved.

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Wal-Mart Check-Out Errors Exceed US Guidelines - Studies

Dow Jones & Company, Inc.
November 21, 2005                      
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NEW YORK (AP)--Wal-Mart Stores Inc. (WMT) charged the wrong price to shoppers in California and the Midwest at a rate that exceeds those set by federal guidelines, according to two union-commissioned university studies released Monday.

Researchers said random purchases at 60 Wal-Mart stores in California found that the wrong price came up 8.3% of the time. At 78 stores in Illinois, Indiana and Michigan, check-out scanners rang up the wrong price 6.4% of the time. In both states, some prices rang up higher and some were lower.

The National Institute for Standards and Technology says that for every 100 items scanned, no more than two should have the wrong price. The NIST's last industrywide study, in 1998, found the rate at 3.35 per 100.

The recent studies were commissioned by the Union of Food and Commercial Workers, which has been unsuccessful in its attempts to organize Wal-Mart workers for years, and released by a UFCW-backed campaign group, Wake Up Wal-Mart. The research was conducted by the University of Illinois-Chicago Center for Urban Economic Development and the University of California-Berkeley.

"A majority of Wal-Mart stores tested in this evaluation of price accuracy demonstrated errors in pricing that exceeded federally accepted standards for large retail establishments," the California and Midwest studies concluded.

The researchers said the average cost of overcharges was more than that of undercharges.

Wal-Mart said it hadn't seen the studies and couldn't say if the research methods were valid.

"It is no surprise that the study, which is union-funded, is being released the week prior to our holiday sales period," Wal-Mart spokeswoman Sarah Clark said. The holiday season is a retailer's busiest time of year - and a bad reputation can hurt a retailer's bottom line.

"If something is not right, we will fix it. However we do not know at this point if the study is valid," Clark said.

The California study was finished in May 2005 and the Midwest study in September 2004, with purchases made over a number of weeks before those dates.

Analysts said the findings were surprising, especially since Wal-Mart has invested heavily for years in leading-edge software and hardware to keep close track of its inventory.

"It seems like a large number," said Don Gher, retail analyst at Coldstream Capital Management in Bellevue, Wash.

"Wal-Mart is widely renowned for having one of the leading IT systems in the industry," said Tom Rubel, who heads consultant Retail Forward in Columbus, Ohio.

Based on the studies, Wake Up Wal-Mart and the National Consumers League wrote to the nation's 50 state attorneys general asking them to take steps to enforce accurate price charging at Wal-Mart.

On the Net:

Union-backed site: www.wakeupwalmart.com Wal-Mart Stores Inc.: www.wal-martfacts.com

Copyright (c) 2005 Dow Jones & Company, Inc.

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Wal-Mart Check-Out Errors

Top Guidelines Two Studies Show Wal-Mart Charged Wrong Price to Shoppers at Rate That Exceeds U.S. Guidelines

By MARCUS KABEL
The Associated Press                   
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Wal-Mart Stores Inc. charged the wrong price to shoppers in California and the Midwest at a rate that exceeds those set by federal guidelines, according to two union-commissioned university studies released Monday.

Attorneys general in Illinois and California said the reports raised serious concerns. Connecticut Attorney General Richard Blumenthal, on a conference call held by the studies' backers, said his office would investigate what he called a "culture" of inaccuracy.

The two studies said random purchases at 60 Wal-Mart stores in California found that the wrong price came up 8.3 percent of the time. At 78 stores in Illinois, Indiana and Michigan, check-out scanners rang up the wrong price 6.4 percent of the time. In both states, some prices rang up higher and some were lower.

The National Institute for Standards and Technology says that for every 100 items scanned, no more than two should have the wrong price. The NIST's last industrywide study, in 1998, found the rate at 3.35 per 100.

The recent studies were commissioned by the United Food and Commercial Workers, which has been unsuccessful in its attempts to organize Wal-Mart workers for years, and released by a UFCW-backed campaign group, Wake Up Wal-Mart. The research was conducted by the University of Illinois-Chicago Center for Urban Economic Development and the University of California-Berkeley.

"A majority of Wal-Mart stores tested in this evaluation of price accuracy demonstrated errors in pricing that exceeded federally accepted standards for large retail establishments," the California and Midwest studies concluded.

The researchers said the average cost of overcharges was more than that of undercharges.

Wal-Mart said its last internal audit found an error rate of 2.4% less than the 1998 national study by NIST and slammed the union studies as incomplete and outdated. The company noted that the studies' authors say their results are specific to those states and cannot be generalized for the entire country.

"This desperate attack has more holes than a pasta strainer. This is another paid attack by union critics," Wal-Mart spokeswoman Sarah Clark said.

Clark had said earlier Monday that it was no surprise the study was released just ahead of the holiday shopping season a retailers' busiest time of year.

Analysts said the study's findings were surprising, especially since Wal-Mart has invested heavily for years in leading-edge software and hardware to keep close track of its inventory.

"It seems like a large number," said Don Gher, retail analyst at Coldstream Capital Management in Bellevue, Wash.

"Wal-Mart is widely renowned for having one of the leading IT systems in the industry," said Tom Rubel, who heads consultant Retail Forward in Columbus, Ohio.

Based on the studies, Wake Up Wal-Mart and the National Consumers League wrote to the nation's 50 state attorneys general asking them to take steps to enforce accurate price charging at Wal-Mart.

California Attorney General Bill Lockyer and Illinois Attorney General Lisa Madigan said they are taking the issue seriously and will review the union studies to see whether to open an investigation.

"These are very serious concerns that are raised. ... No shopper, at Wal-Mart or any other retailer, should have to go through a crap shoot at the checkout line," Lockyer spokesman Tom Dresslar said. Madigan, in a statement released by Wake Up Wal-Mart, said she was very concerned by the report.

Connecticut Attorney General Richard Blumenthal said he had ordered an investigation even though his state was not included in the studies, saying the results showed a pattern of mischarging that could affect his state's consumers.

"We're involved because these studies show a pattern and even a practice in fact a culture of inaccuracy in charging," Blumenthal said in a conference call with Wake Up Wal-Mart. He said potential sanctions could range from fines of $5,000 per incident of mischarging to court orders requiring Wal-Mart to take steps to fix the problem.

Wake Up Wal-Mart also said its volunteers would be outside Wal-Mart stores in 36 states the day after Thanksgiving to distribute more than 1 million fliers warning shoppers to check their receipts.

The California study was finished in May 2005 and the Midwest study in September 2004, with purchases made over a number of weeks before those dates. The researchers said they used NIST-developed guidelines to pick random items in nine departments, including home fashions, housewares, groceries and sales racks.

Accounting for the union-backed studies' margins of error, 81 percent to 92 percent of the California stores had more than two errors were 100 items scanned and between 75 percent and 94 percent of the Midwest stores had more than two errors per 100 items scanned.

There were more overcharges in California but more undercharges in the Midwest.

At the time of the studies, there were 124 Wal-Mart stores in California and 256 in Illinois, Michigan and Indiana, excluding Sam's Clubs and Neighborhood Markets.

Wal-Mart shares rose 12 cents to close at $49.62 in trading on the New York Stock Exchange.

Copyright © 2005 ABC News Internet Ventures

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Wal-Mart janitors' lawsuit refiled with conspiracy complaint

By MARCUS KABEL
Associated Press 
November 21, 2005                    
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Lawyers seeking class-action status for illegal immigrants who worked as Wal-Mart janitors amended their lawsuit Monday to include newly released information from a federal probe that, the lawyers say, shows Wal-Mart conspired with contractors to use cheap undocumented labor.

The lawsuit seeks overtime pay and other damages from Arkansas-based Wal-Mart Stores Inc. A federal judge in New Jersey last month allowed the lawsuit to proceed but dismissed an allegation that the world's largest retailer violated federal racketeering laws.

The amended complaint filed in U.S. District Court in Newark, N.J., seeks to reinstate the conspiracy charge by using information from a 2003 affidavit filed by the Bureau of Immigration and Customs Enforcement that was unsealed this month at the request of New York attorney James L. Linsey, who represents more than 200 former janitors in the civil lawsuit.

In the affidavit, investigators said testimony and taped conversations from 2003 showed two executives at Wal-Mart headquarters knew that contractors and subcontractors cleaning its stores in several states employed illegal immigrants from eastern Europe and elsewhere.

The amended lawsuit alleges the affidavit and additional information from a former contractor show that Wal-Mart executives conspired with several contractors to hire illegal immigrants who were paid $1,500 a month or less to clean Wal-Mart stores seven days a week _ with no overtime or benefits.

Wal-Mart did not immediately reply to requests for comment. Wal-Mart previously said there was no incriminating evidence in the newly released affidavit and said no company senior official had any direct knowledge that undocumented workers were working in its stores.

Last May, Wal-Mart agreed to pay an $11 million civil fine to end a federal probe into the use of illegal immigrants at stores in 21 states, including New Jersey.

Copyright 2005 Newsday Inc.

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Wal-Mart to match competitors' prices on Friday

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NEW YORK (Reuters) — Wal-Mart Stores (WMT) said Monday that as part of its "Black Friday" promotions, its stores will match any price featured in a local competitor's print advertisement if it has the identical product in stock. A spokeswoman for Wal-Mart said it is the first time the retailer is offering the promotion on Black Friday, the traditional day-after-Thanksgiving start of the holiday shopping season.

"It's all part of our strategy of ... taking a much more aggressive approach to the holidays on all levels," said Wal-Mart spokeswoman Gail Lavielle.

Wal-Mart, the world's biggest retailer, has set the stage for a fiercely competitive end-of-the-year shopping season, launching its holiday advertising Nov. 1, the earliest in company history.

The company is also offering special online deals starting on Monday and continuing through Friday.

Copyright 2005 Reuters Limited.

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Columnists: McDonald's and Wal-Mart - Hard facts please

Roger Cowe
20 Nov 05                
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When it comes to demonstrating real corporate responsibility progress, it is the numbers that count, argues Roger Cowe Closing the Business for Social Responsibility (BSR) conference at the beginning of November, the McDonald's CEO Jim Skinner talked about challenging the assumptions people make about companies like his.

He warned against social responsibility becoming political and bureaucratic, and about: "reports, conversation and presentation".

In classic consumer industry fashion, his claims were accompanied by three videos - about the value of a career start at McDonald's, the importance of exercise, and an attack on the movie Super Size Me.

He is not alone in asserting his company's innocence in the face of sustained assaults on its reputation. Nestle has famously joined the fairtrade enemy (as reported by Mallen Baker in his Ethical Corporation column). And Wal-Mart appears to have experienced the kind of startling Damascene conversion on broad corporate responsibility that GE has gone through on environmental technology.

Wal-Mart CEO Lee Scott recently told employees: "We are going to have the courage to lead and do what is right." He was referring to the environment, but also product sourcing, healthcare and wages - all areas where the supermarket giant has been repeatedly attacked.

As well as calling for an increase in the US minimum wage, he introduced the startlingly green concept of EDLC - Every Day Low Carbon. This is the carbon equivalent of the Every Day Low Price approach which has driven the store group's growth, relegating retailers' traditional tactic of occasional special offers. It will help achieve Scott's ambition "to sell products that sustain our resources and environment".

Cynical reception

It is a pretty safe bet than most activists, many investors, employees and customers will dismiss such promises as "greenwash" - empty public relations which will change little on the ground.

It will take more than a few well-crafted speeches to transform these companies into corporate responsibility heroes. (Skinner's BSR speech was greeted with rapturous applause, but people do tend to get a bit carried away at such events.)

Such speeches are by no means a waste of time. Indeed, they are absolutely necessary. They need to be repeated in different forums many times to get the message across.

But critics will ask three important questions.

Firstly, is the message that the company promises to change, or that it believes it was right all along and the critics are misguided? McDonald's, like NestlŽ and others such as ExxonMobil, seems to suggest the latter. Skinner talked about "challenging assumptions" and "changing the framework of the debate".

Secondly, what are you going to do that is different? The conversation cannot get to this question, of course, unless the company is promising to change. But vague promises to change, even if well intentioned, need to be translated into specific objectives.

Scott went further than many CEOs in making several clear commitments (though not all with timescales attached), including:

- zero waste; - increasing distribution fleet efficiency by 25% over the next three years and doubling it within ten years; - eliminating 30% of the energy used by stores; - reducing greenhouse gas emissions from stores by 20% over the next seven years; - reducing solid waste from US stores by 25% in the next three years; and - replacing PVC packaging for private brands within the next two years.

The third question these companies have to answer is: where is the evidence? Scepticism remains justified until there is solid evidence of improved performance. For example, I could not find any figures about Wal-Mart's current greenhouse gas emissions on its website. The Carbon Disclosure Project says the supermarket giant has so far declined to participate in its efforts to shed light on greenhouse gas performance.

Get the message right

This is where good communications come in. Even if the company is achieving ambitious targets, people's perceptions of the company as it moves from zero to hero will only begin to change if it publishes a credible record of improvement.

Skinner's rousing speech is let down in this respect by his company's report (which was also available at the conference).

Take the issue of "McJobs" - the allegation he framed as "McDonald's offers low-paying, dead-end jobs". Since this is such a big issue, it seems curious that wage rates appear in the company's corporate responsibility report under "Other issues", and no figures are quoted. Equally, there appear to be no figures supporting Skinner's argument that starting at McDonald's is a great first step on the career ladder.

Similarly, the most prominent figures in the "Balanced Lifestyles" section seem to undermine his comments about helping to increase milk consumption, showing that replacing Sprite with milk in a chicken nugget meal significantly increases fat and cholesterol and provides more protein than a six-year-old needs in a day.

But this is only McDonald's second such report, and it takes time to move beyond principles and policies to focus on performance. Next year, perhaps, we will see the company providing figures to back up his BSR claims, in line with his very apt comment that "the more you open the doors of your business, the more you gain credibility and trust".

Roger Cowe is director of Context, a CSR consultancy. rogerc@econtext.co.uk www.econtext.co.uk

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Wal-Mart Arrests Are a Warning, Feds Say

By MICHAEL RUBINKAM
Associated Press 
November 19, 2005             
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SCRANTON, Pa. -- Federal officials say the arrest of 125 workers at a construction site for a new Wal-Mart distribution center should serve as a warning to employers who hire illegal immigrants.

All 125 workers arrested in the raid will be deported, Immigrations and Customs Enforcement officials said Friday. The workers from Mexico and Central America were detained Thursday at the site outside Pottsville, about 80 miles northwest of Philadelphia.

"Employers who knowingly hire illegal aliens, and those who utilize false documents to gain employment, face significant criminal and administrative charges," said John Kelleghan, acting special agent-in-charge for the immigration agency in Pennsylvania.

Some of the 125 workers, who are from Mexico, Costa Rica, El Salvador, Guatemala and Honduras, used fake documents to obtain employment with subcontractors, officials said. The arrests came after search warrants were executed for six companies at the site.

The Pennsylvania job site remains shut down, Wal-Mart spokesman Marty Heires said Friday. He did not know when construction would resume.

Agents obtained the search warrants after learning that 10 workers employed by Destin Drywall & Paint were using Social Security numbers that did not match their names.

Another three used Social Security numbers that were never issued by the government, according to an affidavit unsealed Friday at U.S. District Court in Scranton.

Houston-based Destin has worked on Wal-Mart projects around the country, said office manager Cindy Wyman. She said the company verifies that employees are permitted to work in the United States.

"As far as I know, their Social Security numbers are good," Wyman said of the Pennsylvania workers.

A Wal-Mart spokesman has said the detained workers were not employed by Wal-Mart but by the subcontractors. Wal-Mart's contracts with the companies require that they follow local, state and federal employment laws, the company said.

Last month, Wal-Mart shut down work on seven stores under construction in North Dakota to check for illegal aliens after two illegal immigrants working on Wal-Mart projects in Bismarck were charged with molesting two 13-year-old girls. Charges against one of the suspects were dropped after authorities found out he was a juvenile.

In 2003, a raid of 60 Wal-Mart stores in 21 states led to the arrests of 245 illegal workers. An affidavit claimed a pair of senior Wal-Mart executives knew cleaning contractors were hiring illegal immigrants. The retailer agreed to pay $11 million in March to settle the case but denied senior executives knew of the hirings. Copyright 2005 Newsday Inc.

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100 Arrested at Wal-Mart Construction Site

By MICHAEL RUBINKAM
Associated Press
November 18, 2005                          
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ALLENTOWN, Pa. - Federal immigration agents detained more than 100 workers at a construction site for a new Wal-Mart distribution center, authorities said.

The workers, who Wal-Mart said were employed by a subcontractor and not by the retailing giant, were detained Thursday on suspected immigration violations, said Department of Homeland Security spokesman Marc Raimondi. They were being taken to Immigration and Customs Enforcement detention centers for processing, he said.

More than 50 federal immigration agents, joined by the U.S. Labor Department, Social Security Administration and state police, raided the construction site near Pottsville, about 80 miles northwest of Philadelphia.

Wal-Mart spokesman Marty Heires said the company would cooperate fully with federal authorities.

"We have written contracts with these subcontractors requiring that they follow all applicable local, state and federal employment laws," he said in a statement.

At least 120 illegal immigrants, most of them from Mexico, were detained, Schuylkill County Sheriff Frank McAndrew said. He said he began investigating the site and contacted federal officials after getting complaints from local tradespeople.

"You've got a situation here where illegal immigrants are coming into Schuylkill County and taking (local union workers') jobs for eight bucks an hour. They are working for poverty wages, and creating unemployment because our skilled tradesmen are out of work," McAndrew said.

In 2003, a raid of 60 Wal-Mart stores in 21 states led to the arrests of 245 illegal workers. An affidavit claimed a pair of senior Wal-Mart executives knew cleaning contractors were hiring illegal immigrants. The retailer agreed to pay $11 million in March to settle the case but denied senior executives knew of the hirings.

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Pro-Growth City Denies Super Walmart California

Posted by: Abhijeet Chavan
Thanks to: Marc Bierdzinski
17 November, 2005                  
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The City of Santa Maria denies a general plan amendment/rezone to allow a Super Walmart store on the outskirts of town. The decision was based on protecting the downtown retail area and not rezoning dwindling industrially zoned land.

The City of Santa Maria, considered by some to be a pro-growth city, has denied a general plan amendment and zone change that would have allowed a Super Walmart store to come to town (and close their existing store in town). The request was to change 55 acres of industrially zoned land to commercial at the outskirts of the City. In rendering their unanimous decision, "all of the council members alluded to the city's long-anticipated Downtown Specific Plan, which outlines revitalization for that area and notes that in order to pump life into downtown, subsequent development on the edges of town must be limited. In the end, council members said they would not debate the merits of Wal-Mart, but instead the decision came down to protecting current Santa Maria businesses, the city's stock of available industrial land and the city's work to revitalize downtown."

Source: Santa Maria Times, Nov 16, 2005

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Wal-mart fails to ban work romance

iafrica
Wed, 16 Nov 2005                   
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Wal-Mart has lost a court appeal to try to legally ban its employees in Germany from having office romances after a local tribunal ruled that the company's "ethics rules" were in breach of German law.

According to Ananova.com, Wal-mart tried to introduce a 28-page ethical code that forbids "lustful glances and ambiguous jokes" as well as "sexually meaningful communication of any type".

And it said: "You may not go out with or have a relationship with someone who could influence your employment situation or whose employment situation you could influence."

Wal-Mart also required its 10 500 German employees to report violations of the code, including alcohol and drug use, to a telephone hotline — a move that was also banned by the courts.

According to the tribunal, rules that govern personal relationships, though common in the US, are incompatible with German labour laws and agreement with the regional labour council would be necessary to implement them.

Wal-Mart management defended the disputed passages, saying they were only trying to protect their employees from sexual harassment.

Wal-Mart still has one more chance to appeal the verdict at the Federal Labour Court in Erfurt.

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Wal-Mart Girds for Battle on Md. Bill

By John Wagner               [back to top]

Preparing for a showdown with organized labor in the Maryland legislature, Wal-Mart has deployed at least a dozen Annapolis lobbyists and is making strong overtures to black lawmakers, including a $10,000 donation to help them pay for a recent conference.

The retail giant hopes to derail legislation that would effectively force the company to boost spending on employee health benefits.

"They've hired the largest cadre of lobbyists in recent history in Annapolis to try to influence this legislation," said House Speaker Michael E. Busch (D-Anne Arundel). "It really comes down to whether the legislature is going to succumb to the money and the special interests."

For Wal-Mart, the battle in Maryland represents an opportunity not only to stamp out legislation the retailer considers "really just an attack on the company" but also to curb a trend toward state involvement in its business. After years of fighting -- and often winning -- at the local level, Wal-Mart now faces battles in several state legislatures following Maryland's lead.

Wal-Mart spokesman Nate Hurst said that the donation to the Legislative Black Caucus of Maryland was part of the company's continuing community outreach and that the lobbying effort was designed to inform lawmakers about the bill.

"There are several legislators out there who have requested that we continue to educate them," Hurst said.

The General Assembly passed the landmark bill in April, but it was vetoed by Gov. Robert L. Ehrlich Jr. (R), who called the measure an unwarranted intrusion by government. Lawmakers will seek to override his veto in January.

Wal-Mart is the only known business that would be affected by the bill, which would require companies with more than 10,000 workers to spend at least 8 percent of their payrolls on health benefits or contribute to the state's health insurance program for the poor.

The clash has coincided with a national public relations push by Wal-Mart, which has tapped former presidential advisers to counter its reputation as a low-wage employer with benefits so stingy that some workers rely on public assistance. The company recently announced an expansion of health insurance options for employees, more than 15,000 of whom work in Maryland.

The stakes in coming weeks are particularly high because support for the bill in April was very close in both chambers to the three-fifths majority needed to override the governor's veto. The Senate was one vote above that threshold, and the House was one short of it. Several delegates who back the bill missed the vote.

State Ethics Commission records showed Wal-Mart retaining 12 lobbyists as of last month, nine of whom registered in October. Among the new recruits were Joseph A. Schwartz III and J. William Pitcher, both among the 10 highest-paid lobbyists in Annapolis last year, receiving more than $500,000 each from clients.

Other lobbyists registered to represent the company included Pamela Metz Kasemeyer, the wife of a state senator who voted for the bill; a father-and-son team, George N. Manis and Nicholas G. Manis, well known at the State House; and Frank D. Boston III, an African American who represented Wal-Mart during the past session.

The legislation is strongly backed by union officials and health care advocates, who are gearing up lobbying operations that they say will rely more on grass-roots activists than hired guns.

The Service Employees International Union chapter serving Maryland and the District gave $7,500 to support the same late October black caucus event that Wal-Mart sponsored, chapter Executive Director Jamie Kendrick said. Kendrick said the union, whose membership is 54 percent black, routinely contributes to the caucus.

As part of Wal-Mart's outreach, company representatives plan to appear tomorrow at a retreat of the 42-member black caucus. Among those likely to speak, a company representative said, is Fenimore Fisher, Wal-Mart's national director of diversity relations, who is black.

Hurst said the meeting is an opportunity for lawmakers to ask any questions they want about the company, which he said is the largest private-sector employer of blacks in the country. But leaders of the caucus said they expect the focus to be the legislation that became known as "the Wal-Mart bill" last session.

Del. Joanne C. Benson (D-Prince George's) said it will be hard to get caucus members, who voted overwhelmingly for the bill in April, to switch their votes. "More than likely, it will not happen," she said. "We are adamant that anybody who comes into Maryland ensure that people who work for them get adequate health care."

That has not deterred the company from making friendly gestures. Wal-Mart promised a $10,000 donation to help underwrite the legislative conference late last month, according to company officials and Del. Rudolph C. Cane (D-Wicomico), the caucus chairman, who was involved in discussions with a Wal-Mart representative.

"I explained to the gentleman he's not buying votes," Cane said. "I made it perfectly clear."

Several other corporations and Annapolis lobbying firms were financial sponsors of the event. Still, Wal-Mart's donation and tomorrow's meeting have made some lawmakers uncomfortable.

"I don't think the caucus needs to create the perception that we're patronizing any one company affected by a bill that we've already cast votes on," said Del. Obie Patterson (D-Prince George's).

Wal-Mart representatives said they are not targeting the caucus any more than other legislators who will give them an audience. But company critics said the tactic is part of a national pattern, citing recent efforts by Wal-Mart to court members of the Congressional Black Caucus in Washington.

"Wal-Mart's become increasingly aggressive at trying to peddle their influence, and I don't think their money in Maryland is going to buy them the love they want," said Tracy Sefl, a spokeswoman for Wal-Mart Watch, a national group that monitors the company.

Advocates of the bill said they feel buoyed by a recently leaked internal Wal-Mart document in which a company executive said that "our critics are correct in some of their observations. Specifically, our coverage is expensive for low-income families, and Wal-Mart has a significant percentage of associates and their children on public assistance."

The retailer, which held a fundraiser for Ehrlich last year, has said its expansion of health care options for employees includes a more affordable "value plan" in some markets. It is not clear whether that option and other changes would affect Wal-Mart's status under the Maryland legislation.

The vote in the spring fell largely along party lines, although some Democrats opposed the measure because they saw it as anti-business. Senate President Thomas V. Mike Miller Jr. (D-Calvert) said he does not expect additional defections.

"Any member would be very hard-pressed to change their vote based on a fat-cat lobbyist asking them to side with a big corporation," he said.

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Wal-Mart Memo Shows Huge Expansion in U.S.

By MARCUS KABEL,
Associated Press
November 15, 2005                      
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Wal-Mart Stores Inc. plans to open or expand 484 stores across the United States next year, over 100 more than previously disclosed, according to an internal document obtained by a leading Wal-Mart opponent and released to The Associated Press on Monday.

Wal-Mart Watch, a Washington, D.C.-based group backed by unions and environmental and other interests, said it will use the detailed list to alert activists in those communities listed in the document to help them rally against projects in their towns. The group said it received the document from Sprawl Busters, a group opposed to unchecked suburban development.

Wal-Mart confirmed that the document belonged to them.

"This report is simply a listing of all stores we expect to open over the next 12 to 14 months, and many are already under construction. Since the unions oppose us wherever we locate our stores, this new stolen document doesn't seem to provide them any advantage," Wal-Mart spokesman Marty Heires said.

Wal-Mart Watch said the list provided key details that would make it easier to organize local resistance because it names the specific towns and gives the size of expansion plans there.

"This internal document reveals where, when, and how Wal-Mart will bully its way across the country to open hundreds of new stores. With this in our hands, our committed supporters are now all the more ready to fight back," Wal-Mart Watch Executive Director Andrew Grossman said in a statement.

Burt Flickinger, managing director of consulting firm Strategic Marketing, said the list's publication could hurt Wal-Mart by giving advanced notice to opposition groups and local and state government officials who might be skeptical of letting Wal-Mart in.

"It presents a challenge to Wal-Mart, especially in key battleground states like California," Flickinger said.

The 11-page list provides details that Wal-Mart has not made public about what type and size of store it plans and by what date, as well as for which communities. The world's largest retailer operates four kinds of stores in the U.S. — Supercenters, which include a full grocery department, Discount Stores without the grocery component, smaller Neighborhood Markets that are mainly grocery, and Sam's Clubs membership stores.

Wal-Mart in October listed its expansion plans in general terms, without mentioning states or towns. At that time, it said it expected to open 335 to 370 new stores, including 180 expansion projects, either upgrading a Discount Store to a Supercenter or expanding the size of a Sam's Club.

It is the latest internal document obtained by Wal-Mart critics and may add to pressure on the Bentonville, Ark.-based company as it attempts to maintain a rapid growth rate in the face of criticism from organized opponents who claim it treats workers badly and hurts local economies.

Last month, Wal-Mart Watch released another internal Wal-Mart document that detailed the company's plans to seek cost savings by cutting health care and retirement benefits, including proposals to make cashiers collect shopping carts to attract more physically fit employees and discourage unhealthy applicants.

Shares of Wal-Mart rose 30 cents to close at $49.30 Monday on the New York Stock Exchange.

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Wal-Mart sued over accused shoplifter's death

By ROBERT CROWE
Houston Chronicle
Nov. 15, 2005, 2:02PM
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The family of an accused shoplifter who died after struggling with Wal-Mart employees filed a lawsuit today against the retail giant.

Stacy Clay Driver's father and widow are seeking unspecified damages for his Aug. 7 death at the Atascocita Wal-Mart at 6626 East FM 1960. The Harris County Medical Examiner's Office recently ruled his death homicide

"This family was grievously harmed," said Jim Lindeman, the lawyer for Driver's family.

Wal-Mart spokesman Marty Heires declined to discuss the details of the suit.

"Because this likely will be presented to a grand jury, I think any further comment now is inappropriate," he said.

Loss-prevention employees told police that Driver tried to steal $94 worth of merchandise by using a receipt sticker to get store credit from items like diapers and a BB gun, which he had not purchased.

After he was confronted by employees, Driver ran into the parking lot, where a loss-prevention employee chased him. According to the suit, the employee wrestled Driver to the ground. Other Wal-Mart employees assisted the loss-prevention associate in subduing Driver as he struggled to get up. Witnesses said the employees used a choke hold in addition to pinning Driver, who was shirtless, to the ground with handcuffs behind his back, the suit also states.

During the struggle, he begged the Wal-Mart employees to get off him, saying he could not breathe.

On Nov. 4, the medical examiner ruled his death was caused primarily by asphyxia due to neck and chest compression, while a secondary cause was hyperthermia with methamphetamine toxicity.

Before his death, Driver, 31, and his wife, Wendy, 27 and son, Ashton, 5 months, lived in a garage apartment behind his father's house in Cleveland, about 45 miles north of Houston. He was a master carpenter who worked for his father's business.

robert.crowe@chron.com

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Fight intensifies over Wal-Mart Good or evil? Dueling movies make their cases

By JESSICA HOLZER
Houston Chronicle Washington Bureau
Nov. 15, 2005, 3:11AM                              
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WASHINGTON - To its fans, Wal-Mart is a retailing revolution that has trimmed household budgets, leaving shoppers with more cash in their pockets.

Yet its critics, which include mom and pop retailers and labor unions, decry the retail giant as nothing less than an evil empire that ruthlessly drives out rivals by depriving its workers of decent pay and benefits.

This week this fiery debate is being framed by two dueling documentaries — one that fiercely attacks the retailer as bad for America and another that heaps praise on it.

Today, Sen. Edward Kennedy, D-Mass., will stand side by side to denounce the company with Robert Greenwald, the director of Wal-Mart: The High Cost of Low Prices, and Red Ersy, a Missouri grocer who says Wal-Mart put his four family-run stores out of business.

On Monday, Why Wal-Mart Works and Why That Makes Some People Crazy, a film doggedly defending Wal-Mart, by brothers Ron and Robert Galloway, made its debut near the company's Bentonville, Ark., headquarters.

The release of both films on DVD in stores across the country this week are timed to coincide with High Expectations Week, a campaign organized by Wal-Mart Watch, a leading critic based in Washington.

Making an example "If we make an example out of Wal-Mart, other businesses will notice and be less inclined to emulate them," said Nu Wexler, the group's press secretary.

In conjunction with the effort, Greenwald, with the help of activist groups such as Wakeup Wal-Mart, have also planned thousands of screenings in churches, small businesses, community organizations and homes.

Meanwhile, the company has brushed off the The High Cost of Low Prices as a hit job.

"The Greenwald propaganda video is exactly that," said Bob McAdam, vice president of corporate affairs. "It is intended to excite a narrow group of people who don't like Wal-Mart."

Testimony of struggles The High Cost of Low Prices capitalizes on the deluge of negative publicity battering Wal-Mart that blames the company for everything from messing up traffic patterns to bloating the trade deficit with China.

It relies heavily on the testimony of disgruntled former Wal-Mart employees who were denied promotions or struggled to make ends meet while on the company's payroll.

By contrast, in Why Wal-Mart Works, the Galloway brothers make use of the insights of bow-tied academics and the praise of contented store workers in order to respond to the chief criticisms of the company.

In one instance, a teary-eyed woman, who describes herself as a former drug user, credits Wal-Mart for giving her a second chance at life.

"These are tears of gratitude," she says.

Ron Galloway, a former stockbroker, got the idea for the film when, while doing research for a book on Wal-Mart's stellar logistics management, he was astounded by the fierce criticism of the company.

"Wal-Mart's a success, and people are just trying to drag it down," he said.

He and his brother, Robert, an independent filmmaker, pooled $85,000 of their own cash to make the film. Although Wal-Mart has been helping to promote the film, it has not, so far, stocked it in its stores.

Fighting back Wal-Mart has stepped up its efforts to fend off its critics in light of the Greenwald film. It recently launched a war room at its headquarters, staffed by political spin masters Michael Deaver, who worked for Ronald Reagan, and Leslie Dach, a media consultant for Bill Clinton.

The retailer also commissioned a study by Global Insight, a respected economic research firm, that found that Wal-Mart saves the average American household more than $2,300 annually and created 210,000 jobs last year.

But the public relations push suffered a setback last month when a memo was leaked to the New York Times. In it, the executive vice president in charge of benefits urged the company's board to arrange for "all jobs to include some physical activity." This would help to defray health care costs by discouraging unhealthy job applicants, she argued.

Critics accuse Wal-Mart of trying to lighten its costs by offering health plans that many workers can't afford. Of the 1.2 million people Wal-Mart employs in the U.S., less than half are covered by the company's health insurance plans.

"The only reason that Wal-Mart can undercut its rivals is that it can shift that responsibility onto the government," said Christian Waller, an economist with the Center for American Progress, a liberal think tank.

But Wal-Mart's defenders point out that nobody is forced to work at Wal-Mart and that the company pays well above the minimum wage.

Most important, they insist that Wal-Mart's business model serves the poor the most.

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Wal-Mart Official Responds to USA Today Editorial, Opinion Piece on Company Health Benefits

medicalnewstoday.com
15 Nov 2005
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Susan Chambers, Wal-Mart executive vice president of benefits, in a letter to the editor of USA Today responds to a Nov. 7 editorial and opinion piece on company health benefits (Chambers, USA Today, 11/11).

The editorial described a new lower-cost health plan that Wal-Mart will offer to employees as a "bare-bones policy" that is "better than nothing." In the opinion piece, Paul Blank, campaign director of Wake Up Wal-Mart, wrote that the plan has "extremely high deductibles and strict eligibility requirements" and is "unlikely to insure one additional worker" (Kaiser Daily Health Policy Report, 11/7).

Chambers writes that the editorial and opinion piece "offered no solutions to the health care challenges facing every American business." According to Chambers, "Wal-Mart's health benefits are as good or better" than those offered by most other retailers. Chambers concludes, "We are providing solutions, and we look forward to working with genuine partners -- not just one-sided critics -- to generate even more remedies in the future for everyone" (USA Today, 11/11).

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Wal-Mart Memo Shows Expansion in U.S.

By MARCUS KABEL
Associated Press Writer                     
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Wal-Mart Stores Inc. plans to open or expand 484 stores across the United States next year, over 100 more than previously disclosed, according to an internal document obtained by a leading Wal-Mart opponent and released to The Associated Press on Monday.

Wal-Mart Watch, a Washington, D.C.-based group backed by unions and environmental and other interests, said it will use the detailed list to alert activists in those communities listed in the document to help them rally against projects in their towns. The group said it received the document from Sprawl Busters, a group opposed to unchecked suburban development.

Wal-Mart confirmed that the document belonged to them.

"This report is simply a listing of all stores we expect to open over the next 12 to 14 months, and many are already under construction. Since the unions oppose us wherever we locate our stores, this new stolen document doesn't seem to provide them any advantage," Wal-Mart spokesman Marty Heires said.

Wal-Mart Watch said the list provided key details that would make it easier to organize local resistance because it names the specific towns and gives the size of expansion plans there.

"This internal document reveals where, when, and how Wal-Mart will bully its way across the country to open hundreds of new stores. With this in our hands, our committed supporters are now all the more ready to fight back," Wal-Mart Watch Executive Director Andrew Grossman said in a statement.

Burt Flickinger, managing director of consulting firm Strategic Marketing, said the list's publication could hurt Wal-Mart by giving advanced notice to opposition groups and local and state government officials who might be skeptical of letting Wal-Mart in.

"It presents a challenge to Wal-Mart, especially in key battleground states like California," Flickinger said.

The 11-page list provides details that Wal-Mart has not made public about what type and size of store it plans and by what date, as well as for which communities. The world's largest retailer operates four kinds of stores in the U.S. -- Supercenters, which include a full grocery department, Discount Stores without the grocery component, smaller Neighborhood Markets that are mainly grocery, and Sam's Clubs membership stores.

Wal-Mart in October listed its expansion plans in general terms, without mentioning states or towns. At that time, it said it expected to open 335 to 370 new stores, including 180 expansion projects, either upgrading a Discount Store to a Supercenter or expanding the size of a Sam's Club.

It is the latest internal document obtained by Wal-Mart critics and may add to pressure on the Bentonville, Ark.-based company as it attempts to maintain a rapid growth rate in the face of criticism from organized opponents who claim it treats workers badly and hurts local economies.

Last month, Wal-Mart Watch released another internal Wal-Mart document that detailed the company's plans to seek cost savings by cutting health care and retirement benefits, including proposals to make cashiers collect shopping carts to attract more physically fit employees and discourage unhealthy applicants.

Shares of Wal-Mart rose 30 cents to close at $49.30 Monday on the New York Stock Exchange.

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Target Wal-Mart

Robert L. Borosage and Troy Peters
November 14, 2005
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Robert L. Borosage is co-director and Troy Peters is policy fellow at the Campaign For America's Future.

Wal-Mart must feel like a piñata these days—everyone’s lining up to take a shot at it. This week, 7,000 house parties are being held to screen Robert Greenwald’s blockbuster documentary, “Wal-Mart: The High Cost of Low Price.” The inspector general of the Labor Department censured its sweetheart deal that promised to give Wal-Mart notice before any future investigation of illegal child labor practices. Legislators from the L.A. City Council to the U.S. Senate are introducing legislation to curb the giant’s public subsidies. Communities are rejecting Wal-Mart’s demands for subsidies and zoning exemptions. Right-wing groups are furious Wal-Mart is taking the Christ out of the Christmas holidays. It’s gotten so bad that Wal-Mart has created a war room staffed by veterans of political campaigns to wage the PR battle.

Why Wal-Mart? For one thing, it’s hard to avoid. It is the world’s largest private corporation, employing more than 1.6 million “associates” worldwide—more people than Ford, GM, GE and IBM combined. The company serves 138 million customers per week worldwide and has outstripped any competitor. In 2004, it pocketed $10.3 billion in profits, on sales of $285 billion, more business than Target, Sears, Kmart, J.C. Penney, Safeway and Kroger combined. There are upward of 3,800 Wal-Mart stores in the United States today, in addition to nearly 1,600 locations in countries from Mexico to China. Wal-Mart alone is China’s eighth-largest trading partner. It accounts for over 10 percent of our annual trade deficit with China, with over 70 percent of Wal-Mart products made in China.

If Wal-Mart’s size is a problem, its policies are a threat. Wal-Mart is the model “low-road” corporation in the global economy. Its efficiency is celebrated, but its exploitation is caustic. The average pay of a Wal-Mart employee is $8.23 per hour, or an average yearly income of $14,000—not enough to lift a family out of poverty. Wal-Mart is infamous for requiring workers to work overtime off the books. It’s been cited for locking workers in plants overnight. The company has been hauled into court for discriminating against female employees. And it is viciously, rabidly anti-union, crushing any attempt by its workers to organize to gain a fair share of the profits they help generate.

But Wal-Mart doesn’t merely follow the low road; it drives its suppliers and its competitors into the same race. When Wal-Mart comes to town, it purposefully wipes out small mom-and-pop stores, leaving small towns looking like they were hit by a neutron bomb—buildings intact, but people gone. Wal-Mart also undercuts big competitors that have unions and pay decent wages and benefits. They must slash wages, cut back on benefits or hang it up.

Given its size in the United States, Wal-Mart is a major force in driving wages down and forcing cutbacks in benefits. It is a central reason why we have an economy in which CEO salaries are up, stocks are up, but wages are down.

In China, Wal-Mart pushes its suppliers to lower their costs, generating sweatshops in which young workers—primarily women—are forced to work grotesque hours at subsistence wages. According to The Washington Post , Wal-Mart even pressures its suppliers to pay less than the Chinese minimum wage.

Wal-Mart also exploits taxpayers, for it is what Ronald Reagan would denounce as the leading corporate welfare queen. It’s estimated that Wal-Mart’s government subsidies total a whopping $2.7 billion, or $2,100 per employee. An internal memo to the board leaked recently reported that “our [health care] coverage is expensive for low-income families, and Wal-Mart has a significant percentage of associates and their children on public assistance." In fact, nearly one-half of the children of Wal-Mart employees are either on Medicaid or have no insurance at all.

While Wal-Mart is driving down wages and driving up public health care costs, its CEO and its owners are making out like bandits. The Walton family is the richest in the world. And the Waltons use their private wealth to foster their low-road policies. They donate millions to politics. Most goes to Republicans who defend their low-wage sweatshop practices, while 20 percent goes to buy a few business Democrats and divide the opposition. They are leading contributors to the voucher movement seeking to privatize education, and staunch advocates of the free trade policies that have stymied efforts to link trade access to the right to organize, environmental protection or even a crackdown on sweatshops.

Across America, people are starting to realize the stark reality: Wal-Mart’s triumph is the defeat of middle-class America. If Wal-Mart sets the pace, Americans will pay the price, in declining wages, rising health care costs, longer hours, worse workplace conditions and rising personal taxes to offset soaring corporate subsidies.

America as we know it can’t afford Wal-Mart. We can’t sustain a $200 billion annual trade deficit with China, but Wal-Mart drives that deficit. We can’t afford to subsidize the health care costs of the largest employers in the country—even as declining wages starve our public coffers. We can’t afford to allow sweatshop labor access to the largest distribution network, without accelerating a global race to the bottom.

In the Gilded Age of the 19th century, America faced a similar problem: corporate behemoths, private fortunes amassed from exploiting workers, unions banned, politicians bought. It took a progressive movement to put new rules around the marketplace—to break up monopolies, create the 40-hour work week, institute the minimum wage, the right to organize, environmental protection, and workplace health and safety laws.

Now a new progressive movement is beginning to emerge. Once more, its agenda is to ban sweatshops, lift wages, empower workers and curb corporate power.

And surely Wal-Mart is and must be that movement’s first target. The question isn’t why Wal-Mart gets such bad press. The question is why Wal-Mart hasn’t been confronted sooner.

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NASHUA Wal-Mart back, with altered plan

By James Vaznis
Globe
November 13, 2005             
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The yellow frowns have returned to Nashua.

Residents unhappy with a new proposal to build a Wal-Mart super center at the site of a Building 19 on Route 101A are mobilizing, and they intend to use Wal-Mart's yellow smiley face again to attract attention -- with smiles turned upside-down on the yellow faces.

This is Wal-Mart's second attempt to get a super center built at the site. The retailer would tear down Building 19, which is still open for business.

''This plan is different, but still crappy," said Jocelyn Demuth, a high school Latin teacher and a spokeswoman for Citizens Action for Southern New Hampshire.

But Philip Serghini, a Wal-Mart spokesman, said the retailer has re-crafted its proposal to address legitimate concerns raised by residents.

''We feel like we came back with a responsible and reasonable proposal," he said.

Wal-Mart has reduced the building's size by 45,000 square feet to 147,080 square feet, said Rick Sawyer, a city planner. Building 19 is about 83,000 square feet, according to the site plan, Sawyer said.

Another major change, he said, is that no portion of the super center would be built in wetlands, unlike the previous proposal, but construction crews will need to work in a wetlands buffer zone, he said. Because of that work, the project requires a special exception approval by the Zoning Board of Adjustments. The board is scheduled to discuss the project on Nov. 22.

Serghini said that the proposed Nashua store is smaller than the average Wal-Mart super center of 200,000 square feet.

Citizens Action for Southern New Hampshire is still concerned that a Wal-Mart will increase traffic too much on Route 101A, a heavily traveled commuting corridor packed with strip malls, grocery stores, and chain restaurants. The proposed site is also across from a popular connector road to the F. E. Everett Turnpike. The original proposal estimated an increase in traffic of 10,000 vehicles, Demuth said. It's not known yet by how much that estimate will shrink with the scaled-back proposal.

The group, she said, also remains worried about wetlands around the site. Although the project no longer calls for filling in wetlands, the group fears that having more cars in the parking lot could cause gas, oil, and other substances from those vehicles to leak into the wetlands, which feed into an aquifer for the city's drinking water.

''It's still on a sensitive wetland area," she said. ''It's like you have two gorillas. One weighs 500 pounds, and the other is 450 pounds. It's still a big development. It's not a Wal-Mart super shack. It's a Wal-Mart super center."

But Serghini said that Wal-Mart is planning to install a state-of-the-art water treatment system to protect the wetlands.

If the project gains local approval, this would be the first Wal-Mart in the city, which has about 88,000 residents. However, two Wal-Marts are just over the city lines. One is in Hudson, and the other is on Route 101A in Amherst, just a few miles down the road from the proposed site in Nashua.

Building a Wal-Mart in Nashua has long been a contentious battle. The city's Conservation Commission considered the original proposal for nearly two years. Finally, in January the Conservation Commission, in a 4-to-3 vote, said it would recommend to the zoning board to grant Wal-Mart the necessary wetland permits.

The day after that vote, the Conservation Commission's chairwoman, Kathryn Nelson, resigned, believing Mayor Bernie Streeter, who supported the Wal-Mart proposal, would not reappoint her to the board. Hours after she resigned, the mayor informed vice chairwoman Jacqueline Trainer, another dissenting voter, that he would not reappoint her. The mayor denied at the time the Wal-Mart vote had anything to do with the decision.

The next month, however, the zoning board rejected several variances to zoning laws the project required. The board said Wal-Mart failed to prove why it needed to build in the wetlands and believed the building was too large for the site and would cause undue traffic congestion on an already busy roadway, according to some of the reasons listed in a rejection letter the board sent to the retailer's attorney.

Demuth said the citizens group was not surprised that Wal-Mart is trying to build at the site again.

''They're a major corporation and they don't give up," she said. ''We thought they were going to submit the same plan."

© Copyright 2005 The New York Times Company

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Ministers to Use Pulpit to Urge Changes at Wal-Mart, Group Says

Lauren Coleman-Lochner            [back to top]

Nov. 12 (Bloomberg) -- An anti-Wal-Mart group is urging religious leaders to use their pulpits to demand that the world's largest retailer boost wages and benefits and allow its workers to organize.

About 150 clergy plan to mention Wal-Mart Stores Inc. in their sermons this weekend, said Tracy Sefl, communications director for Walmartwatch.com, a Washington-based coalition of labor, environmental and community groups formed earlier this year.

The homilies in churches, synagogues and mosques are part of what Walmartwatch.com is calling ``Higher Expectations Week,'' which will feature more than 1,000 screenings of a documentary critical of the company. Sefl said two ``faith organizers'' will visit congregations to meet with religious leaders.

``When we began thinking about the most compelling messages to Wal-Mart, the same themes continued to come up, and those included the principal values of fairness, opportunity and mobility,'' Sefl said.

Walmartwatch.com also has issued a ``Faith Resource Guide'' for religious leaders that includes scriptural passages from the Koran and Bible.

`Much Is Expected'

The guide calls on Wal-Mart to set national standards for treatment of workers. ``Wal-Mart is not an ordinary company,'' the guide says. It is a trendsetter. It is a pioneer ... Wal- Mart has been given much. Much is expected!''

Sarah Clark, a Wal-Mart spokeswoman, said in a statement, ``We at Wal-Mart pledge to continue talking with our associates, our customers and communities all across America about how we can offer solutions to the challenges we all face together.''

Last month, Chief Executive H. Lee Scott unveiled a new low-cost health plan, outlined a way to cut waste and energy use and urged Congress to raise the minimum wage. Wal-Mart also is promoting a second documentary, entitled ``Why Wal-Mart Works & Why That Makes Some People Crazy.''

Separately, an internal Wal-Mart memo made public last month said the company should consider benefits cut to save money. The memo was written by M. Susan Chambers, executive vice president for benefits.

To contact the reporter on this story: Lauren Coleman-Lochner in New York at llochner@bloomberg.net.

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Dogged documentary presents a damning case against Wal-Mart

By Ty Burr
Globe Staff
November 11, 2005      
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Robert Greenwald doesn't make impartial documentaries. Films like ''Uncovered: The Whole Truth About the Iraq War" (2003) and ''Outfoxed: Rupert Murdoch's War on Journalism" (2004) are agit-pop: impassioned, fact-filled broadsides edited for maximum impact. Greenwald wants to get you steamed, and with ''Wal-Mart: The High Cost of Low Price," he has presented his most damning case yet. The film convincingly presents the world's largest company as a mendacious, rapacious enemy of the American people. By the final credits you may want to picket Sam Walton's grave.

The movie's masterstroke is to avoid interviewing the usual anti-globalist suspects and let solid, hard-working middle Americans speak. These testimonies, taken from towns and cities across the country, are cripplingly blunt. Locals in Hearne, Texas; Hamilton, Mo.; and elsewhere tell of Wal-Mart destroying three-generation mom-and-pop businesses and gutting downtowns, in many cases with the aid of state and local subsidies. (In Denver, the company got a $1.7 million grant; meanwhile, three local schools were forced to close for lack of funds.)

Former Wal-Mart employees of all levels go on record about the company's mistreatment of its workers, from a healthcare program so expensive that employees let their kids stay sick or are forced to go on Medicaid (the film reels off some appalling numbers here) to anti-union activities that include hidden-camera surveillance and a rapid-response team from headquarters that arrives in a corporate jet.

Speaking of surveillance cameras, there are plenty inside the stores but none outside, which is why a small tidal wave of crime seems to have erupted in Wal-Mart parking lots nationwide. Lest you think Greenwald's being hysterical here, he unfurls dozens of local headlines across the screen and then sucker punches a viewer with the news that all came from just the first seven months of 2005.

The film goes to China to document the living and working conditions of people who work seven-day weeks making 18-cent toy trucks that Wal-Mart sells for $14.96 apiece. It interviews a former global services operations manager who wept at what he saw in the company's South American factories and who was ignored, sidelined, and fired for reporting it. Greenwald goes to Belmont, N.C., where a local woman tried to alert Wal-Mart that open bags of pesticide were spilling out next to a storm-drain leading to the river; no one at Bentonville, Ark., HQ was even sure there was an environmental officer in the company.

It goes on and on and on, and there are only a few missteps as far as I can tell. Greenwald can't resist a heavy hand in his soundtrack-music choices -- sensitive acoustic guitar for the people he likes; doomy Darth-Vader chords for anybody from Wal-Mart -- and he doesn't really need the ''Law and Order" cell-door slam when presenting his statistics. (And how about some sources for those statistics while we're at it?)

More important, the film never addresses the critical question of why the company's a success. Who shops there and how come? That's a larger story that opens out into issues of class and the culturally devastating chain-storing of small town America. It might have been nice to hear those topics acknowledged.

''Wal-Mart: The High Price of Low Cost" doesn't let the customers speak, though, and all we hear from the company's side are happy-happy TV commercials and videos of CEO Lee Scott's pep talks. Wal-Mart has so far responded only to the film's trailer, with a ''point-by-point rebuttal" (you can view it online at walmartfacts.com) that stoops to reprinting negative phrases from reviews of earlier Greenwald documentaries.

The sheer weight of the voices and evidence here can't be easily dismissed, though. ''Wal-Mart" is advocacy journalism at its most unsparing, and it demands to be seen, discussed, argued with, and acted upon.

Ty Burr can be reached at tburr@globe.com.

© Copyright 2005 The New York Times Company

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$210,000 penalty sought in iwi case

By Gordon Y.K. Pang
Friday, November 11, 2005             
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A state historic preservation agency recommends that $210,000 in fines be levied against an archaeological firm and others for tampering with human remains at the construction site of the Ke'eaumoku Street Wal-Mart complex.

Among the infractions cited in an agency report were "writing on a child's skull with indelible red ink, taping a child's teeth to an index card, using duct tape and modeling clay to hold remains together, and writing the words 'Handbag Louis Vuitton' on a paper sack that contained a human hand."

The recommendation is part of a report filed by the State Historic Preservation Division to the Board of Land and Natural Resources, and comes on the heels of an investigation by state attorneys. The board will consider the recommendation at its Nov. 18 meeting.

Besides unauthorized examination and tampering of the iwi, or bones, the report also accuses Aki Sinoto Consulting, the archaeological firm, and others of failing to notify the proper authorities about the inadvertent find of human remains in a timely fashion, moving human remains without permission and failing to examine human skeletal remains in a respectful manner.

Messages left at Sinoto's home and cell phones were not returned.

According to the report, the remains examined in 2003 and 2004 were presumed to be "Native Hawaiians, juvenile remains, including the remains of infants, and remains for which requests for examination had been specifically denied by the state."

Besides the Sinoto firm and principal archaeologist Aki Sinoto, others cited within the 21 counts were Sinoto employees L.J. Moana Lee and Paul Titchenal, the firm of International Archaeological Research Institute Inc., and two of its employees, J. Stephen Athens and Rona Ikehara-Quebral.

Besides the fines, the report recommends that the Sinoto firm's permit to conduct archaeological activities in the state be revoked for the remainder of the year.

Ikehara-Quebral, lead osteologist for the International Archaeological Research Institute, which had been hired as a subcontractor by Sinoto, said she would reserve comment on the specifics of the allegations until she could thoroughly review Historic Preservation's report.

"A quick review reveals it's full of inaccuracies," Ikehara-Quebral said. "And the State Historic Preservation Division, DLNR, continues to misrepresent our work to the public."

She added: "We were instructed by SHPD to inventory every set of human remains from the Wal-Mart site, separate commingled burial remains into individuals and to determine their ethnicity, as required by law, which we did using standards of the profession. We always handled the remains in a respectful manner."

Melanie Chinen, SHPD administrator, said the recommendation was based in large part on a report given to her by the state attorney general's office.

Chinen said the $210,000 in fines recommended by her office is the maximum amount allowed under the law.

"There was total disregard for the laws, for the rules, for our warnings that unnecessary handling and examination is considered desecration by many Native Hawaiians," Chinen said. "We're talking about human beings."

Partly in reaction to the Wal-Mart case, Chinen said, state lawmakers last session passed legislation increasing the maximum fine for violating burial laws and rules from $10,000 a day to $25,000 daily.

Regina Keana'aina, whose family was recognized by the O'ahu Island Burial Council as a lineal descendant to iwi in the area, opposes the fines.

"The archaeologists were doing the right thing," she said. "They did not desecrate any of our iwi kupuna at the Wal-Mart site."

Keana'aina, who helped Sinoto and the other archaeologists on a voluntary basis, said some of the personnel at Historic Preservation are unqualified to deal with finds. "I think the state needs to be hiring more qualified people to be running Historic Preservation."

But Paulette Kaleikini, whose family was one of several designated cultural descendants to bones on the site, said she was pleased with Historic Preservation's recommendation.

"It's very disturbing what they did, how they desecrated the iwi," Kaleikini said. "They shouldn't be let off the hook so easily."

Kaleikini said both Wal-Mart and contractor Dick Pacific Construction, which hired Sinoto, also should bear some responsibility for what happened to the bones.

A lawsuit filed by the Native Hawaiian Legal Corp. on behalf of Kaleikini's family and the nonprofit Hui Malama I Na Kupuna 'O Hawai'i Nei named Wal-Mart, the city and the state as responsible for the mishandling of the iwi.

Wal-Mart, however, was dismissed by a Circuit Court judge from that suit. The claim against the state was settled while a judgment in favor of the city is expected to be appealed.

Moses Haia, an attorney with the Native Hawaiian Legal Corp., said proper action by the city planning officials and Historic Preservation also could have prevented the desecration.

"This could have been avoided," Haia said.

At least 61 sets of remains have been found on the site. After taking possession of the remains, state officials initially were prepared to rebury them on the site in February. That date was postponed indefinitely after state attorneys began their investigation.

The remains continue to be housed in a trailer on the Wal-Mart site that is secured 24 hours a day. Chinen said when they are reburied could depend on what the Land Board chooses to do with her division's report, and whether one of the sides will appeal that decision.

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Catholic League Calls Off Wal-Mart Boycott

By KELLY P. KISSEL
Associated Press                      
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LITTLE ROCK, Ark. (AP) -- A Roman Catholic civil rights group called off a boycott of Wal-Mart on Friday after the world's largest retailer apologized for an employee's e-mail that called Christmas a mix of world religions.

"This is a sweet victory for the Catholic League, Christians in general, and people of all faiths," said Bill Donohue, president of the Catholic League for Religious and Civil Rights, said in a statement on the group's Web site.

Wal-Mart Stores Inc. said Thursday that a customer-service employee named Kirby had written an inappropriate e-mail to a woman who complained that the retailer had replaced a "Merry Christmas" greeting with "Happy Holidays." It also said Kirby no longer worked for Wal-Mart.

Kirby wrote that Christmas resulted from traditions ranging from Siberian shamanism to Visigoth calendars.

"Santa is also borrowed from the Caucuses (sic), mistletoe from the Celts, yule log from the Goths, the time from the Visigoth and the tree from the worship of Baal. It is a wide wide world," Kirby wrote.

Wal-Mart spokesman Dan Fogleman said Kirby's e-mail - sent without any review by other employees - did not represent Wal-Mart's policies.

"We sincerely apologize to any person or organization that was offended by the inappropriate and inflammatory comments made by this former associate," Fogleman said.

Fogleman said employees will continue to wish people "Happy Holidays" because the greeting is more inclusive.

© 2005 The Associated Press.

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Wal-Mart aims at small cities

Shanghai Daily
2005-11-10                                  
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Wal-Mart Stores Inc, the world's biggest retailer, plans to open its first outlet in Jinjiang, Fujian Province this month.

Workers prepare for the opening of Wal-Mart's store in Pudong New Area. The US-based firm plans to build stores in second-tier cities including Yuxi, Yunnan Province; Weifang, Shandong Province; and Wuhu, Anhui Province by the end of this year. [Shanghai Daily]

The US-based firm plans to build stores in several other second-tier cities including Yuxi, Yunnan Province; Weifang, Shandong Province; and Wuhu, Anhui Province by the end of this year.

The company also says it is conducting market research in even smaller cities such as Shaoxing in neighboring Zhejiang Province.

"We see surging demand for consumption in small cities these years, which offers us a good chance to expand our investment in China," said an official of Wal-Mart, who declined to give his name.

Business analyst Li Mingliang from Haitong Securities Co Ltd said that if Wal-Mart opened in smaller cities it would create challenges for its rivals in those areas.

The company declined to release its revenue this year, but said sales across the country have been satisfactory.

According to Fortune 500 report, Wal-Mart achieved sales of more than US$288.189 billion in 2004, topping the list for the fourth straight year.

Wal-Mart opened six stores this year in China, including its Pudong New Area location.

The world's biggest retailer now has 49 stores in the country, either in provincial capitals or east coast cities. It employs more than 27,000 people in China.

The firm expects to add 12 more stores in 2006, according to Xinhua news agency, citing Wal-Mart's Chief Executive Officer H. Lee Scott.

Wal-Mart also said it improved sourcing from domestic suppliers since its entry into China in 1996. The retailer now has about 19,000 suppliers across the country.

Copyright By chinadaily.com.cn. All rights reserved

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Retail Wal-Mart Stands Up To Wave Of Lawsuits

Tom Van Riper
11.10.05                          
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Give Wal-Mart Stores credit for one thing--the company certainly doesn't scare easily.

The world's dominant retailer has been facing a tidal wave of negativity--from community activists trying to keep its stores out of their neighborhoods, to local governments mandating that Wal-Mart (nyse: WMT - news - people ) supply workers with health insurance, to opportunistic lawyers trying to strike it rich by bringing on endless lawsuits. Critics--many of whom are as financially motivated as Wal-Mart is--are accusing the company of everything from discriminating against women, to mistreating illegal aliens, to denying overtime pay. Thousands of customers who slip and fall in a store aisle are also trying to reach into the company's deep pockets.

No other retailer seems to get under people's skin like Wal-Mart. Sears Holdings (nasdaq: SHLD - news - people ), J.C. Penney (nyse: JCP - news - people ), Target (nyse: TGT - news - people )and May Department Stores (nyse: MAY - news - people ) aren't subject to the same social criticism.

And with Wal-Mart's stock price stuck in neutral for the past five years, some shareholders are asking whether it's time to throw in the towel by settling most of these suits and getting back to minding the stores. Wal-Mart's sales growth has slowed in each of the last four years, to 11.3% for the fiscal year ended last January from 12.8% in 2001. The increase in same-store sales so far this year has slowed to 3%, compared with a 4% hike last year over 2003, although the company did see a rebound last month. Is it time for the company to yield rather than battle?

The answer is no, from a broad cross section of observers of the company's litigation strategy. Management experts say the company's strategy of confronting the charges head-on while not wavering from its low-price business model is the most effective formula over the long haul.

"When you're just about the largest company in the world, it's tough to breathe without offending someone," said Kathryn Harrigan, a professor at Columbia Business School.

Wal-Mart didn't respond to a call seeking comment on Wednesday.

Indeed, suing Wal-Mart is now a cottage industry, with some 5,000 lawsuits filed against the company each year. After one of Wal-Mart's 1.2 million employees gets to work at 9 A.M., three lawsuits will be filed against the company by the time he or she takes a 10:30 A.M. coffee break. By lunchtime, the count is up to six. By the time the employee heads home at 5 P.M., no fewer than 17 people or groups have brought a complaint in court. The same pattern will repeat itself tomorrow, and the next day, and the day after that.

The message is clear. To some, the American dream is no longer just about being successful, it's about not being too successful. Or it's about being successful enough for others to leech off of you.

The company is generally loath to settle all but the smallest suits, opting instead to take on plaintiffs' complaints while hammering home its message of "Everyday Low Prices" to the public. The more serious class-action complaints, each of which can potentially result in hundreds of millions of dollars in liability, are complaints the company has decided it won't take lying down.

Larry McQuillan, a director at the Pacific Resource Institute, a free-market think tank, said fighting the lawsuits makes the most long-term sense, based on building momentum for tort reform, and because winning some of these cases would deter more organizations from filing suits. The trial bar's strategy against corporate America up to now has been to file a suit, depress the stock price and bring the company to the table to get a settlement out of it, he said.

"Wal-Mart has been a leader in not bowing to those pressures, unlike many companies that are afraid of bad publicity and want to settle," McQuillan said. "If you don't defend yourself early on, and be persistent, you will be steamrolled."

"I would litigate everything," Harrigan said. "And if in the end the law made me do something, I'd fight to make sure my competitors had to do it as well." She added that shareholders shouldn't be overly concerned about litigation exposure, because it's a small price to pay for Wal-Mart's effective use of the world's supply chain to keep costs so low.

Some of the biggest cases against Wal-Mart currently open:

--New York City attorney James Linsey is representing a group of illegal aliens employed at janitorial contractors who are suing Wal-Mart on grounds involving back pay, lost minimum wages, false imprisonment (cleaning workers are routinely locked inside retail stores during their shift) and involuntary servitude, among other allegations. Linsey plans to file at least one complaint under the federal Racketeer Influenced and Corruption Organizations (RICO) act, alleging that Wal-Mart harbored and transported janitorial staff it knew were working illegally.

--Six women in California are suing over alleged gender discrimination, claiming they were denied promotions and received less pay than their male counterparts. The plaintiffs won class-action status that could blow their ranks all the way up to 1.6 million, though Wal-Mart is appealing that decision.

--Just last week, a suit filed in Missouri on behalf of employees who claimed they were forced to work off the clock and denied overtime gained class-action status.

-Internal memos leaked to the press recently showed Wal-Mart's human resources managers suggesting that to keep health care costs down, the company should hire people who are in good physical shape. Some say that initiative could spur a whole new wave of litigation based on discriminatory hiring practices, though plaintiffs could have a tough fight if the policy is found to have been discussed but not implemented.

To champions of the little guy, the current wave of lawsuits and anti-Wal-Mart sentiment represents justice and deserved comeuppance for a retail behemoth intent on keeping prices down by squeezing workers and suppliers to save every penny it can.

"It's the development of what is almost a new politics, deciding whether the company reflects the values of the community," said Paul Blank, a spokesman for "Watch Out Wal-Mart," a watchdog group that is critical of the company.

But Harrigan cites the familiar phrase that what goes around often comes around. For instance, what if many of the women allegedly denied promotions were secondary household breadwinners who didn't have the flexibility to work longer hours or switch stores, tasks that are routine for retail store managers?

"Some of these feminists could see this thing bounce back," she said, even while acknowledging that some individual lawsuits are undoubtedly valid.

"Sometimes it takes a lawsuit to test the boundaries of what you can do. It is a cost of doing business," Harrigan said.

"The rhetoric may be cumulatively having some effect [on sales], but the challenge is to make sure the in-store environment is good," said retail analyst Mark Husson of HSBC. "That's what will accelerate sales and accelerate the stock price."

Wall Street is generally bullish on the company, despite current high gas prices that are having some effect on its low-end shoppers. All but one of 25 analysts rate the stock as a "buy" or a "hold," with HSBC's Husson saying Wal-Mart has improved its product mix to include more high-margin goods. Husson, who is neutral on the stock, said the next challenge is to improve customer checkout times and store cleanliness.

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Activist posts anti-Wal-Mart ad online

By Marcus Kabel
AP Business
November 10, 2005                        
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A leading critic of Wal-Mart Stores Inc. launched an Internet ad campaign Wednesday that uses publicity around recent Republican legal troubles to allege the world's largest retailer is morally corrupt in how it treats its 1.3 million U.S. employees.

The ad escalates an increasingly bitter battle between Wal-Mart and critics led by labor and other activist groups. The organizations accuse Wal-Mart of underpaying workers, denying them affordable health insurance and damaging communities, while the Bentonville, Ark.-based retailer maintains that its low prices are good for consumers and the economy.

Wake Up Wal-Mart, founded this year by the United Food and Commercial Workers, put a 30-second television-style ad on its Web site http://www.wakeupwalmart.com comparing Wal-Mart CEO Lee Scott with Vice President Dick Cheney's former chief of staff, I. Lewis "Scooter" Libby, former House Majority Leader Tom DeLay, R-Texas, and Senate Majority Leader Bill Frist.

The ad includes brief shots of headlines about the indictments of Libby and DeLay and the investigation into stock sales by Frist.

Wal-Mart said the effort insulted the 100 million Americans who shop its stores each week.

"By stooping to the politics of personal destruction, these groups have proven once again that they offer no solutions, and no ideas," Wal-Mart spokesman Bob McAdam said in an e-mailed statement.

The launch comes ahead of a week of protests by Wake Up Wal-Mart and a similar group, Wal-Mart Watch, that will coincide with screenings of a scathing documentary by filmmaker Robert Greenwald, "Wal-Mart: The High Cost of Low Price".

Wal-Mart, which in past years has preferred to ignore critics rather than respond, has switched strategy amid signs the mounting attacks are bad for its growth. In the past month it has announced lower-cost health plans for employees, started an environmental program to use less energy and packaging, and hosted an academic conference in Washington D.C. that examined its economic impact.

On the Net:

http://www.wakeupwalmart.com

http://www.walmartwatch.com

http://www.wal-martfacts.com

© Copyright 2005 The New York Times Company

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Wal-Mart, Metro to buy more from China

Xinhuanet
www.chinaview.cn
2005-11-09 20                     
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SHENZHEN, Nov. 9 (Xinhuanet) -- Wal-Mart, Metro and other international retailers will purchase more goods from China, a national procurement fair in south China's Guangdong Province was told Wednesday.

Wal-Mart will spend 22 billion US dollars on Chinese goods thisyear, an increase of 20 percent over last year, said Wang Tieming,a senior consultant with Wal-Mart China Investment Co. Ltd. at the Fourth China Consumer Goods Procurement Fair (CCGPF) in Shenzhen.

It has been in business contact with 20,000 providers in the Chinese mainland, added Wang.

Metro group, Germany's retailing giant, purchases about 64 percent of its overseas outsourcing goods from the Chinese market, said Lu Guoman, vice president with Shanghai Jinjiang Metro Shopping Center.

Besides Wal-Mart, some other multinational retailers like Carrefour, TESCO, B&Q and IKEA have also set up sourcing offices in Shenzhen, bringing their products standards and sales concepts to China.

The four-day CCGPF has attracted 18 purchasing teams from abroad and 8,500 agents and distributors from home. It will end Friday, according to the fair organizer. Enditem

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Ex-Official at Wal-Mart Pleads Guilty to Three Counts Of Wire Fraud

By ANN ZIMMERMAN and JAMES BANDLER
THE WALL STREET JOURNAL
November 8, 2005                           
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Former Wal-Mart Stores Inc. Vice President Robert Hey Jr. pleaded guilty yesterday in federal court to three charges of wire fraud for helping former Vice Chairman Thomas Coughlin, who is accused by the company of misappropriating as much as $500,000 from the retailer through fraudulent reimbursements and improper use of gift cards.

Mr. Hey, 42 years old, is one of several former Wal-Mart executives who had been under investigation in the case and is the first to enter a plea. He faces as long as 30 years in prison and/or as much as a $1 million fine for each count, according to a statement from Robert Balfe, U.S. Attorney for the Western District of Arkansas. Mr. Hey couldn't be reached to comment.

Between 1997 and 2004 Mr. Hey "used his position...to execute a scheme to illegally manipulate the employee travel reimbursement and vendor invoice accounting system at Wal-Mart to embezzle monies, gift cards and products, which were provided to a senior Wal-Mart executive for the executive's personal benefit and use," according to a statement from the U.S. Attorney's office.

The statement and a federal document outlining the charges that was filed in federal court yesterday in Fort Smith, Ark., do not name Mr. Coughlin. However, Mr. Coughlin is the main focus of a federal grand jury investigating the matter. Through his attorneys, Mr. Coughlin denies the allegations.

Wal-Mart, the world's largest retailer by sales, fired Mr. Hey on March 25 after the company conducted a six- week investigation into questionable transactions he and other managers conducted on behalf of Mr. Coughlin. At the same time, Mr. Coughlin resigned his board seat as Wal-Mart, based in Bentonville, Ark., handed the investigation to federal authorities. Mr. Coughlin had retired as vice chairman of the company in January.

People close to the Wal-Mart and federal investigations said that Mr. Coughlin told his subordinates that Wal-Mart owed him this money as reimbursement for monies he personally spent on a "union project" to obtain information on stores that were targeted as part of a unionizing effort.

According to a federal document filed yesterday outlining the charges, Mr. Hey, who reported to Mr. Coughlin between 1997 and 2004, illegally obtained money and personal property for a senior executive. These include thousands of dollars for the senior executive's membership in a personal hunting lease, a computer for the executive's son as a graduation gift, a hunting trip, and a hunting vehicle.

John Everett, Mr. Hey's lawyer, said Mr. Hey has agreed to cooperate with the federal investigation. The plea calls for a punishment other than incarceration, and may be accepted or rejected by U.S. District Judge Robert Dawson.

Copyright 2005 Dow Jones & Company, Inc. All Rights Reserved 

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Wal-Mart banking move stirs record comment

By Jonathan Birchall 
New York Financial Times
Nov. 7, 2005                               
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Wal-Mart, the largest US retailer, is optimistic that it will get permission to open a state bank in Utah to handle credit card processing, in spite of an unprecedented wave of lobbying by opponents in the banking community.

Jane Thompson, president of the retailer's financial services division, told the FT that she was "amazed at the stir that we've created".

"It's almost as if we've been the excuse to bring up every issue known to man about it," she said of the application, which was filed in July.

An attempt by Wal-Mart to acquire an industrial bank in California in 2002 was blocked by a hostile state legislature. An initial attempt to enter the banking services sector was blocked by changes to federal banking law in 1999.

Wal-Mart says it wants to operate an industrial loan corporation (ILC) in Utah to reduce the costs of access to credit and debit payment processing networks. The application, said Wal-Mart did not mean it intended to open branches outside Utah – one of the concerns of opponents who fear that the retailer could eventually establish a national banking network.

Ms Thompson has repeatedly asserted that the retailer was focused on a strategy of encouraging local banks to open branches at its stores.

The application requires the approval of the Federal Deposit Insurance Corporation as well as Utah's state regulators. Last month, the FDIC said it had received a record number of public comments on the application, many from small, independent, community banks.

Two members of the House of Representatives have called on the FDIC to hold public hearings over the application. Jim Leach, a Republican former head of the house financial services committee, has filed a bill that would prevent commercial entities from owning state industrial banks.

This bill may be attached as an amendment to banking services legislation currently before Congress.

Target, Wal-Mart's main competitor, operates a Utah ILC, as do several US and international car companies.

Ms Thompson said Wal-Mart believed the existing operation of ILCs by other commercial companies in Utah had demonstrated no risk to the banking system. ILCs are not subject to supervision by the Federal Reserve.

"We look at it that [these] issues [have] been debated and resolved. All these commercial entities own one. That cat is out of the bag," she said. "We still think this is legal. It's what these banks were set up to do. We still don't see why we shouldn't have one if our number one competitor, Target, has one."

Copyright The Financial Times Ltd. All rights reserved. © 2005 MSNBC.com

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Feds: Wal-Mart Execs Knew Workers Illegal

By MARCUS KABEL
Associated Press              
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SPRINGFIELD, Mo. - A pair of senior Wal-Mart executives knew cleaning contractors were hiring illegal immigrants, many of whom were housed in crowded conditions and sometimes slept in the backs of stores, according to a federal agency's affidavit.

The affidavit, unsealed last week, was part of an investigation of Wal-Mart by federal immigration officials that led to the 2003 raid on 60 Wal-Mart stores in 21 states, and the arrests of 245 illegal workers. The retailer agreed to pay $11 million in March to settle the case. It has maintained that top executives neither knew of nor encouraged the practice, but that is contradicted by the newly released documents.

The affidavit was filed by the Bureau of Immigration and Custom Enforcement to secure search warrants for a 2003 raid on Wal-Mart Stores Inc. headquarters in Bentonville, Ark.

The document was unsealed Nov. 2 by a U.S. district judge in Fayetteville, Ark. at the request of a New York attorney representing more than 200 former employees in a civil lawsuit against the world's largest retailer.

In the affidavit, investigators said testimony and taped conversations from 2003 showed two executives at Wal-Mart headquarters knew that contractors and subcontractors cleaning its stores in several states employed illegal immigrants from eastern Europe and elsewhere.

The lawyer who asked that the affidavit be unsealed said it shows Wal-Mart knew it had illegal janitors in its stores.

"The sworn testimony (in the affidavit) establishes that top Wal-Mart executives conspired with contractors to exploit undocumented immigrants," said James L. Linsey, a New York attorney leading a class-action lawsuit on behalf of former janitors.

Wal-Mart denied there was any incriminating evidence in the affidavit and said the comments by executives that it contained were "bits and pieces of information from larger conversations."

"As we have maintained all along, no company senior official had any direct knowledge that undocumented workers were working in our stores," Wal-Mart spokesman Marty Heires said in an e-mail to The Associated Press.

According to the affidavit, one cleaning contractor, Christopher Walters, told INS investigators that his company, IMC Associates of St. Louis, had been dropped by Wal-Mart in 1997 after INS raids in the St. Louis area found illegal workers cleaning the retailers' stores.

Walters told the INS that a Wal-Mart vice president, identified in the affidavit as Leroy Schuetz and Leroy Shutz, advised him to set up multiple subsidiaries so that if one of them were found using illegal workers, he could continue to do business with the retailer through the others.

The affidavit said another conversation took place in April 2003 at Wal-Mart headquarters between Steve Bertschy, a Wal-Mart vice president who managed maintenance of all Wal-Mart stores, and two contractors accompanied by an undercover INS investigator.

After one of the contractors repeatedly mentioned that many cleaning subcontractors were known to be using illegal immigrants at Wal-Mart stores, the affidavit said Bertschy commented: "And they load them up into one or two apartments and they take a family of five and pay them $1,000 a week, that's probably a dollar an hour if they're there seven days a week and they're not paying taxes because they're not getting paid a fair rate compared to U.S. standards, then they start stealing from the store to make up the difference."

Bertschy did not immediately return a call seeking comment. Schuetz could not be reached for comment.

Federal raids later found immigrants crowded into small apartments or trailers in sleeping bags and, in some cases, sleeping in the backs of Wal-Mart stores, carrying their personal belongings from job site to job site.

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Wal-Mart: sued for film piracy?

p2p news / p2pnet                   [back to top]

With the MPAA behind it, the US Justice Department says a 19-year-old US man secretly camcorded a movie, making him liable for a long jail sentence and a huge fine.

Will the movie hit organization now act on behalf of Robert Greenwald of Outfoxed fame?

"Everyone has seen Wal-Mart's lavish television commercials, but have you ever wondered why Wal-Mart spends so much money trying to convince you it cares about your family, your community, and even its own employees? What is it hiding?"

That's the intro on Greenwald's latest promo site featuring WAL-MART: The High Cost of Low Price which, "takes you behind the glitz and into the real lives of workers and their families, business owners and their communities, in an extraordinary journey that will challenge the way you think, feel... and shop".

Greenwald came up with the brilliant Outfoxed which took a long look at Rupert Murdoch's 'balanced reporting' empire.

If you haven't seen it, see it ; )

Meanwhile, Greenwald spotted Wal-Mart consultant John Marino "pointing his open cellphone toward the screen" during the High Cost release, says the New York Times.

So Greenwald threw Marino out.

"Rick Jacobs, the chairman of Brave New Films, which is distributing the film, said he was considering filing charges against Wal-Mart and the consultant for attempted piracy, says the NYT.

"You can't just go in and record a movie," Jacobs said. "Wal-Mart should know. They are the largest seller of DVD's in the country."

Quite right. Just ask the MPAA.

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The Wal-Mart 22

Jonathan Tasini
November 07, 2005           
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Jonathan Tasini is president of the Economic Future Group and writes his "Working In America" columns for TomPaine.com on an occasional basis. His blog Working Life chronicles the labor movement and other issues affecting American workers.

Last week, I attended the screening of Robert Greenwald’s new film, “Wal-Mart: The High Cost of Low Price.” It is a great piece of investigative work that gives voice to the people and communities Wal-Mart has destroyed. You have to see it (or buy your own copy here). During the movie, I caught myself thinking: If you want to know why the Democratic Party will continue to be the minority party in the country, look no further than the raft of Democratic operatives and elected representatives who do the bidding of Wal-Mart.

Let’s start by looking at what I call the Wal-Mart 22: The 22 Democrats who, on June 24, voted against an amendment to the 2006 fiscal year labor appropriations bill (offered by Rep. Rosa DeLauro of Connecticut). This bill barred any spending of money by the Department of Labor to implement the part of the deal the department had made with Wal-Mart calling for advance notice of inspections any time the DOL planned to investigate Wal-Mart. This is the deal that was recently heavily criticized by the department’s inspector general.

That point bears repeating—the federal government, the people who are supposed to protect citizens from corporate abuse, essentially said to perhaps the most notorious corporate law breaker in recent years, “when we come looking for wrongdoing in your company, we’re going to tell you ahead of time.”

Anyway, so who were the Wal-Mart 22? Marion Berry, Ark., Sanford Bishop, Ga.; Dan Boren, Okla.; G. K. Butterfield, N.C.; James Clyburn, S.C.; Bud Cramer, Ala.; Henry Cuellar, Texas; Artur Davis, Ala., Diana DeGette, Colo.; Harold Ford, Tenn.; Charles Gonzalez, Texas; Ron Kind, Wis.; Jim Matheson, Utah; Dennis Moore, Kan.; Mike Ross, Ark.; John Salazar, Colo.; Vic Snyder, Ark.; John Tanner, Tenn.; Mike Thompson, Calif.; Bennie Thompson, Miss., Ed Towns, N.Y.; and Al Wynn, Md.

I note a few things about the Wal-Mart 22. A disturbing number of them were members of the Congressional Black Caucus (Bishop, Butterfield, Clyburn, Davis, Ford, Thompson, Town and Wynn). I know Harold Ford is running for the Senate and needs money. But why should any labor union give him a dime if he’s protecting Wal-Mart, a company where not a single worker is a union member because of the company’s virulently anti-union behavior?

And then up pop the names of Dennis Moore, Jim Matheson, Vic Snyder, Ed Towns, John Tanner and Henry Cuellar, six of the 15 Democrats who voted for the Central American Free Trade Agreement . Is there any more evidence needed that these six deserve to be booted from office via a challenge in the Democratic primary or, at least, not receive a dime from organized labor?

Let’s tally up some other Democrats who are on the Wal-Mart dole: Matt Miller, a fellow at the Center for American Progress, is doing consulting work for Wal-Mart. Miller considers himself a Democrat and CAP, I believe, fancies itself as a rapid-response operation in opposition to the Republican idea- and-spin machine. Mia Masten, Wal-Mart’s East Coast rep, is a former Clinton administration staffer (her post was special assistant to the senior adviser to the president for policy development). One of the Chicago Daley brothers, Michael, was hired by Wal-Mart to lobby for the zoning changes to clear the way for two new stores; as a local observer told me, when Daley’s firm is hired, “it is a signal that his position is the one supported by the mayor, a very powerful signal.” I could go on, but you get the point.

This is unconscionable, morally and politically. I think we all get the moral part—I know many people are pretty hip to the way Wal-Mart rampages through our communities (if not, go to www.walmartwatch.com and get religion). But politically, this is dumb: if the Democratic Party can’t be unified in opposition to the number-one economic enemy of the people, to the number-one enemy undermining any hope for a decent standard of living in the future, then, what exactly should people think the Democratic Party stands for? Why exactly should voters believe that Democrats have any more intention to challenge corporate power if the party is feeding at the Wal-Mart trough? And I do believe that, given the choice between Republicans and Republican-lite (the latter includes Democratic supporters of Wal-Mart or so-called “free trade” or both) people will always vote for the real thing.

Labor has to ratchet up the cost of doing business for anyone cozying up to Wal-Mart. Here are my humble suggestions:

The Change To Win federation and the AFL-CIO should jointly send a letter to Harry Reid, Nancy Pelosi, Charles Schumer (head of the Democratic Senatorial Campaign Committee) and Rahm Emanuel (head of the Democratic Congressional Campaign Committee) demanding that no work be given to any Democratic operative or consulting firm that shills for Wal-Mart. If the party refuses to turn off the spigot for Wal-Mart shills, then, the two federations should pledge not to send a single dollar to any campaign committee. Both federations should also write to every member of Congress declaring that any Democrat receiving Wal-Mart money can kiss any labor donations or labor support good-bye. Both federations should, then, send a letter to every alleged Democratic campaign consultant and make it clear: You work for us OR you work for Wal-Mart. You can’t do both. We all know the political world is oiled by money. So if there’s really a commitment to roll back Wal-Mart, it makes no sense to me to reward people who aid Wal-Mart. Stop the money—and their hearts will follow.

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Wal-Mart's plan a sham

By Paul Blank                                      [back to top]

Wal-Mart's announcements about its health care plan are nothing more than a desperate publicity stunt to salvage a faltering public image. Unfortunately, Wal-Mart's new plan is unlikely to insure one additional worker. Here's why: Wal-Mart refuses to address the fundamental reason half of its workers don't have company health care — extremely high deductibles and strict eligibility requirements. (Related: Our view) The cheapest deductible on Wal-Mart's new plan is $1,000 for individual coverage and $3,000 for family coverage. For Wal-Mart workers, many of whom make $12,000 to $15,000 a year, the cost could be as much as 25% of their take-home pay for individual coverage and up to 40% for family coverage.

Second, Wal-Mart has strict eligibility requirements. Unlike managers, who qualify immediately, full-time workers are eligible for health care coverage only after six months, twice the national average. Part-time employees are eligible after two years and are never eligible for family coverage.

In addition, Wal-Mart's health savings accounts shift health care costs from the employer onto the individual and are available only to workers who already have health care. Therefore, by definition, the HSAs don't help any uninsured Wal-Mart workers.

The fact is, despite the company's nearly $10 billion profit last year, more than 600,000 Wal-Mart workers live without company health care. Even though Wal-Mart is the USA's largest corporation, it provides health care to 30% fewer workers than the average company in the S&P 500. And, most disturbing, one of every two children of Wal-Mart workers is either uninsured or relies on public health care.

No wonder Wal-Mart Executive Vice President Susan Chambers admits in a leaked memo, "Our coverage is expensive for low-income families, and Wal-Mart has a significant percentage of associates and their children on public assistance."

Behind Wal-Mart's smiley face, senior executives are hatching out new schemes to cut costs at workers' expense. Wal-Mart's internal memo exposes their plan to cut health care costs by dissuading unhealthy or obese people from applying, pushing out more senior workers, shifting to more part-time employees and cutting spousal benefits.

Americans will see Wal-Mart's announcement for what it is — a company desperate to hide its growing moral bankruptcy.

Paul Blank is campaign director of Wake Up Wal-Mart, a project of United Food and Commercial Workers union.

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No Escape for Wal-Mart

washingtonpost.com
Sunday, November 6, 2005        
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It was probably inevitable that Wal-Mart would come to be viewed not just as an incredibly successful company but as a metaphor for everything that is right and wrong about American capitalism. No company had ever gotten so big so fast, had more customers or employed more people. Like Sears and Ford, AT&T and Microsoft, its innovation has not only revolutionized its industry, but also changed the way business is done in countless other industries.

Its impact has been so profound that economists can now quantify its effect on what things cost, what people make, what fringe benefits they get, and how fast jobs and wealth have been created. And that's true not just in the United States, but in countless countries around the world.

It's gotten to the point where Wal-Mart inspires local zoning ordinances and national boycotts, while almost single-handedly catalyzing public support for the union movement. It is now the subject of dueling movies, one by a critic determined to show how it disappoints even its most loyal employees, another by an admirer who marvels at its organizational prowess. And last week, it was the subject of a critical report by the inspector general of the U.S. Department of Labor.

For all this public scrutiny, Wal-Mart is an intensely private company, with an insular culture, that is only just now learning to use tools long since taken for granted by other large businesses.

Management gurus from McKinsey & Co. have laid out a multi-year strategy that has already led the company to announce improved community outreach, more affordable health benefits and tougher environmental standards for suppliers and store formats. Chief executive H. Lee Scott Jr. went so far as to call for an increase in the minimum wage.

To respond to all the criticism, Wal-Mart has engaged the public relations firm Edelman to help it set up a 24/7 "war room" where the New York Times last week found Reagan confidant Michael K. Deaver and Dukakis press secretary Leslie Dach huddling over strategy.

The company has even asked the consulting firm of Global Insight Inc. to commission academic studies of its economic impact, several of which were presented last week at an open forum in Washington. They showed that in areas where its stores are located, Wal-Mart has lowered wages, cut food costs and increased Medicaid spending but lowered spending on other kinds of public assistance.

No company enjoys this kind of scrutiny and attention. But with its same-store sales rising only 3 percent, its stock price languishing and even once-loyal customers beginning to turn away because of all the bad publicity, Wal-Mart probably has no choice but to deal with it.

© 2005 The Washington Post Company

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Wall to wall Wal-Mart

November 6, 2005                [back to top]

The company:

Is the world's largest retailer, with $285.2 billion in sales.

Employs 1.6 million people worldwide, 1.2 million of them in the United States.

Has 3,600 facilities in the United States, and more than 1,750 in Mexico, Puerto Rico, Canada, Agentina, Brazil, China, Korea, Germany, and the United Kingdom.

Has more than 138 million customers per week worldwide.

Milestones1962 -- First Wal-Mart opens in Rogers, Ark.

1968 -- Wal-Mart moves outside of Arkansas into Missouri and Oklahoma.

1979 -- Annual sales top $1 billion.

1991 -- Wal-Mart enters Connecticut, Delaware, Maine, Massachusetts, Maryland, New Hampshire, New Jersey, and New York.

1996 -- Wal-Mart enters China thru a joint venture agreement.

2002 -- The company's biggest single sales day: $1.43 billion on the day after Thanksgiving.

Wal-Mart in Massachusetts:Has three supercenters, 41 discount strores, and four Sam's Clubs.

Has 11,788 employes.

Pays an average fulltime wage of $10.87 per hour.

Paid more than $13.4 million in state and local taxes in 2004.

Source: Wal-Mart.

© Copyright 2005 The New York Times Company

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Wal-Mart opens door to critics

By ANNE D'INNOCENZIO
The Associated Press
Saturday, November 5, 2005                 
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WASHINGTON — Wal-Mart, which has been prickly about criticisms of its low-cost business model, opened itself up to a lively debate among economists Friday about how the world's largest retailer affects the economy.

The all-day session, the latest effort by Wal-Mart to repair its reputation, included rosy findings from a Wal-Mart-commissioned report and mixed results from studies done by other economists. It was attended by about 100 people in the media and academia.

The seminar may have raised more questions than answers on Wal-Mart's impact on jobs, earnings and individual communities, but in the end the company appeared to make progress toward its goal of appearing more open to change.

"I learned a lot about Wal-Mart," Ray Bracy, Wal-Mart's vice president of corporate affairs, said in a closing address. "We are trying to listen more to be a better company." Bracy promised that Wal-Mart would share more data in the future.

However, some participants said Wal-Mart was taking a chance by inviting scrutiny.

"I think this is a gamble by opening up to more research," said David Neumark, a senior fellow at the Public Policy Institute of California, who presented findings that Wal-Mart's presence causes earnings to fall. "Some will be good, and some will be bad."

Wal-Mart's critics have argued that the retailer's low-cost model has bad effects on the economy and that its low pay and benefits drive down those at other companies trying to compete with Wal-Mart.

But Wal-Mart has long argued that its low-priced goods help raise the standard of living, particularly for low-income shoppers, and help control inflation. By holding its own economic conference, Wal-Mart appears to be trying to have some control over the information being disseminated.

Wal-Mart's study, conducted by Global Insight, an economic-forecasting company, offered a positive assessment of the company that was in line with findings from some economists but were starkly different from others.

"Wal-Mart has been an economic positive to the U.S.," said Chris Holling, executive director at Global Insight. He also emphasized that the study found that there was no evidence that Wal-Mart pays its workers below-market wages, and said its low prices were not from driving down wages for workers, as its critics contend, but from its own economic efficiencies.

The study, conducted by a team of 18 economists who were given unfettered access to Wal-Mart's data on wages, benefits and real estate, found that the expansion of the retailer over the 1985 to 2004 period saved American households on average $2,329 by 2004, estimating that it lowered the Consumer Price Index by 3.1 percent.

Impact on employment

The study also found that Wal-Mart had a positive impact on employment nationwide, generating 210,000 jobs by 2004, a 0.15 percent increase relative to the number of jobs that would have existed without Wal-Mart.

The study did report that Wal-Mart caused nominal wages to decline by 2.2 percent, but that was more than offset by the fall in consumer prices, creating an increase in real disposable income of 0.9 percent.

On the other hand, Wal-Mart causes wages to fall for workers in towns where it operates, depresses pay for unskilled laborers and increases Medicaid costs.

"Residents of a local labor market do indeed earn less following the opening of Wal-Mart stores," said Public Policy Institute economist Neumark.

Neumark's study, "The Effects of Wal-Mart on Local Labor Markets," co-authored with Junfu Zhang and Stephen Ciccarella, concludes that total payroll wages per person declined by almost 5 percent where Wal-Mart stores are located due to the company's low wages.

Another conference participant, Michael Hicks, an economist at the Air Force Institute of Technology at Wright-Patterson Air Force Base in Dayton, Ohio, studied Wal-Mart's effect on government anti-poverty programs and found that Wal-Mart increased Medicaid costs an average of $898 per worker.

Hicks found that a 1 percent increase in Wal-Mart's market share in a state is accompanied by a 1.5 percent increase in Medicaid spending. Wal-Mart insures fewer than half its employees.

Hicks found that government aid to needy families decreased by 3.3 percent with every 1 percent increase in Wal-Mart's market share.

Import strategy

Emek Basker and Pham Hoang Van, economists at the University of Missouri, studied the relationship between Wal-Mart's growth and the growth of U.S. imports, examining Consumer Price Index data in 23 markets between 1984 and 2003 along with apparel import prices and market share information. The pair found that Wal-Mart's strategy of importing goods lowered wages for unskilled workers.

In their presentations, both Wal-Mart's Bracy and Global Insights' Holling emphasized that Wal-Mart did not influence results. The study was also overseen by an advisory committee including representatives from the Brookings Institution and the American Enterprise Institute.

Still, Wal-Mart and Global Insight faced tough questions from the audience, including why benefits were not included in the wages studied. Some expressed concern that the study didn't address the fact that Wal-Mart may be entering mainly high-growth regions, possibly inflating the positive impact it has on the economy.

Meanwhile, Wake up Wal-Mart, a union-backed anti-Wal-Mart group, tried to steal Wal-Mart's thunder by holding a news conference before the seminar announcing that it was creating a national association for Wal-Mart workers to help employees change the company.

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Wal-Mart's fear of the Googleplex

by Dan Farber
November 5, 2005                     
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The New York Times has a story by Steve Lohr about how upstart Google is disrupting many traditional business sectors. As an example, Wal-Mart views Google as a threat. Lohr quotes Jim Breyer, a venture capitalist from Accel Partners who sits on Wal-Mart's board, who says that Google could threaten the retailer's business by telling shoppers where better bargains can be had in proximity to Wal-Mart stores. It's good news for buyers, who will have information at their fingertips to make more informed decisions.

It will also force Wal-Mart, and Walmart.com, to figure out how to keep customers happy beyond low prices and product selection. Wal-Mart might have the leanest and smartest (RFID) supply chain in the works for gaining efficiencies, but Google is building a scalable, massively parallelized, distributed infrastructure for serving billions of users and delivering increasingly targeted content and services on any device. Do you go to Wal-Mart or Google (Yahoo, MSN, etc.) first and last in the product purchase cycle?

Google is already impacting advertising, stirring up a hornet's nest over book search and enabling all kinds of mashups and new services that could disrupt everything from real estate sales and Craig's List to television and communications.

To be fair, Google is simply has the most buzz and momentum today, and a growing power base and employee count. Yahoo and Microsoft, in particular, are other powerhouses striking fear in the business plans of mature and emergent businesses that could be disrupted by the continued evolution of the Internet and digital lifestyles.

As the Web giants gather more content, harvest and harness more data about individual and group user behavior and preferences and improve the scope and quality of search, commerce will become more about "pull" than "push" in the words management consultant of John Hagel:

Over the past century, institutions have been perfecting highly efficient approaches to mobilizing resources. These approaches may vary in their details, but they share a common foundation. They are all designed to “push” resources in advance to areas of highest anticipated need.

In the past decade, we have seen early signs of a new model for mobilizing resources. Rather than “push”, this new approach focuses on “pull” – creating platforms that help people to reach out, find and access appropriate resources when the need arises.

The pull world makes you think the the network has ambient intelligence and values your time and attention. That's tough for any single retailer to do

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Mixed Grade for Wal-Mart on Report Card

By STEVEN GREENHOUSE
November 5, 2005                                 
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WASHINGTON, Nov. 4 - With critics hammering Wal-Mart day after day, the company sponsored an unusual conference on Friday about its impact on America's economy, and it got some good - and a few not so good - grades.

The best news for Wal-Mart was that a respected economic forecasting firm, Global Insight, found that by keeping its prices low and pressuring rival retailers over the last 19 years, Wal-Mart has kept the Consumer Price Index 3.1 percent below what it would have otherwise been.

Chris Holling, executive managing director of Global Insight, told the 80 economists and journalists at the conference that Wal-Mart had increased the economy's overall productivity by three-quarters of a percent through steps like pressuring its suppliers to be more efficient.

In these ways, Global Insight found, Wal-Mart increased net consumer purchasing power by $118 billion last year, translating into savings of $401 a person.

Global Insight, which Wal-Mart hired to conduct the study and organize Friday's conference, said Wal-Mart's savings to consumers resulted not from low wages but from numerous efficiencies, including its highly advanced distribution network. Global Insight found that Wal-Mart paid wages no lower than the average retail wage in the communities where it does business.

But other economists, using some different data and assumptions, disputed that, finding that Wal-Mart wages were lower than the retail average and had pulled down wages for the nation's retail workers.

Opening the conference, Ray Bracy, Wal-Mart's vice president for corporate affairs, hailed Global Insight's conclusion that Wal-Mart had lowered prices for Americans. He said the conference showed a new openness at Wal-Mart, the world's largest retailer, and an effort to improve its understanding of its strengths and its effects.

"There is no debate about Wal-Mart in terms of the fact that we have low prices," Mr. Bracy said. "There are also indirect savings, if you don't shop at Wal-Mart, because our competitors have to lower their prices."

Several economists who submitted papers for the conference gave Wal-Mart bad marks for its effects on wages and Medicaid spending.

In a study of nationwide payroll data, David Neumark, a senior fellow with the Public Policy Institute of California, and two other economists found evidence that earnings for a county's retail workers fell by 3.5 percent eight years after Wal-Mart entered the county.

Mr. Neumark said there was even stronger evidence that after Wal-Mart opened in a county, total earnings per worker, retail and nonretail, fell 2.5 percent to 4.8 percent. One reason for the decline, he said, is that Wal-Mart pressures its suppliers to cut their costs and that may lead to lower wages for the suppliers' workers. Wal-Mart says its full-time workers earn an average of $9.68 an hour.

Mr. Neumark wrote that his findings showed that "residents of a local labor market do indeed earn less following the opening of Wal-Mart stores."

He said that the retailer had the most negative effect in the South where its stores are most numerous, noting that he had found that retail employment, total employment and total earnings per person in many counties fell as a long-term result of Wal-Mart's presence.

Global Insight agreed that Wal-Mart led to a net increase in jobs, finding that Wal-Mart, by making the economy more productive, led to the creation of 210,000 jobs than would otherwise have existed.

In a paper released this week that was not submitted for the conference, Arindrajit Dube, an economist at the University of California, Berkeley, and two other economists found that the arrival of a Wal-Mart led to a reduction of 0.5 percent to 0.8 percent in average earnings per worker in the general merchandising sector. They found that Wal-Mart reduced take-home pay for retail workers by $4.7 billion annually.

In the same hotel and 15 minutes before the conference began, the United Food and Commercial Workers Union announced that it was setting up an advocacy group to inform Wal-Mart workers of their rights. The move is intended to pressure Wal-Mart to improve pay and working conditions. The new group, Wal-Mart Workers of America, invited Wal-Mart workers to join it free by calling a toll-free number.

The group will not be a formal union that seeks to negotiate contracts.

Wal-Mart's critics often say that many Wal-Mart workers earn so little that they receive food stamps. But Michael Hicks, a professor at the Air Force Institute of Technology, found that the presence of a Wal-Mart does not increase welfare or food stamp spending. But Mr. Hicks wrote, "Wal-Mart does increase Medicaid expenditures by roughly $898 per worker," which he said was consistent with studies of other low-wage workers nationwide.

Jerry Hausman, an economist at the Massachusetts Institute of Technology, and another economist found that Wal-Mart's prices average 15 to 25 percent below prices for identical food items at traditional supermarkets. He also found that Wal-Mart pressured supermarkets to cut their prices by 4.8 percent more than they would have.

Emek Basker of the University of Missouri found that Wal-Mart had a major impact in pushing down prices for several products, including shampoo, toothpaste and laundry detergents. She said the savings ranged from 1.5 percent to 3 percent in the short run to four times that long term.

Global Insight largely agreed, finding that Wal-Mart had held down prices of food by 9.1 percent nationwide and of nonfood goods by 4.2 percent by pressing down its own prices, and those of its competitors and suppliers, in the last two decades.

Over all, the economics firm found, Wal-Mart saved consumers $263 billion last year. But because Wal-Mart played a role in lowering inflation and that, in turn had helped hold down wage increases, the net rise in consumer purchasing power thanks to Wal-Mart was $118 billion.

Some economists questioned some of Global Insight's assumptions, including an effort to determine how consumer prices would have been different if Wal-Mart did not exist.

Copyright 2005 The New York Times Company 

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A Wal-Mart-brand symposium

Academics and PR coexist at conference on social impact

By Amy Joyce
The Washington Post
Nov. 5, 2005                                 
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WASHINGTON - One of the world's most private of public companies went public in an unusual way yesterday when it hosted a presentation of nine academic papers on Wal-Mart's impact on the economy, the retailer's latest move to repair its image.

The embattled retailer commissioned the independent economic research firm Global Insight Inc. to do a study and invite academics to present their own research at the conference. The presentations were made yesterday for an audience of about 150 in the District.

The event was a strange hybrid of academics and public relations at which attendees toted around registration information in plastic Wal-Mart shopping bags. A room full of people asking questions was reminded -- after a journalist asked about a statistic in a paper -- that reporters were not allowed to take part in the Q&A.

Critics greet attendees Outside, Wal-Mart critics greeted attendees. About a dozen demonstrators with the United Food and Commercial Workers union and its Wake Up Wal-Mart organization gathered outside the J.W. Marriott to protest the conference, some arrayed behind a large Wake Up Wal-Mart banner. A few others handed out fliers headlined "Research Confirms: Wal-Mart Needs to Change" that touted some of the more critical findings of the academic papers.

Security guards checked attendees' identification before allowing them to the registration table.

The conference's sessions featured statistics, charts and econometric models. The papers focused on different aspects of the world's largest retailer, finding positive and negative impacts. Academics and economists were rapt during the most arcane portions of the presentations; reporters, less so.

The conference comes at a time when Wal-Mart is battling critics over its image. Dueling movies about Wal-Mart are being released, and chief executive H. Lee Scott recently asked Congress to raise the minimum wage, a move that appeared to be part of an approach outlined for Wal-Mart by a consulting company to counter negative public perceptions.

"It's pretty interesting that something this banal could be this interesting" to journalists and the public, said Paul Argenti, professor of corporate communications at Dartmouth's Tuck School of Business. He said he thinks the conference is a smart public relations move. "That you would set up a conference to discuss how Wal-Mart effects the economy -- it totally takes away from everything going on.""

Wal-Mart's conference was a year in the making, according to Bob McAdam, the company's vice president of corporate affairs. It was designed in part to counter anti-Wal-Mart sentiment, which McAdam said has resulted in studies with misguided statistics and conclusions. Labor unions and community groups argue that the company does not provide decent wages or health care to its workers and that it crushes small business.

"We thought it was time to do a definitive study. . . . We thought it would add credibility," said McAdam, who noted there was a risk in what might come out of the studies.

"There are a lot of people who hate Wal-Mart. In the absence of data, they have a visceral reaction," said David Neumark, a senior fellow with the San Francisco-based Public Policy Institute of California who presented a paper yesterday. Wal-Mart is "opening it up," he said. "They are gambling."

Paid presenter gives positive report A handful of the papers presented at the conference were at least partly critical. But the Global Insight study, paid for by Wal-Mart, painted the company in a positive light. Neither Wal-Mart nor Global Insight would disclose how much Global Insight was paid. The other presenters, many of whom have been studying Wal-Mart for some time, received no compensation. Global Insight solicited papers, which it then selected "for relevance, methodology and academic rigor," regardless of papers' conclusions, the economic forecasting firm said.

Other researchers included Michael J. Hicks, assistant professor of economics at the Air Force Institute of Technology and Marshall University, who included a disclosure in his paper: "In short, except for roughly $1,500 purchases of diapers annual since 1999 I have no financial relationship with Wal-Mart or any affiliate that I am aware of."

Hicks said between presentations that though the company's effect is good and bad, none of its issues "rise to the magnitude that we ought to be facing [a change in] state or federal policy" related to the company. The New York City Council recently passed a law that would force grocers of a certain size to pay a portion of employee health care costs.

The Global Insight analysis found that Wal-Mart saved consumers $263 billion during a 19-year period. It also found that by 2004, the company created 210,000 net new jobs. The firm's methodology was reviewed by an outside advisory board of economic experts.

Among the findings in other presentations: that the average state spends about $898 per Wal-Mart worker in Medicaid expenditures; that items typically sold in drugstores, such as aspirin and shampoo, decline in price when Wal-Mart enters a market; and that Wal-Mart stores had an adverse effect on retail employment, total employment and total payroll per person in the South, where Wal-Mart stores are numerous and where they have been open the longest.

Staff writer Ylan Mui contributed to this report.

© 2005 The Washington Post Company © 2005 MSNBC.com

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A hard look at Wal-Mart Economists discuss retailer's impact on U.S.

By STEVEN GREENHOUSE
New York Times
Nov. 5, 2005, 2:18AM                  
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WASHINGTON - With critics hammering Wal-Mart day after day, the company sponsored an unusual conference on Friday about Wal-Mart's impact on America's economy, and it got some good — and a few not so good — grades.

The best news for Wal-Mart was that a respected economic forecasting firm, Global Insight, found that by keeping its prices low and pressuring rival retailers over the last 19 years, Wal-Mart has kept the consumer price index 3.1 percent below what it would have otherwise been.

Chris Holling, executive managing director of Global Insight, told the 80 economists and journalists at the conference that Wal-Mart had increased the economy's overall productivity by three-quarters of a percent through steps like pressuring its suppliers to be more efficient.

In these ways, Global Insight found, Wal-Mart increased net consumer purchasing power by $118 billion last year, translating into savings of $401 a person.

Global Insight, which Wal-Mart hired to conduct the study and organize Friday's conference, said Wal-Mart's savings to consumers resulted not from low wages but from numerous efficiencies, including its excellent distribution network. Global Insight found that Wal-Mart paid wages no lower than the average retail wage in the communities where it does business.

But other economists, using some different data and assumptions, disputed that, finding that Wal-Mart wages were lower than the retail average and had pulled down wages for the nation's retail workers.

"We are trying to listen more to be a better company," said Ray Bracy, Wal-Mart's vice president for corporate affairs.

Several economists who submitted papers for the conference gave Wal-Mart bad marks for its effects on wages and Medicaid spending.

David Neumark, a senior fellow with the Public Policy Institute of California, and two other economists found evidence that earnings for a county's retail workers fell by 3.5 percent eight years after Wal-Mart entered the county.

Neumark said there was even stronger evidence that after Wal-Mart opened in a county, total earnings per worker, retail and nonretail, fell 2.5 to 4.8 percent. One reason for the decline, he said, is that Wal-Mart pressures its suppliers to cut their costs and that may lead to lower wages for the suppliers' workers. Wal-Mart says its full-time workers earn an average of $9.68 an hour

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Union Group Launches 'Association' for Wal-Mart Workers

By Randy Hall
CNSNews.com
November 04, 2005                     
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(CNSNews.com) - A pro-union, anti-Wal-Mart group Friday launched "a new and exciting step to empower" employees of the company by forming a "national association" called the Wal-Mart Workers of America. The "national association" is not a union.

A spokeswoman for Wal-Mart dismissed the strategy as "nothing new" and accused the anti-Wal-Mart group of trying to obtain union dues from the company's workers even before a union is created.

But the Wake Up Wal-Mart campaign continues its relentless criticism of the world's number one retailer. "Every day, 1.3 million workers help make Wal-Mart one of America's most profitable companies, and yet, every day, it seems Wal-Mart finds new ways to exploit these hard-working Americans," said Paul Blank, campaign director for WakeUpWalMart.com, during a news conference in Washington, D.C.

The new "association," Blank said, "will be a powerful tool to help Wal-Mart's workers join together to improve their lives and make Wal-Mart change for the better." He added that Wal-Mart Workers of America (WWOA) will help employees "improve their working conditions, their lives and change Wal-Mart into a more responsible and moral corporation.

"Let there be no doubt: The WWOA will finally create a 'real open door' for change -- a door Wal-Mart will never be able to close," said Blank

Also on Friday, the "association" officially launched its first membership drive with plans to reach 100,000 workers at America's largest retailer through grassroots actions and a community-based radio and print advertising campaign.

Membership in WWOA is free to all former and current Wal-Mart workers and will provide an array of services to members, including: how to qualify for health-care money; a toll-free hotline to provide advice and consultation about workplace issues; and information about class-action lawsuits affecting Wal-Mart workers.

As part of its launch, the WWOA is offering 50 uninsured Wal-Mart workers the opportunity to qualify for $200 in health-care money. The assistance offered is the result of over $10,000 raised by more than 100 grassroots Halloween fund-raisers held by WakeUpWalMart.com supporters last week in 84 cities in 22 states.

According to Buffy Wicks, deputy coordinator of the Wake Up Wal-Mart Campaign, the WWOA is being founded in response to Wal-Mart's secret memo and the company's troubling record of exploiting its workers.

Written by Wal-Mart Executive Vice President Susan Chambers, the memo outlined a "series of shocking recommendations," according to Wicks, including: plans to cut costs further by reducing hours; shifting from full-time to part-time workers; pushing out senior workers; and cutting health-care costs by dissuading unhealthy or obese people from applying.

In addition, Wicks noted that "Wal-Mart has a long and well-documented record of exploiting its workers, including forcing them to work off-the-clock, discriminating against female employees and breaking child labor laws.

"Both the Wal-Mart memo and its unwillingness to substantively change how it treats its workers has led to the creation of the Wal-Mart Workers of America," Wicks added.

However, Christi Gallagher, a spokeswoman for Wal-Mart, told Cybercast News Service that the Wake Up Wal-Mart campaign is "nothing new" and compared it to "starting their own secret Internet chat club.

"The unions have been trying to organize our associates through the Internet for several years in a lot of different states and have not had any success," she said.

Gallagher noted that anti-Wal-Mart forces in Florida even went so far as to ask company associates to provide their checking, savings and debit card numbers so money could be deducted from their personal accounts each month.

"So unlike a union where you get to vote and then you pay your dues, they tried to take the dues up front," Gallagher said.

"We might be concerned if this group was really offering solutions to our associates or any American workers on issues they face every day, but that's simply not the case," Gallagher added.

As Cybercast News Service previously reported, Wal-Mart will also be the focus of more than 300 labor unions and other liberal groups during "Higher Expectations Week."

That series of events, which is slated for Nov. 13-19, will feature the debut of the film "Wal-Mart: The High Cost of Low Price," which is intended by WakeUpWalMart.com to pressure the retail giant to make reforms in such areas as "affordable health care, corporate responsibility and economic justice."

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Government Report Confirms Wal-Mart Violated Child Labor Laws and Made a Sweetheart Deal with Bush's Labor Department to Avoid Oversight and Penalties

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A federal inspector general has found that a secret and controversial agreement between Wal-Mart and the U.S. Department of Labor (DOL), signed in January 2005, was in violation of DOL's normal procedures and resulted in an agreement that was "significantly different" than other agreements signed by the Department. The investigators also concluded that the agreement has brought significant monetary benefits to Wal-Mart while weakening future federal oversight of labor practices at Wal-Mart. The report found that the breakdowns resulted in Wal-Mart being able to author "key provisions" of the agreement, reached after DOL had found that the company had violated child labor laws at operations in three states. In February 2005, Rep. George Miller (D-CA) had requested that the DOL's Inspector General investigate the sweetheart deal after it was revealed in news accounts.

This week, Reps. Rosa DeLauro (D-CT) and Miller introduced a bill (H.R. 4190) that would bar the DOL from including in its compliance agreements assurances of advance notice about DOL inspections before a proper investigation is completed.

A new documentary, Wal-Mart: The High Cost of Low Price, has just been released and will be shown around the country in conjunction with town hall forums and public rallies. It documents Wal-Mart's long history of labor violations, from failing to pay workers for overtime hours, violating child labor laws, and locking workers into stores at night as well as the costs to taxpayers who pick up medical, educational and other costs associated with the company's well-known low wage policy.

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Wal-Mart faces association that aims to organise workers

Business Respect
Issue Number 88
4 Nov 2005                         
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Critics of Wal-Mart have formed a national association that aims to organise Wal-Mart workers, and to help them to push forward complaints.

The group 'Wake Up Wal-Mart' said that they hoped that by getting Wal-Mart workers to work together they would be able to force changes in the company's employment practices. The company is famous for its resistance to unionisation.

The people behind the new initiative say that it is not their aim to form a union, but only to provide a broad approach to organisation for Wal-Mart workers.

The company dismissed the move, saying that it was nothing new and offered no solutions to the issues facing working people.

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Wal-Mart pledges greater transparency

Retailer promises to make more information available to the public in the face of growing criticism.

November 4, 2005                      [back to top]

WASHINGTON (Reuters) - Long-secretive Wal-Mart Stores Inc. vowed Friday to share more of its proprietary data and encouraged researchers to continue studying its impact on the U.S. economy.

"We're trying to be more transparent," Ray Bracy, Wal-Mart's (Research) vice president of corporate affairs, said at the conclusion of a day-long conference examining the economic influence of the world's biggest retailer.

Bracy said Wal-Mart will soon release more data on its Web site but declined to say what sort of information would be included.

The Bentonville, Arkansas-based retailer has a reputation for guarding its data so zealously that even its suppliers are reluctant to speak to the media about doing business with the company.

But Wal-Mart has promised to change its ways as it faces increasing opposition from labor groups, environmentalists and others who accuse the company of paying poor wages and benefits, gobbling up green space and pressuring suppliers to lower prices.

At Friday's conference, researchers presented 10 papers that concluded Wal-Mart has lowered consumer prices, but also driven down wages and pushed more employees onto government aid programs.

"They are to be commended for presenting negative research," said Tracy Sefl, spokeswoman for Wal-Mart Watch, one of several groups that have been pushing Wal-Mart to improve wages and benefits.

"But what it comes down to is, will they act on any of the studies that show they have negative effects on a community?" she said in a statement.

Bracy said the retailer learned from the presentations, but did not yet know what it would do with the information. He said the company encouraged researchers to come forward with additional study ideas.

"We are very interested in where the gaps in understanding Wal-Mart might be," he said. "We are indeed committed to studying this more."

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To change Wal-Mart, first change America

Joseph Nocera
The New York Times
FRIDAY, NOVEMBER 4, 2005                    
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At the turn of the last century, a new phenomenon arose in America: the supermarket chain store. The most dominant such chain was the Great Atlantic and Pacific Tea Co., known as A&P. By 1930 it had become the fifth-largest corporation in the United States, with $1 billion in sales, and was "opening stores at a rate unprecedented in the history of American retailing," according to Richard Tedlow, author of "New and Improved: The Story of Mass Marketing in America."

The New York Times described A&P that year as "the world's greatest retailing machine." Its president, John Hartford, attributed the company's success to its policy, as the Times put it, "of immediately passing on reductions in wholesale commodity prices to the consumer." Under Hartford, writes Tedlow, "A&P had one dominant mission: to sell quality food at low prices."

Of course, the rise of A&P had other consequences as well. When A&P came to town, it usually meant that most of the mom-and-pop grocery stores went out of business. Food wholesalers got squeezed, and were sometimes cut out entirely, as A&P took ever greater control of the supply chain. And the company's emphasis on keeping prices low for its customers meant that it was ruthless about keeping wages low for its workers.

You can guess what happened. Unions agitated, sometimes violently, to organize A&P's poorly paid workers. Laws were passed intending to prevent the big supermarket chains from getting price breaks from manufacturers that small grocers could not get. More than half the states enacted "chain taxes." And anti-chain store rhetoric flourished. "We can whip these chain stores," one populist radio commentator used to proclaim. "We can drive them out in 30 days if you people will stay out of their stores."

But people didn't stay out of the stores. Instead, they kept shopping at A&P even though it meant that some of their neighbors lost their businesses, and others worked for low pay. In time, the opposition to the big supermarket chains faded away, and they became part of a commercial landscape we now completely take for granted. The desire for low prices trumped all other considerations. In America - unlike in, say, Europe - it always does.

These days, there is another huge chain-store phenomenon that finds itself under populist attack: Wal-Mart Stores. For most of its existence, the company was lauded for its low prices, its astonishing logistical capabilities, its rah-rah culture, and its rising stock price. There was a widespread feeling, shared by Wal-Mart's management, that it was doing God's work in making goods affordable. Indeed, a reasonable argument can be made that over the last 10 or 15 years, Wal-Mart has done more to keep inflation in check than Alan Greenspan. The chairman of the Federal Reserve can't force Procter & Gamble to roll back a planned increase in the wholesale price of toothpaste. Wal-Mart can, and it does.

But now that Wal-Mart vies with ExxonMobil as the largest company in the United States, with more employees than the U.S. Army, the worm has turned. Instead of embracing Wal-Mart, many communities now fight to keep the company out. Groups like Wal-Mart Watch have sprouted, bent on exposing the company's evil ways. Wal-Mart's low wages - less than $10 an hour, on average - and stingy benefits - employees often have to rely on Medicaid, the U.S. public health insurance plan for the poor, because they can't afford the company's health plan - have galvanized union activists.

Just a week ago, for instance, Wal-Mart Watch, which is allied with the unions, got ahold of an internal Wal-Mart memo, which it leaked to The New York Times, fretting about rising health care costs and suggesting the possibility that the company might start "discouraging unhealthy people from working at Wal-Mart," as The Times put it. And this past week, a new anti-Wal-Mart documentary, entitled "Wal-Mart: The High Cost of Low Price," opened in movie theaters in New York and Los Angeles.

The documentary, which I saw on DVD earlier in the week, is of the Michael Moore variety. A polemic designed to enrage viewers, it catalogues all of Wal-Mart's alleged sins, from forcing small businesses to close, to paying so little that its workers need public assistance to buy food, to its supposed reliance on Asian sweatshop labor.

Not surprisingly, Wal-Mart refused to cooperate with the film, but the movie's producer and director, Robert Greenwald, made no effort to find anyone who was remotely sympathetic to the company. The background music turns melancholy as each Wal-Mart victim tells his or her sad story.

For taking this approach, Greenwald makes no apologies. "Here is a corporation with $10 billion in profits and it's screwing over two big parts of the country: its work force and all these communities," he said a few days ago. "It's not right." (Wal-Mart's profit in 2004 was $9.1 billion, but who's counting?) The film will be shown in a few dozen theaters around the United States, but Greenwald's real strategy is to sell DVDs for $12.95 to activists who will screen it in an effort to gain more converts to the cause. "This is not a model for maximizing profits," Greenwald said proudly. He struck me as the modern equivalent of the radio populists during A&P's heyday.

So far, Wal-Mart's efforts to rebut its critics have been largely inept. On Tuesday, for instance, it sent its director of corporate affairs, Mia Masten, to New York to try to counter the film, which was being screened that night as a fund-raiser for a group called Wall-Mart Free NYC.

But no one at Wal-Mart had actually seen the movie, so Masten was reduced to mouthing platitudes, which she did both nervously and unconvincingly.

On Friday, the company held a conference for academics and journalists to examine Wal-Mart's impact on the U.S. economy. Although some of the papers presented at the conference are mildly critical of the company, the centerpiece was a study by the economic research firm Global Insight that purportedly shows, to quote the headline of the Wal-Mart news release, that "Wal-Mart Saves Working Families $2,329 Per Year." That may be true, but the fact that Wal-Mart paid for the study will undercut its ability to persuade anyone not already in its camp.

Here's the thing, though. Whatever you might think of its tactics, its wages, its effect on local communities, and its economic power, Wal-Mart has largely played by the rules that society has set out for it. That's what the anti-Wal-Mart folks tend to leave out of their analysis. "Wal-Mart has devised an extremely efficient way to deliver low prices to consumers and good returns to shareholders," said Robert Reich, a professor at Brandeis University. "That is American capitalism," he added. "That is what the system rewards."

Reich, who was Secretary of Labor under President Bill Clinton, doesn't even blame Wal-Mart for the fact that its workers often need to rely on Medicaid for their health insurance. That program, he said, "is designed for the working poor and the poor. If we are not happy about the results, then the real question we ought to be asking ourselves is whether we should be changing the rules. Wal-Mart is an invitation to have that debate."

The new documentary has a number of short clips showing the Wal-Mart chief executive, Lee Scott, speaking to investors, employees and others. In one clip, he says quite bluntly that the company can't raise wages without cutting into the profits that its shareholders expect it to generate. That may sound awfully harsh, but it is undeniably true. In America, the economic culture exalts "shareholder value" above pretty much everything else. Can you really expect Scott and his company to turn its back on that?

Similarly, what was true 70 years ago remains true today: Americans could shut down Wal-Mart, and allow small local stores to thrive, by doing one simple thing: shopping at the latter instead of the former. But Americans don't do that, and for the most basic of reasons: They care about low prices above all else. That is what the U.S. economy is built around. The growth of Wal-Mart is a direct result of its understanding of that fundamental fact.

Does America really want to change Wal-Mart? If the answer truly is yes, then Americans need to change themselves first.

Copyright © 2005 The International Herald Tribune | www.iht.com

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Group to Form Association For Wal-Mart Employees

Union-Backed Critics Trying to Organize Workers

By Amy Joyce
Washington Post
Friday, November 4, 2005                  
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A leading critic of Wal-Mart Stores Inc. will announce today the creation of a national association that will advise past and present Wal-Mart workers of their rights and help them to file complaints.

Leaders of Wake Up Wal-Mart say they hope the Wal-Mart Workers of America will give the retailers' employees a chance to band together and change the way Wal-Mart treats them.

Forming an association is the latest move by Wal-Mart's vocal critics, who hope to change the mammoth company's practices. The company is notoriously anti-union, giving supervisors a "Manager's Toolbox to Remaining Union-Free" and telling employees to rely on an open-door policy.

Unions have been flummoxed by the inability to organize Wal-Mart workers, and they count the company as one of the major organizing challenges they face. The United Food and Commercial Workers union formed Wake Up Wal-Mart earlier this year to push for changes in what it deems bad labor practices at the company. The Service Employees International Union provided seed money for Wal-Mart Watch, a nonprofit group that also opposes the company's business practices.

Wake Up Wal-Mart stresses that it is not attempting to form a union. But the move is an effort to organize Wal-Mart workers in a wide way. It remains to be seen whether it will succeed.

"This isn't really anything new," said Wal-Mart spokeswoman Mona Williams. "The unions have tried to organize Wal-Mart associates through the Internet for more than five years . . . with no success. . . . We might be concerned if this group was offering solutions to some of the issues working people face each day, but that is not the case."

"They are reaching out and offering the workers a service, but they are also laying out the possibility of workers beginning to work together," said Harley Shaiken, a labor professor at the University of California at Berkeley. "So as an individual, you don't have to confront the largest employer in the world. You can do it as a group."

Other groups have formed similar organizations, including the AFL-CIO, which created Working America in 2003. Its more than 1 million members are workers without a union.

Shaiken said this is a good time to launch such an association, as "the world's largest retailer has been on the defensive of late . . . and the counter to it is Wal-Mart telling its workers, 'Really, you don't need your rights.' And that doesn't fly." Wal-Mart recently launched its largest public relations blitz since it was founded to try to improve its battered reputation. It is holding an economic conference in Washington today where economists will discuss the broad impact of the company on society.

Paul Blank, director of Wake Up Wal-Mart, said he hopes to reach 100,000 employees in the next several weeks to offer free membership in the association.

Any employee who signs up will have access to a Web site that includes a list of company's ongoing legal battles, a toll-free help line and a link to a recently disclosed memo outlining the company's attempts to cut health care.

Wake Up Wal-Mart raised money to provide $200 in health care assistance funds to 50 uninsured workers, saying this underscores its contention that Wal-Mart does not provide adequate health care benefits to its employees. That money was raised through 102 Halloween candy fundraisers that the group and its supporters held at stores throughout the country to highlight health care issues. Blank said more money will be raised in the future for health care assistance.

The site informs employees they may be eligible for unemployment compensation if their hours have been cut -- along with a link to state unemployment offices. It explains overtime pay, equal employment rights, rights regarding occupational safety and health, workers compensation, and the Family and Medical Leave Act.

"The best way for Wal-Mart workers to have a voice is through a union," Joe Hansen, president of the UFCW, said in an e-mail. "Wal-Mart Workers of America will mobilize and empower Wal-Mart workers to change Wal-Mart into a responsible corporation."

The group plans to reach workers by visits at home, advertisements in local media and word of mouth.

"We have a lot of Wal-Mart workers come to us directly because of serious concerns they have at the company," Blank said. "So now we have an association that they are going to be able to join to help work on those issues."

© 2005 The Washington Post Company

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DUE DILIGENCE: At Wal-Mart, It's About Change -- Finally

11-04-05 01:13 AM EST                       [back to top]

CHICAGO (Dow Jones) -- For years, Wal-Mart Stores Inc.'s top executives forgot or just ignored a tenet of founder Sam Walton's: "Never get so set in your ways that you can't change."

But faced with challenging operational issues, rising expenses as well as lawsuits, political attacks and community resentment over its employment policies, the $285.2 billion house that Sam built now is all about change.

In fact, nearly everything surrounding Wal-Mart (WMT) these days is changing: the management structure, the merchandising mix, the marketing, the store experience, the public-relations image, the operational functions; perhaps even health-care coverage and wages and hiring practices.

"The company is changing today as radically as it has ever changed in its history," Chief Executive Lee Scott told analysts last week.

It is even taking the unusual, and risky, step of putting itself on display before a gathering of economists Friday in Washington who might not paint an entirely rosy picture of the retailer's impact on its surroundings, from the overall economy to individual communities.

But if this truly is an inflection point, and many believe it is, investors may have a long wait ahead of them before the changes make a difference in earnings and the share price.

"Wal-Mart is like a super-freighter oil tanker plowing down the Mississippi River to the Port of New Orleans," said A.G. Edwards analyst Bob Buchanan. "If it sways off its course it takes a long, long time to get back on it.

"Why should I make a bet on that?" he said, voicing the concern on the minds of many investors.

Even after attending what he called an "uplifting" analysts' meeting near company headquarters in Bentonville, Ark., last month, Buchanan is encouraging clients to stay on the sidelines with his hold rating.

That's counter to most other analysts who support the initiatives and recommend the stock but heavily pepper their notes with caveats.

For nearly three decades, Wal-Mart executives kept mostly out of the public eye as they built a retail juggernaut with nearly 6,000 stores spanning much of the globe. The now-familiar motto of "Every day low prices" resonated with low- income families and in rural areas.

The formula worked well.

Only 10 years ago Wal-Mart was a $78 billion company with only two divisions: Wal-Mart's traditional stores and Sam's Clubs. International sales were just getting started, and accounted for only 2% of total sales. By last year, international sales generated 20% of total sales -- or a whopping $56 billion, more than FedEx Corp. (FDX) and Best Buy Cos. (BBY) combined.

But the giant's steps forward have slowed, setting off warning bells for analysts and investors who have long feared the time when Wal-Mart would move beyond the growth stage.

After a long run of solid middle to upper double-digit revenue growth, Wal- Mart turned in an 11.3% increase in net sales last year, its smallest percentage gain in more than a decade. It also marked the fifth straight year of declining sales gains.

By most measurements that's still pretty good.

And Wal-Mart executives have been quick to point that out, while rejecting suggestions the company's path to further growth could be getting rockier. They have at least 2,700 opportunities within easy reach in the United States alone.

But projections for future results suggest a further slowing of growth, even while Wal-Mart adds 60 million square feet annually to its retail footprint.

At Thomson First Call, net sales are forecast to grow at a 10.1% clip to $ 317.42 billion, earnings at 8.2% to $11.11 billion.

Expenses on everything from energy to land costs and now marketing are accelerating. It costs 13% more today to build a new store than it did a year ago.

Scott began last week on a good note. In a rare question-and-answer media teleconference, he unveiled four major initiatives that he hoped would calm the external attacks.

Scott described a plan to offer more affordable health-care insurance for employees that, in some cases, slashed monthly premiums to just $11.

He said the retailer would become more environmentally responsible by turning to solar power to help light stores, reducing greenhouse emissions by 20% and solid waste by 25%, and demanding greater mileage out of its vast fleet of trucks, among other things.

He called for a higher federal minimum wage that would not only help his own employees, but would fatten the wallets of millions of customers.

And he vowed to monitor the labor and environmental practices of foreign suppliers, another issue for activists.

"It is possible and probable we are going to do well by doing good," he said.

But days later an internal memo discussing ways to cut benefit costs was leaked to the press and drew a round of intense criticism.

Among the revelations was the company's acknowledgement that one out of every two children related to their workforce has no insurance or relies on government support.

Groups such as Wake Up Wal-Mart, seeded with money from the United Food and Commercial Workers International union, lambasted the company. "Wages at poverty levels, unsafe working conditions ... Wal-Mart ended up becoming not just the poster child for the ills of America, but the leader of those ills," said the group's spokesman Chris Kofinis.

"Wal-Mart has the ability to make changes but chooses not to," he added.

Chief Financial Officer Tom Schoewe has said repeatedly over the past eight months that the stock's decline has more to do with what he calls "headline impact" than fundamentals.

Wal-Mart's stock price has suffered as charges of sexual and racial discrimination, questionable hiring practices and insiders hands in the till have piled up. From March of 2004 until hitting a four-year low of $42.31 in September, Wal-Mart's stock fell 31%.

Friday's release of the documentary, "Wal-Mart: The High Cost of Low Price," by Robert Greenwald could push the shares lower.

But it's not just headlines. Wal-Mart's returns on invested capital are lagging and profit margins at its U.S. stores are falling.

Wal-Mart executives have predicted that return on investment will fall in the next 12 to 18 months before rebounding as the company shores up operations, distribution, purchasing, inventory turnover and cross-category selling.

"It is not going to surprise you that we look at return on investment each and every day inside of our company," Schoewe told analysts last week.

"Sam's (Club) over the last couple of years flattened out," he said about ROI, "and over the last several quarters actually improved. But the largest operation, Wal-Mart U.S. has actually seen a decline in its ROI. And why is that? Mainly because of the impact of earnings not growing at the same rate as sales."

The company pointed out two merchandising initiatives it believes will be a source of new sales: fashion and electronics. Fashion merchandisers, for example, are already in place to boost sales.

"We want to improve our marketing and communications. We want to improve the customer experience... all of that relates to sales growth," said Schoewe.

"The question you need to keep asking yourself and us (is) are the kinds of things that we're talking about enough to change that trend," Schoewe added.

Jaison Blair, for one, doesn't think so.

An analyst at Rochdale Research, Blair sees a declining ROI over the next decade as Wal-Mart spends more on building sites. Escalating community resistance to new stores is also likely to prove costly. Store development costs have risen 13% over each of the last three years, a climb that translates into lower returns from new stores.

"While management suggests that returns on new investment are still 'decent,' we believe that there are fewer no-brainers (for finding real estate) and that the low-hanging fruit has been picked clean," he told his clients. The company is also likely to face more lawsuits over store openings, he added.

By his account, Wal-Mart's ROIC peaked in 2004 and will fall for years to come. As a result, Wal-Mart is no longer a U.S. retailing story, but an international buyer looking for another acquisition like its 1999 purchase of Britain's Asda grocery chain.

"We believe a large acquisition is on the horizon and that the acquisition strategy faces considerable challenges," he said.

Among the initiatives Schoewe urged analysts to examine was Wal-Mart's strategy to raise the fashion quotient, and prices, on certain apparel lines as it tries to lure trendier value shoppers who turn to Target Corp (TGT).

In that way, Wal-Mart will be able to appeal to a broader base of customers and get those who typically shop just for groceries to pick up clothes in the same trip. The company recently launched the Metro 7 line of hip apparel and accessories that it hopes will compete with, say, Target's line of designer Isaac Mizrahi casual clothing.

While analysts applaud the move, they are skeptical that Wal-Mart customers who shop for milk and detergent are going to stop for fashion, too.

"It is still unclear if the consumer will respond." Morgan Stanley's Melich.

Analysts also say they are worried that Wal-Mart is cannibalizing its own sales by building stores too close together.

Schoewe waves off those fears.

"You hear about this internal cannibalization, is there still a growth opportunity," he said at the analyst meeting.

Copyright (C) 2005 Dow Jones & Company, Inc. All Rights Reserved.

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Wal-Mart Seeks Unbiased Research -- and Gets It

A conference about the retailer's effects on communities yields some negative findings.

By Abigail Goldman
Times
November 3, 2005                
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The company that boasts of "Always Low Prices" might have been better off heeding another slogan: Buyer beware.

As part of an increasingly aggressive campaign to burnish its image, Wal-Mart Stores Inc. decided in August to sponsor an academic conference to explore the retailer's effects on the U.S. economy and local communities.

And to make sure the findings were credible, the company turned over management of the conference to independent consultant Global Insight, which pledged to select papers only for their academic rigor, not for their pro-Wal-Mart bent.

When the scholars delivered, some of their findings didn't exactly cut in the company's favor. At the conference Friday in Washington, billed as "An In-Depth Look at Wal-Mart and Society," the retailer will be stuck with them anyway.

"To us it's worth the risk to have a real healthy discussion," said Robert McAdam, vice president of corporate affairs for the Bentonville, Ark., retailer. "We start out with a bias because we think we have a positive economic impact. If the results come back and they show that we don't have a positive economic impact, that will be a disappointment, but at least it's an honest look."

Wal-Mart critics say the company's willingness to hear dissent at the conference will be meaningful only if its executives decide to make changes.

"There's a lot here that requires legitimate listening" by Wal-Mart and actions based on the study findings, said Tracy Sefl, a spokeswoman for advocacy group Wal-Mart Watch. "There is a compelling empirical case being made about the scope of their problems."

The 10 papers are to be presented by economists, urban planners and other experts.

Some of their findings, which a few of the researchers released before the conference, tend to confirm what Wal-Mart critics have been saying for years.

At least two concluded that Wal-Mart stores' pay practices depressed wages beyond the retail sector. Another found that states on average spent $898 for each Wal-Mart worker in Medicaid expenses.

One study concluded that Wal-Mart's giant grocery and general merchandise Supercenters brought little net gain for local communities in property taxes, sales taxes and employment; instead, the stores merely siphoned sales from existing businesses in the area.

Not all the news was bad for Wal-Mart. Several of the studies noted that its stores led to lower prices throughout a region. Two suggested that Wal-Mart increased a county's total employment, with one pegging that long-term gain at 1% to 2%.

David Neumark, a senior fellow at the Public Policy Institute of California, found that "residents of a local labor market do indeed earn less following the opening of Wal-Mart stores."

Worse yet, he wrote, is Wal-Mart's influence in the South, where it has its greatest concentration of stores. There, Neumark and his coauthors found, Wal-Mart has decreased retail employment and total employment.

Michael Hicks of the Air Force Institute of Technology and Marshall University found that each employee of Wal-Mart caused "the average state to expend just under $900 a year in Medicaid benefits."

In a look at the Supercenters' effects on local businesses in Mississippi, Albert Myles and his coauthors found that a Supercenter's own community benefited from sharp retail sales increases — as much as 59% — though nearby towns suffered annual decreases. Any gains, the researchers found, came at the expense of local merchants.

"Many times the net increases are minimal as the new big-box stores merely capture sales from existing businesses in the area," they wrote.

Emek Basker of the University of Missouri, however, found that Wal-Mart stores decreased prices across a region and increased total employment. And in a study of Ohio, economist Hicks found that a Wal-Mart store increased commercial property tax revenue and raised employment.

A study of the San Francisco Bay Area also presents a mixed picture. UCLA researcher Randall Crane and his coauthors found that once Wal-Mart established itself as the region's leading grocer — the company is already the national leader — it would probably depress grocery store employees' wages by hundreds of millions of dollars. But, they found, the company also would save shoppers hundreds of millions of dollars by offering cheaper food.

Still, Wal-Mart runs the risk that the conference's negative findings will garner more attention than the positive ones.

Wal-Mart, which last year had $285 billion in sales, faces increasing pressure from critics as Wall Street is clamoring for better returns and expansion into areas including California.

In response, Chief Executive H. Lee Scott Jr. pledged recently to improve health benefits for employees, to reform Wal-Mart's environmental practices and to more closely monitor working conditions at overseas factories.

A new documentary film, "Wal-Mart: The High Cost of Low Price" — a scathing look at what filmmaker Robert Greenwald says is the company's "assault on families and American values" — premieres in Los Angeles tonight before moving to thousands of churches, colleges and homes for free screenings.

And on Nov. 13, Wal-Mart Watch will launch what it is calling "Higher Expectations Week," including screenings of Greenwald's film and hundreds of other events nationwide, aimed at making the retailing giant "a better employer, neighbor and corporate citizen."

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Sweet Victory: Wal-Mart Roundup

It's been a tough year for Wal-Mart, and things are about to get tougher.

Co-written by Sam Graham-Felsen                      [back to top]

Last Tuesday, at the world premiere of Robert Greenwald's Wal-Mart: The High Cost of Low Price, SEIU chief Andy Stern declared: "This isn't just the premiere of a movie, it's the premiere of a movement." During the week of November 13 to 19, over 3000 screenings of the film are planned in all 50 states and 19 countries. Throughout "Wal-Mart Week," the two largest groups opposing the retail behemoth's practices, Wal-Mart Watch and Wake Up Wal-Mart, are planning an unprecedented series of actions.

Spiraling into PR crisis mode, the world's largest corporation has just assembled a "rapid-response public relations team in Arkansas," which includes former presidential advisors Michael K. Deaver of the Reagan Administration and Leslie Dach of the Clinton White House. Wal-Mart's new "war room" certainly has its work cut out for itself.

While the movement to change Wal-Mart has reached a fever pitch, throughout the year, Wal-Mart Watch and Wake Up Wal-Mart have waged a tireless and highly coordinated campaign. Here are some of the highlights:

-- Innovative Boycotts: Over 2,000 teachers, students, and activists in more than 20 states participated in Wake Up Wal-Mart's national "Send Wal-Mart Back to School" campaign with the AFT and NEA (the country's two largest teacher unions), urging students to buy school supplies at stores other than Wal-Mart. Over 20,000 Americans pledged not to buy their Mother's Day gifts at Wal-Mart thanks to Wake Up Wal-Mart's Love Mom, Not Wal-Mart" campaign.

-- Make Wal-Mart Care About Health Care Campaign: Wake Up Wal-Mart helped coordinate more than120 house parties in 38 states, which led to over 150 actions encouraging legislators to crack down on Wal-Mart's health care policy. Thanks largely to pressure from Wake-Up Wal-Mart supporters, Rep. Anthony Weiner, Sen. Ted Kennedy, and Sen. Jon Corzine introduced the Health Care Accountability Act in Congress--which would require states to disclose the names of large employers whose workers are on Medicaid as a result of the companies refusal to provide insurance benefits.

-- Fair Share Health Care Act: Representatives of Wake Up Wal-Mart and Wal-Mart Watch lobbied Maryland's legislature and helped pass the first legislation in the nation that would require large companies (specifically Wal-Mart) to pay for health benefits for employees. Although Republican Gov. Robert Erlich vetoed the bill, the movement to get such legislation passed in other states has just begun. Over 2,000 Wake Up Wal-Mart supporters have pledged to lead the fight in their states to introduce Fair Share Health Care legislation (click here to help introduce such a bill in your state). In September, the Working Families Party and the Long Island Federation of Labor helped get a bill passed in Suffolk County, New York.

-- Blocking the Bank: In September, Wal-Mart Watch delivered over 11,000 signed petitions to the FDIC in opposition to Wal-Mart's application for an Industrial Loan Charter (ILC) in Utah. According to Wal-Mart Watch, a Utah ILC "would effectively grant Wal-Mart the ability to loan businesses and individuals money to spend in Wal-Mart stores, violating prohibitions against the mixing of banking and commerce." The petitions have had a "staggering impact on the FDIC" and has significantly delayed the ILC process, says Wal-Mart Watch spokesperson Tracy Sefl.

-- The Leaked Memo: On October 26th, Wal-Mart Watch delivered a knock-out blow to Wal-Mart. The corporation had just made giant strides to rebuild its image--publicly declaring its intentions to offer health care plans for its employees and voicing support for a Federal minimum-wage increase. The very next day, the New York Times published a cover-story on a leaked internal memo, acquired by Wal-Mart Watch, which detailed Wal-Mart's plans to systematically weed out unhealthy employees and applicants in order to avoid health care costs. The exposure of the memo instantly deflated Wal-Mart's hollow attempt at an image makeover.

"We don't want to destroy Wal-Mart. We want to change it, to make it a decent, humane company, which it could easily do," says Chris Kofinis, communications director of Wake Up Wal-Mart, who stresses that Wal-Mart will be a key issue in the 2006 and 2008 elections. "We're not going to rest or sleep one bit until that happens."

[Full disclosure: The Nation is part of a wide coalition of groups, organizations and publications helping to generate interest in the screenings.]

Co-written by Sam Graham-Felsen, a freelance journalist, documentary filmmaker and blogger (www.boldprint.net) living in Brooklyn.

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Wal-Mart to Tighten Control Over Its Japanese Affiliate

By MARTIN FACKLER
November 3, 2005
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TOKYO, Nov. 2 - Wal-Mart Stores said on Wednesday that it would extend its control of Seiyu, its ailing Japanese affiliate, by installing one of its top United States executives at the helm.

In a sign of Seiyu's deepening trouble, the Japanese company also said it now expected to post a loss of 13.5 billion yen ($116 million) for this calendar year, compared with a previous forecast for a loss of 7.5 billion yen.

Ed Kolodzieski, senior vice president and chief operating officer of Wal-Mart's international operations, will take over as the chief executive of Seiyu in December, the companies said. He will succeed Noriyuki Watanabe, who will remain chairman.

The companies said Wal-Mart executives would also occupy 6 of the 11 seats on Seiyu's board. The move comes a month after Wal-Mart, based in Bentonville, Ark., announced its intention to make Seiyu a subsidiary by increasing its ownership stake to just more than 50 percent. The company said on Wednesday that it would lift its stake to 54 percent.

Seiyu has lost money every year since Wal-Mart bought its initial stake three years ago, underscoring the challenges that Wal-Mart, the world's largest retailer, faces in bringing its price-cutting strategy to Japan, the world's largest retail market after the United States.

So far, Wal-Mart has moved cautiously in search of the right mixture of price and quality to please Japanese shoppers.

Success in Japan is crucial for Wal-Mart, which increasingly must look outside the saturated United States market for growth opportunities.

Mr. Kolodzieski will preside over an acceleration in changes at Seiyu and the adoption of Wal-Mart methods to Japan, Mr. Watanabe told reporters.

In particular, he said, Mr. Kolodzieski will oversee the operation of a new five-year plan that could determine the success of Wal-Mart's venture in Japan, where it has already said it will invest $1.3 billion by the end of this year.

The companies refused to disclose details of the plan on Wednesday, saying they would do so later. Previously, Wal-Mart said the plan would probably include heavy new spending to revamp half of Seiyu's 405 stores.

Mr. Kolodzieski has limited experience in Japan, although he has sat on Seiyu's board for two years. He also sat on a Wal-Mart real estate committee that advised Seiyu on land issues.

Analysts have said Wal-Mart might try to recover part of its investment by selling Seiyu stores, some of which sit on prime Tokyo land. Wal-Mart declined to say whether Mr. Kolodzieski's real estate background had been a factor in his appointment.

The companies attributed Seiyu's forecast of a wider loss for 2005 to the cost of sales promotions and price cuts in the intensely competitive Japanese market. They said Seiyu had a loss of 17.5 billion yen in the first nine months of the calendar year.

Copyright 2005 The New York Times Company

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Wal-Mart Movie Opens With Fracas In Manhattan

Thursday, November 03                   [back to top]

• The New York Times reports that Robert Greenwald confronted Wal-Mart consultant John Marino, at the New York launch of Wal-Mart: The High Cost of Low Price on 1 November 2005. The Guardian notes that Greenwald's film distributor is contemplating suing Wal-Mart for piracy.

• 200,000 Missouri employees have filed a class action suit against Wal-Mart over its unauthorized removal of rest and meal breaks from pay cycles. In retaliation at the negative publicity, BusinessWeek reveals that Wal-Mart is sponsoring an academic conference to examine the conglomerate's economic impact on businesses and communities.

• Salon's Andrew O'Hehir surmises: "We didn't know about any of this alleged bad stuff, Wal-Mart insists -- and that happy little yellow Low-Pricey Man throws his gloved hands in the air and does his best impression of a frown. But as you watch Greenwald's movie that response becomes more and more incredible; what the chain's execs presumably didn't know about their global quest to drive costs, wages and prices ever downward dwarfs the already galactic scale of what George W. Bush and Dick Cheney presumably didn't know about Iraq."

• CBS5 has broadcast an excellent interview with Greenwald.

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Wal-Mart exec to take helm at Japanese retailer

Seiyu is set to become a subsidiary of the U.S. discount chain in December

MSNBC.com
The Associated Press
Nov. 2, 2005                                  
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TOKYO - A Wal-Mart executive will take the helm of Seiyu Ltd., a Japanese retailer set to become a subsidiary of the U.S. chain in December, signaling Wal-Mart’s determination to succeed in Japan’s lucrative — and finicky — retail market.

Seiyu announced Wednesday that Ed Kolodzieski, senior vice president and chief operating officer of Wal-Mart International, would become its new chief executive on Dec. 15 upon shareholder approval.

Kolodzieski, who has been a Seiyu board member since 2004, replaces Noriyuki Watanabe, who stays on as chairman.

Since arriving in Japan in 2002, Wal-Mart Stores Inc., the world’s biggest retailer, has been gradually increasing its stake in Tokyo-based Seiyu, the nation’s fifth-largest chain with more than 400 stores.

But Seiyu has lost money in the three years since, struggling to win over shoppers with a reputation for being both picky and trendy. Other global retailers have also struggled in Japan. Carrefour SA of France, the world’s No. 2 retailer, abandoned the country earlier this year.

Wal-Mart, which has international operations in Mexico, Germany, South Korea, Canada and elsewhere, seems intent on establishing itself in Japan, the world’s second biggest retail market.

“For Wal-Mart, this is an extremely important market,” Jeff McAllister, senior vice president at Wal-Mart International told reporters at a Tokyo hall. “Frankly we’re optimistic about the future.”

Retail partnership Under its partnership with Seiyu, Wal-Mart has been gradually cutting costs, remodeling stores and opening large-scale supermarkets, which are still relatively rare here. McAllister said those efforts would accelerate because Wal-Mart was not only boosting its investment but sending in new management.

Last month, Bentonville, Ark.-based Wal-Mart said it will raise its stake in Seiyu to more than 50 percent from 42 percent by December, turning it into a Wal-Mart subsidiary. On Wednesday, Seiyu said Wal-Mart would expand its holding to 54 percent through an investment of 67.5 billion yen, or about $585 million.

Seiyu will keep its brand name, although executives said the company may consider adopting the Wal-Mart name in the future.

Seiyu also cut its profit forecast for the full year through December, citing a high level of promotions and discounts to attract customers. The chain is now expecting its net loss to widen to $117.4 million (13.5 billion yen), from a July forecast of $65.2 million (7.5 billion yen).

For first three quarters of the year, Seiyu’s net loss expanded to $152.2 million (17.5 billion yen), from a loss of 9 billion yen a year earlier.

Sales slid 4.8 percent to $6.33 billion (727.9 billion yen) in the first nine months.

“Seiyu’s performance in the third quarter has been disappointing, but we remain confident in the company’s long-term future,” Mike Duke, vice chairman of Wal-Mart International, said in the statement.

McAllister said more customers are coming to the remodeled stores although he declined to say when Seiyu will turn profitable.

Watanabe and McAllister did not give specifics on a new strategy under Kolodzieski, who was not at the news conference. They said Seiyu membership in “the Wal-Mart family” will offer a stable financial base and allow Seiyu to speed up its revival.

Kolodzieski has 28 years of retail and supermarket experience and joined Wal-Mart in May 2000. He was first involved in Seiyu in 1992 when he led a managerial and cultural exchange program between Seiyu and Kash N’ Karry Foods, a U.S. supermarket chain.

One challenge Wal-Mart faces is that Japanese retailers have begun to imitate Wal-Mart’s mall-type stores. The company has also learned it must adapt to local tastes in Japan, and has not yet been able to offer the extremely low prices here like those with which the chain built its brand in the United States.

© 2005 The Associated Press. All rights reserved.

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Labor Dept. to Wal-Mart — How may we help you?

By L.M. SIXEL
HoustonChronicle.com
Nov. 2, 2005                          
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COMPANIES typically aren't supposed to be tipped off before government investigators launch an overtime, minimum wage or child labor inquiry.

Nor is the Labor Department supposed to give companies a head start to fix problems before imposing fines for violating federal wage and hour laws. That is, unless you're Wal-Mart.

The Labor Department cut a secret deal in January with the giant retailer that would give it a 15-day advance notice of all wage and hour investigations and then a 10-day grace period to fix the problems.

The department also promised, if necessary, it would develop joint press releases with Wal-Mart — a provision that violates the department's own press policy.

Though the Office of the Inspector General said this week it found nothing illegal, there were "serious breakdowns" in the department's process when it negotiated the corporate-wide "compliance agreement."

"These breakdowns resulted in the wage and hour division entering into an agreement that gave significant concessions to Wal-Mart,"according to the inspector general, who was asked to investigate in February by U.S. Rep. George Miller, D-Calif., when the agreement was leaked to the media.

"In our view, the Wal-Mart agreement may adversely impact wage and hour division's authority to conduct future investigations and issue citations or penalty assessments, and potentially restricts information to the public," the report said.

Child labor law at issue The deal, which remains in effect, was struck while Wal-Mart and the department were negotiating alleged child labor violations in Arkansas, Connecticut and New Hampshire that involved the use of hazardous equipment.

"We feel the agreement was an appropriate course of action," said Wal-Mart spokesman Marty Heires. It stipulated that the company would follow all the labor laws that apply to workers aged 16 and 17.

However, according to the inspector general, significant portions of the agreement were written by lawyers for Wal-Mart. And the department never asked its own solicitor to review the document.

Labor agrees to change Following the investigation, the department agreed to send all settlement agreements to its solicitor for review and would establish ground rules for all future agreements, Victoria A. Lipnic, assistant secretary for employment standards, said in a letter to the inspector general.

Though the department agreed to change its ways, it downplayed its agreement with Wal-Mart, saying it applied only to child labor violations and would not stop it from intervening in a hazardous situation at other companies.

However, the Inspector General said the agreement clearly stated it includes any wage and hour audit.

The problem with the agreement between Wal-Mart and the Labor Department is that it only benefits the company, said Rex Burch, an employment lawyer who specializes in wage and hour issues with Bruckner Burch.

"Wal-Mart is being rewarded for doing something they are required by law to do: obey the child labor laws and pay employees what they are owed," said Burch, who said he's never before seen an agreement like Wal-Mart's.

So why did the Labor Department make the deal? The inspector general found no evidence of influence or pressure.

It might have been money — or, rather, the lack of it.

According to the inspector general, the regional administrator in Dallas said that "resource allocation issues" played a significant role in opting to forgo further investigations.

The administrator believed that the agreement would ensure the retailer's compliance with child labor laws.

'Notoriously litigious' Or maybe it was Wal-Mart's reputation.

The retailer is "notoriously litigious," said Burch, pointing to the number of times courts have sanctioned Wal-Mart for failing to provide documents and other evidence during lawsuits.

Miller and Rep. Rosa DeLauro, D-Conn., introduced a bill Tuesday that would prevent the Labor Department from agreeing to give advance notice of inspections.

lm.sixel@chron.com

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Jackson County court certifies class in Wal-Mart suit

Kansas City Business Journal
November 2, 2005                            
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A Kansas City law firm said it scored a victory for Wal-Mart employees Tuesday after a Jackson County judge granted class-action status in a lawsuit alleging that the company required employees to work "off the clock."

The matter was argued in Jackson County Circuit Court by Steve Long of Shughart Thomson & Kilroy PC. Long is a partner in the firm's Denver office.

"While this specific case applies only to current and former Wal-Mart employees in Missouri, it promises to be the breakthrough that will finally force Wal-Mart to quit profiteering illegally at the expense of its own employees," Long said in a written statement.

The decision could directly affect 250,000 current and former Wal-Mart employees and indirectly benefit an additional 750,000 current and former Wal-Mart employees nationwide because of other cases pending in other states.

Wal-Mart said the certification by Judge Sandra Midkiff didn't validate the charges against the company.

"We strongly deny the allegations in this lawsuit and are considering our options," Wal-Mart spokeswoman Christi Davis Gallagher said in a written statement.

Shughart Thomson said it has won a similar ruling against Wal-Mart in Colorado and has pending actions against the company in several other states.

The firm said the Missouri case is based on statements from Wal-Mart employees who reported routinely working without pay -- some for nearly 10 hours a week -- so the company could avoid paying them higher wages triggered by overtime laws.

Gallagher disputed the allegation.

"Wal-Mart's policy is to pay associates for every minute they work," her written statement said. "Any manager who requires or even tolerates 'off the clock' work would be violating company policy and subject to disciplinary action, up to and including termination."

© 2005 American City Business Journals Inc.

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Missouri Wal-Mart workers get class-action status

St. Louis Business Journal
November 2, 2005
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A Missouri circuit court judge gave class-action status to about 250,000 current and former Wal-Mart workers in the state who are challenging some of the company's practices.

The employees claim that the company forces them to work without pay and miss promised breaks in an effort to avoid paying them overtime, said Shughart, Thomson & Kilroy PC, a Kansas City-based law firm handling the case.

"What sets the Missouri case apart is that for the first time, Wal-Mart was forced by the court to provide outside access to its electronic database," said Steve Long, lead trial attorney on the case, in a statement. "Based on Wal-Mart's own data, it's abundantly clear they're forcing employees collectively to work many thousands of hours each month without pay. What they're doing is illegal."

In a written statement provided to the St. Louis Business Journal by Christi Davis Gallagher, a Wal-Mart spokeswoman, the company said certifying this as a class does not mean that the company has done anything wrong or improper.

"There has been no ruling on the merits of the plaintiffs' claims. We strongly deny the allegations in this lawsuit and are considering our options. Wal-Mart's policy is to pay associates for every minute they work. Any manager who requires or even tolerates 'off-the-clock' work would be violating company policy and subject to disciplinary action, up to and including termination."

With nearly 12,000 employees in the St. Louis area, Bentonville, Ark.-based Wal-Mart Stores Inc. (NYSE: WMT) is the fifth-largest employer in the St. Louis area.

© 2005 American City Business Journals Inc.

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Wal-Mart completes $1B Seiyu bailout

Retail giant assumes a majority stake in company; senior vice president Ed Kolodzieski to take helm.

November 2, 2005                   [back to top]

TOKYO (Reuters) - Wal-Mart Stores Inc. finalized a $1 billion rescue package for its struggling unit Seiyu Ltd. on Wednesday and named one of its top officials to head the Japanese retailer, which also widened its loss estimate.

Under the deal, Wal-Mart will inject �67.5 billion to take a controlling 53.56 percent voting stake in Seiyu, up from 42.48 percent, allowing the world's biggest retailer to step further into the crowded Japanese market.

Mizuho Financial Group Inc. will also inject �47.5 billion through the purchase of preferred shares.

Ed Kolodzieski, senior vice president and chief operating officer of Wal-Mart's international division, will become chief executive officer of Seiyu on Dec. 15, giving the U.S. company a firmer grip on the troubled Japanese retailer.

Jeff McAllister, chief operating officer for Wal-Mart's Japanese operations, said the U.S. retailer continues to bet the size of the Japanese market would provide a return despite a widened 2005 loss outlook at Seiyu.

"This market has a lot of promise, and because of that we are patiently investing both management as well as capital, and we expect to get a return on that over time," he told reporters on the sidelines of a news conference.

"Nobody really owns market share in Japan ... Everybody is pretty small," he said. "Over time, we think there will be opportunities for further consolidation, further market share growth, and I believe Seiyu will continue to demonstrate that they can be the customers' first choice."

Seiyu, Japan's fourth-largest retailer, said it now expects a net loss of �13.5 billion, nearly doubling its previous loss forecast of �7.5 billion in the year to December, due to slower-than-expected improvement in its profit margin.

It would be Seiyu's fourth straight year in the red and worse than the �7.9 billion net loss that analysts estimated in a Reuters Estimates poll before the company's revision.

Seiyu, which has struggled to adopt Wal-Mart's sales strategy since the U.S. giant took a 6 percent stake in it in 2002, had already cut its forecast in July to a loss of �7.5 billion from a nil profit projection.

Turnaround may take time Contrary to Wal-Mart's optimism, analysts remain skeptical that the injection of capital and a new management team will bring about a quick turnaround for Seiyu in Japan's crowded general merchandise market.

"Even after an injection, it is still difficult to boost sales in the current environment of having too many stores, unless Seiyu seeks some measures such as closing unprofitable outlets," J.P. Morgan analyst Kenji Tsukazawa said.

He added that the key to the success of the new Wal-Mart-led management would be to fully understand the Japanese market's unique culture and customers.

Seiyu on Wednesday also reported a net loss in the nine months to September of �17.5 billion, widening from a loss of �9.05 billion a year earlier.

Wal-Mart will buy 170.7 million in new shares for �35 billion, paying �205 per share, which means a 16 percent discount to Seiyu's Wednesday closing price. Wal-Mart will also buy preferred shares worth �32.5 billion. The payment will be made on Dec. 21.

Shares in Seiyu grew 17.8 percent in the January-September period, but underperformed a 25.1 percent rise in the Tokyo Stock Exchange's retailer subindex IRETL.

Prior to the announcement, the stock ended the day up 0.82 percent at �245, while the subindex closed up 0.3 percent. The Nikkei average rose 0.19 percent.

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Wal-Mart: Is This the Worst Company in the World?

by Andrew Gumbel
Independent / UK
Wednesday, November 2, 2005                     
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There can be few chief executives in corporate America more uncomfortable at the moment than Lee Scott of Wal-Mart. Not that he should necessarily have our sympathy: his company, known unaffectionately as the Beast of Bentonville, after its corporate home, is the biggest single private employer in the United States. Its network of more than 3,500 discount retail stores has been lambasted repeatedly in recent years for its rock-bottom wages, which oblige thousands of its lower-end employees to resort to government subsistence, including food stamps, to make ends meet. It has faced down critics for its reliance on overseas sweatshop labour, especially in China, to produce the goods with which it stocks its shelves. It has met community resistance to new store openings in many parts of the country because of its tendency to empty town centres of traditional family-owned businesses and foster suburban sprawl. It has been accused, in fact, of being the very emblem of everything that assails the modern American economy, as old-style industrial manufacturing jobs are outsourced overseas and are replaced with low-wage, low-security service-sector work. All that, though, is only one of the multiple headaches confronting Mr Scott. His biggest problem is that he has been making energetic efforts to improve his company's lousy reputation, only to have his efforts undermined by embarrassing new information unearthed about the company and by a spirited organising effort by churches, small businesses, unions, environmentalists and rich coastal liberals to stop the Wal-Martisation of America dead in its tracks. Things were looking distinctly promising a little over a month ago, when Wal-Mart threw considerable energy into volunteer efforts in the immediate aftermath of Hurricane Katrina in Louisiana and Mississippi. In stark contrast to both the federal and state governments, Wal-Mart was present with containers full of fresh water, food and medical supplies. That was followed in mid-October by a flurry of touchy-feely proposals by Mr Scott - to make Wal-Mart stores more energy-efficient, to make health care at least ostensibly more accessible to his employees, and to lobby politicians for an increase in America's minimum wage, which has glaringly failed to keep up with inflation for more than 20 years. But all the careful public relations work was demolished by the leak of an internal memo last week which acknowledged some shocking home truths about Wal-Mart - including the fact that 46 per cent of the children of company employees either had no health insurance or relied on emergency government programmes nominally set up for the indigent and unemployed. The memo, written by Wal-Mart's executive vice-president for benefits in conjunction with the management consultants McKinsey, also showed the true purpose of rearranging the company's health plan was to cut costs further. Sure enough, close examination of the health plan revealed that, while monthly insurance payments were being lowered in some cases, they came with a hefty deductible that many company employees were unlikely to be able to afford. The memo went so far as to suggest adding a physical element to sedentary jobs such as cashiering to deter unhealthy people from applying. This week sees the arrival of a whole new public relations nightmare, in the shape of a documentary film which has already become an organising tool for anti-Wal-Mart activists across the country. Called Wal-Mart: The High Cost of Low Price, it was made by Robert Greenwald, a prominent Hollywood liberal who has pioneered a new form of viral marketing in which politics and film promotion are merged, and screenings are arranged - often simultaneously - everywhere from private house parties to traditional cinema outlets. Mr Greenwald's last two films, one citing a panoply of intelligence and national security experts on why they thought the Bush administration had lied its way to war in Iraq, and the other turning an unflattering spotlight on the rabidly pro-Bush Fox News channel, punched considerably above their low-budget weight and earned a torrent of press coverage, as much for the innovative way they were distributed as for their content. This time, the marketing has gone into overdrive. The film is the focus of two anti-Wal-Mart groups, Wal-Mart Watch and Wake Up Wal-Mart, which were set up six months ago by an alliance of unions representing service workers and food and retail workers as clearinghouses for information - especially damning information about a company they have come to regard as public enemy number one. Through their networks, Mr Greenwald's film will be shown in more than 6,000 venues over the next couple of weeks - union halls, churches, small businesses and private homes as well as higher-profile venues like the Writers Guild Theatre in Beverly Hills. Screenings are being attended by mayors, city-council members, union leaders and showbusiness personalities. And that's just the tip of the iceberg. Last weekend, anti-Wal-Mart activists went Hallowe'en trick-or-treating outside more than 100 Wal-Mart stores to raise money to help meet the healthcare costs of struggling company employees. Starting on 13 November, a Wal-Mart "week of action" promises more documentary screenings, street protests, TV and newspaper advertising campaigns and other, as yet unannounced gimmicks. The existence of Mr Greenwald's film has been no secret. He not only cultivated an advance fan club on the internet, he even consulted them to select a title. Initially, Wal-Mart appears to have thought the best strategy was to pay no attention. One company spokeswoman said: "I guess we will pretty much ignore it - because to all but a handful of anti-Wal-Mart activists, it simply will be irrelevant." That, though, was before the sheer size and scope of the accompanying organising effort became clear. Now the company has gone to the other extreme, putting out a 10-page press release accusing Mr Greenwald of getting his facts wrong even in the short trailer he has put out - the company has seen no more for now - and attempting to discredit him by digging out the most embarrassing item on his long resume - the disastrous 1980 Olivia Newton-John vehicle, Xanadu - and reprinting as many scathing reviews as it could find. Mr Greenwald believes his film actually occasioned the entire charm offensive undertaken by the company in the past couple of months. " Listen, I understand, I'd be nervous too," he said in an interview. " I wouldn't myself waste millions of dollars in PR money to attack the messenger rather than trying to address some of the problems. This is a company that spends $3.8m [£2.2m] a day on telling its story - not on milk and eggs but on propaganda. If that money was spent on providing adequate healthcare to its employees it could make a huge difference." Wal-Mart, for its part, cannot quite bring itself to acknowledge Mr Greenwald's work as a film. Rather, it is referring to it as a "special interest video" - the special interests in question being labour unions and environmentalists. And it has started pumping out some high-charged rhetoric of its own to counter the often emotional accusations being hurled by its detractors. "Let's be clear about Mr Greenwald's intent," the company press release said. "It is not to present a fair and accurate portrayal of Wal-Mart. It is a propaganda video - pure and simple." Among the issues it has challenged is the testimony of an Ohio hardware store owner, who explains on camera how his bank refused to keep his line of credit going once it learned Wal-Mart was coming to town and so forced him out of business. Wal-Mart argues first that it cannot have been responsible for the closure, because its store did not open until after the hardware shop closed, and second that it cannot have deterred hardware businesses because another one sprang up on exactly the same site shortly afterwards and is still going. Depending on your point of view, this is either an attempt to nitpick the film to death, or an illumination of Mr Greenwald's slanted view of the company. One of the film's most powerful sequences has, however, prompted no comeback to date from Wal-Mart. It concerns a former company executive, Weldon Nicholson, who describes how he was ordered to bust attempts at union organisation, "ignore" the existence of undocumented immigrant cleaning crews, make campaign contributions to local politicians who indicated their opposition to new Wal-Mart projects, shave hours off employees' time-cards, and inform workers about government healthcare programmes so the tax-payer, not the company, would meet any medical costs. " You won't ever find these policies in a Wal-Mart handbook, but every single manager in this country is taught how to do these things," Mr Nicholson alleges. "If you learn to do them well, you are promoted. If not, then they find a way to force you out... There's so much wrong with this company, I wouldn't even know how to begin." Such incendiary accusations aside, Wal-Mart is an extraordinary phenomenon in American society. First because of its size: with more than 1.3 million employees and revenues of $285bn this year, it is larger than quite a few countries. And second because the very thing that makes it so attractive - low prices on everyday consumer goods - may be the very thing that is strangling the communities it serves. The company denies this, of course, but a newly published academic paper argues in scientific fashion that Wal-Mart stores reduce employment by anywhere from 2 to 4 per cent in communities and depress local wages by as much as 5 per cent. What makes the paper so powerful is that its lead author, David Neumark of the Public Policy Institute of California, has been sceptical of union-led "living wage" campaigns in the past. Certainly, Mr Greenwald would argue that the Wal-Mart economic model is by definition unsustainable. He calls it a "suicide economy" and cites a multiplicity of people in his film -- Republican small business owners who feel stifled, residents of gated communities who resent Wal-Mart changing the land-use rules and moving in next door - who might otherwise be moved to applaud capitalist enterprise in action. The film charts one particularly striking instance in which a community slammed the door on Wal-Mart - the middle-class, predominantly black Los Angeles neighbourhood of Inglewood, which voted against admitting the chain in a referendum last year despite a long and costly campaign by the company. That, in turn, has spooked Wal-Mart into thinking it has to stop being the bogeyman of American business and try to make itself, at the very least, less visible. That lower-profile approach has been employed at Asda, Wal-Mart's British subsidiary, which has in large part avoided hitting the headlines, while attempting to import simlarly controversial tactics into the UK. Asda managers, it is claimed, have adopted a softly-softly approach to marginalise unions under a so-called "chip-away" strategy. One internal document proposes increasing employees' productive time by cutting back on lavatory breaks, putting pressure on shop stewards to spend less time on union business and creating channels for communicating with employees without the involvement of the GMB general union. Asda has continued, nonetheless, to insist it is not anti-union. Perhaps Asda's most unpopular initiative, however, was to try to cut costs by withdrawing a Christmas discount offered to the group's 140,000 employees. The supermarket chain was forced last week to reinstate most of the price cuts after a rebellion by staff. The acting general secretary of the GMB, Paul Kenny - together with a number of his members - contacted bitter rival Tesco asking if it would honour the discount instead. Asda is desperately trying to take customers away from Tesco, which enjoys the lion's share of the market. These problems pale into insignificance when compared with the trouble brewing back home. According to a piece in USA Today this week, Wal-Mart has built up a very cosy relationship with the California governor Arnold Schwarzenegger, whereby Mr Schwarzenegger receives lavish contributions to causes close to his campaign organisation and in return votes down legislation aimed at curbing Wal-Mart's more odious labour practices - such as its habit of locking overnight shift-workers into the store where they work. Wal-Mart nevertheless has one more trump card with which to counter Mr Greenwald and his friends: a rival documentary film, casting Wal-Mart in a uniformly positive light. According to the publicity materials: "The documentary explores why Wal-Mart is one of the greatest success stories in business history, how it improves the lives of individual working Americans and their communities and the pathology behind the escalating attacks on the company by special interest groups." The title of the film, due out later this month, says it all: Why Wal-Mart Works, And Why That Drives Some People C-r-a-z-y. Questionable practices: Dead Peasant's Insurance Wal-Mart has taken out life insurance policies, known as "dead peasants" , on low-wage hourly employees that pay benefits to the company when the workers die. On top of that - before Congress began cracking down on the practice in 1996 - companies were able to take out loans against the value of these policies and enjoy a tax write-off on the interest payments. Lock-ins Employees are locked in stores until managers return in the morning. Wal-Mart uses this practice to ensure overnight shelf-fillers cannot pilfer goods and they don't need to pay supervisors. In one case a pregnant employee who was unwell had to wait more than two hours to be released. Discrimination Wal-Mart is the subject of a class action lawsuit by past and present female "associates" who claim they were systematically paid less and promoted less than their male colleagues. No unions, no way New Wal-Mart supervisors receive a booklet called Manager's Tool Box For Remaining Union Free. Managers are "the first line of defence against unions", and encouraged to report organised labour activity to a special hotline. In 2000 the company closed its meat counters nationwide in response to 10 of its butchers in Texas forming a union. Off-the-clock Thousands of workers have reported being forced to work after hours without overtime. Regular tactics include having "associates" clock off and then calling them back in to clean stores. This has helped the company to get average sales staff pay down to $14,000 a year, $1,000 less than the American poverty line. Health benefits A Wal-Mart internal memo focused on ways to reduce the "unacceptable" 15 per cent annual rise in health benefits, including adding a "physical element" to all jobs - eg, making checkout staff gather trolleys - to discourage the overweight or infirm from applying in the first place.

© 2005 Independent News & Media (UK) Ltd.

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Campaign Against Wal-Mart to Heighten in Mid-November

by F. Timothy Martin
NewStandard                          
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Nov 1 - Opposition to Wal-Mart, the world's largest retailer, is escalating as a coalition of the company's detractors prepares to launch a week-long series of grassroots actions nationwide from November 13 - 19. Led by WalMartWatch, an umbrella group of liberal and progressive organizations founded by Service Employees International Union (SEIU) head Andrew Stern, tens of thousands are expected to take part in organized discussions and protests to be held at community centers and churches across the country, as well as outside many of Wal-Mart's 3,600 stores.

Organizers are calling their event Higher Expectations Week, a jab at Wal-Mart founder Sam Walton, who was once quoted as saying, "High expectations are the key to everything." Organizers say they want to step up pressure on Wal-Mart to improve conditions for employees and neighboring communities.

"The goal," said Stern in a recent letter addressed to SEIU members, "is to get the world's largest corporation to address issues such as decent health care benefits, the right for workers to have a voice in their workplace, and to address smart-growth issues in our communities."

The highlight of the week: 3,500 house parties featuring screenings of a highly critical new documentary by Robert Greenwald, who previously directed Outfoxed, a damning examination of political bias at Fox News. Greenwald's newest film, Wal-Mart: The High Cost of Low Prices, is expected to open on Novenber 4 in New York and Los Angeles, and will eventually show in at least 19 countries and all 50 states.

Wal-Mart has already responded by slamming the film's trailer, which the retailer says presents at least three inaccuracies. Wal-Mart has countered the recent spate of negative publicity by hiring a new PR firm, and issuing a 10-page press kit for reporters that defends the company's business practices and details the company's grievances with the film.

A second film, Why Wal-Mart Works: And Why That Drives Some People Crazy, takes a more favorable look at the Wal-Mart corporation and is being pushed through editing so it can open around the same time as the Greenwald film. Director Ron Galloway claims his film cost only $80,000 to make and that he received no funding or support from Wal-Mart.

A press release advertising the film, however, can be found on Wal-Mart's website, along with an open letter from Galloway to Greenwald challenging him to show the two films together.

© 2005 The NewStandard.

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A New Weapon for Wal-Mart: A War Room

by Michael Barbaro
the New York Times
Tuesday, November 1, 2005            
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BENTONVILLE - Inside a stuffy, windowless room here, veterans of the 2004 Bush and Kerry presidential campaigns sit, stand and pace around six plastic folding tables. Open containers of pistachio nuts and tropical trail mix compete for space with laptops and BlackBerries. CNN flickers on a television in the corner.

The phone rings, and a 20-something woman answers. "Turn on Fox," she yells, running up to the TV with a notepad. "This could be important."

A scene from a campaign war room? Well, sort of. It is a war room inside the headquarters of Wal-Mart, the giant discount retailer that hopes to sell a new, improved image to reluctant consumers.

Wal-Mart is taking a page from the modern political playbook. Under fire from well-organized opponents who have hammered the retailer with criticisms of its wages, health insurance and treatment of workers, Wal-Mart has quietly recruited former presidential advisers, including Michael K. Deaver, who was Ronald Reagan's image-meister, and Leslie Dach, one of Bill Clinton's media consultants, to set up a rapid-response public relations team in Arkansas.

When small-business owners or union officials - also employing political operatives from past campaigns - criticize the company, the war room swings into action with press releases, phone calls to reporters and instant Web postings.

One target of the effort are "swing voters," or consumers who have not soured on Wal-Mart. The new approach appears to reflect a fear that Wal-Mart's critics are alienating the very consumers it needs to keep growing, especially middle-income Americans motivated not just by price, but by image.

The first big challenge of the strategy will come Nov. 1 with the premiere of an unflattering documentary. "Wal-Mart: The High Cost of Low Price" was made on a shoestring budget of $1.8 million and will be released in about two dozen theaters. But its director, Robert Greenwald, hopes to show the movie in thousands of homes and churches in the next month. The possibility that it might become a cult hit like Michael Moore's 1989 unsympathetic portrait of General Motors, "Roger & Me," has Wal-Mart worried.

So, Wal-Mart has embarked on a counteroffensive that would have been unthinkable even a year ago. Relying on a preview posted online, Wal-Mart investigated the events described in the film and produced a short video contending the film has factual errors. (Mr. Greenwald denies there are errors and says that Wal-Mart has not seen the final cut.)

Wal-Mart has also begun to promote a second film, "Why Wal-Mart Works & Why That Makes Some People Crazy," which casts the company in a rosier light. Wal-Mart declined to make its executives available for the Greenwald film, but it participated with the second film's director, Ron Galloway. The war room team helped distribute a letter, written by Mr. Galloway, that challenges Mr. Greenwald to show the two movies side-by-side.

To keep up with its critics, Wal-Mart "has to run a campaign," said Robert McAdam, a former political strategist at the Tobacco Institute who now oversees Wal-Mart's corporate communications. "It's simply nonsense for us to let some of these attacks go without a response."

Wal-Mart's aggressive new posture is a departure from its tradition of relying on an internal staff to manage the company's image. The war room, which is part of a larger Wal-Mart effort to portray itself as more worker-friendly and environmentally conscious, runs counter to the philosophy of the chain's founder, Sam Walton. Believing that public relations was a waste of time and money, the penny-pinching Mr. Walton would not likely have hired a public relations firm like Edelman, Wal-Mart's choice to operate its war room.

So what has changed? For one thing, Wal-Mart's critics have become more sophisticated.

For years, unions hurled little more than insults at the chain. But over the last year, two small groups - Wal-Mart Watch and Wake Up Wal-Mart - set up shop in Washington with the goal of waging the public relations equivalent of guerilla warfare against the company. Wal-Mart Watch received start-up cash from the Service Employees International Union; Wake Up Wal-Mart is a project of the United Food and Commercial Workers International Union. Unions have tried, unsuccessfully, to organize Wal-Mart's employees.

At the suggestion of Wake Up Wal-Mart, members of the nation's largest teachers' unions staged a boycott of Wal-Mart for back-to-school supplies this fall. Wal-Mart Watch, meanwhile, set up an automated phone system that called 10,000 people in Arkansas in June seeking potential whistle-blowers willing to share secrets about the retailer.

Wal-Mart did not rebut such attacks, even when Wal-Mart Watch released a 24-page report blasting the company's wages and benefits. Wal-Mart Watch said the report had been downloaded from its Web site 55,000 times.

Once a darling of Wall Street, Wal-Mart's stock price has fallen 27 percent since 2000, when H. Lee Scott Jr. became chief executive, a drop that executives have said reflects, in part, investors' anxieties about the company's image. Sales growth at stores open for more than a year has slowed to an average of 3.5 percent a month this year, compared with 6.3 percent at Target. And Wal-Mart is facing growing resistance to new urban stores, with high- profile defeats in Los Angeles, Chicago and New York.

There is some evidence that criticism is influencing consumers. A confidential 2004 report prepared by McKinsey & Company for Wal-Mart, and made public by Wal-Mart Watch, found that 2 percent to 8 percent of Wal-Mart consumers surveyed have ceased shopping at the chain because of "negative press they have heard."

The Greenwald movie threatens to make matters worse. It features whistle-blowers who describe Wal-Mart managers cheating workers out of overtime pay and encouraging them to seek state-sponsored health care when they cannot afford the company's insurance. And it travels across small-town America to assess the effects on independent businesses and downtowns after a Wal-Mart opens.

The film is a particular concern now that Wal-Mart is trying to move upscale, a strategy it hopes will appeal to higher-income consumers. In the last year, Wal-Mart has introduced a line of urban fashions called Metro 7, hired hundreds of fashion specialists to monitor how clothing is displayed in stores, and produced more polished advertising.

But for the fashion strategy to pay off, Wal-Mart must win over a group of shoppers who are sensitive to criticism of the chain's record - consumers, in the words of Wal-Mart's chief executive, "who are not worried about their next paycheck."

Hence the war room in Bentonville. Wal-Mart executives realized they were unprepared to react to what Mr. Scott began to call the most expensive campaign ever waged against a corporation. So the company quietly mailed a letter to the country's biggest public relations firms several months ago seeking their help in developing a response.

The contract went to Edelman, which assigned its top two Washington operatives to the account. Wal-Mart would not say what it is paying Edelman, nor would it allow interviews with the war room staff. Mr. Dach, who is active in environmental and Democratic causes, was an outside adviser to President Clinton during the impeachment battle. Mr. Deaver was President Reagan's communications director and the creative force behind Mr. Reagan's so-called Teflon image.

Edelman also dispatched at least six former political operatives to Bentonville, including Jonathan Adashek, director of national delegate strategy for John Kerry, and David White, who helped manage the 1998 re-election of Representative Nancy Johnson, a Connecticut Republican. Terry Nelson, who was the national political director of the 2004 Bush campaign, advises the group.

In turn, Wakeup Wal-Mart is led by, among others, Paul Blank, former political director for the Howard Dean presidential campaign, and Chris Kofinis, who helped create the DraftWesleyClark.com campaign.

Wal-Mart Watch's media team includes Jim Jordan, former director of the Kerry campaign, and Tracy Sefl, a former Democratic National Committee aide responsible for distributing negative press reports about President Bush during the 2004 campaign.

The war room staff arrives at Wal-Mart's headquarters, a short drive from a nearby corporate apartment where they live, by 7 every morning. The group works out of an old conference room on the second floor, christened Action Alley, the same name Wal-Mart gives to the wide, circular aisle that runs around its stores.

Three display boards are covered with to-do lists. One says: "Promote Week of 10/24/05: MLK Memorial Donation. Urban/blighted community plan." Two large maps show the location of Wal-Mart and Sam's Club stores across the United States.

The team starts the day by scanning newspaper articles and television transcripts that mention Wal-Mart. Next come conference calls with Wal-Mart employees around the country to plan for events. Whenever possible, Mr. McAdam said, the war room will try to neutralize criticism before it is leveled.

That was the strategy behind what Action Alley considers its first coup. In late September, after several unions broke off from the A.F.L.-C.I.O., the splinter groups announced they would hold a convention in St. Louis on a Tuesday.

Action Alley members, assuming Wal-Mart would be a target of criticism during the union gathering, arranged for Wal-Mart to hold its own news conference the day before. It invited three local suppliers, a sympathetic local official and a cashier to say that Wal-Mart had a positive effect on the community.

"If you look at many of the stories that were written about that overall convention, they've got our messages in them," Mr. McAdam said. "In the past, when we've just responded to something somebody else is doing, it's sort of 'you know, by the way, Wal-Mart says ...' We got ahead of this one."

A campaign atmosphere pervades Action Alley. A small bus with the words "Clinton-Gore" on the side sits on the table. When discussing Wakeup Wal-Mart, Wal-Mart Watch and the Greenwald movie, Mr. McAdam slips into political-speak.

"The people who show up at Mr. Greenwald's film are probably not swing voters," he said. "They are probably the true believers of their point of view and I doubt there is a heck of a lot we can do to change their minds."

Mr. McAdam continued: "They've got their base. We've got ours. But there is a group in the middle that really we all need to be talking to."

Copyright 2005 The New York Times Company

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Wal-Mart To Make Japan's Seiyu A Group Unit On Dec 21

By Hiroyuki Kachi and Natsuo Nishio
Dow Jones
11-02-05                      
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TOKYO -(Dow Jones)- Wal-Mart Stores Inc. (WMT) will turn Seiyu Ltd. (8268.TO) into a group subsidiary on Dec. 21, the Japanese supermarket chain operator said Wednesday.

Seiyu, which announced details of its planned new share issues to the U.S. retail giant and others, said its board approved the appointment of a Wal-Mart executive to be its new president and chief executive as of Dec. 15.

The U.S. retail giant first invested in Seiyu in March 2002 and has been providing guidance and technology to help the Japanese company revive its business.

In September, Seiyu announced plans to issue new shares to Wal-Mart and Mizuho Corporate Bank Ltd. At the time, Seiyu said Wal-Mart's voting rights in the Tokyo-based supermarket chain was likely to rise to more than 50% from 42%.

Now, Seiyu said it will issue new common shares worth Y35.00 billion and preferred shares worth Y32.5 billion toward Wal-Mart. Seiyu will also ask Mizuho Corporate Bank to buy preferred shares totaling Y47.5 billion.

As a result, Wal-Mart will lift its voting rights in Seiyu to 53.56% as of Dec. 21.

Seiyu also said Ed Kolodzieski, currently chief operating officer of Wal-Mart International and Seiyu board member since 2004, will become its president and CEO.

Seiyu will hold an extraordinary shareholders meeting on Dec. 15 to seek approval of the new share issues and the management changes.

In addition, Seiyu said it now expects a deeper group net loss of Y13.5 billion for this fiscal year through Dec. 31, due to poor results for the January-September period.

For the nine-month period ended Sept. 30, Seiyu suffered a group net loss of Y17.53 billion, worse than the net loss of Y9.05 billion in the same period a year ago. Group revenue fell 4.8% to Y727.95 billion from Y764.49 billion, it said.

-By Hiroyuki Kachi and Natsuo Nishio, Dow Jones Newswires; 813-5255-2929; natsuo.nishio@dowjones.com; hiroyuki.kachi@dowjones.com

-Edited by Chris Gallagher and Tomoko Hosaka

Copyright (C) 2005 Dow Jones & Company, Inc. All Rights Reserved.

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Judge Limits Wal-Mart Suit vs. Ex-Executive Agreement to Not Sue Each Other Cited

By Marcus Kabel
Associated Press
washingtonpost.com
Wednesday, November 2, 2005                     
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BENTONVILLE, Ark., Nov. 1 -- An Arkansas judge Tuesday dismissed a large part of Wal-Mart Stores Inc.'s lawsuit against former vice chairman Thomas M. Coughlin, saying the executive and the company had agreed not to sue each other over any events that happened during Coughlin's tenure.

Wal-Mart had claimed Coughlin, a protege of company founder Sam Walton, misused $500,000 in cash and property over several years.

Benton County Circuit Judge Jay Finch, whose courtroom is about a mile from Wal-Mart's headquarters, said Wal-Mart failed to show that Arkansas law required a company officer to disclose any improprieties before signing a general release from liability.

Finch said Wal-Mart can still pursue losses that occurred after Jan. 22, when the company and Coughlin waived their right to sue over past events. Wal-Mart says it gave Coughlin $400,000 in April because of a benefits calculation error and wants the money returned.

Wal-Mart, the world's largest retailer, sued the company veteran this summer after referring the matter to federal prosecutors.

But an agreement between Coughlin and Wal-Mart said they would release each other "from any and all liability from claims, causes of actions, demands, damages, attorneys fees, expenses, compensation or other costs or losses of any nature whatsoever, whether known or unknown."

Finch's order said Wal-Mart could pursue only claims for any alleged wrongs that occurred after the release was signed.

"We grant Coughlin's motion to dismiss that part of Wal-Mart's complaint of all allegations occurring prior to signing the mutual release," Finch wrote. "With regard to Wal-Mart's post-release allegations, we deny Coughlin's motion to dismiss."

Coughlin retired in January but remained on the company's board. He resigned from the board in March, when Wal-Mart disclosed it was handing documents over to the Justice Department showing that $500,000 had been misused.

A grand jury has been meeting in Fort Smith, Ark., to address Wal-Mart's claims against its former executive. Coughlin, through his attorney, has denied any wrongdoing.

The company sued Coughlin, seeking the return of his compensation from a retirement agreement plus any money he misappropriated. The lawsuit also seeks $400,491.90 that Wal-Mart says Coughlin received April 12 as the result of a benefits error.

Wal-Mart disclosed in April that it was suspending Coughlin's benefits. Under his retirement agreement, Coughlin is to receive his base salary of $1.03 million for two years.

A notice in a filing with the Securities and Exchange Commission said Coughlin would lose 186,407 shares of restricted stock, worth $9.77 million at the end of Wal-Mart's last fiscal year.

Coughlin led Wal-Mart's discount and warehouse stores divisions until late 2004.

© 2005 The Washington Post Company

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Big Box Ordinance 

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The City Council, at their January 12, 2004, meeting, voted to approve amendments to the existing development and use regulations in the Turlock Municipal Code (Zoning Ordinance) and the Northwest Triangle Specific Plan (NWTSP). The changes resulted in the following: A new definition and classification for large-scale ("big box") retail stores Specifying that a Conditional Use Permit for certain large-scale retail stores ("discount stores" and "discount clubs") A prohibition against "discount superstores" which are defined as large-scale (greater than 100,000 square feet) retail stores that devote more than 5% of sales floor area to non-taxable (grocery) items - typically such stores contain a full service grocery department

As a result of these actions, Wal Mart filed suit against the City of Turlock in both Federal and State court. The City Council has contracted with a law firm that specializes in representing cities in these types of lawsuits.

Due to the amount of public interest in the City Council's actions, the City of Turlock is providing a complete copy of the staff report provided to the City Council for the so-called big box ordinance.

The site also has the petition for writ of mandate, general plan policies pertaining to retail, and other useful docs.

http://www.ci.turlock.ca.us/citydepartments/communityplanning/bigboxordinance.asp

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Brazil Wal-Mart Unit To Invest BRL40 Million In Sao Paulo Store

By Jeff Fick
Dow Jones Newswires
11-01-05                                                
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SAO PAULO -(Dow Jones)- The Brazilian subsidiary of U.S. retail giant Wal-Mart Stores (WMT) will build a new supercenter in Sorocaba in Sao Paulo state, the company said in a statement.

Wal-Mart Brasil will invest 40 million Brazilian reals ($17.8 million) in the store. The store is expected to open in the first quarter of 2006.

"We are very satisfied to announce our arrival in Sorocaba, because the region represents a strategic market for us and the great potential for growth in the retail sector," said Wilson Mello Neto, vice president of corporate affairs for Wal-Mart Brasil.

Furthermore, Wal-Mart Brasil plans to open 10 new stores before the end of 2005, including five in new markets. The cities expected to welcome their first Wal-Mart stores include Vitoria in Espirito Santo state, as well as two stores each in the capital city of Brasilia and Goiania in Goias state.

In addition, Wal-Mart will plans to open its first store in the Minas Gerais city of Uberlandia.

Wal-Mart competes in Brazil with retail chains Companhia Brasileira de Distribuicao (CBD), or CBD, and France's Carrefour (12017.FR). CBD, which is Brazil's largest supermarket chain, and Carrefour are the top two retailers, respectively.

-By Jeff Fick, Dow Jones Newswires; (55 11) 3145-1481; jeff.fick@dowjones.com

Copyright (C) 2005 Dow Jones & Company, Inc. All Rights Reserved.

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Labor Deal With Wal-Mart Criticized

Inspector General Cites 'Breakdowns'

By Amy Joyce
Washington Post
Tuesday, November 1, 2005                  
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Wal-Mart Stores Inc. received "significant concessions" from the U.S. Department of Labor's Wage and Hour Division when the department and Wal-Mart signed a settlement agreement last year after the company was cited for child labor violations, according to a Department of Labor inspector general report released yesterday.

While the agreement did not violate laws, the inspector general's office found "serious breakdowns" in the department's "negotiating, developing and approving" such agreements.

The agreement between Wal-Mart and the Wage and Hour Division "was significantly different from other agreements," the report concluded. "Specifically, the Wal-Mart agreement had the most far-reaching restrictions on [the division's] authority to conduct investigations and assess [civil money penalties]."

Wal-Mart agreed in January to pay a federal fine of $135,540 for child labor violations in which 85 minors operated hazardous equipment at stores in Connecticut, New Hampshire and Arkansas. The investigations into violations occurred from October 1998 through April 2002.

Some lawmakers and child advocate groups called the agreement a sweetheart deal, particularly because it stated the company will receive 15 days' notice "of any audit or investigation at the stores covered by this agreement."

The report released yesterday said that the 15-day advance notice is "inconsistent" with the department's guidelines and that Wal-Mart could avoid penalties or a formal citation if it brings a facility into compliance within 10 days of a notice of violation. Labor officials in February said that Wal-Mart's advance notice would involve only child labor investigations and that it is standard practice in such cases. But the inspector general's office said the 10-day provision "was designed to allow Wal-Mart to avoid penalties if compliance is achieved."

The report also raised specific concerns about the agreement because "it contained significant provisions that were principally authored by Wal-Mart attorneys and never challenged by" the Department of Labor.

"The Bush Labor Department chose to do an unprecedented favor for Wal-Mart, despite the fact it is well known for violating labor laws, including child labor laws," Rep. George Miller (D-Calif.), the lawmaker who requested an investigation, said in a statement. He also said such an arrangement could allow the nation's largest employer to cover up evidence of a violation and would discourage employees who might fear retribution from filing a complaint.

"The inspector general's office did find that the agreement is in compliance with federal law. We continue to believe that the agreement was the appropriate course of action," said a company spokesman, reading from a statement.

The Department of Labor said it stands by the agreement.

"It's a strong agreement that has significantly advanced compliance on a nationwide basis with the federal child labor laws," a department spokeswoman said yesterday. The agreement produced positive response, she said, with Wal-Mart conducting quarterly meetings to monitor the agreement's implementation. The company also did more than 9,000 facility audits and updated training for workers and managers.

The inspector general's office recommended that the Wage and Hour Division create written procedures for negotiating, developing and approving agreements with employers. It also recommended that future agreements be developed in coordination with the Labor Department's Office of the Solicitor. The Wage and Hour Division created a new policy in June that satisfied any recommendations from the inspector general's office, according to the report.

© 2005 The Washington Post Company

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Judge Dismisses Much Of Wal-Mart Suit Vs Ex-Executive Coughlin

11-01-05                               [back to top]

BENTONVILLE, Ark. (AP)--An Arkansas judge Tuesday dismissed a large part of Wal-Mart Stores Inc.'s (WMT) lawsuit against former Vice Chairman Tom Coughlin, saying the executive and the company had an agreement that neither would sue over any events that happened during Coughlin's tenure.

Benton County Circuit Judge Jay Finch, whose courtroom is about a mile from Wal-Mart's headquarters, said Wal-Mart failed to show that Arkansas law required a company officer to disclose any improprieties before signing a general release from liability.

Wal-Mart, the world's largest retailer, had sued Coughlin this summer, saying he misspent company money before announcing his retirement late last year while keeping a seat on the company board.

Copyright (C) 2005 Dow Jones & Company, Inc. All Rights Reserved.

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Critics put Wal-Mart on 'war room' footing

By Michael Barbaro
The New York Times
TUESDAY, NOVEMBER 1, 2005                       
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BENTONVILLE, Arkansas Inside a stuffy, windowless room here, veterans of the 2004 Bush and Kerry presidential campaigns sit, stand and pace around six plastic folding tables. Open containers of pistachio nuts and tropical trail mix compete for space with laptops and BlackBerrys. CNN flickers on a television in the corner.

The phone rings, and a 20-something woman answers. "Turn on Fox," she yells, running up to the TV with a notepad. "This could be important."

A scene from a campaign "war room"? Well, sort of. It is a war room inside the headquarters of Wal-Mart, the giant discount retailer that hopes to sell a new, improved image to reluctant consumers.

Wal-Mart is taking a page from the modern political playbook. Under fire from well-organized opponents who have hammered the retailer over its wages, health insurance and treatment of workers, Wal-Mart has quietly recruited former presidential advisers, including Ronald Reagan's image-meister Michael Deaver, as well as one of Bill Clinton's media consultants, Leslie Dach, to set up a rapid-response public relations team in Arkansas.

When small business owners or union officials - also employing political operatives from past campaigns - criticize the company, the war room swings into action with press releases, phone calls to reporters and instant Web postings.

One target of the effort is "swing voters," or consumers who have not soured on Wal-Mart. The new approach appears to reflect a fear that Wal-Mart's critics are alienating the very consumers it needs to keep growing.

The first big challenge for the strategy was to come on Tuesday with the premiere of an unflattering documentary. The film, "Wal-Mart: The High Cost of Low Price," was made on a shoestring budget of $1.8 million and will be released in only a handful of U.S. theaters. But its director, Robert Greenwald, hopes to show the movie in thousands of homes and churches over the next month.

The possibility that it might become a cult hit like Michael Moore's unsympathetic portrait of General Motors, 1989's "Roger & Me," has Wal-Mart worried. So Wal-Mart has embarked on a counteroffensive that would have been unthinkable even a year ago.

Relying on a preview posted online, Wal-Mart investigated the events described in the film and produced a short video contending factual errors - Greenwald denies that there are errors and notes that Wal-Mart has not seen the final cut. Wal-Mart has also begun to promote a second film, "Why Wal-Mart Works & Why That Makes Some People Crazy," which casts the company in a rosier light.

Wal-Mart declined to make its executives available for the Greenwald film, but it participated with the second film's director, Ron Galloway. The war room team helped distribute a letter written by Galloway that challenges Greenwald to show the two movies together.

To keep up with its critics, Wal-Mart "has to run a campaign," said Robert McAdam, a former political strategist at the Tobacco Institute who now oversees Wal-Mart's corporate communications. "It's simply nonsense for us to let some of these attacks go without a response."

Wal-Mart's aggressive new posture is a departure from its tradition of relying on in-house staff to manage the company's image. The new war room, which is part of a larger Wal-Mart effort to portray itself as more worker-friendly and environmentally conscious, runs counter to the philosophy of the chain's founder, Sam Walton. Believing that public relations was a waste of time and money, the penny-pinching Walton never hired a giant public relations firm like Edelman, Wal-Mart's choice to staff its war room.

So what has changed? For one thing, Wal-Mart's critics have become more sophisticated. For years, unions hurled little more than insults at the chain. But over the last year, two small groups - Wal-Mart Watch and Wake Up Wal-Mart - set up shop in Washington with the goal of waging the public relations equivalent of guerrilla warfare against the company.

Wal-Mart Watch received startup cash from the Service Employees International Union; Wake Up Wal-Mart is a project of the United Food and Commercial Workers International Union. Both unions have tried unsuccessfully to organize Wal-Mart's employees.

At the suggestion of Wake Up Wal-Mart, members of the largest U.S. teachers unions boycotted Wal-Mart for back-to-school supplies this fall.

Labor Dept. is rebuked

Steven Greenhouse of The New York Times reported:

The U.S. Labor Department's inspector general has strongly criticized department officials for "serious breakdowns" in procedures involving an agreement promising Wal-Mart 15 days' notice before investigators would inspect its stores for child labor violations.

The criticism, in a report released on Monday by the inspector general, faulted department officials for making "significant concessions" to Wal-Mart without obtaining anything in return.

The report also criticized department officials for letting Wal-Mart lawyers write substantial parts of a settlement over child labor violations and for leaving the department's own legal division out of the settlement process.

The Labor Department reached the settlement in January after finding 85 child labor violations at Wal-Mart stores in Connecticut, New Hampshire and Arkansas, involving workers under 18 who operated dangerous machinery, including like cardboard balers and chain saws.

Wal-Mart settled the investigation by agreeing to pay $135,540, but it continued to deny any wrongdoing.

In addition to allowing the 15-day notice, the agreement lets Wal-Mart avoid civil citations and fines if it brings a store into compliance within 10 days of when the department notifies it of a violation.

Copyright © 2005 The International Herald Tribune | www.iht.com

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Wal-Mart to open 13 stores next year

www.chinaview.cn
2005-11-01                       
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BEIJING, Nov. 1 (Xinhuanet) -- The world top retailer, Wal-Mart, will open another 13 stores in China next year to increase the total to 62, the Economic Daily reported Tuesday.

These 13 stores, most at shopping plazas besides and including one or two Sam Club stores, will be scattered in the current operating regions of Wal-Mart in China, said President and CEO of Wal-Mart Lee Scott Monday in Beijing, the last stop of his annual trip to China, which covered some major cities of the country including Shanghai, Wuhan, capital of central China's Hubei Province, and Changsha, capital of central China's Hunan Province.

Besides developing the great potential of metropolitan cities like Beijing and Shanghai, Wal-Mart has also been paying much attention to China's medium- and small-sized cities and is planning to move westward with a view to the country's surging economic growth, said Lee Scott.

Wal-Mart pledged to practise a universal standard inside and outside the United States in its service and the use of newly introduced environment-friendly packaging material, the Economic Daily reported.

The new corn plastic packages that can be degraded and reused and were introduced into all packaging in the U.S. Wal-Mart storeson Tuesday, will be put into use in China too according to a timetable currently being worked on, Lee Scott said.

The Chinese market is ranked No. 1 among Wal-Mart's overseas outsourcing.

Wal-Mart has 27,000 employees in China, and only four of them are foreign nationals.

Initially a little cautious in its development in China, Wal-Mart has opened 49 stores in 23 cities so far, including Beijing, Shanghai, southwest China's Chongqing Municipality, Shenzhen city in South China's Guandong Province, and Dalian of northeastern Liaoning Province.

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Labor Dept. Is Rebuked Over Pact With Wal-Mart

By STEVEN GREENHOUSE
November 1, 2005                             
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The Labor Department's inspector general strongly criticized department officials yesterday for "serious breakdowns" in procedures involving an agreement promising Wal-Mart Stores 15 days' notice before labor investigators would inspect its stores for child labor violations.

The report by the inspector general faulted department officials for making "significant concessions" to Wal-Mart, the nation's largest retailer, without obtaining anything in return. The report also criticized department officials for letting Wal-Mart lawyers write substantial parts of the settlement and for leaving the department's own legal division out of the settlement process.

The report said that in granting Wal-Mart the 15-day notice, the Wage and Hour Division violated its own handbook. It added that agreeing to let Wal-Mart jointly develop news releases about the settlement with the department violated Labor Department policies.

The inspector general, Gordon S. Heddell, said the agreement did not violate federal laws or regulations.

The Labor Department reached the settlement in January after finding 85 child labor violations at Wal-Mart stores in Connecticut, New Hampshire and Arkansas, involving workers under 18 who operated dangerous machinery, including cardboard balers and chain saws.

Wal-Mart settled the investigation by agreeing to pay $135,540, but it continued to deny any wrongdoing.

In addition to allowing the 15-day notice, the agreement lets Wal-Mart avoid civil citations and fines if it brings a store into compliance within 10 days of when the department notifies it of a violation.

In exchange for these concessions, the inspector general wrote, there was "little commitment from the employer beyond what it was already doing or required to do by law."

"In our view," the inspector general's office wrote about the Wage and Hour Division, "the Wal-Mart agreement may adversely impact W.H.D.'s authority to conduct future investigations and issue citations or penalty assessments, and potentially restrict information to the public."

Responding to its inspector general, the Labor Department said it "strongly disagrees with the report's overall characterization of the effectiveness of the Wal-Mart child labor settlement agreement."

The department said the inspector general had wrongly given the impression that Wal-Mart had been permitted to avoid all penalties for violations of wage and hour laws by bringing its stores into compliance.

Even though department officials asserted that the agreement was much like that with other companies, Mr. Heddell found that the agreement between Wal-Mart and the Wage and Hour Division "was significantly different from other agreements entered into by W.H.D." and "had the most far-reaching restriction on W.H.D.'s authority to conduct investigations and assess" fines.

Representative George Miller, the California Democrat who asked the inspector general to investigate the settlement, said the report showed that the Bush administration was seeking to do favors for a powerful friend and a major Republican contributor in Wal-Mart.

"The Bush Labor Department chose to do an unprecedented favor for Wal-Mart, despite the fact it is well known for violating labor laws, including child labor laws," Mr. Miller said. "The sweetheart deal put Wal-Mart employees at risk, undermined government effectiveness, and further undermined public confidence that the government is acting on its behalf."

Mr. Heddell said he did not find that the agreement resulted from improper pressures. "Nothing came to our attention indicating evidence of influence or pressure from internal or external sources," he wrote.

Martin Heires, a Wal-Mart spokesman, said, "We think it's important to note that the inspector general's office found that the agreement is in compliance with federal law."

"We continue to believe the agreement was the appropriate course of action," he added. "Our goal remains to make sure that our stores are in full compliance in that our associates are fully informed of all policies, regulations and laws that apply to the employment of workers who are 16 and 17 years of age."

The inspector general recommended that the Wage and Hour Division develop procedures for developing and approving agreements and require that all future settlements be developed in coordination with the department's legal division.

The department said that it had developed a new policy on reaching settlements that, it was confident, would carry out the inspector general's recommendations.

The Labor Department said that the advance notification provisions applied only to child labor matters. But the inspector general voiced concern that "the plain language of the advance notification clause applies to any potential violations, not just child labor violations." Department officials say that giving 15 days' notice helps to ensure that Wal-Mart will come into compliance.

The department denied the inspector general's suggestion that it had consulted with Wal-Mart before issuing a news release on the settlement. The department took the unusual action of announcing the agreement a month after it was signed, doing so only after some details were leaked to a newspaper.

The report said: "The inspector general has specific concerns with the Wal-Mart agreement because it contained significant provisions that were principally authored by Wal-Mart attorneys and never challenged by W.H.D., and because it did not receive adequate W.H.D. review and approval."

Copyright 2005 The New York Times Company 

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Wal-Mart critics to air first TV ads

Reuters                             [back to top]

CHICAGO - A group that has been pressuring Wal-Mart Stores Inc. <WMT.N> to raise pay and benefits and address environmental and other issues said on Monday it will launch its first television advertising campaign to highlight a documentary that is critical of the retailer.

Wake-Up Wal-Mart, a union-funded group that is organizing a grassroots movement to oppose the world's biggest retailer, said the 30-second spots will run on news networks CNN and CNBC.

They will focus on Robert Greenwald's new documentary, "Wal-Mart: The High Cost of Low Prices," as well as a leaked Wal-Mart memo that detailed ways the company wants to cut its health-care costs -- including a proposal to add physical activity to job descriptions in the hope of discouraging unhealthy applicants.

Spokesman Chris Kofinis said the advertising campaign would cost "hundreds of thousands" of dollars but declined to give a specific figure. The latest campaign also includes an advertisement in USA Today and on several Web sites.

Wal-Mart has estimated that its most vocal critics are spending $25 million on what the retailer calls the largest and best-financed campaign against a corporation in history.

Copyright 2005 Reuters News Service. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

Copyright © 2005 ABC News Internet Ventures

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Wal-Mart, Walton family support Schwarzenegger

By Jim Hopkins,
USA TODAY                   
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SAN FRANCISCO — Wal-Mart (WMT) and its founding Walton family have emerged as big backers of Gov. Arnold Schwarzenegger, giving about $1 million in the past year to his favored causes as he vetoed legislation aimed at the company. One union-backed bill, which Schwarzenegger vetoed early in October, would have forced the state to disclose names of companies whose workers get government health services meant for poor residents.

Getty Images file Schwarzenegger

A second bill, vetoed last year, would have stopped employers from locking workers inside workplaces — a policy Wal-Mart has when employees stock shelves and clean floors after closing hours.

The bills reflect issues creating a public relations nightmare for the USA's biggest private employer, with 1.3 million workers, as it expands in California, the USA's biggest market. Critics including Wake-Up Wal-Mart accuse it of endangering workers by locking them in stores, and of reducing its health care costs at taxpayer expense.

"Tens of thousands of Wal-Mart employees are on taxpayer-funded health care," says Chris Kofinis of union-led Wake-Up Wal-Mart.

The Wal-Mart and Walton political gifts appear in new public campaign finance documents. They show that the same day Schwarzenegger vetoed the health care disclosure bill — Oct. 7 — his California Recovery Team logged a $250,000 gift from Christy Walton. She is the widow of John Walton, a Wal-Mart director who died four months ago. In the next three weeks, the Schwarzenegger-backed Proposition 77 campaign got $250,000 from Wal-Mart Chairman Rob Walton and $100,000 from Wal-Mart. Those gifts and others followed $200,000 to the Recovery Team last year from John Walton about two weeks after Schwarzenegger vetoed the lock-in bill.

Proposition 77, on the Nov. 8 ballot, would give authority to redraw congressional and legislative districts to three retired judges, shifting that power from the Democrat-controlled General Assembly and strengthening the Republican governor's hand.

Schwarzenegger's office and a Walton family spokesman said there was no connection between his vetoes and the Wal-Mart gifts. "Absolutely not," Schwarzenegger spokeswoman Margita Thompson says.

Wal-Mart and the Waltons now rank No. 15 on its list of the 100 biggest donors to Schwarzenegger-controlled campaign committees, says the Foundation for Taxpayer & Consumer Rights, a non-partisan government watchdog group.

Wal-Mart opposed the health disclosure bill, which would have affected firms with 25 or more workers, because it did not require enough detailed information to be useful public policy, said Barry Brokaw, a lobbyist for the company. Wal-Mart took no position on the worker lock-in bill, he said.

Employees in some stores are locked inside overnight for their safety against intruders, spokeswoman Mona Williams says, but there is always someone with a key to let them out if they choose to leave.

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Walmart invests in super mall project

www.chinaview.cn
2005-10-31                                   
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HANGZHOU, Oct. 31 (Xinhuanet) -- Walmart, the world's retail giant, and Morgan Stanley Bank, have jointly injected 100 million US dollars into a super mall project in Hangzhou, capital of east China's Zhejiang Province.

Located in the prestigious West Lake area of Hangzhou, the super mall project, with 70,000 square meters of floor space, is expected to operate in early 2007. Walmart already invested 60 million yuan (about 7.5 million US dollars) into the project last year.

An official with the West Lake District said that other general merchanise projects, with a total investment of 100 million US dollars, will also be launched in the scenic area, with investment from the Shanghai ice blue investment corporation, Morgan Stanley Group, and Suzhou Alcartel Corporation.

Possessing the country's first wetland lake, the West Lake area has made itself an investment attraction for investors from overseas. Statistics show the district allured 585 million US dollars of foreign investment at this year's West Lake Exposition.

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Wal-Mart stumbles in reshaping image

AFP WASHINGTON
10/31/2005                            
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Wal-Mart, which has cultivated an image for brutal cost-cutting at the expense of employees and suppliers, is trying to reshape itself as a kinder, gentler company, but its legion of critics is not buying it.

Over the past week, Wal-Mart has launched a new environmental initiative — aimed at cutting greenhouse gas emissions and other pollution — and announced plans to offer new health insurance for US employees.

The world’s largest retailer and the biggest global company in terms of 2004 revenues also said it wanted to raise the percentage of minorities and women in managerial positions.

And Wal-Mart stunned many by suggesting that the US Congress raise the minimum wage, currently stuck at 5.15 dollars an hour — a move seemingly contrary to the company’s efforts to constantly cut costs and prices.

But the image-building effort stumbled quickly after the leak to the New York Times of an internal memo from a top executive saying the firm should redesign benefits to “attract a healthier, more productive workforce,” suggesting it was discouraging the hiring of people who are obese or have medical problems.

The memo acknowledged that 46 percent of the children of Wal-Mart’s employees in the United States were uninsured or on Medicaid, the government health insurance program for the poor.

Views are mixed on whether there is a change at Wal-Mart, which is the world’s largest private employer, with 1.3 million people on the payroll.

Edward Weller, an analyst at ThinkEquity Partners, said he sees “major changes in the company’s attitude.

“This company has been very defensive, and now they are shifting from a reactive position to a proactive one. They say that they can be good at business and at the same time be a good citizen,” Weller said.

He added: “There will always be critics, because Wal-Mart is a very big target.”

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Serious breakdowns in Wal-Mart settlement

By Erica Werner
Associated Press
October 31, 2005                           
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WASHINGTON --There were serious breakdowns in a government settlement with Wal-Mart Stores Inc. over child labor law violations -- including allowing attorneys for the world's largest retailer to write key parts of the deal, according to a Labor Department inspector general report Monday.

The inspector general attributed the problems to inadequate management controls and guidelines.

As a result, Wal-Mart received "significant concessions" in the $135,540 settlement made public in February, the report said. Among them: The Labor Department was required to notify the retail giant 15 days in advance of opening an audit or investigation, something that's inconsistent with guidelines for the department's Wage and Hour Division.

Wal-Mart also could avoid formal citations or penalties if it brought facilities into compliance within 10 days of being notified about a violation.

The report said the Wal-Mart deal was "significantly different" from other agreements the Labor Department has made with companies and included far-reaching restrictions on the government's ability to assess monetary penalties.

"These breakdowns resulted in (the Wage and Hour Division) entering into an agreement that gave significant concessions to Wal-Mart ... in exchange for little commitment from the employer beyond what it was already doing or required to do by law," the report said.

The report said it found no evidence of violations of federal laws or regulations. Nor did inspectors find evidence of pressure from internal or external sources during development of the agreement.

Wal-Mart spokesman Marty Heiers emphasized those points.

"We continue to believe that the agreement was the appropriate course of action," Heiers said. "Our goal is to make sure our stores are in full compliance and that our associates are fully informed of all policies, regulations and laws that apply to the employment of workers who are 16 and 17 years of age. We don't employ anyone under the age of 16."

But the top Democrat on the House Education and Workforce Committee, who sought the investigation, criticized deal.

"The Bush Labor Department chose to do an unprecedented favor for Wal-Mart, despite the fact it is well known for violating labor laws, including child labor laws," said Rep. George Miller of California.

"The sweetheart deal put Wal-Mart employees at risk, undermined government effectiveness and further undermined public confidence that the government is acting on its behalf," Miller said.

The settlement involved alleged violations at 25 stores in Arkansas, Connecticut and New Hampshire between 1998 and 2002 that had to do with teenage workers who used hazardous equipment such as chain saws, paper balers or forklifts.

Child labor laws prohibit anyone under 18 from operating hazardous equipment. Wal-Mart, based in Bentonville, Ark., denied the allegations but agreed to pay the penalty.

In a letter responding to the report, Victoria A. Lipnic, the Labor Department's assistant secretary for employment standards, agreed that more controls were needed in negotiating settlement agreements, and she said the inspector general's recommendations were being implemented.

Lipnic disputed the inspector general's criticism of the deal, saying it was successful in securing penalty payments and agreements from Wal-Mart to change its policies. It noted the company had agreed to take measures including conducting more than 9,000 facility audits and training more than 160,000 managers on compliance with child labor laws.

"Most of these measures never would have been implemented in the absence of the agreement," Lipnic wrote.

Miller and Rep. Rosa DeLauro, D-Conn., plan to introduce legislation Tuesday that would bar the Labor Department from agreeing to provide notice to companies before investigating any wage-and-hour law complaints.

Wal-Mart is the world's largest retail company as measured by sales. The company had sales of $285 billion in its last fiscal year, ending last January.

© Copyright 2005 The New York Times Company

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So, you want to work for Wal-Mart

New York Daily News
Saturday, October 29th, 2005                  
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An internal Wal-Mart memo recently leaked to The New York Times showed the company musing on how to cut costs. The ideas kicked around included - for real - hiring more part-time workers to reduce the number of employees getting health benefits, and discouraging unhealthy people from applying, period. This could be done by making every job, including cashier, require some taxing physical activity, such as cart-gathering. Elsewhere the memo proposed in-store clinics, so workers wouldn't waste time taking family members to the emergency room. It noted that workers were sicker than the general population, as they tended to be heavier. And it bemoaned the fact that loyal employees garnered raises over the years, but were no more productive than their entry-level counterparts.

Wal-Mart workers make around $17,500 a year and, the memo noted, "a significant percentage [are] on public assistance."

All that is real. This job application is not:

WAL-MART JOB APPLICATION

Part I

Name:

Nickname: (Note: If it's "Gimpy," "Stubby" or "Wheezy," please skip to Part IV.)

Age:

Weight:

Real weight, you big fat liar:

Part II

Check one:

I am willing to work half days.

I am willing to work quarter days.

I am willing to work every other hour, alternating with a mother of seven. Do you

Smoke? Drink? Eat fatty foods? Have you ever eaten hot dogs from the stand in the front of the store? If yes, skip to Part IV.

Reason I would like to work at Wal-Mart:

Mom-and-pop grocery down the street where I used to work just closed.

Dress shop where I used to work just closed.

Furniture store where I used to work just closed.

Nothing left to pawn.

Nothing left in fridge.

I am seeking enlightenment and have taken a vow of poverty.

Just seems like a great place to work! (If checked, please fill out Form 198-A: Psychiatric Issues.) Do you have any children? Yes/No

If yes, would you be willing to have your sick child seen by a Wal-Mart doctor/frozen entree department supervisor?

Would you consider alternative medicine, such as a shot of NyQuil and your choice of a Great Values frozen dinner?

Are you able to lift heavy things (not including your jumbo-size self, that is)?

Fill in the blanks: I am eager to help gather carts despite chronic problems with my ------ that cause painful ------ that sometimes leak.

Part III

The Wal-Mart Pledge: I promise to leave this job any time I am in line for a raise and send my younger sibling, child or, where applicable, grandchild to replace me at an entry level salary, preferably part-time.

I will not sue Wal-Mart even if I spend my nights locked in the store.

I will not sue Wal-Mart even if I am a woman making less than any of the men around me.

I will go on a diet, take vitamins, do pushups and move into a dank cave on the outskirts of town all for the sake of boosting the Walton family higher up the "Richest Humans in the World" list. (If no, please skip to Part IV.) Part IV: Try Kmart.

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Wal-Mart tests Mexico grocery

Giant retailer tries to compete with smaller stores to attract more low-income shoppers

By ELIZA BARCLAY
HoustonChronicle.com 
Oct. 29, 2005, 11:48PM                  
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• Total stores and restaurants: 820 • Cities where it operates: 85

• Sales: $13 billion*

Major stores: •179 Bodega Aurreras

•95 Wal-Mart Supercenters

•64 Sam's Clubs

•50 Superamas

•1 MercaMás

MercaMás • Size: About 850 square feet

• Concept: Use small stores to win business from lower-income customers in small towns or poor areas not served by its big stores.

*Last 12 months as of Sept. 30.

Source: Wal-Mart de Mexico

TULTITLAN, MEXICO — Since Wal-Mart began swiftly weaving its way into Mexico's retail fabric 18 years ago, it's largely avoided neighborhoods like this one in a city on the outskirts of Mexico City.

But now the retail giant's Mexican operation, known as WalMex, is out to fill in the expanse of empty spaces between its 388 supermarkets and Supercenters which have targeted middle-class and upper-income areas in cities.

In a scrappy neighborhood replete with abarrotes shops — storefronts crammed with food and daily necessities — Walmex is testing a smaller store called MercaMás. Its goal is to find a store design that will allow it to enter poor neighborhoods on the fringes of the cities, like this one, and small towns across Mexico.

Soriana, Mexico's second-largest retailer after WalMex, is eyeing similar opportunities. It recently opened a small store called Super City, with lower prices than its "hypermarket" supermarkets scattered across northern Mexico.

Together these two retail ventures could begin to chip away at the market share held by the many people who serve Mexico's poorer half: abarrotes shops and the ubiquitous unofficial markets set up on sidewalks.

These tiny shops are a mix of taxpaying businesses registered with the government and small operators who are not registered and who do not pay taxes, which are in the "informal sector."

As WalMex and Soriana scale down their store formats, their principal competition is operating at a micro scale, but in huge numbers.

Olga Gomez and Eric Olivares are among them, running side-by-side abarrotes shops across the street from the MercaMás.

Olivares says his clientele usually stops by for individual items: a bottle of soda, a beer or a tub of cream. His shop is one-tenth the size of the MercaMás but far more densely packed. Customers there have to navigate around goods piled on the floor.

"It's the way we treat people. That's the reason my customers keep coming back to me even if there are more options like the Bodega Gigante and the MercaMás," Olivares said. He added that he wasn't afraid of losing business because his selection was just as good.

But Olga Gomez, who runs an abarrotes shop with a corrugated tin roof and walls a stone's throw from the new Wal-Mart, isn't so optimistic.

"Their prices are just more economical, and my sales are getting worse," Gomez said. She acknowledged that her selection is low on fresh vegetables but boasts 28 flavors of Sabritas brand potato chips.

Customers may also notice the difference in prices. Where Gomez sells a 20-liter jug of purified water for $2.11, MercaMás sells the same one for $1.47.

A new format The MercaMás store is 850 square feet, about halfway between the size of the average convenience store and grocery store but less than half the size of WalMex's smallest stores, according to Manolo Zapata, an analyst with the Citigroup-owned Banamex.

It stocks basics like milk, canned goods and domestic supplies in a well-lit, windowless space with high ceilings and a cheery orange exterior.

According to Zapata, one of WalMex's strategies is to use low-cost "private market products," or products sold under the Wal-Mart "Great Value" brand. Selling in-store brands helps the chains turn a profit while keeping prices down.

On the shelf, one after another of the products' prices are listed with comparisons to those of the Bodega Gigante, a competing grocery chain in Tultitlan. But even if the sign says customers can save 50 cents on a carton of Alpura milk, they have their own ideas about which store offers the best prices and quality.

"The prices are all the same at these places," said Manuel Velázquez, who was buying a bottle of Coca-Cola and two packages of instant soup at the MercaMás. "But I come here because it's close, the quality is bad at the street markets, and the prices are too high at the small shops."

Another shopper, Raquel Sanchez, said she likes the WalMex store's prices and has become a regular in the few months it has been open.

As WalMex experiments with its smaller stores and competitive prices, Zapata said the company told him it is considering other ways to attract low-income clientele.

"WalMex also wants to better serve the low-income consumer by offering credit to low-income consumers in these stores to develop loyalty," Zapata said.

"It's a store that is a little bit smaller, and we are simply trying to understand the client a little bit more," Eduardo Solórzano, president and CEO of WalMex, said in a recent radio interview. "In the long term, we are trying to measure the pulse of the consumer, how he reacts to the changes we are proposing."

WalMex officials declined to comment for this story.

Federico Mora, an analyst with Standard & Poor's, said Soriana, the Monterrey-based retailer that has 160 food and general merchandise markets in 54 Mexican cities, is also well-positioned to change the low-income market.

A solid foundation "Soriana has a solid financial situation and has begun focusing on smaller formats, including convenience stores where there is still a lot of room for growth," Mora said.

While WalMex says it is still pilot-testing MercaMás, analysts predict the format will be successful and the two retail leviathans will soon open more.

It remains to be seen if the owners of abarrotes shops can survive if the big chains move ahead with small stores. Analysts say it boils down to proximity and affordability.

"Low-income people want stores close to home like the street markets down the street," said Mora, the Standard & Poor's analyst. "But they still have a perception that the big stores have higher prices."

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Wal-Mart forfeits soul to low prices

By LOREN STEFFY
Houston Chronicle
Oct. 29, 2005, 9:08PM                          
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In an old store on the town square in Bentonville, Ark., sits a wooden desk that changed the world.

It once belonged to Sam Walton, humble furniture from which he gave birth to what is now a retailing empire with $285 billion a year in sales.

The trip from Walton's original store to Wal-Mart's world headquarters is a few minutes. The journey from Walton's desk to the internal memo about Wal-Mart benefits that surfaced last week is far longer.

Somewhere along that road, the company lost its soul.

Limiting tenure The memo, written by Susan Chambers, the executive vice president for benefits, outlines ways Wal-Mart can reduce employee benefits expenses, which cost the company $4.2 billion between 2002 and 2005 and are growing at 15 percent a year.

The problem, it seems, is that the employees are sticking around too long. Tenure drives costs. The more years workers have with the company, the more paid time off, the bigger the 401(k) contributions and profit-sharing.

As Chambers notes, an associate with seven years experience is almost 55 percent more expensive than someone with one year on the job, "yet there is no difference in his or her performance."

The solution? Shift more work to part-time employees, who don't get benefits. Chambers proposes lowering life insurance benefits and cutting 401(k) contributions to 3 percent of wages from 4 percent.

In other words, do everything possible to discourage long-term employment.

She also suggests raising health care premiums for employees' spouses because they are "by far the most expensive plan members."

Pushing out the unhealthy Chambers' memo says Wal-Mart can encourage a healthier work force by adding physical activity to most jobs. Cashiers, for example, could be required to gather shopping carts.

The idea isn't that the exercise would make employees healthier, it's that it would weed out the unhealthy, overweight and infirm, groups that have higher medical bills.

"These moves would also dissuade unhealthy people from coming to work at Wal-Mart," Chambers wrote.

Think of the savings if each Wal-Mart simply posted a sign that said "fatsos need not apply."

In fairness, Chambers' memo outlines some possible improvements as well. It proposes shortening the time employees have to wait to be eligible for health benefits and discusses opening in-store clinics for employees to reduce costly trips to the emergency room for routine care.

But she also acknowledges long-standing criticism of Wal-Mart. Its health care plan is expensive for low-income families, which make up a big chunk of its work force.

Under a new plan unveiled last week, Wal-Mart employees, who earn an average of $17,500 a year, could face out-of-pocket expenses of up to $2,500, according to the New York Times.

Only 48 percent of the company's workers enroll in its benefits plans, compared with the national average of 68 percent, Chambers said in the memo. Forty-six percent of Wal-Mart employees' children are either on Medicaid or uninsured.

Executive benefits Wal-Mart is far less stingy with its executives. Chief Executive Lee Scott nabbed $12.5 million last year, not counting stock options. That includes contributions to a 401(k) plan and term life insurance, two benefits Chambers would slash for employees.

There's no mention of whether Scott keeps his health up by gathering shopping carts in the parking lot.

He also gets more than $100,000 a year for personal use of a corporate jet, a far cry from Walton's famed pickup truck.

A different Wal-Mart A few years ago, I toured Walton's original store, which is now a museum. Looking at that wooden desk, it's hard to reconcile the image of Wal-Mart then and now.

Wal-Mart, of course, is no longer a small business in a small town. It has 1.7 million employees worldwide, and health care is a significant and rising expense.

Wal-Mart is not alone in struggling with these costs. But its proposed solutions reveal the company's dark heart. It's extracting the cost from those who can least afford it.

Business doesn't look back. Wal-Mart led the charge from the town square to the edge of town. It trained us to believe that the cost of our purchases was all that mattered. Somewhere along the road, the company started believing that, too.

It taught us to expect low prices — always. Chambers' memo shows a company that believes in the low price at any cost.

Loren Steffy is the Chronicle's business columnist.

HoustonChronicle.com

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Wal-Mart close to land grab in India

By James Hall
(Filed: 29/10/2005)                         
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Wal-Mart, the world's largest retailer, has taken a major step towards opening stores in India, the second most populous country in the world.

Wal-Mart has requested permission from the Indian government to open two experimental stores in Kolkata, India's second largest city, formerly known as Calcutta. Under the proposals, Wal-Mart would buy locally produced food and general merchandise and transport it for sale in its outlets.

Manmohan Singh wants more foreign investment The proposals were put to Buddhadeb Bhattacharjee, the chief minister of West Bengal, the Indian state, 10 days ago by Marc Rosen, Wal-Mart's senior vice-president for international strategy and implementation.

Bhattacharjee is considering the proposals. He is understood to have requested documents from Wal-Mart regarding its employment policies and track record in other developing countries. The move by Wal-Mart would be controversial as India currently has a ban on foreign companies making direct investments in the retail sector.

Manmohan Singh, the Indian prime minister, is keen to open up India to foreign direct investment (FDI), but the plans have been resisted by India's Marxist parties, on which Singh relies for political support. These parties fear the entry of international retailers will wreak havoc on India's rural economy.

Wal-Mart confirmed that a meeting took place in Kolkata 10 days ago. However, it said the US giant was waiting for India's rules on foreign investment to be relaxed before formalising its expansion plans.

"I can confirm that Marc Rosen was in India and did have a meeting with the chief minister of West Bengal. It was part of our building relationships in the country to learn about the government's point of view on FDI," a spokeswoman said.

"We have talked with Indian leaders. Every time we have spoken with them we have discussed our desire to open stores, but we are really waiting for India to make some decision on its FDI framework," she added.

Earlier this month there were suggestions that Wal-Mart would attempt to bypass the rules on foreign investment by opening a Sam's Club cash-and-carry outlet in either Bangalore or Haryana state. Foreign-owned cash-and-carry stores are permitted in India as their customers are businesses rather than consumers.

Wal-Mart is not the only large foreign retailer to have plans to expand in India. Metro, the German retailer, has had a cash-and-carry store in Bangalore for two years. Executives from Metro are due to meet Bhattacharjee this week to discuss opening another store in Kolkata.

India remains an untapped market with huge potential for foreign retailers. The country has over 1bn inhabitants, a third of whom live in cities, and the disposable income of India's emerging middle class - estimated at 300m people - has grown by 20 per cent between 1999 and 2003. Estimates of annual retail sales in the country's 12m shops range from £99bn to £154bn.

Wal-Mart has been keen to enter the country for months. In May John Menzer, the president of Wal-Mart's international division, met Singh in New Delhi as part of a fact-finding delegation.

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Wal-Mart Doubles Down on Its Investment in Japan

By MARTIN FACKLER NIIZ
October 29, 2005                              
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At first glance, this Seiyu supermarket on Tokyo's northern fringes looks like any other grocery store in order-obsessed Japan, with its spotless floors and perfectly arranged displays of everything from fresh tuna to diapers.

But it does not take long to notice some differences.

The aisles are wider than in the cramped stores typically found in Japan. Some items bear brand names unfamiliar in Japan, like Simply Basic and Sam's Club. Then there are the signs overhead with yellow smiley faces and the word "Rollback" in English, just the way lower prices are announced at the American stores of Seiyu's corporate parent, Wal-Mart.

Three years after entering Japan by buying a stake in Seiyu, Wal-Mart has yet to make a big splash here. Indeed, it looks dangerously close to falling on its smiley face.

Seiyu, Japan's fourth-largest supermarket chain, has posted consecutive losses every year since Wal-Mart bought a stake in 2002. Its president resigned in July after failing to turn the company around. There have been almost no visible changes at most of Seiyu's 405 stores, prompting frustrated investors and analysts to ask why Wal-Mart is not doing more.

"Wal-Mart is in a real bind," said Yasuyuki Sasaki, a retail analyst in Tokyo for Credit Suisse First Boston. "Its way of doing business hasn't been accepted here."

Wal-Mart says all this is about to change. As early as next week, the company is expected to announce an ambitious new plan for Japan that will cost hundreds of millions of dollars over the next five years. Most of this new spending will go to overhauling half of Seiyu's stores by 2010, company executives predict.

And many will resemble the renovated store in Niiza, which Wal-Mart calls a prototype for what it is betting will be the right mix of American and local retailing styles to appeal to Japan's notoriously finicky shoppers. For one, Wal-Mart says it will keep the Seiyu name, which is familiar to Japanese shoppers.

Is Wal-Mart finally breaking away from its cautious path? Analysts here have not seen details of the plan, but they point out that Wal-Mart is, after all, Wal-Mart: a company with extensive resources, impressive technological skills and very deep pockets. They also say that Wal-Mart appears to be determined to stay in Japan, pointing to its decision last month to take a controlling stake of just over 50 percent in Seiyu by raising its total investment to $1.3 billion.

"Wal-Mart is starting to feel more confident," said David Hamaty, who runs the Japan office of Kurt Salmon Associates, a retail consulting company. "It's now moving into the growth phase. The next few years will be extremely critical for Wal-Mart here."

Success in Japan is important for Wal-Mart, the world's largest retail company. With sales flattening in the United States and fewer places left there to build new stores, the company must look overseas for growth. Japan is a tantalizing prize: Its $1.2 trillion retail market is the world's second-largest after the United States. Sales at Seiyu last year were the equivalent of $9.3 billion; Wal-Mart's were $256 billion.

But Japan is also one of the world's most impenetrable markets. Its consumers demand high levels of quality and service. A complex network of distributors and wholesalers block retailers from buying directly from suppliers, impeding Wal-Mart's traditional strategy for cutting costs.

Homegrown competitors like Aeon, Japan's largest supermarket chain, have already been lowering prices and erecting large-format stores. Several big foreign retailers have entered Japan and failed, including Carrefour, the French supermarket chain, which announced in March it will pull out of the country.

One of the biggest challenges has been convincing suppliers to sell directly, bypassing costly middlemen. Wal-Mart has also spent heavily on behind-the-scenes improvements, including linking Seiyu stores into Wal-Mart's global computer system and training employees how to use it. It has also closed stores and cut the full-time work force.

While some shoppers at Seiyu's model store in Niiza were impressed by the wider aisles and lower prices, a few expressed disappointment that the changes were not more extensive. Indeed, Carrefour failed because its supermarkets stocked too many Japanese products, rather than the high-end French foods shoppers wanted.

Still, Wal-Mart appears to be ready, finally, to move more aggressively. The company has started upgrading 20 other stores at a total cost of about 9.6 billion yen ($83 million). That could mean Wal-Mart might spend about $800 million to renovate another 180 stores.

The pace of renovations will pick up further next year. One part of the plan will most likely call for overhauling some 200 stores by 2010, said Wal-Mart's spokeswoman in Japan, Billie Cole.

Seiyu is also building two huge distribution centers that Wal-Mart says will cut costs by allowing it to better control the flow of goods to stores. It has two sprawling "supercenter" general merchandise stores and plans more, though the number may be limited because land is so scarce and expensive.

The Niiza store certainly has a more spacious feel than is typical in Japan. Other changes came directly from the United States, like opening a space at the entrance for stacks of low-price items, displaying goods in their original shipping boxes and grouping together related products like dog food and flea collars. The store also has Japan-only innovations, like an Ikea-style padded area where children can play while parents shop.

"We do a lot of experimenting here to find what works in Japan," said the store's manager, Fumihiko Sugo.

Mr. Sugo says he is trying to sell more items from Wal-Mart's global buying operations. About 10 percent of the store's 60,000 items now come from Wal-Mart, ranging from toy cars and fleece jackets to Chinese-made toilet paper.

Wal-Mart will not say how much of its inventory is now directly sourced, but it admits progress has been slow. It also says it is not pushing suppliers too hard, at least not yet. This may be to avoid repeating the failure of Carrefour, which entered Japan in 2000 vowing to bypass distributors and wholesalers, only to find some important suppliers refusing to sell to it at all.

"Some of the things Wal-Mart is doing here may be ahead of their time," said Mr. Hamaty of Kurt Salmon. "Their concepts are correct. But is Japan ready?"

Copyright 2005 The New York Times Company

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Protesters Target 'Shocking, Secret' Wal-Mart Memo

By Susan Jones
CNSNews.com
October 28, 2005                   
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(CNSNews.com) - A pro-union, anti-Wal-Mart group plans to hold Halloween candy sales outside various Wal-Marts and Sam's Clubs this weekend, with the proceeds intended to offset the cost of Wal-Mart employees' health care.

WakeUpWalMart.com, which routinely blasts the giant retailer over wages and health care, is inviting local children and families to don costumes and join the fund-raising fun in Seattle and dozens of other cities on Saturday.

The publicity stunt is intended to highlight what critics call the "Wal-Mart health care crisis" and to raise money for some of Wal-Mart's 600,000 workers who go without company-provided health insurance.

WakeUpWalMart was newly provoked earlier this week, when the New York Times published a "shocking secret memo" from Wal-Mart management, proposing various ways of keeping employee health care costs down.

The internal memo, written by Susan Chambers, executive vice president for benefits at Wal-Mart, suggested hiring more part-time workers and discouraging unhealthy people from working at Wal-Mart, the newspaper reported.

The memo mentioned that Wal-Mart might consider wooing younger, healthier people by offering education benefits; and it suggested that all workers, including cashiers, be required to perform some type of physical activity, such as collecting shopping carts in the parking lot.

The suggestions produced outrage from the retailer's critics. "It is simply appalling that Wal-Mart's senior management would actually write a memo suggesting not to hire certain workers because they may be unhealthy or obese," WakeUpWalMart fumed in a press release issued earlier this week.

Wal-Mart's Chambers acknowledged that 46 percent of the children of Wal-Mart's 1.3 million U.S. employees were uninsured or on Medicaid, the New York Times reported. "Specifically, our coverage is expensive for low-income families, and Wal-Mart has a significant percentage of associates and their children on public assistance," the memo said.

WakeUpWalMart called that admission "most startling," saying this is the first time Wal-Mart has "admitted there is a Wal-Mart health care crisis in America."

Wal-Mart executives said the memo was part of an effort to rein in soaring health care costs, but WakeUpWalMart isn't buying it.

"It is inexcusable and unconscionable for a company, with $10 billion in profits, to know 1 out of every 2 of their employees' children has no health care or is forced to rely on our public safety net and do nothing about it," the group said.

WakeUpWalMart said activists in 84 cities and towns in 26 states will host Halloween candy sales outside local stores this weekend, and copies of the Wal-Mart memo will be handed out at those events. Activists also plan to hand out flyers noting the "scary facts" about Wal-Mart's "health care crisis" to customers.

The Halloween candy fundraisers are part of WakeUpWalMart.com's new "Nothing's Scarier Than Not Having Health Care" campaign.

Wal-Mart executives have said their stores offer consumers the affordable prices they want and need; the retailer has no trouble filling job slots with people who apply of their own free will; and communities benefit when Wal-Marts move into areas where jobs are scarce, boosting the local tax base.

As for health care coverage, Wal-Mart Chief Executive H. Lee Scott Jr. said in February, "I don't think anybody should have a competitive advantage because they either do or do not pay health care." The Los Angeles Business Journal quoted him as saying that "Government has to get involved."

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Wal-Mart Pushes to Soften Its Image

Social, Environmental Initiatives Seen as Part of Larger Effort to Counter Critics

By Amy Joyce and Ben White
Washington Post 
Saturday, October 29, 2005                   
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A series of image-improving initiatives announced by Wal-Mart Stores Inc. in recent days closely follows the recommendations of a consultant's report that found that the public believes the retailer treats its employees poorly and is a negative force in communities where it operates.

The report, by consulting firm McKinsey & Co., was obtained from Wal-Mart Watch, a union-backed nonprofit that opposes the company's business practices. Wal-Mart Watch spokeswoman Tracy Sefl said the report was sent to the group anonymously.

"Sincere concerns exist that Wal-Mart is not treating its employees well, is too aggressive and is hurting local companies," the Aug. 24, 2004, report said. "The challenge is likely only to intensify," said the report, which went on to lay out a plan to defuse those concerns.

"Like any company, we want to make sure our associates, customers and local communities feel good about us," said Mona Williams, a company spokeswoman. "This research provided a benchmark to help us understand what we are doing well and where we need to improve."

Wal-Mart chief executive H. Lee Scott Jr. announced in a speech Monday that Wal-Mart would add a new health care plan. He introduced a program that would reward environment-friendly suppliers and pledged that Wal-Mart would curb its energy use. Scott also called on Congress to raise the minimum wage. The federal minimum wage is $5.15 an hour. Wal-Mart says its full-time workers are paid an average of $9.68 an hour.

But those initiatives left critics wanting more. "We'd be the first to applaud them. But the jury's out on how much of this will amount to real and meaningful, lasting change," Sefl said.

The McKinsey report outlines a long-term approach to "managing change." In the first three to 12 months, the company was told, it should find ways to convince the public that its wages and benefits are better than perceived, spread messages that it cares for employees, build local relationships, increase local philanthropy, and research the impact of stores on their communities. Next, the study calls on the company to create another initiative that benefits workers ("e.g. workplace education, child-care program"). Finally, the study says Wal-Mart should "take public leadership on broader societal issue."

Wal-Mart, the nation's largest employer, has spent much of the past several years appearing to ignore critics who claimed that the company paid poverty-level wages and provided minimal health care benefits, forcing employees into government programs. Community groups have blocked development of new stores in some areas. Wal-Mart has also been the focus of major lawsuits, including an ongoing sex-discrimination class action, the largest private-employer civil rights case in history.

But even as Wal-Mart introduced initiatives to soften its image, the company continued to take hits.

Another internal memo, disclosed by Wal-Mart Watch to the New York Times, suggested how the company might cut health care costs -- including hiring healthier, younger workers. The memo also confirmed that 46 percent of the children of Wal-Mart's employees are uninsured or on Medicaid. Scott's support for raising the minimum wage also generated criticism that the company was trying to drive up costs for lower-wage competitors. Meanwhile, Scott said Wal-Mart would not change its own wage structure.

And next week, the company faces the release of "Wal-Mart: The High Cost of Low Price." The movie, directed by Robert Greenwald, paints a dark picture of the company as a destroyer of small business and a ruthless opponent of unions. It includes interviews with current and former Wal-Mart workers who claim that the company forces employees to work off the clock, encourages them to sign up for welfare benefits, and discriminates against women and minorities. In an interview, Greenwald said he repeatedly asked for on-camera interviews with Wal-Mart executives but was turned down.

Wake-Up Wal-Mart, another labor-backed group, will run an advertisement on CNN and CNBC promoting the movie.

Wal-Mart is responding. The company's outside public relations firm, Edelman, which has six people each in Washington and at Wal-Mart's Bentonville, Ark., headquarters, sent reporters a press kit last week attacking claims made in the film's trailer, along with negative reviews of Greenwald's previous work. Wal-Mart is also promoting a competing documentary about the company, directed by Ron Galloway, titled "Why Wal-Mart Works & Why That Drives Some People Crazy."

Paul A. Argenti, a professor of corporate communication at Dartmouth College's Tuck School of Business, said that the company is "reacting to the world around them" and that it is "in a bind."

Wal-Mart's public relations problems, and the rising costs and threats to its rapid expansion, have dragged down the company's stock price and frustrated investors. The stock price is down nearly 14 percent this year. John P. Waterman, chief investment officer at Rittenhouse Asset Management Inc., which owns about 4.7 million Wal-Mart shares, according to Bloomberg, praised the company's efforts to aggressively respond to critics. "The negative PR has not helped them," he said. "I think they realize they have to play offense a little bit."

Bernard Sosnick, a retail analyst at Oppenheimer & Co., described the company's response to critics as a two-step process that began a year ago. He said the first step was to hire scores of lawyers to respond to lawsuits and improve the company's compliance with laws and regulations. The second step, just getting started, is to reshape the company's image to allow expansion into major urban areas while also attracting more affluent customers who might not shop at a company with a poor labor and environmental image.

"There's little question that Wal-Mart isn't so much initiating as responding," said Harley Shaiken, a labor professor at the University of California at Berkeley. "Economists call this the union threat effect. It's not that Wal-Mart fears it's going to be unionized soon, but a major PR campaign is out there, raising the labor issues."

Robert Slater, author of "The Wal-Mart Decade," said the recent initiatives are part of the company's natural, if halting, evolution from a profit-making machine singularly focused on internal issues such as supply-chain management and cost cutting to a seasoned global company sensitive to its public image. "Wal-Mart already knew how to sell things to people. But it didn't know how to put its best foot forward," Slater said. "For a long time, that didn't hurt them. Now they realize that down the road it can really hurt them."

Staff researcher Richard Drezen contributed to this report.

© 2005 The Washington Post Company

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Predicting the Next Wal-Mart

By John Reeves
TMF Bane
10/28/2005                        
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"I know no way of judging of the future but by the past." -- Edward Gibbon

It earned the name "category killer," a term used for large companies that put less efficient merchants out of business. When this retailer went public in 1978, it soon became No. 1 in the market, as independent shops closed their doors, unable to compete with the growing colossus.

The future looked bright for the new industry leader in the 1980s and 1990s. The absence of competition and increased demand led to revenues of more than $10 billion per year by the late '90s. Alas, it never saw the competitor in the rearview mirror. In March 2005, the company bowed to the inevitable and accepted a $6.6 billion buyout offer from a consortium of investment firms. The deal was completed earlier this summer.

Why did Toys "R" Us fail to see the gathering threat posed by Wal-Mart(NYSE: WMT)? Perhaps it was unable to adequately predict future trends in its market. An ability to anticipate the future is perhaps the single most important skill that a manager or an investor can possess (which is kinda like saying "an ability to know the final score" is the single most important skill required of a gambler). So where do you go to learn about the future?

In the days of old, you might have visited a fortune teller and, for a princely sum, learn that something bad is going to happen to someone you know somewhere down the line. These days, you go to Harvard Business School when you want to see what the future has in store. With this in mind, Fool co-founder David Gardner sat down with Harvard's Clayton Christensen, a professor and consultant who uses innovation to predict business growth and industry change.

When being disruptive is a good thing ... Christensen has identified the concept of innovation -- either sustaining innovation or disruptive innovation -- as crucial to determining the direction of a particular company or industry.

Sustaining innovation is when, say, a computer company introduces a faster chip in its product. As a result of the improved product, margins should increase, thereby strengthening the company. Disruptive innovation takes root at the low end of the market. According to Christensen, disruptive innovation is the mechanism by which industries are transformed and prior market leaders (such as Toys "R" Us) are toppled. Christensen described disruptive innovation to David as follows:

A disruptive innovation is a new product or service or a new business model that doesn't attack the core market by bringing a better product to established users in direct competition with the leaders in an industry, but rather it comes into the low end of the market, either through a business model that can compete at much lower costs, can compete profitably at lower costs, or brings to the market a product or service that is so much more convenient and simple to use and affordable that a whole new population of people who previously couldn't afford or didn't have the skill to own and use a product can now own one.

There are countless examples of this business principle. Target(NYSE: TGT) and Wal-Mart rose to dominance in discount retailing as former leaders tried to concentrate on higher-margin items. Early on in the computer industry, Apple(Nasdaq: AAPL) was disruptive to the likes of IBM(NYSE: IBM) and Digital Equipment. Dell(Nasdaq: DELL) later transformed the PC market further, thereby undermining former leaders such as IBM (again!) and Hewlett-Packard(NYSE: HPQ).

Christensen illustrates this principle in some depth by examining the case of Charles Schwab. Below I've included a table that depicts a typical life cycle for a disruptive firm:

The Life Cycle of a Disruptive Firm

Early Life Cycle Mid-Life Cycle Late Life Cycle

Disruptive company enters the market via the low end Company meets with success and gains market share Company moves upmarket in search of higher margins

Schwab was a discount broker that utilized the Internet in a disruptive way relative to industry leaders such as Merrill Lynch(NYSE: MER). As Schwab gained market share, it was faced with a dilemma: Go upmarket in search of higher margins or remain downmarket, slugging it out against low-cost competitors in a commodity market. At the moment, the jury is still out on which way Schwab will go. Ironically, Merrill Lynch started out as a disruptive innovator itself. According to Christensen, Charles Merrill began his business with the aim of bringing Wall Street to Main Street, and his approach made it easier for average folks to own stocks. Now, Merrill Lynch is ensconced in the upmarket niche, selling its financial products to consumers with high net worth.

The price of experience By studying disruptive innovation, Christensen has learned to recognize certain patterns, and this helps him to determine the future course of a company or industry. The title of his most recent tome, Seeing What's Next: Using Theories of Innovation to Predict Industry Change, provides a useful shorthand for his work. Apparently, corporate America sees a lot of value in Christensen's ideas. The demand for his insights was so strong that he started Innosight, his own consultancy. For $40,000, Innosight will visit your firm and put on a two-day innovation-themed workshop. For approximately $400,000, it might perform a highly detailed analysis to determine whether your firm possesses a potentially disruptive product.

In the interview, David asked Christensen about such topics as biotechnology and the future of the health-care industry -- topics addressed every month in David's Motley Fool Rule Breakers newsletter advisory service.

Seeing what's next Christensen considers biotechnology to be disruptive relative to big pharma, and he sees the future of the entire pharmaceutical industry being turned upside down. Companies that tap into the fundamental changes affecting the industry will win out.

In the area of nanotechnology, Christensen advises investors to go slow. He explains how understanding the dynamics of the value chain will allow investors to identify the companies more likely to be successful.

One of the more tantalizing parts of the interview is when Christensen discusses the future of the health-care industry. Unlike most experts, he sees significant potential for innovation in this industry. The Minute Clinic in Minneapolis, for example, represents the type of model that might transform the entire industry. This innovative company uses nurse practitioners, located within Target stores and Cub supermarkets, to treat such illnesses as strep throat, sinus infections, and earaches. Apparently, 80% of all health-care events in a family's life consist of 14 very common ailments. Patients can visit the clinics and receive immediate treatment for a modest fee (approximately $45). Needless to say, business is booming. As David Gardner remarked, "When you combine lower cost with more convenience, you have a killer app in the business world."

The hunt for innovators As someone who once thought the whole personal computer thing was a fad, I should be listening to Professor Christensen, especially because he thinks disruptive technology will be playing an even larger role in the next 10 years. By my reckoning, almost half of our current Rule Breakers stock picks are disruptive innovators. And I recently heard from the CEO of one of these innovators that his company is ready to go mano a mano with the industry leader in what was once believed to be a one-company market.

Want to join us in our search for disruptive companies? David Gardner is offering a free 30-day trial to the service -- full privileges included. Your trial will provide you with access to each of our 27 active picks. You'll also be able to read about our two most recent stock selections, which were released last week. If you don't like the service, just cancel. No questions asked. To have a peek at the future, just click here.

This article was originally published on Feb. 23, 2005. It has been updated.

Legal Information. ©1995-2005 The Motley Fool. All rights reserved.

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Wal-Mart Responds To Critical Video

Sandra O'Loughlin
October 28, 2005                               
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NEW YORK -- November promises to be an interesting month for retail, not only because of the start of the holiday shopping season. It will also see the launch of two independent movies about the world's largest retailer, Wal-Mart, one of which is flattering and one of which is not, and Wal-Mart's response to the negative one.

The retail war begins with the Nov. 4 release of Robert Greenwald's critical movie, Wal-Mart: The High Cost of Low Prices. Eight days later a more flattering Wal-Mart appraisal will be released in a second film, Why Wal-Mart Works: And Why That Drives Some People C-r-a-z-y, created by independent filmmakers Ron and Robert Galloway.

Wal-Mart in turn has already launched a salvo at director Greenwald. In press kits sent this week to news organizations and on its Internet site, www.walmartfacts.com, the mass merchant claims Greenwald has a "careless disregard" for facts and that his facts are "wrong."

Greenwald's movie will air in select independently owned theaters in New York and Los Angeles before being shown at more than 3,000 screenings and "house parties" across the nation by churches, small business owners, teachers and others. Trailers for the film originally released exclusively on the Web began showing on dozens of screens across the country in October. The trailers are parodies of Wal-Mart ads.

Greenwald describes the movie as "the story of one company using its power to destroy the fabric of American life," and claims "it is important to us that as many people as possible see it."

Wal-Mart, on the other hand, claims that "instead of presenting a well-documented, objective assessment of Wal-Mart's impact on the community, Greenwald has amassed an array of advocacy, conjecture and misinformation contrived to fuel his anti-Wal-Mart agenda." Its Web site sends up a counter-attack with an article titled, "Robert Greenwald: Three Errors in Three Minutes" and a chart, "The Facts on Wal-Mart's Contributions to Working Families" as well as negative reviews of Greenwald's previous films.

Wal-Mart's Web site touts the Galloways' documentary and a letter by Ron Galloway to Greenwald challenging him to show both films at screenings. "You have a Wal-Mart movie. I have a Wal-Mart movie, albeit one on a smaller scale (again, I had to self-fund mine)," Galloway writes. "Both are the result of a lot of hard work and research. Hopefully, we can launch a genuine and informed discussion about the impact of this company."

© 2005 VNU eMedia Inc. All rights reserved.

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Wal-Mart's Perverse Strategy on the Minimum Wage

by Tim Kane, Ph.D.
www.heritage.org
October 28, 2005                          
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[back to web version] For those conservatives who are still unclear on the distinction between big business and the free-market, consider exhibit #1: Wal-Mart CEO Lee Scott’s rallying cry on October 24th for a higher federal minimum wage. Wal-Mart has been a target of liberal activists in recent years, and so Scott’s announcement may cause some cognitive dissonance. It should not.

Big labor is on one side. Big business is on the other. And then there is the typical American consumer and taxpayer. We should not confuse these three.

The free market works to the advantage of the typical citizen and suffers relentless assault from special interests that profit from its disfiguration. Big labor favors taxpayer-guaranteed benefits, curtailed competition, and protection from cheap labor (at home and abroad), while the strategy of many big businesses is to lobby for corporate welfare, tax breaks, and ways to stifle competition. Small businesses are forced to play the market purely and without any favors, lacking the power to lobby politicians. Until its latest move, Wal-Mart was more of a pure player, making profits by innovating in the marketplace.

Most people would agree with the principle that in a free society, Wal-Mart should be free to engage employees with whatever compensation package the two parties both accept. When Wal-Mart recently came under fire (wrongly) over its health benefits, it unwisely responded by suggesting a number of so-called socially conscious policies, including calling for a government role regulating the compensation of its competitors.

No single issue is more confusing to legislators who want to do the right thing than the minimum wage because on the surface it symbolizes “justice for the little guy.” But truth is rarely superficial in economics. In fact, the poorest of the poor are kept out of the labor market when the price of low-skilled labor is set artificially high through minimum wages. A minimum wage of $6 an hour makes it illegal for a single mother to work for $5 an hour, even if she wants to.

Why would a government deny an individual the freedom to work? Because she deserves more, some argue. But regardless of what a low-skilled worker deserves, unemployment is what she gets when a minimum wage is imposed. There is no debate among serious economists that this is true.

A higher minimum wage also forces higher costs on small businesses in small towns. Yes, those mom-and-pop stores are exactly the American institutions that Wal-Mart is competing against. This means that the corporate strategy of manipulating the price of labor is more than a PR stunt, as some critics claim.

Scott’s most egregious statement is this one: “We can see first-hand at Wal-Mart how many of our customers are struggling to get by. Our customers simply don't have the money to buy basic necessities between pay checks."

That is a surprising statement, given the 9.4 percent rise in Wal-Mart sales over the last 5 years. As for poor customers, surely Scott knows that the number of people living below the official poverty line is roughly the same as it was in 1996, the last time the minimum wage was raised, even though the population has grown by millions. The result is a poverty rate that’s a full percentage point lower, even though the minimum wage hasn’t changed.

Only 2 percent of America’s workers make the minimum wage, but 5 percent of the workforce is unemployed. Which group needs the most help? Consider also that most minimum wage workers are part-timers and under 25 years old and that half are bound for a raise within a year. Clearly, raising the minimum wage won’t help the unemployed at all and will only make their job opportunities scarcer.

Wal-Mart often honors its rural roots and maintains its headquarters in small-town Arkansas. But the idea of a national wage is actually hostile to rural communities. Small towns have lower costs, meaning that its workers don’t need a “city” wage to pay for the exact same things that urban residents buy—especially real estate. So in effect, when the national government imposes a national price on hourly labor, cities and big companies are given a competitive advantage at the expense of small, rural employers.

After a private internal memo on controlling medical insurance costs was leaked, Wal-Mart is now being hammered anew by critics. These are exactly the kind of people who want to control the private affairs of employers and employees. But American firms from GM to Delphi to Northwest are becoming hamstrung by their exploding health care costs, potentially harming American competitiveness. The lesson should be that businesses—which are not obligated to provide any health care to employees—should be free to compensate employees however they and their employees see fit. Congress could remedy the mess in a single stroke by treating benefits as income under the tax code.

What is lost in this debate is that Wal-Mart has been a major factor in enriching America’s poorest consumers. Americans can buy more goods (including medicines, clothing, and fresh food) than ever before thanks to Wal-Mart’s effect of lowering prices in real terms. It is a shame the firm has chosen to muddy this legacy as a poverty fighter with this misguided attempt to raise every employer’s labor costs.

The Wal-Mart endorsement of a higher minimum wage should not give comfort to any senator or congressman who thinks that he or she can now support it as a conservative. In the end, it doesn’t matter who is calling for a higher minimum wage. It is a bad idea whether it comes from the AFL-CIO, a Fortune 500 company, or the North Pole. Congress should never pass legislation that artificially controls wages or prices.

Tim Kane, Ph.D., is the Bradley Research Fellow in Labor Policy in the Center for Data Analysis at The Heritage Foundation.

1995 - 2005 The Heritage Foundation All Rights Reserved.

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Is Wal-Mart really changing?

Anne D?Innocenzio And Marcus Kabel
Canadian Press
October 28, 2005                              
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NEW YORK (AP) - Wal-Mart Stores Inc. accelerated its campaign to polish its image by proposing this week a lower-cost health care plan for its employees, promising an environmental initiative, and calling for a boost in the minimum wage.

But the world's largest retailer is finding that by trying to please everyone - the public, politicians, shareholders and Wall Street - it may be pleasing no one.

The company, which grew to be a $285 billion US giant by relentlessly focusing on offering goods at the lowest-possible cost, has come under a barrage of criticism in recent years for how it treats its workers, diversity in the workplace and its environmental record.

Critics complain that the recent initiatives are merely publicity stunts. At the same time, the company seems to have lost some of its competitive edge to retailers like Target Corp., and a lacklustre economy and high gasoline prices have also hurt sales and profits. The 17 per cent drop in Wal-Mart's stock price this year reflects the company's woes. And now a scathing documentary to be released nationally next month, will put the retailer in its crosshairs.

Wal-Mart's opponents call its new health care plan inadequate because workers would still have a $1,000 deductible. And they term the company's advocacy of a higher minimum wage as a self-serving attempt to boost the buying power of its low-income customers.

"This is a desperate attempt to remake their faltering image," said Chris Kofinis, spokesman at Washington-based Wake Up Wal-Mart, one of Wal-Mart's harshest critics. Opponents argue Wal-Mart's pay and benefits drive down those at other companies trying to compete.

Even some conservative allies aren't embracing Wal-Mart's fuzzy approach.

"Wal-Mart had a pure position earlier" as a capitalist company, said Tim Kane, economist at the conservative Heritage Foundation. "Now they are muddying the waters by trying to offer a softer image. It leaves them vulnerable to charges that they are insincere."

In fact, an internal memo - obtained by Washington-based Wal-Mart Watch and appearing in the New York Times - appeared to undercut Wal-Mart's charm offensive. (Wal-Mart provided a copy to The Associated Press after it learned the New York Times was planning a story.) The memo, written by a company benefits executive to the board, suggested ways to cut soaring medical costs by hiring more part-time workers and discouraging unhealthy job applicants by including physical activity in all jobs.

One longtime Wal-Mart associate, who declined to be named for fear of retaliation, said the memo had left a lot of employees angry. He noted that there is a lot of unhappy talk among employees that Wal-Mart will stop paying for their health insurance.

Wal-Mart spokeswoman Mona Williams says the debate underscored that health coverage is "the number one problem facing our nation today."

Burt Flickinger, managing director of consulting firm Strategic Marketing, estimates that Wal-Mart spends 70 per cent less per employee on all benefits, including health care and pension plans, than unionized retailers. Union shops, which include supermarkets and wholesale clubs, pay anywhere from $10,000 to $30,000 in all benefits per full-time employee.

Such a stark difference may not be surprising, given Wal-Mart's focus on cutting costs to maintain its edge as the low-price leader. But it certainly highlights its dilemma going forward.

"Wal-Mart is continuing to mature as a company and this requires us to think about our business in a new way," Williams continued. "Many of the issues we have dealt with from a defensive posture are now seen as an opportunity to embrace proactively and become a more innovative and competitive company as a result."

In fact, on Nov. 4, Wal-Mart is reaching out to critics by holding a conference in Washington to study its impact on the economy. The company hired Global Insight Inc., a global independent economic forecasting company, to conduct an independent study, giving its economists access to internal data on wages and benefits.

But the strategy could backfire: The gathering will also feature presentations from a group of economists, some of which are not flattering.

Wal-Mart says it has listened to critics, employees and shoppers over the past year. But how much it is willing to sacrifice to please its opponents remains to be seen.

In the memo, Wal-Mart acknowledged that health care is one of the most pressing reputation issues it faces. But how will it keep escalating costs down while still being perceived as a good citizen?

Wal-Mart's benefits costs jumped to $4.2 billion this year, from $2.8 billion in 2002, and the company noted that its workers are getting sicker than the national average, particularly with obesity-related diseases.

At the same time, the company acknowledged the current insurance plan is unaffordable to many people. In fact, less than half of Wal-Mart employees are on company insurance, compared with more than 80 per cent at Costco Wholesale Corp.

© The Canadian Press 2005

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Wal-Mart pressuring electronics rivals

By Nicole Maestri
Fri Oct 28, 2005                      
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NEW YORK (Reuters) - Wal-Mart Stores Inc. will roll out its holiday advertising campaign next week, and jitters that the seasonal pricing competition is getting an early start put pressure this week on shares of electronics retailers Circuit City Stores <CC.N> and Best Buy Co. <BBY.N>.

On Tuesday, Wal-Mart <WMT.N> said it would launch an "aggressive" advertising campaign for the holidays starting on November 1, which would make it the earliest launch in the retailer's history.

In light of the announcement, Banc of America Securities downgraded shares of Circuit City, citing "an intensifying promotional environment highlighted by Wal-Mart's aggressive tone at its analyst meeting."

The bank downgraded shares to "sell" from "neutral."

Wal-Mart is increasing its focus on consumer electronics by offering a wider range of products and stocking more high-end items, like high-definition, flat panel televisions, to try to lure higher-spending shoppers in its stores.

Its Web site currently features electronics on its home page including high-definition television, an MP3 player, a portable DVD player and a digital camera. Those are many of the same products that Best Buy listed at its recent analyst meeting as ones that are expected to be hot for the holiday.

Wal-Mart's expanded focus on consumer electronics has sparked worries that the world's biggest retailer will cut its prices on high-end, hot items like flat panel televisions, and customers will walk through its doors instead of into a Circuit City or a Best Buy store.

The announcement that its advertising efforts would start earlier than usual added to those worries.

"When someone hears that, and everyone is nervous ... it pressures whoever is in the way," said David Ricci, a portfolio manager for William Blair & Co. and a former stock analyst who covered electronics retailers. "Right now, it's like 'Oh my God, this has to be bad news for Best Buy and Circuit City' and so their stocks are down."

For the week, Circuit City shares are down roughly 4 percent, while Best Buy is down roughly 3 percent. The S&P Retail Index <.SPX> is roughly flat for the week.

Ricci said there are ways to get around the promotional environment. For instance, he said Best Buy focuses on "solution selling." They are competitive with pricing on hot items, but when consumers come in to their stores they then try to sell them higher-margin accessories to go with their electronics purchase.

He also said the market for flat panel or high definition televisions is expected to grow so much this year that while Wal-Mart will increase its sales, so too will Best Buy and Circuit City.

"I don't see them really cutting into Best Buy's or even Circuit City's sales for that matter because the market is just growing so fast," he said.

In a research note on Best Buy last week, Goldman Sachs said the "bark" from promotions could be worse than the "bite," and that while Best Buy and Circuit City stock would be more volatile than the broader retail group, "sanity will ultimately prevail" by December, the heart of the shopping season.

© Reuters 2005. All rights reserved.

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Subsidizing the World's Largest Corporation

by Greg LeRoy
Association of Alternative Newsweeklies
POSTED ON OCTOBER 28, 2005                                  
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AlterNet Offers Wal-Mart Story for Free to AAN Papers "Subsidizing the World's Largest Corporation" is an investigative report by Greg LeRoy examining Wal-Mart's efforts to secure hundreds of millions of dollars in tax breaks from communities across the U.S. LeRoy's investigation is part of a collaboration among four progressive magazines to echo the findings of Robert Greenwald's new documentary "Wal-Mart: The High Cost of Low Price." In addition to AlterNet, The Nation, The American Prospect and In These Times are all tackling stories and themes showcased in Greenwald's film, which premiers Nov. 1. "Subsidizing the World's Largest Corporation" will be ready for publication Monday, Oct. 31.

For more information, contact AlterNet associate editor Kristina Rizga at (415) 284-1420 ext. 323 or kristina_rizga@alternet.org.

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Wal-Mart's Memo Blurs Its Message on Benefits

By Abigail Goldman and Lisa Girion
Times
Thu Oct 27                     
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Wal-Mart Stores Inc., which built its reputation — and a virulent opposition — on rock-bottom prices, has talked a lot lately about becoming a kinder, more responsible company.

But the retailing giant is finding that convincing the world that it is "committed to change," and to keeping costs low, is a tough balancing act.

On Monday, Chief Executive H. Lee Scott Jr. pledged to bring health insurance within reach of his 1.3 million U.S. employees. On Wednesday, a leaked company memo revealed "bold steps" to reign in Wal-Mart's employee benefit costs.

Among the recommendations: using more part-time workers, cutting life-insurance payouts, pushing spouses off health plans through higher premiums and trying to dissuade unhealthy people from seeking jobs by, among other things, requiring cashiers to gather carts in Wal-Mart's vast parking lots.

To some Wal-Mart watchers, the difference between what Wal-Mart says and what Wal-Mart does makes perfect sense.

"I don't think the DNA of Wal-Mart has changed at all," said HSBC Securities analyst Mark Husson, returning Wednesday from an analyst meeting at Wal-Mart headquarters in Bentonville, Ark. "It's like a religious cult — it has a low-cost gospel to bring to the country and sees it as a divine duty to do that and nothing is going to get in its way. It will do what it has to do and say what it needs to say to get there."

In the healthcare memo, whose contents were first reported in the New York Times, Executive Vice President of Benefits Susan Chambers wrote to the company's board of directors that Wal-Mart workers on average spent 8% of their income on healthcare — almost double the national average. Last year, Chambers wrote, nearly two-fifths of those enrolled in Wal-Mart health plans spent 16% of the average Wal-Mart income on healthcare.

What's more, 46% of the children of Wal-Mart employees either are on Medicaid or are uninsured, the memo said. That marked the first time that Wal-Mart has acknowledged that a significant number of employee dependents rely on public assistance. On Wednesday, a Wal-Mart spokeswoman called that figure "unacceptable."

"We have to do better and we will," spokeswoman Sarah Clark said. "But … that challenge isn't just limited to Wal-Mart."

Clark said that the memo was not a final list of recommendations and was the result of a six-month study of employee benefits.

"Those are the things that we are looking at — how do you continue to provide the best benefits to employees and remain competitive?" Clark said. "There is a genuine desire to do just that at Wal-Mart, but we feel like we can certainly improve our offerings today."

In his speech Monday, Scott announced new benefit options for employees, including health savings accounts and a trial health plan for some workers with premiums as low as $11 a month.

Chambers described Wal-Mart's problem: a workforce that is older and less healthy than the national average, and a population that overuses the most expensive kinds of care, such as emergency room visits, leading to a 15% annual growth rate in benefit costs. Fewer than half of Wal-Mart's workers at more than 3,600 stores are covered by the company's insurance programs.

If not addressed, Chambers said, benefit costs would consume an incremental 12% of total profit by 2011, or $30 billion to $35 billion in market capitalization.

Throughout the 27-page benefit memo, Chambers refers repeatedly to the company's public reputation and "messages to use in combating critics." The critics, which the memo said include labor unions and state governments that have attacked Wal-Mart for the number of workers it has on public aid, have grown increasingly vocal about what they consider to be stingy benefits at the world's biggest retailer.

Chambers recommended "reframing" the Medicaid issue as everyone's problem, not just Wal-Mart's, and engaging in a "sustained communication campaign" about the company's healthcare offerings.

She also posits that the company would have "political cover" for moving employees into health savings accounts because other retailers offer similar options.

Several of Chambers' proposals are considered progressive, including offering part-time employees health insurance after one year on the job instead of the current two, and adding health clinics to Wal-Mart stores for employees and the public.

Still, the memo concludes that even if all the recommendations are adopted, the company's healthcare enrollment will drop because of the shift to more part-time workers and that a "significant number" of employees and their children will continue to qualify for Medicaid.

"It's like an X-ray into the heart of them — on the one hand they want to portray themselves as family that cares and that is respected," said Nelson Lichtenstein, a professor of history at UC Santa Barbara and editor of the forthcoming book "Wal-Mart: The Face of 21st Century Capitalism."

"On the other hand, Wal-Mart's core mission was low-cost distribution of goods to a huge working-class clientele," he added.

"These two things are clashing and Wall Street is not stupid, Wall Street understands the contradiction that the company is caught in," he said.

Wal-Mart, which last year earned nearly $10.3 billion on sales of $285 billion, has seen its stock fall 21% from its 52-week high of $57.89 last November. Shares in Wal-Mart rose 19 cents Wednesday to $45.58.

Sales growth at stores open at least a year, a key measure of strength, has slowed to 3.2% in the first half of the year, compared with 5.2% for the first six months of last year.

Crucial to the company's growth in the United States is expansion into urban areas most hostile to the company's business model, including California, the East Coast and Chicago. Wal-Mart's new public relations bid, analysts and academics have said, is an attempt to win over those new consumers.

The benefit memo, however, may undercut the corporate image that Wal-Mart has sought to promote through its television commercials and public relations efforts.

"The company story is that the workforce is everything," said David West, executive director of the Center for a Changing Workforce, a Seattle think tank that has studied Wal-Mart's benefits. In TV ads, "it's 'Our people make the difference.' But, if you read this memo, their people aren't making the difference. It's time to get a new, younger workforce that doesn't go see the doctor."

Benefit experts also said that Wal-Mart was partially to blame for its rising healthcare bill because expensive health plans discourage healthy workers from participating.

"The people that have health problems buy it and those who don't, don't," said David Style, who heads Corporate Benefit Marketing in Encino and is a board member of the Los Angeles Assn. of Health Underwriters. "They are in a death spiral."

Wal-Mart is not alone in its struggle to contain healthcare costs. Nationally, such costs have outpaced inflation for several years. That has prompted employers to shift costs onto workers through higher co-pays and deductibles.

"A Wal-Mart world — low wages, low benefits, stagnant incomes for the working class — is not actually good for Wal-Mart," Lichtenstein said. "And now they understand that."

Covering workers

Wal-Mart's health insurance plan covers fewer than half the company's employees. About 80% of all employees are eligible to participate, but only 60% sign up for coverage.

Percentage of workers eligible for coverage

Wal Mart: 81%

National employers: 81%

Retailers: 56%

*

Percentage of eligible workers with insurance

Wal mart: 60%

National employers: 83%

Retailers: 63%

*

Percentage of all employees with insurance

Wal Mart: 48%

National employers: 68%

Retailers: 36%

--

For some employees without insurance, Medicaid is an option.

Employees

Medicaid Uninsured

Wal Mart 5% 19%

National

employers 4 18

Retailers 6 18

Children of employees

Medicaid* Uninsured

Wal Mart 27% 19%

National

employers 22 10

Retailers 36 NA

NA=not available

*Meidcaid or State Children's Health Insurance Program

Source: Internal Wal-Mart document

Copyright © 2005 Los Angeles Times

Copyright © 2005 Yahoo! Inc. All rights reserved. 

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Health insurance costs are on Wal-Mart's mind

By L.M. SIXEL
Houston Chronicle
Oct. 26, 2005                          
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When the CEO of Wal-Mart Stores called for Congress to raise the minimum wage this week, it may have surprised those who think the giant retailer is more about low wages than economic justice.

"We can see firsthand at Wal-Mart how many of our customers are struggling to get by," Lee Scott said in a speech to company executives. Spending patterns, he said, tell the retailer "that our customers simply don't have the money to buy basic necessities between paychecks."

Scott sounded like he really understood the pain of the low-wage earner.

But does he?

It turns out that 46 percent of the children of Wal-Mart employees are either on Medicaid or uninsured, according to an internal memo released Wednesday by Wal-Mart after it was leaked in the New York Times.

That's causing a political problem in some states faced with large bills to cover the uninsured, and those battles will contribute to a decline in the retailer's reputation, according to the document the consulting firm McKinsey & Co. helped prepare.

Wal-Mart's insurance is expensive for low-income families, according to the memo. Only 48 percent of its employees enroll, compared with 68 percent of workers employed by other national employers.

And those who buy the coverage spend 8 percent of their incomes on premiums and deductibles, nearly twice the national average, according to the memo.

Cutting benefit costs To lower the costs of benefits, which have been rising faster than sales, the company should charge spouses higher premiums, reduce its profit-sharing and retirement contributions, and shift more employees to part-time status so fewer would qualify for health insurance, said Susan Chambers, executive vice president of benefits, in a recommendation to the board.

"Every business in America is facing the harsh reality of skyrocketing health care costs," according to a statement from Wal-Mart. "They're having conversations in their boardrooms just like we're having in ours. We're all asking the question: How do we balance the genuine desire to provide the best benefits to employees while remaining competitive in the global economy?"

Wal-Mart continued to say in its statement that it will make several improvements to its benefits offerings, such as in-store health clinics, a cheaper "value" insurance plan and the introduction of pretax health saving accounts.

Adding physical work The memo floated some other ideas.

To make sure it hires healthy employees, Chambers recommended that workers be required to perform physical activity. Cashiers, for example, would have to round up shopping carts and the company would offer educational benefits that would appeal to younger, more healthy workers.

"It will be far easier to attract and retain a healthier work force than it will be to change behavior in an existing one," according to the memo.

As for those longtime employees?

An employee with seven years of service costs almost 55 percent more than an employee with one year, even though their productivity is identical, according to the memo. And because pay and benefits improve the longer employees stay, there's little reason for them to leave because they're earning higher-than-market wages.

Although the memo focused on the cost of benefits, there's a hint of why Scott might have called on Congress to bring up the minimum wage issue.

"Address the Medicaid issue head-on by reframing the debate — e.g., this is everyone's problem, not just Wal-Mart's — and by offering some type of counterproposal or compromise."

Last increase was in 1997 The last time the minimum wage rose was in 1997. It's been stuck at $5.15 ever since, but not for want of trying on the part of Democrats.

"It's an incredibly high priority for the Democrats," said Tom Kiley, a spokesman for U.S. Rep. George Miller of California, the senior Democrat on the House Education and Workforce Committee. Miller's bill would raise the minimum wage to $7.25 an hour in three steps over two years.

Not allowed to come up If it's not the single most effective way to reduce poverty, it's near the top, Kiley said. And it's got significant popular support, he said.

But in the Republican-controlled Congress, it never surfaces. And when the Democrats bring it up as amendments, as they have recently in both the Senate and House, it gets swatted down.

Companies like Wal-Mart realize how that's hurting their business, he said.

"If you raise the minimum wage, it will go into the pockets of people who will go out and spend it," Kiley said.

lm.sixel@chron.com

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Health Care Memo Further Tarnishes Wal-Mart

by Chris Arnold                        [back to top]

The Memo You can read the memo obtained by Wal-Mart Watch at its Web site:

Wal-Mart Benefits Memo (Requires Adobe Acrobat)

All Things Considered, October 26, 2005 · Retail giant Wal-Mart is facing criticism over an internal memo that proposes aggressive moves to trim employee benefit costs, such as discouraging unhealthy people from taking jobs at Wal-Mart. The company, whose stock price has dropped over the last year, is under pressure from investors to cut costs.

Wal-Mart Watch, a labor-affiliated activist group, obtained the memo, which was written by a Wal-Mart executive

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Wal-Mart's Jumbo-Sized Plans

By Mike Cianciolo
10/26/2005                    
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The world's biggest retailer is planning some suitably mammoth moves. When I set out to write this article about Wal-Mart(NYSE: WMT), I simply planned to focus on its expansion plans. However, as the day progressed, Wal-Mart provided a plethora of newsworthy announcements on day one of its annual two-day analyst conference.

Let's start with Wal-Mart's latest demonstration of its retailing muscle. The company announced on Oct. 24 that it plans to open up to 600 new stores in the next fiscal year. That would represent approximately 60 million more square feet of retail space, or 8% growth worldwide. Of that total, up to 280 stores will be supercenters, which sell groceries along with general merchandise. Not surprisingly, these locations generate the biggest profits for the company and now outnumber the smaller discount stores. The supercenters offer additional features, including photo processing, auto repair, and even eye care. Talk about one-stop shopping.

On Oct. 25, Wal-Mart also announced initiatives to cut energy usage, reduce waste, and offer lower-priced health care to its employees. Let's not kid ourselves here. The company's main objective is certainly not to improve the world. CEO Lee Scott said that "improving fuel mileage in the trucking fleet by one mile per gallon would save more than $52 million per year." However, if Wal-Mart can improve its bottom line while helping its employees and the environment, I see nothing wrong with that.

Also, in a bit of irony, Wal-Mart took a stance on public policy by advocating an increase in the minimum wage. The company has often drawn fire for its labor practices and employee pay. However, it maintains that it pays its employees at rates above the minimum wage, while trends indicate that its customers can't afford to purchase basic necessities throughout the month. Given its average wage of approximately $10 an hour, Wal-Mart's call to increase the minimum wage above $5.15 would actually place an additional burden on many of its smaller, low-wage competitors.

In yet another announcement, an internal memo to its board of directors was made public. The memo contained recommendations for holding down costs while also providing the company with ammunition to combat critics. To me, however, it looks like a bait-and-switch tactic. For example, one proposal entails reducing the amount of time it takes for part-time employees to become eligible for health benefits from two years to one. However, the company also proposes reducing retirement contributions from 4% to 3%. It also proposed putting health clinics in its stores. That seems generous, right? But, Wal-Mart benefits by eliminating expensive emergency room visits.

It's too early to tell whether Wal-Mart's announcements are simply lip service to try to improve its battered image. However, if the company can cut costs, improve employee relations, and clean up its image, I'd say it doesn't matter too much what its true intentions are.

Although Wal-Mart is likely to encounter more resistance to its efforts to cover more of the landscape, I expect its expansion plans will enjoy considerable success. When combined with the company's aim to improve its business model, those goals could be the beginning of a newer and stronger Wal-Mart.

The company takes a lot of flak for its business practices, but investors should be happy that it's unwilling to sit and watch its stock price continue to disappoint. With its share price falling about 20% in the past year, Wal-Mart is doing all it can to reverse that trend, hoping to prove that even giants can be nimble.

Fool contributor Mike Cianciolo welcomes feedback and doesn't own shares of Wal-Mart.

Legal Information. ©1995-2005 The Motley Fool. All rights reserved.

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Wal-Mart Memo Suggests Ways to Cut Employee Benefit Costs

By STEVEN GREENHOUSE and MICHAEL BARBARO
October 26, 2005                                                           
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An internal memo sent to Wal-Mart's board of directors proposes numerous ways to hold down spending on health care and other benefits while seeking to minimize damage to the retailer's reputation. Among the recommendations are hiring more part-time workers and discouraging unhealthy people from working at Wal-Mart. In the memorandum, M. Susan Chambers, Wal-Mart's executive vice president for benefits, also recommends reducing 401(k) contributions and wooing younger, and presumably healthier, workers by offering education benefits. The memo voices concern that workers with seven years' seniority earn more than workers with one year's seniority, but are no more productive. To discourage unhealthy job applicants, Ms. Chambers suggests that Wal-Mart arrange for "all jobs to include some physical activity (e.g., all cashiers do some cart-gathering)." The memo acknowledged that Wal-Mart, the world's largest retailer, had to walk a fine line in restraining benefit costs because critics had attacked it for being stingy on wages and health coverage. Ms. Chambers acknowledged that 46 percent of the children of Wal-Mart's 1.33 million United States employees were uninsured or on Medicaid. Wal-Mart executives said the memo was part of an effort to rein in benefit costs, which to Wall Street's dismay have soared by 15 percent a year on average since 2002. Like much of corporate America, Wal-Mart has been squeezed by soaring health costs. The proposed plan, if approved, would save the company more than $1 billion a year by 2011. In an interview, Ms. Chambers said she was focusing not on cutting costs, but on serving employees better by giving them more choices on their benefits. "We are investing in our benefits that will take even better care of our associates," she said. "Our benefit plan is known today as being generous." Ms. Chambers also said that she made her recommendations after surveying employees about how they felt about the benefits plan. "This is not about cutting," she said. "This is about redirecting savings to another part of their benefit plans." One proposal would reduce the amount of time, from two years to one, that part-time employees would have to wait before qualifying for health insurance. Another would put health clinics in stores, in part to reduce expensive employee visits to emergency rooms. Wal-Mart's benefit costs jumped to $4.2 billion last year, from $2.8 billion three years earlier, causing concern within the company because benefits represented an increasing share of sales. Last year, Wal-Mart earned $10.5 billion on sales of $285 billion. A draft memo to Wal-Mart's board was obtained from Wal-Mart Watch, a nonprofit group, allied with labor unions, that asserts that Wal-Mart's pay and benefits are too low. Tracy Sefl, a spokeswoman for Wal-Mart Watch, said someone mailed the document anonymously to her group last month. When asked about the memo, Wal-Mart officials made available the updated copy that actually went to the board. Under fire because less than 45 percent of its workers receive company health insurance, Wal-Mart announced a new plan on Monday that seeks to increase participation by allowing some employees to pay just $11 a month in premiums. Some health experts praised the plan for making coverage more affordable, but others criticized it, noting that full-time Wal-Mart employees, who earn on average around $17,500 a year, could face out-of-pocket expenses of $2,500 a year or more. Eager to burnish Wal-Mart's image as it faces opposition in trying to expand into New York, Chicago and Los Angeles, Wal-Mart's chief executive, H. Lee Scott Jr., also announced on Monday a sweeping plan to conserve energy. He also said that Wal-Mart supported raising the minimum wage to help Wal-Mart's customers. The theme throughout the memo was how to slow the increase in benefit costs without giving more ammunition to critics who contend that Wal-Mart's wages and benefits are dragging down those of other American workers. Ms. Chambers proposed that employees pay more for their spouses' health insurance. She called for cutting 401(k) contributions to 3 percent of wages from 4 percent and cutting company-paid life insurance policies to $12,000 from the current level, equal to an employee's annual earnings. Life insurance, she said, was "a high-satisfaction, low-importance benefit, which suggests an opportunity to trim the offering without substantial impact on associate satisfaction." Wal-Mart refers to its employees as associates. Acknowledging that Wal-Mart has image problems, Ms. Chambers wrote: "Wal-Mart's critics can easily exploit some aspects of our benefits offering to make their case; in other words, our critics are correct in some of their observations. Specifically, our coverage is expensive for low-income families, and Wal-Mart has a significant percentage of associates and their children on public assistance." Her memo stated that 5 percent of Wal-Mart's workers were on Medicaid, compared with 4 percent for other national employers. She said that Wal-Mart spent $1.5 billion a year on health insurance, which amounts to $2,660 per insured worker. The memo, prepared with the help of McKinsey & Company, said the board was to consider the recommendations in November. But the memo said that three top Wal-Mart officials - its chief financial officer, its top human relations executive and its executive vice president for legal and corporate affairs - had "received the recommendations enthusiastically." Ms. Chambers's memo voiced concern that workers were staying with the company longer, pushing up wage costs, although she stopped short of calling for efforts to push out more senior workers. She wrote that "the cost of an associate with seven years of tenure is almost 55 percent more than the cost of an associate with one year of tenure, yet there is no difference in his or her productivity. Moreover, because we pay an associate more in salary and benefits as his or her tenure increases, we are pricing that associate out of the labor market, increasing the likelihood that he or she will stay with Wal-Mart." The memo noted that Wal-Mart workers "are getting sicker than the national population, particularly in obesity-related diseases," including diabetes and coronary artery disease. The memo said Wal-Mart workers tended to overuse emergency rooms and underuse prescriptions and doctor visits, perhaps from previous experience with Medicaid. The memo noted, "The least healthy, least productive associates are more satisfied with their benefits than other segments and are interested in longer careers with Wal-Mart." The memo proposed incorporating physical activity in all jobs and promoting health savings accounts. Such accounts are financed with pretax dollars and allow workers to divert their contributions into retirement savings if they are not all spent on health care. Health experts say these accounts will be more attractive to younger, healthier workers. "It will be far easier to attract and retain a healthier work force than it will be to change behavior in an existing one," the memo said. "These moves would also dissuade unhealthy people from coming to work at Wal-Mart." Ron Pollack, executive director of Families U.S.A., a health care consumer-advocacy group, criticized the memo for recommending that more workers move into health plans with high deductibles. "Their people are paying a very substantial portion of their earnings out of pocket for health care," he said. "These plans will cause these workers and their families to defer or refrain from getting needed care." The memo noted that 38 percent of Wal-Mart workers spent more than one-sixth of their Wal-Mart income on health care last year. By reducing the amount of time part-timers must work to qualify for health insurance, Wal-Mart is hoping to allay some of its critics. One proposal under consideration would offer new employees "limited funding" so they could "gain access to the private insurance market" after 30 days of employment while waiting to join Wal-Mart's plan. Such assistance, the memo stated, "would give us a powerful set of messages to use in combating critics. (For instance, 'Wal-Mart offers associates access to health insurance after they've worked with us for just 30 days.')"

Steven Greenhouse reported from New York for this article, and Michael Barbaro from Bentonville, Ark.

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Wal-Mart's worldview

Giant retailer says it's ready to tackle hot-button issues

Pia Sarkar
Chronicle
Wednesday, October 26, 2005               
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Still basking in the praise it received for its relief efforts after Hurricane Katrina, Wal-Mart now wants to polish its image on issues it has long been criticized for, including health care, wages and the environment.

Last month, Wal-Mart responded to Katrina with an unrivaled $20 million in cash donations, along with truckloads of free merchandise, food and the promise of a job for each of its displaced workers.

At a meeting with workers and executives on Monday, Wal-Mart Chief Executive Officer Lee Scott urged his audience to look even deeper.

"What if the very things that many people criticize us for -- our size and reach -- became a trusted friend and ally to all, just as it did in Katrina?" he said.

With that, Scott introduced a slew of initiatives that the company expects to take up in the coming years. Among them are a plan to reduce greenhouse gases at stores around the world by 20 percent in the next seven years; health care coverage to be made available to workers for about $25 per month; and a call for Congress to raise the nation's minimum wage from $5.15 per hour.

"We have an aggressive vision," Scott concluded. "With courage and commitment to change, we will be at our best and remain true to the legacy of the company Sam Walton founded some 43 years ago."

The timing of Wal-Mart's initiatives coincides with positive press coverage and glowing feedback it received after Katrina. But it also follows years of criticism that has come to a head in the form of lawsuits. Wal-Mart is embroiled in the nation's largest-ever gender discrimination suit as well as a number of wage-and-hour-law cases and environmental disputes.

Scott's speech did little to quiet Wal-Mart's longtime critics, who chalked the initiatives up to little more than an attempt by the retailer to burnish its image.

"It's hard for me to imagine any CEO saying more and promising less," said Chris Kofinis, spokesman for Wake Up Wal-Mart, which is backed by the United Food and Commercial Workers union.

Kofinis said that Wal-Mart has not changed its health insurance eligibility requirements, which he said is why less than half of the company's workforce has coverage. He also criticized Scott for failing to raise Wal-Mart's own wages for full-time workers, which are about 20 percent less per hour than the average retail-industry wage.

"It's a publicity stunt full of empty rhetoric that promises nothing to workers," Kofinis said of Scott's speech. "It fails to address the core failures of this company."

Sarah Wallace, vice president of brand strategy at the Addis Group in Berkeley, said that in the past, Wal-Mart has managed to skate past all the criticism because its core customers remained loyal because of the company's low prices.

"At first perhaps there was a sense that the anti-Wal-Mart sentiment was just confined to the coast and major metros," Wallace said. "But now the negative image has been seeping into the mass consumer psyche as well. That may be one reason why they're sitting up and taking notice now."

Andy Ruben, Wal-Mart's vice president of corporate strategy, said the company's recent call for action has nothing to do with the lawsuits it is facing. Rather, it stems from discussions that company executives have had with people in communities where Wal-Mart stores operate.

"The things we've been talking about have been going on for months," Ruben said.

In his speech, Scott said that the issues people have raised about Wal-Mart include jobs, health care, community involvement, product sources, diversity and environmental impact, "all the issues that we've been dealing with historically from a defensive posture."

"What became clear is that in order to build a 21st century company, we need to view these same issues in a different light," Scott said.

Lisa Smithline, executive director of Brave New Foundation, which has been involved in a soon-to-be released film titled "Wal-Mart: The High Cost of Low Price," said the company's critics have caused enough of a stir that they can no longer be ignored.

"Obviously, I have no idea what is exactly in their minds, but based on the worldwide pressure that they've been under, their response is not surprising," she said.

Smithline added that she would be thrilled to see any improvements come out of Wal-Mart's new initiatives, but she remain cautious in her enthusiasm.

"They obviously know what the right thing is to do," she said.

Latest initiatives from mega-chain Reducing greenhouse gases at stores around the world by 20 percent during the next seven years.

Introducing a program in the United States during the next 18 months showing preference to suppliers who aggressively reduce greenhouse-gas emissions.

Offering a new health care plan on Jan. 1 that provides insurance coverage for $25 a month in some parts of the country and $11 a month in others.

Calling on Congress to raise the nation's minimum wage from $5.15 per hour.

Source: Wal-Mart

E-mail Pia Sarkar at psarkar@sfchronicle.com.

©2005 San Francisco Chronicle

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Wal-Mart vows changes in health care, environment

By: Emily Kaiser
Wed Oct 26, 2005                     
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CHICAGO (Reuters) - Wal-Mart Stores Inc., under attack from critics including labor groups and environmentalists, has vowed to cut energy usage, reduce waste and offer lower-priced health care to employees.

In a speech to employees released on Tuesday, Chief Executive Officer Lee Scott said the world's biggest retailer needed to take the lead in efforts such as switching to renewable energy sources, and even called on Congress to raise the national minimum wage from the current $5.15 an hour.

Some of Wal-Mart's most vocal critics dismissed the efforts as little more than a charm offensive, but others applauded the retailer for taking at least some small steps to change the way it does business.

Scott said the U.S. minimum wage "is out of date with the times," noting that many Wal-Mart customers do not have enough money to buy basic necessities between paychecks.

"While it is unusual for us to take a public position on a public policy issue of this kind, we simply believe it is time for Congress to take a responsible look at the minimum wage and other legislation that may help working families," he said.

Scott presented the changes as a positive for both employees and shareholders, saying goals such as using only renewable energy and creating zero waste can boost profits.

For example, he said improving fuel mileage in the trucking fleet by one mile per gallon would save more than $52 million per year. The company also aims to cut energy usage at its stores by 30 percent.

Wal-Mart recently opened an experimental store in McKinney, Texas, to study environmental efforts such as heating the store with used cooking and motor oil. Scott said the savings so far were not enough to cover the cost of building the store, but it may be economically feasible if Wal-Mart takes advantage of its size and rolls out such changes across the chain.

NOT ENOUGH?

But some Wal-Mart observers said the retailer did not go far enough to address concerns about employee wages, treatment of suppliers and environmental damage.

Wal-Mart Watch, a group initially funded by the Service Employees International Union that has called on Wal-Mart to change its labor and other practices, said the retailer can afford to do more.

"Wal-Mart Watch credits Wal-Mart for recognizing that their employee health plan is inadequate for their employees and unfair to taxpayers forced to support their use of Medicaid," the group said in a statement.

"We call on Wal-Mart to go further and address the full range of deficiencies in their plans, from affordability to eligibility to out-of-pocket costs to waiting periods. This is a company that can well afford to remedy those problems."

Wake-Up Wal-Mart, a group backed by the United Food and Commercial Workers union, dismissed the efforts as "empty actions" that shift responsibility to suppliers and others.

"What this truly is, is a publicity stunt meant to repair a faltering public image," Chris Kofinis, a spokesman for Wake-Up Wal-Mart, said.

Wal-Mart has acknowledged that it has an image problem, and has stepped up its marketing efforts in the hope of convincing critics that it treats employees fairly and gives back to the community. Scott said the retailer spent a year meeting with critics, and the latest changes were partly in response to concerns raised in those discussions.

The retailer, which is hosting a two-day analysts meeting beginning on Tuesday, also has to convince investors that it is changing for the better as lawsuits alleging worker mistreatment pile up.

Wal-Mart faces the largest ever class-action lawsuit, charging it with discriminating against women in pay and promotions. Analysts say a settlement could reach into the billions of dollars.

The bad news - what Wall Street calls "headline risk" - is clearly weighing on the stock, which is down some 20 percent from a November 2004 peak. Its shares trade at 15.4 times analysts' profit forecasts for next year, below rival Target Corp.'s price-to-earnings ratio of 18.

Shares of Wal-Mart were off 45 cents, or 1 percent, at $45.76 in morning New York Stock Exchange trading.

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Wal-Mart Chief Says Customers Need Increase in Minimum Wage

By Amy Joyce
Washington Post
Wednesday, October 26, 2005                     
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Wal-Mart Stores Inc. chief executive H. Lee Scott Jr. called on Congress to raise the country's minimum wage from $5.15 an hour, saying the company's customers are "struggling to get by."

Scott, head of the world's largest retailer, which has been criticized for paying low wages, providing few health care benefits and causing the demise of small businesses across the country, ticked off a list of changes he said the company plans to make and called for a higher minimum wage in a speech to directors and executives Monday.

"We have seen an increase in spending on the 1st and 15th of each month and less spending at the end of the month, letting us know that our customers simply don't have the money to buy basic necessities between paychecks," Scott said in his speech, a transcript of which was released yesterday. Scott also said the company wants to reduce energy use by its stores by 30 percent.

Some of the proposed initiatives, including a new health care option for employees with lower premiums but high out-of-pocket costs, were met with skepticism.

"It's obviously time to raise the minimum wage. I'm a big advocate of it. I'm always looking for allies. I'm mindful that eventually even the Gingrich Congress got behind the last minimum wage," said Jared Bernstein, senior economist at the Economic Policy Institute. "That said, there is some pretty serious posturing going on here. . . . One can't help but think if they want people to have more money, how about paying your workers more?"

Bernstein noted that Wal-Mart workers on average are paid slightly above minimum wage. But, he said, there are "certainly lots of workers" at the company that remain "in dead-end, minimum-wage jobs."

Scott emphasized that he was calling for the improvement in wages for workers who are his customers and said the company could not change its own wage structure because of tough competition. "Even slight overall adjustments to wages eliminate our thin profit margin," he said. "Because we are so big, people forget that we have to compete." He called on those who criticize the company's pay, saying "we almost always pay better, but that is also often overlooked or ignored in the public debate about Wal-Mart." According to Wal-Mart, full-time workers, who are about three-quarters of the workforce, are paid an average of $9.68 an hour. A spokeswoman said that all of the company's workers start at above the minimum wage.

Some supporters of increasing the minimum wage embraced Scott's statement. Sen. Charles E. Schumer (D-N.Y.), a member of the Senate Finance Committee, released a statement saying, "If Wal-Mart can push for an increased minimum wage, so can the House and Senate leadership."

Sen. Edward M. Kennedy (D-Mass.), said in a statement, "If the CEO of Wal-Mart can call for an increase in the minimum wage, the Republicans should follow suit on behalf of the millions of working men and women living in poverty."

© 2005 The Washington Post Company

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Wal-Mart proclaims its conversion to a caring, sharing firm

World's largest retailer sets emission and fuel targets · Union dismisses calls for higher wages as a 'stunt'

David Teather
Guardian
Wednesday October 26, 2005             
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Wal-Mart, under mounting attack from critics, pledged yesterday to invest hundreds of millions of dollars a year to reduce greenhouse gas emissions, press Washington to increase the minimum wage and introduce more affordable healthcare for its American workers. In a wide-ranging address to the firm's employees, the chief executive, Lee Scott, said the world's largest retailer would become a more pro-active company on issues that it had historically dealt with from a "defensive posture".

In the speech, Mr Scott laid out specific targets for the company: increasing fuel efficiency of its fleet by 25% within three years; reducing greenhouse gases from existing stores by 20% within seven years and reducing solid waste from its stores by 25% within three years. It hopes to design and open a prototype store that produces 30% less greenhouse gas emissions within the next four years.

The address has turned the world's largest public company by revenues into an overtly political animal and, at first glance, an unlikely ally of the left.

While the Bush administration still questions the facts behind climate change and withdrew from the Kyoto treaty, Mr Scott suggested there was little doubt remaining. "This used to be controversial but the science is in and it is overwhelming," he said. "We believe every company has a responsibility to reduce greenhouse gases as quickly as it can ... we should view the environment as [hurricane] Katrina in slow motion."

The company said it would invest $500m (£280m) a year in new technologies to achieve its aims. The company is experimenting with solar panels, wind turbines and used cooking and motor oil for heating at a store in McKinney, Texas.

Mr Scott said the company would also be pressing for regulatory change to create incentives to invest in alternative energy sources. It would also push for changes among suppliers. It plans, for instance, to replace PVC packaging for Wal-Mart's private brands with sustainable and recyclable materials within two years. The company is also beginning to introduce clothing in its George line made of organic cotton. Mr Scott said the initiatives were the result of meetings over the past 12-18 months with detractors including environmental groups but pointedly, not unions; the company steadfastly opposes its workers organising.

As the company has grown relentlessly, Wal-Mart, which owns Asda in Britain, has been held up as the epitome of corporate bad behaviour. It has come under fire for depressing wages and its poor healthcare provision for US workers; over its environmental record; for destroying town centres and local businesses; forcing suppliers to outsource at the cost of local jobs, often to countries with poor environmental and worker laws; and the diversity of its workforce, among other things.

Wake-Up Wal-Mart, a group backed by the United Food and Commercial Workers union, dismissed yesterday's efforts as empty actions. A spokesman, Chris Kofinis, called it "a publicity stunt meant to repair a faltering public image".

Mr Scott said the US minimum hourly wage of $5.15 (£2.89) was "out of date ... We can see first-hand at Wal-Mart how many of our customers are struggling to get by." A proposal to raise the minimum wage was thrown out of the senate this week; it was last lifted in 1996 and is at its lowest level in real terms since 1956. In Britain, the minimum wage is £5.05.

He said: "While it is unusual for us to take a public position on a public policy issue of this kind, we simply believe it is time for Congress to take a responsible look at the minimum wage and other legislation that may help working families." The firm is introducing a "value option" healthcare plan of $23 a month in the US and setting up in-store health clinics.

Mr Scott said the changes would be good for business. Doubling fuel efficiency of its fleet of lorries by 2015 would save $310m a year, he said. Making the packaging smaller on one line of toys cut freight costs by $2.4m, he added.

Wal-Mart has enlisted Conservation International to endorse its programme. Peter Seligmann, chief executive of the environmental lobbying group, said: "All sectors of society have to be included and engaged in conservation and Wal-Mart stepping up is an important development and an important signal."

Mr Scott admitted he had undergone something of a conversion in the past year. "If you'd asked me 12-18 months ago, I would have said focusing on the environment sounded more like a good PR campaign than substance because we thought we were responsible. We were recycling responsibly and are not wasteful."

Guardian Unlimited © Guardian Newspapers Limited 2005

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Trouble in Wal-Mart's America

By Harold Meyerson
washingtonpost.com
Wednesday, October 26, 2005                 
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Is Wal-Mart going wobbly? Over the past couple of weeks, America's largest company -- linchpin of the low-wage, no-benefit economy that is increasingly the norm in America -- has announced some surprising reversals of course. In a series of speeches and interviews, chief executive H. Lee Scott unveiled four initiatives that he clearly hopes will polish the company's increasingly tarnished image.

Wal-Mart, he said, will shift to more environmentally responsible practices -- demanding greater mileage of its truck fleet and better packaging of its products. It will offer more affordable health insurance to its employees, cutting the monthly premium in some cases to just $11. It will monitor the environmental and health and safety practices of its foreign suppliers. And it will lobby for a higher federal minimum wage.

Scott's timing is anything but accidental. The sweatshop conditions in which thousands of employees of Wal-Mart's suppliers routinely work, and the depressive effect that Wal-Mart has on working-class living standards here in the United States, are receiving increasing scrutiny -- enough to impede the company's growth. Wal-Mart's attempts to open stores in the major cities of the Northeast and West Coast have been largely checked by a coalition of fearful and indignant unions, smaller retailers, churches and liberal activists. Wal-Mart's stock is down 13 percent this year. And worse is still to come. In November filmmaker Robert Greenwald will release "Wal-Mart: The High Cost of Low Price," a scathing documentation of the company's business practices at home and abroad.

So the leopard realized it was time to change its spots -- up to a point. Only 44 percent of Wal-Mart's nearly 1.3 million U.S. employees are covered under its health insurance plan; indeed, as any state government can attest, many thousands of Wal-Mart employees qualify for and routinely use the Medicaid program for the indigent. Now the company says it will make its insurance more affordable -- though it still comes with a $1,000 annual deductible, a hefty chunk of change considering that the average Wal-Mart employee makes less than $19,000 a year.

Scott's announcement that Wal-Mart wants better environmental and workplace practices from its foreign suppliers raises many more questions than it answers. The reason Wal-Mart has 3,000 factories in China making the products that go on its shelves isn't that U.S. workers can't do the work, of course. It's because China is home to more cheap labor than anyplace else on earth. In 2003 Wal-Mart imported $15 billion worth of goods from China, 11 percent of China's total exports to the United States.

Now Scott says that Chinese factories should be brought up to U.S. standards. And how amenable is China to that transition? "China actually has very good environmental and safety standards on the books," Beth Keck, Wal-Mart's director of international corporate affairs, assured me last week. Right, and the Soviet constitution under Stalin contained ringing affirmations of civil liberties. Wal-Mart didn't shift production to China because of the communist state's safety standards. On the contrary, Scott and Co. knew full well that workers in China who agitate for better safety standards are commonly arrested and occasionally tortured. Wal-Mart is in China because it's been able to forge a symbiotic relationship between its own dirt-cheap and inherently abusive labor practices and the Chinese government's totalitarian suppression of worker rights. To demand that Wal-Mart's foreign suppliers clean up their act is to demand that Wal-Mart alter its own zealous low-wage culture. Which is why Scott's pledges merit a healthy dose of skepticism.

Of all Scott's commitments, the one that does merit belief is his out-of-the-blue declaration of support for a higher minimum wage. For Wal-Mart is bumping up against a serious problem at least partly of its own making: Because it pitches its products to a disproportionately low-income clientele, its revenue rises and falls with the fortunes of the lower end of the American working class.

And those fortunes these days are anything but bright. The coming crunch in heating oil prices, the decimation of American manufacturing, the steady decline of median family incomes over the past several years, the failure to raise the federal minimum wage since 1997 and the fact that Wal-Mart is setting the pay standards for millions of American workers -- all these are combining to limit the ability of Wal-Mart shoppers to buy as much as they used to. While sales at the Neiman Marcus end of retailing have been doing just fine, the working-class money crunch is taking a real toll in Wal-Mart-land.

Wal-Mart, could, of course, raise its workers' wages, but Scott has dismissed that out of hand. So now it's the feds' responsibility to rescue Wal-Mart from the consequences of the low-wage, low-consumption economy that Wal-Mart, with such fanatical devotion, has created. For, in Wal-Mart's America, it's not clear that even Wal-Mart can thrive.

meyersonh@washpost.com

© 2005 The Washington Post Company

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A Stepped-Up Assault on Wal-Mart

By Aaron Bernstein                             [back to top]

A scathing documentary and a coordinated campaign by labour, religious, and environmental groups spell more trouble for the retailing giant It seems as if everyone lays into Wal-Mart (WMT ) these days. Small business types attack the world's largest retailer for killing local mom & pop shops. Women's groups blast it for alleged discrimination against female employees. Labor and community organizations accuse it of paying poverty-level wages and dumping employee health-care costs onto taxpayers. And environmental and community activists decry the traffic and sprawl its big-box stores can bring to a neighborhood (see BW Online, 8/7/05, "Wal-Mart's Giant Sucking Sound").

Now all these groups have joined forces to gang up on the Bentonville (Ark.)-based giant. They intend to fire the first fusillade the week of Nov. 13, when a coalition of 400-plus national and local groups will mount hundreds of actions nationwide -- just as the key retailing holiday season kicks into gear.

"GRASSROOTS ACTIONS." The campaign, dubbed Higher Expectations Week, is being coordinated by Wal-MartWatch, an umbrella group started early this year by maverick union leader Andy Stern, head of the Service Employees International Union (SEIU).

Wal-MartWatch is also in league with independent filmmaker Robert Greenwald to publicize the Nov. 4 release of his bitingly satirical new movie, Wal-Mart: The High Cost of Low Price. "Our goal is to use a wide range of grassroots actions to raise awareness of the problems Wal-Mart causes for our society," says Wal-MartWatch Executive Director Andy Grossman.

Not that the giant retailer isn't fighting back. Wal-Mart has launched a campaign of its own, billing the Greenwald movie as propaganda and arguing that damaging Wal-Mart hurts American consumers, especially poor ones.

CHARM OFFENSIVE. It's even sponsoring an academic conference to examine its own impact on the U.S. economy. To anchor the Washington, D.C., meeting -- scheduled for the movie's opening date -- Wal-Mart commissioned a yearlong study on the subject by respected economic consulting firm Global Insight. "There are critics who have good information and challenges for us that we're interested in hearing from, and then there are those who don't want our company to succeed, like many of these (anti-Wal-Mart) groups," says Robert McAdam, Wal-Mart's corporate affairs vice-president.

Still, the concerted attack challenges Wal-Mart's recent efforts to reach out to its critics (see BW, link to "Can Wal-Mart fit into a White Hat?". Wal-Mart CEO H. Lee Scott Jr. began the charm offensive to counter the mounting damage adversaries have inflicted on the company's reputation, which has hindered its new-store openings and bitten into sales growth.

While it's too early to tell how well the outreach has been working, Wal-Mart already has scored early successes by getting some environmental and human rights groups to sit down and talk over problems. That progress could be threatened if the Wal-MartWatch campaign catches on.

UNION? NOT JUST YET. That's the strategy of Stern, Sierra Club Executive Director Carl Pope, and other Wal-MartWatch board members. Dubbing themselves The Hub, the group formally got underway in March when Stern's union put up $1 million in seed money. Since then, it has hired a staff of 34 and pulled in donations from foundations, other unions, and individuals.

Ironically, the one campaign it isn't pursuing is an effort to unionize Wal-Mart workers. The United Food & Commercial Workers, which has tried to organize the company for years, recently joined SEIU in breaking from the AFL-CIO to mount more aggressive recruitment drives. But at least temporarily, the unions have decided that Wal-Mart is too powerful to tackle head-on.

Instead, the groups gearing up for the November actions are aiming at what they see as the evils of Wal-Martization: A business model that puts top priority on low prices -- and the low costs that underpin them. A half-dozen town hall meetings in places such as Iowa City, Madison, Wis., and Tucson will push for local and state legislation requiring Wal-Mart to pay a higher share of its employees' health insurance, which currently covers just 44% of its 1.3 million U.S. workers.

IMMORALITY ON AISLE FIVE? The meetings will be modeled after a Sept 19 Cleveland State University forum attended by a 100 or so, featuring local business and union leaders as well as elected officials, led by Ohio Congressional Democrats Sherrod Brown, Dennis Kucinich, and Stephanie Tubbs-Jones.

For churches and synagogues that plan to participate in Higher Expectations Week, there's even a sample sermon drafted by activist religious leaders. Reverends and rabbis will be prompted to ask: "Should we be calling upon Wal-Mart to be a good employer and a good neighbor?" Says Reverend Ron Stief, the Washington, D.C. director of the Justice & Witness Ministries of the United Church of Christ (see BW, 8/6/03, "Is Wal-Mart Too Powerful?"). "Wal-Mart's strategy for economic development doesn't meet our standards for a moral economy."

The anti-Wal-Mart film will get wide play, too. Greenwald directed a similar exposé-type documentary last year called Outfoxed: Rupert Murdoch's War on Journalism, which took aim at the conservative media magnate's Fox News channel. The new feature has interviews with former company managers who claim they directed employees to local government-run health-care programs so the company wouldn't have to pay for their insurance, along with other damning testimonials.

GRIM APPRAISALS. McAdam rejects the accusation that his company has any such corporate policy. And he says the retailer plans to continue to reach out to critics who aren't bent on eliminating Wal-Mart's core business model. The Nov. 4 conference is one innovative -- if risky -- way to do so.

Planners had hoped that economists would point out the boon Wal-Mart's low prices bring to consumers and the economy, says McAdam. But executives knew that to have credibility, a conference would have to accept critics as well as advocates. So Wal-Mart hired Global Insight to put out a call for academic papers.

Being an unpredictable bunch, however, the academics submitted several papers that conclude that the company's low prices derive not just from being more efficient but also by lowering wages.

QUEST FOR CREDIBILITY. Worse yet, some are by economists who might be expected to be sympathetic. David Neumark, a senior fellow at the Public Policy Institute of California, has written numerous studies criticizing minimum-wage laws as misguided. Yet he co-authored a paper that found "when Wal-Mart opens a new store, total payrolls per worker in the county decline by 3% to 5% over the following years." McAdam says he won't comment on any studies until he has read them.

Wal-Mart also paid Global Insight to conduct a yearlong examination of the retailer's role in the U.S. economy. Wal-Mart even supplied what it says are unprecedented amounts of data on its wages and workforce.

To lend it further credibility, Wal-Mart asked several prominent economists to oversee Global Insight's study. One, Marvin Kosters of the American Enterprise Institute, is a conservative, while another, Isabel Sawhill of the Brookings Institution, is a liberal.

BIG TARGET. The study won't be completed until a few days before the Nov. 4 meeting. Still, if it completely contradicts the independent economists' findings on wages, the entire exercise might hurt Wal-Mart more than it helps.

Wal-Mart officials frequently point out that its wages and benefits are no worse than at other low-price companies such as Target (TGT ) or McDonald's (MCD ). Some of the critics don't disagree. But to them, Wal-Mart's status as the world's largest company makes it a target -- one they intend to keep shooting at with all the firepower they can muster.

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Outside Audit Wal-Mart Investors Fret Over Costs

Rise in Operating Expense Stirs Concern About a Loss Of Vigilance Over Outlays

By KRIS HUDSON
THE WALL STREET JOURNAL
October 25, 2005                                  
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Wal-Mart Stores Inc. rose to retail dominance with a legendary focus on controlling its costs. Founder Sam Walton required executives to argue their case repeatedly before he approved technology purchases, and employees of the same gender were expected to room together while traveling.

This year, however, Wal-Mart lost some of its grip on operating costs amid missteps in labor management, high fuel costs and rising interest rates. Investors began to wonder if the world's largest retailer was allowing its vigilance on costs to wane amid the other issues it juggles.

In the second quarter, Wal-Mart operating costs amounted to 18.3% of its net sales, compared with 18% a year earlier. That 0.3% difference amounted to $230 million in extra costs. The numbers were similar in the first quarter.

Wal-Mart Chief Financial Officer Tom Schoewe said in a recent interview that the Bentonville, Ark., company made several moves in the current quarter to corral its costs, including stricter management of work shifts at its stores and an effort to boost the fuel efficiency of its trucking fleet.

But those efforts will take time to bring the growth of Wal-Mart's operating costs back in proportion with its sales growth, and results for this quarter -- the third in Wal-Mart's fiscal year -- likely won't show a full turnaround. "More likely than not, you're going to see [operating costs] as a percentage of sales that's equal to or higher than last year," Mr. Schoewe said. He is expected to discuss operating costs, along with other issues, in a two-day meeting with analysts that begins today in Bentonville,

Ultimately, those extra costs, along with lackluster sales growth in stores open more than a year -- 3.2% in the first half of this year compared with 5.2% a year earlier -- weigh on the giant retailer's earnings. Whereas Wal-Mart logged earnings-per-share growth of about 16% for the past two years, the consensus of Wall Street analysts is that the company will deliver 6% EPS growth this quarter. And it looks likely to record 11% growth for the year ending in January, according to Deutsche Bank analyst Bill Dreher, who rates Wal-Mart shares a "buy" and owns none. Although those results would be good by most standards, it's not what investors expect of Wal-Mart. The stock is down about 20% from its 52-week high last November.

"There's a lot of concern, confusion and frustration ... as to what exactly is going on here," Mr. Dreher said. "The growth of operating costs is a key issue investors have been focusing on, and we look forward to hearing the latest progress the company has made."

Mr. Schoewe offered some reasons for the higher-than-expected costs on an Aug. 16 call with analysts: Higher fuel prices, higher utility costs, higher interest rates and higher maintenance costs. Yet a persistent factor, which Mr. Schoewe didn't talk about on the call but Wal-Mart has discussed in the past, is the retailer's cost for staffing its stores: "We didn't do as good a job as we should have in managing the wages in our stores," Mr. Schoewe said in the interview.

Wal-Mart overstaffed its stores because of overly optimistic sales projections in the first half of its fiscal year, Mr. Schoewe said. He declined to say how much labor costs surged other than to say it was a key factor in the company's extra costs.

The company has made its sales projections more conservative and restricted individual store managers' ability to deviate from the staffing schedules generated in Bentonville. As well, the retailer is shifting more of its staff to part-time workers with flexible schedules. Currently, 75% of its workers are full-time. The goal: to shave labor costs without hurting customer service by scheduling part-time workers during peak shopping hours.

So far, Wal-Mart's labor-scheduling changes have paid off. Wal-Mart's wages as a percentage of its net sales are roughly the same this quarter as a year ago, Mr. Schoewe said. The retailer employs 1.6 million people globally.

Then there are the trucks. Wal-Mart Stores operates 7,100 of them. The fleet averages 6.5 miles per gallon, and fuel prices have surged over the past year. The result: $30 million of Wal-Mart's extra costs last quarter came courtesy of more expensive gasoline.

To counter that, Wal-Mart this quarter began outfitting the wheel wells of its trucks with "skirts" made of a lightweight, composite material to cut down on air resistance. Should the skirts improve the trucks' fuel efficiency by one mile per gallon, "there's about $50 million that drops to the bottom line over the course of a year," Mr. Schoewe said.

Still, Mr. Schoewe says investors and analysts are focusing too heavily on operating costs. He said they also should watch the growth of Wal-Mart's operating margin, which is operating income as a percentage of sales. That measure amounted to 6.1% last quarter as Wal-Mart imported more lower-cost goods from abroad.

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Wal-Mart cuts insurance costs

By UPI
Oct 24, 2005                                  
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NEW YORK, NY, United States (UPI) -- Wal-Mart is introducing a cheaper health insurance plan the company hopes will increase the number of employees who can afford coverage.

The new benefits follow years of complaints that health insurance is out of reach for many of the company`s 1.2 million U.S. workers, the New York Times reported.

Currently, fewer than half of Wal-Mart`s workers are covered by company health insurance, compared with more than 80 percent at Costco, its leading competitor.

Under the company`s new Value Plan, monthly premiums will be, on average, less than $25 for an individual, $37 for a single parent and $65 for a family. An $11 premium for individuals, will be available in a handful of areas.

Those who participate will pay a $1,000 deductible.

Copyright 2005 by United Press International

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Wal-Mart Tries to Win Over Consumers

By MARCUS KABEL
Associated Press
Oct 24                                 
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SPRINGFIELD, MO. (AP) -- Wal-Mart Stores Inc. announced more affordable health care for some of its workers Monday in the latest shot in a battle with critics for the hearts of consumers. The move by the world's largest retailer comes as the crucial holiday sales season approaches.

Analysts say Wal-Mart needs to add about $250 million a day in sales during the holiday season to meet earnings targets and cannot afford to lose ground to an increasingly united front of opponents who want consumers to shun the discounter until it changes its ways.

"Consumers increasingly have a conscience and are increasingly shifting to competitors," said Burt Flickinger, managing director of Strategic Marketing.

"It is critical for Wal-Mart to start doing a billion dollars a day in sales starting on Black Friday, the day after Thanksgiving, which is the big 30-day push for Christmas and year-end sales," Flickinger said. He said daily sales are now about $750 million.

Pressure on Wal-Mart has mounted as groups from unions to the Sierra Club to the National Organization of Women have linked up, creating two new campaign organizations this year, Wake-Up Wal-Mart and Wal-Mart Watch.

"Where there is pressure there is change, universally," said Richard Hastings, senior retail analyst at Bernard Sands in New York.

Wal-Mart says it is not responding to outside critics but rather to demand from its employees, or associates in Wal-Mart parlance, by launching a plan to lower health insurance premiums, allowing some to buy coverage for as little as $11 per month.

Wal-Mart spokesman Dan Fogleman would not say how much the plan would cost the Bentonville, Ark.-based company, which has 1.2 million domestic employees. The plan is to go into effect in 2006.

Latest News Japanese Shop Amid Economic Optimism

The move comes as Wal-Mart has been under increasing criticism for not offering health coverage to enough workers and for its high costs to employees for the insurance, which include high deductibles. Fewer than half of Wal-Mart's employees are covered by the company health care plan, compared to 80 percent at rival Costco Wholesale Corp.

Wal-Mart's critics have said some company workers have had to rely on government-funded programs to pay for health care, an issue that has spurred federal legislation aimed at pressuring the retailer to be more generous.

Compared to Wal-Mart's current plan, monthly premiums under the new plan would require workers to pay between 40 percent and 60 percent less. The plan would have a $1,000 deductible but would allow individuals three doctor visits before having to pay the deductible, according to The New York Times, which first reported on the plan.

The $11 monthly premium won't be widely available. The plan would have most individuals pay about $25 per month, and $65 for a family. A single parent would pay $37 per month. The plan has a $25,000 cap for a worker's first year with the insurance.

It is the latest move in a series of changes after Wal-Mart earlier this year took out full-page ads in national newspapers to defend itself as good for the economy, employees and consumers.

Last week, Wal-Mart Chief Executive Lee Scott said the company, which imported $18 billion in goods from China last year, would push overseas manufacturers to raise environmental and social standards. Critics have accused it of selling cheap goods from sweatshop factories.

Wal-Mart also last week announced it would invest $25 million to establish a private equity fund to back women and minority-owned business enterprises. The company faces a class-action lawsuit on behalf of up to 1.6 million current and former female employees alleging it discriminates against women in pay and promotions.

Wal-Mart's opponents have so far largely dismissed the initiatives as publicity stunts.

Wake-Up Wal-Mart, supported by the United Food and Commercial Workers Union, said the new health plan was just a repackaging of Wal-Mart's existing coverage.

"Wal-Mart fails to address the key reasons more than half of its employees aren't covered under their health care plan - ridiculously high deductible costs and overly strict eligibility requirements," Wake-Up Wal-Mart campaign director Paul Blank said in a news release.

Wal-Mart Watch said the moves so far may be good but do not address a central allegation, that the company pays substandard wages.

"That is a burden not just on people struggling to make ends meet, it becomes a burden on taxpayers, it becomes a burden on communities, and Wal-Mart sits back and counts their billions," Wal-Mart Watch spokesperson Tracy Sefl said.

Wal-Mart shares rose 49 cents, or 1.1 percent, to close at $46.21 on the New York Stock Exchange. It shares have traded in a 52-week range of $42.31 to $57.89.

© 2005 The Associated Press. All rights reserved.

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Wal-Mart to open 270 to 280 supercenters

Mon Oct 24, 2005                     [back to top]

CHICAGO (Reuters) - Wal-Mart Stores Inc. <WMT.N> plans to open 270 to 280 supercenters in the next fiscal year and add more than 60 million square feet to its total retail space, an increase of more than 8 percent.

The world's biggest retailer, which faces increasing opposition to its rapid expansion, particularly in urban areas, said it would open between 20 and 30 discount stores, which are smaller than the supercenters and do not include a full line of groceries.

Wal-Mart plans to open 30 to 40 Sam's Club warehouse stores in the next fiscal year, which starts in February, and 15 to 20 of its smaller Neighborhood Market grocery stores. Its international unit plans 220 to 230 new stores.

The retailer said that of the 550 to 600 total stores to be opened next year, about 215 will be relocated or expanded, including some 160 supercenters that will be converted from smaller discount stores.

The supercenters are Wal-Mart's main profit driver and now outnumber the traditional discount stores. Wal-Mart opened its first supercenter in the early 1990s, and it quickly grew into the largest seller of groceries in the United States.

That has drawn the ire of grocery unions who say Wal-Mart wields too much power and drives down wages across the sector. Wal-Mart was listed as one of the factors in a lengthy grocery strike in southern California that ended last year.

The retailer, based in Bentonville, Arkansas, faces increasing opposition to its expansion efforts from labor groups, environmentalists and others who say the big-box stores push competitors out of business and gobble up green space. Communities across the country have waged fierce battles to block Wal-Mart's expansion efforts.

The retailer has taken steps to counter that criticism, however, experimenting with environmentally friendly stores and changing its pay structure.

Wal-Mart Chief Executive Officer Lee Scott said earlier this year that he expects zoning laws to get tougher in the years to come, so Wal-Mart is eager to ramp up expansion now.

The company also plans to build two new distribution centers for general merchandise and three for food, adding more than 5 million square feet of distribution space.

Wal-Mart is hosting a two-day analyst meeting beginning on Tuesday, and Wall Street will be looking for an update on holiday sales prospects as well as initial results from the retailer's efforts to add more upscale merchandise.

(Additional reporting by Alexandria Sage)

© Reuters 2005. All rights reserved.

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WAL-MART OFFERS SHAM HEALTH CARE PLAN AS PUBLICITY STUNT

New Name, Same Basic Plan - Extremely High Deductibles & Strict Eligibility Requirements

October 24, 2005                     [back to top]

(Washington, D.C.) - Today, Wal-Mart's CEO Lee Scott is announcing Wal-Mart's "new" health care plans for 2006. Wal-Mart falsely claims its plans will increase the number of employees who can afford health insurance. In fact, Wal-Mart's so-called "new" Value Plan is simply a repackaging of the poor health care plans Wal-Mart already offers, which already leave over half of its employees without company provided health care.

"Wal-Mart's new health care plan is another empty promise wrapped in a publicity stunt that will do nothing to increase health care coverage for over 600,000 Wal-Mart employees who go without company provided health care," said Paul Blank, campaign director of WakeUpWalMart.com.

"Wal-Mart fails to address the key reasons more than half of its employees aren't covered under their health care plan - ridiculously high deductible costs and overly strict eligibility requirements. Wal-Mart latest publicity stunt will do nothing to help their employees and is more reflective of a morally bankrupt company trying to deceive the American public than live up to its responsibilities as America's largest corporation," added Blank

Here are the facts.

Last year, Wal-Mart had two major health care plan options: 1) the Standard plan and 2) the Network plan. Each of those plans has 4 options within them: 1) a $350 deductible; 2) a $500 deductible; 3) a $750 deductible; and, 4) a $1,000 deductible.

This year, Wal-Mart is introducing two additional options: 1) a so-called Value plan and 2) Health Savings Accounts (HSA's). Since the HSA's are only available to employees who have already been enrolled in a Wal-Mart health care plan for one year, the HSA's are not designed to, nor will the HSA's, increase health care coverage for anyone.

Therefore, the only plan that has the potential to increase the abysmal fact that Wal-Mart only provides health insurance coverage to 48% of its employees is the Value plan. The Value plan, however, comes with a $1,000 deductible. In addition, the Value plan has additional deductibles for in-hospital care, prescription drugs and surgical care. All told, the Value plan's deductibles plus premiums could be as much as 25% of an employee's take-home pay for individual coverage and up to 40% for family coverage.

Even more disturbing is the fact that the Value plan is almost identical, if not worse, than the $1,000 deductible versions of the existing Standard and Network plans already offered to Wal-Mart employees.

The following is a comparison of the rates between Wal-Mart's proposed plan for 2006 and last year's plans.

                                               Jan. 2005        Jan 2006

Network Plan $1000 deductible         $17.50             $18

Standard Plan $1000 deductible        $21.00            $21.50

Value Plan                            $25 (on average)   $10.50 (limited areas)        
   $1000 deductible Not Available
 

Wal-Mart's business model has already paved the way for other corporations to try and reduce their health benefits to employees. Currently, the average company with 200 or more employees has 67% of its workers covered under the company health care plan, Wal-Mart is well below that average with only 48% of its employees covered under the company health care plan.

"Wal-Mart's so-called Value health care plan offers nothing but an empty promise of higher deductibles that remain unaffordable and out-of-reach to most Wal-Mart workers. With Wal-Mart's poverty-level wages, the average worker would have to spend up to 40% of their take-home pay to purchase the family option of this so-called Value plan. No wonder Wal-Mart admits the taxpayer-funded public safety net is often a 'better value' than their own inadequate health care plan."

Jeremy Bird
Wake-Up Wal-Mart Campaign
Field Director 202-728-1827
jbird@ufcw.org www.wakeupwalmart.com

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Md. Community Sizes Up Its Future Neighbor: Wal-Mart Landover Hills Weighs Pros and Qualms

By Ovetta Wiggins
Washington Post
October 23, 2005                        
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Chandler's Drug and Medical Supplies, a small corner store in an aging Landover Hills strip mall, has sold everything over the past 57 years, from sugar-free candy to walking canes to hospital bedsheets.

Stephen Needel, the pharmacist and owner, has peered over the worn, brown counter for 32 of those years, long enough to watch the toddlers who came in with moms or dads return as adults to pick up medicine for their aging parents.

But Needel said he is not sure how much longer he will remain in the neighborhood. This month, the Prince George's County Council amended zoning laws to allow Wal-Mart, the world's largest retailer and grocer, to open its first store inside the Capital Beltway late next year. The site is the abandoned Capital Plaza Mall, about a mile from Chandler's.

"Wal-Mart is Wal-Mart," Needel said. "There is always a place for the independents -- hopefully."

Yet history suggests that where Wal-Mart goes -- and with 3,600 stores in the United States, it is close to everywhere -- small businesses often disappear. Some community leaders also have concerns about how the Bentonville, Ark., company, the nation's largest employer, treats its 1.6 million workers, who are not unionized.

Wal-Mart, which has stores in Bowie and Clinton, said its hourly wage in the region is $10.08, compared with $13.19 at Giant and Safeway, whose employees are represented by the United Food and Commercial Workers International Union. The company offers a health plan, but labor leaders, who have tried unsuccessfully to organize Wal-Mart's workforce, said the wages are so low that employees cannot afford to pay premiums.

"Wal-Mart doesn't have the greatest reputation," council member David Harrington (D-Cheverly) said. "It leads to low wages and little benefit."

Still, community leaders and residents said, most people who have qualms are ready to set aside those concerns for anything that might help Landover Hills and its Annapolis Road corridor, which has been in an economic tailspin.

Even Needel said he has hated watching Capital Plaza, which takes up several blocks, turn into another abandoned building.

"I really do think it will be an igniter," said the Rev. Terence D. Collins, executive director of the Community Ministry of Prince George's County, a nonprofit group that works with unemployed and low-income residents. "There has to be a starting point, and that's what I see Wal-Mart as."

It has been almost 20 years since shoppers strolled the mall, which was anchored by Montgomery Ward and Bradlees. Girls bought shoes at Fayva, and women shopped for clothes at Merry-Go-Round.

"Everything was leased up, the traffic flow was great and we had quite a number of national tenants," said Randall J. Levitt, president of Nellis Corp., which owns and manages Capital Plaza.

When Bradlees left the Washington market, Hechinger, the hardware and lumber company, moved in. "It was a good retailer but not a good anchor for a mall," Levitt said. A person buying lumber isn't likely to buy a pair of shoes or a dress at the same time, he said.

Montgomery Ward and Hechinger filed for bankruptcy, leaving Capital Plaza about five years ago. That left mostly small local businesses working on month-to-month leases.

"We really weren't making enough in rent to keep the lights on," Levitt said.

In addition to Wal-Mart, Levitt said, talks are underway to build a grocery store, pharmacy, dry cleaner and restaurants.

"The people here need jobs," Collins said. "I realize they may not be union jobs and they may not have benefits. But they are better than nothing."

Collins recently witnessed the area's need for economic revival firsthand as he watched his son play football a few blocks from the Capital Plaza site. Suddenly, the skies opened.

"There really wasn't anywhere for me to get an umbrella," Collins said. "What is available outside the Beltway should be available to those who are inside the Beltway."

Sharon Jennings of Landover Hills travels to the Laurel Wal-Mart to buy an outfit for her daughter, a gallon of laundry detergent or a bottle of body lotion.

"I can't wait for it to open," Jennings said of the Landover Hills plan. "Do you know if it's going to be a Super Wal-Mart, or when it's opening?"

Needel said he will continue to do the things that set his business apart from a Wal-Mart, such as making deliveries.

On a recent afternoon behind the counter, Needel asked a woman, whose nose was red from wiping it, whether she wanted both of her prescriptions for antibiotics filled. "You're not going to take both, are you?"

"I'm not planning to take the Cipro right away," the woman replied.

"Okay, I just don't want to make you sicker than you already are," said Needel as he counted out the little white pills.

Later, Needel said he remains hopeful that he will keep his customers.

"The way I dealt with that lady, that's not Wal-Mart," he said. "I'm not putting them down. But like I said, Wal-Mart is Wal-Mart."

© 2005 The Washington Post Company

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Cleaning business to forfeit $200,000


BY JOHN BEAUGE
Patriot-News
Friday, October 21, 2005                        
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An Illinois company that subcontracted cleaning work at Wal-Mart stores in Harrisburg, York and elsewhere has admitted that it conspired to transport and encourage illegal aliens to live in the United States.

DJR Cleaning Enterprises Inc. of Roselle, Ill., pleaded guilty Monday in U.S. Middle District Court in Harrisburg, and federal Judge Yvette Kane ordered the company to forfeit $200,000 as its sentence. The payment also will settle two civil cases the government had filed against DJR.

The janitorial company had been indicted by a federal grand jury in Williamsport after an investigation. Wal-Mart Stores Inc. in March agreed to pay an $11 million fine to end the federal probe into the use of illegal aliens to clean floors at its stores in 21 states, including Pennsylvania.

DJR was accused of hiring firms between 1996 and October 2002 that used illegal aliens to do janitorial and cleaning work. Vincent Romano, identified in court documents as the president of DJR, was not charged.

The Wal-Mart investigation followed the 1998 arrest of two illegal immigrants from Russia who worked for a cleaning contractor at a store in Honesdale.

Another 27 illegal aliens were arrested in March 2001. They were working for cleaning contractors at Wal-Mart stores in Harrisburg, York, East Stroudsburg and Honesdale. An additional 68 were arrested at 15 Wal-Mart stores in Pennsylvania, New York, Ohio and Missouri.

Court documents said DJR had contracts to clean some of the stores, but subcontracted the work to other firms that employed illegal aliens because it did not have enough workers of its own.

Ten firms that handled the cleaning work pleaded guilty earlier this year and paid $4 million in fines.

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Wal-Mart Nudges Foreign Suppliers Retailer to Demand Environmental and Social Responsibility

By Marcus Kabel
Associated Press
October 21, 2005                         
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FAYETTEVILLE, Ark., Oct. 20 -- Wal-Mart Stores Inc. will start holding its suppliers more accountable for environmental and social standards at foreign factories as public expectations in the United States rise, chief executive H. Lee Scott Jr. said Thursday.

Scott told suppliers at a business conference that the public has high expectations of the world's largest retailer. The company has come under mounting fire from organized opponents over the environmental and labor standards of the low-cost manufacturers overseas from which it buys.

Scott said Wal-Mart would be more involved in its suppliers' businesses to make sure they are accountable and would work with them to find new products that meet demand for higher standards.

"Are you running your factories in a way that promotes environmental sustainability? Are you sourcing from people that causes there to be inclusion and opportunity for women- and minority-owned businesses?" Scott said. "You'll see Wal-Mart taking a stronger stand over the next several months in these areas," he told a conference on retail trends held by the Sam M. Walton College of Business at the University of Arkansas.

Scott said Wal-Mart had to act because the public was targeting retailers, not the manufacturers they buy from, over environmental and social issues.

"The factories in China are going to end up having to be held up to the same standards as the factories in the U.S.," Scott said. "There will be a day of reckoning for retailers. If somebody wakes up and finds out that children that are down the river from that factory where you save 3 cents a foot in the cost of garden hose are developing cancers at a significant rate so that the American public can save 3 cents a foot, those things won't be tolerated, and they shouldn't be tolerated."

But Paul Blank, director of Wake-Up Wal-Mart, backed by the United Food and Commercial Workers Union, was not impressed.

"Unfortunately, Wal-Mart's exploitation of workers is not limited to its use of sweatshop labor overseas," he said in a statement. "Our campaign is building a sea of public pressure to force Wal-Mart to end its race-to-the bottom business model." Blank added that sweatshop labor is only the beginning of many problems Wal-Mart must address.

Scott said he would fly to Shanghai on Wednesday to visit Wal-Mart's fast-growing store operations in China.

As one example of the new approach, Scott said the company would start selling clothing made from organically grown cotton next year.

"We're going to take thousands of tons of pesticides out of the environment and produce a better garment for our customer and a garment that they can be proud of. Those are the kinds of solutions that exist out there that take more sophistication," he said.

© 2005 The Washington Post Company

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Wal-Mart to Toughen Overseas Standards

By MARCUS KABEL
Associated Press 
Thursday, October 20, 2005      
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Wal-Mart Stores Inc. will start holding its suppliers more accountable for environmental and social standards at foreign factories as public expectations in the United States rise, Chief Executive Lee Scott said Thursday.

Scott told suppliers at a business conference that the public has high expectations of the world's largest retailer. The company has come under mounting fire from organized opponents over issues including the environmental and labor standards of low-cost manufacturers it buys from overseas.

Scott said Wal-Mart would be more involved in its suppliers' businesses to make sure they are accountable. The company will work with them to find new products that meet demand for higher standards, such as new clothing lines made from organically grown cotton that Wal-Mart plans to sell next year.

"Are you running your factories in a way that promotes environmental sustainability? Are you sourcing from people that causes there to be inclusion and opportunity for women and minority owned businesses?" Scott said.

"You'll see Wal-Mart taking a stronger stand over the next several months in these areas," he told a conference on retail trends held by the University of Arkansas' Sam M. Walton College of Business.

Scott said Wal-Mart had to act because the public was targeting retailers, not the manufacturers they buy from, over environmental and social issues.

"The factories in China are going to end up having to be held up to the same standards as the factories in the U.S.," Scott said. "There will be a day of reckoning for retailers. If somebody wakes up and finds out that children that are down the river from that factory where you save three cents a foot in the cost of garden hose are developing cancers at a significant rates so that the American public can save three cents a foot, those things won't be tolerated, and they shouldn't be tolerated."

But Paul Blank, director of Wake-Up Wal-Mart, backed by the United Food and Commercial Workers Union, was not impressed, issuing the following statement: "Unfortunately, Wal-Mart's exploitation of workers is not limited to its use of sweatshop labor overseas.Our campaign is building a sea of public pressure to force Wal-Mart to end its race-to-the bottom business model." He added that sweatshop labor is only the beginning of the long list of problems that Wal-Mart must address."

Scott said he would fly to Shanghai on Wednesday to visit Wal-Mart's fast-growing store operations in China.

As one example of the new approach, Scott said the company would start selling clothing made from organically grown cotton next year.

"We're going to take thousands of tons of pesticides out of the environment and produce a better garment for our customer and a garment that they can be proud of. Those are the kinds of solutions that exist out there that take more sophistication," he said.

©2005 Associated Press

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A Stepped-Up Assault on Wal-Mart

By Aaron Bernstein
OCTOBER 20, 2005                            
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A scathing documentary and a coordinated campaign by labour, religious, and environmental groups spell more trouble for the retailing giant It seems as if everyone lays into Wal-Mart (WMT ) these days. Small business types attack the world's largest retailer for killing local mom & pop shops. Women's groups blast it for alleged discrimination against female employees. Labor and community organizations accuse it of paying poverty-level wages and dumping employee health-care costs onto taxpayers. And environmental and community activists decry the traffic and sprawl its big-box stores can bring to a neighborhood (see BW Online, 8/7/05, "Wal-Mart's Giant Sucking Sound").

Now all these groups have joined forces to gang up on the Bentonville (Ark.)-based giant. They intend to fire the first fusillade the week of Nov. 13, when a coalition of 400-plus national and local groups will mount hundreds of actions nationwide -- just as the key retailing holiday season kicks into gear.

"GRASSROOTS ACTIONS." The campaign, dubbed Higher Expectations Week, is being coordinated by Wal-MartWatch, an umbrella group started early this year by maverick union leader Andy Stern, head of the Service Employees International Union (SEIU).

Wal-MartWatch is also in league with independent filmmaker Robert Greenwald to publicize the Nov. 4 release of his bitingly satirical new movie, Wal-Mart: The High Cost of Low Price. "Our goal is to use a wide range of grassroots actions to raise awareness of the problems Wal-Mart causes for our society," says Wal-MartWatch Executive Director Andy Grossman.

Not that the giant retailer isn't fighting back. Wal-Mart has launched a campaign of its own, billing the Greenwald movie as propaganda and arguing that damaging Wal-Mart hurts American consumers, especially poor ones.

CHARM OFFENSIVE. It's even sponsoring an academic conference to examine its own impact on the U.S. economy. To anchor the Washington, D.C., meeting -- scheduled for the movie's opening date -- Wal-Mart commissioned a yearlong study on the subject by respected economic consulting firm Global Insight. "There are critics who have good information and challenges for us that we're interested in hearing from, and then there are those who don't want our company to succeed, like many of these (anti-Wal-Mart) groups," says Robert McAdam, Wal-Mart's corporate affairs vice-president.

Still, the concerted attack challenges Wal-Mart's recent efforts to reach out to its critics (see BW, link to "Can Wal-Mart fit into a White Hat?". Wal-Mart CEO H. Lee Scott Jr. began the charm offensive to counter the mounting damage adversaries have inflicted on the company's reputation, which has hindered its new-store openings and bitten into sales growth.

While it's too early to tell how well the outreach has been working, Wal-Mart already has scored early successes by getting some environmental and human rights groups to sit down and talk over problems. That progress could be threatened if the Wal-MartWatch campaign catches on.

UNION? NOT JUST YET. That's the strategy of Stern, Sierra Club Executive Director Carl Pope, and other Wal-MartWatch board members. Dubbing themselves The Hub, the group formally got underway in March when Stern's union put up $1 million in seed money. Since then, it has hired a staff of 34 and pulled in donations from foundations, other unions, and individuals.

Ironically, the one campaign it isn't pursuing is an effort to unionize Wal-Mart workers. The United Food & Commercial Workers, which has tried to organize the company for years, recently joined SEIU in breaking from the AFL-CIO to mount more aggressive recruitment drives. But at least temporarily, the unions have decided that Wal-Mart is too powerful to tackle head-on.

Instead, the groups gearing up for the November actions are aiming at what they see as the evils of Wal-Martization: A business model that puts top priority on low prices -- and the low costs that underpin them. A half-dozen town hall meetings in places such as Iowa City, Madison, Wis., and Tucson will push for local and state legislation requiring Wal-Mart to pay a higher share of its employees' health insurance, which currently covers just 44% of its 1.3 million U.S. workers.

IMMORALITY ON AISLE FIVE? The meetings will be modeled after a Sept 19 Cleveland State University forum attended by a 100 or so, featuring local business and union leaders as well as elected officials, led by Ohio Congressional Democrats Sherrod Brown, Dennis Kucinich, and Stephanie Tubbs-Jones.

For churches and synagogues that plan to participate in Higher Expectations Week, there's even a sample sermon drafted by activist religious leaders. Reverends and rabbis will be prompted to ask: "Should we be calling upon Wal-Mart to be a good employer and a good neighbor?" Says Reverend Ron Stief, the Washington, D.C. director of the Justice & Witness Ministries of the United Church of Christ (see BW, 8/6/03, "Is Wal-Mart Too Powerful?"). "Wal-Mart's strategy for economic development doesn't meet our standards for a moral economy."

The anti-Wal-Mart film will get wide play, too. Greenwald directed a similar exposé-type documentary last year called Outfoxed: Rupert Murdoch's War on Journalism, which took aim at the conservative media magnate's Fox News channel. The new feature has interviews with former company managers who claim they directed employees to local government-run health-care programs so the company wouldn't have to pay for their insurance, along with other damning testimonials.

GRIM APPRAISALS. McAdam rejects the accusation that his company has any such corporate policy. And he says the retailer plans to continue to reach out to critics who aren't bent on eliminating Wal-Mart's core business model. The Nov. 4 conference is one innovative -- if risky -- way to do so.

Planners had hoped that economists would point out the boon Wal-Mart's low prices bring to consumers and the economy, says McAdam. But executives knew that to have credibility, a conference would have to accept critics as well as advocates. So Wal-Mart hired Global Insight to put out a call for academic papers.

Being an unpredictable bunch, however, the academics submitted several papers that conclude that the company's low prices derive not just from being more efficient but also by lowering wages.

QUEST FOR CREDIBILITY. Worse yet, some are by economists who might be expected to be sympathetic. David Neumark, a senior fellow at the Public Policy Institute of California, has written numerous studies criticizing minimum-wage laws as misguided. Yet he co-authored a paper that found "when Wal-Mart opens a new store, total payrolls per worker in the county decline by 3% to 5% over the following years." McAdam says he won't comment on any studies until he has read them.

Wal-Mart also paid Global Insight to conduct a yearlong examination of the retailer's role in the U.S. economy. Wal-Mart even supplied what it says are unprecedented amounts of data on its wages and workforce.

To lend it further credibility, Wal-Mart asked several prominent economists to oversee Global Insight's study. One, Marvin Kosters of the American Enterprise Institute, is a conservative, while another, Isabel Sawhill of the Brookings Institution, is a liberal.

BIG TARGET. The study won't be completed until a few days before the Nov. 4 meeting. Still, if it completely contradicts the independent economists' findings on wages, the entire exercise might hurt Wal-Mart more than it helps.

Wal-Mart officials frequently point out that its wages and benefits are no worse than at other low-price companies such as Target (TGT ) or McDonald's (MCD ). Some of the critics don't disagree. But to them, Wal-Mart's status as the world's largest company makes it a target -- one they intend to keep shooting at with all the firepower they can muster.

Bernstein is an editor in the BusinessWeek's Washington bureau

Copyright 2000-2004, by The McGraw-Hill Companies Inc. All rights reserved. Terms of Use Privacy Notice

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Grocers try to fend off Wal-Mart by going upscale

By LOREN STEFFY
Houston Chronicle
Oct. 20, 2005                               
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From the battlefield that is the local grocery store market this week came the blaring sound of retreat.

Safeway said it would close 26 stores in Texas, including 15 Randalls locations in the Houston area. It announced the closings as it released its third-quarter earnings, which fell 23 percent from a year earlier.

Safeway's strategy has become the standard tactical withdrawal in the grocery wars: run from Wal-Mart and flee toward affluence. Safeway says it will remake its remaining Randalls and Tom Thumb stores in Texas with its new "lifestyle format."

"It's a way for them to differentiate from the price-oriented stores, specifically the Wal-Mart Superstores," says Mark Hamstra, retail editor for Supermarket News.

Grocers like to say they compete on price, but with the Walmartification of the grocery world, companies that choose to stay in the fight are looking for profitable niches.

In the past five years, Wal-Mart has more than doubled the number of its Supercenters, which sell food as well as household merchandise and clothing. In that time, Wal-Mart has become the country's biggest food retailer.

Kroger, which is still the biggest U.S. grocer, posted its biggest sales gain in five years last quarter, but largely because of heavy discounting. Albertsons, after reporting falling profits in three of the past four years, put itself up for sale last month.

Meanwhile, specialty grocers, such as Austin-based Whole Foods Market, are booming. Upscale stores offer better margins because grocers can charge higher prices. They also offer a broader selection of perishable items, such as produce. At its new "lifestyle" stores, Randalls promises organic fruits and vegetables, more prepared foods, full-service meat counters, and sushi and olive bars.

"They see it as a weakness that Wal-Mart isn't able to duplicate," Hamstra says.

Companies that sell off weak stores and spruce up profitable ones are sometimes preparing for a sale. But Burt Flickinger, managing director of Strategic Resource Group, a New York consulting firm, doubts Safeway has any plans to pull out of Texas.

Instead, he says, it's preparing a strategy here it hopes will stop Wal-Mart's advances into traditional grocer territory.

Convenience overall Before I go any farther, let me say that I am not a typical shopper. I don't want a shopping experience. I don't want to choose among 37 varieties of fresh mushrooms or linger over the olive bar.

Nor do I consider buying groceries part of my lifestyle. It is simply a necessity, a time-consuming chore. It's one of those tasks that gets pushed to the margins of the weekend, along with mowing the lawn and cleaning the house.

So while I appreciate selection and I care about quality, I'd like to get the buying done quickly. For people like me, convenience, in most cases, trumps price.

Going online That's why companies like Safeway are experimenting with a new front in the grocery wars: the return of Internet grocery shopping.

Don't laugh.

With the bankruptcy of companies such as Webvan, online grocers became a symbol of dot-com frivolity. Their capital investments in warehouses and delivery fleets made their costs too high. The concept, though, appealed to many consumers.

Safeway invested in Dallas-based Groceryworks.com before shuttering the operation after the dot-com bust.

Now some grocers are willing to try again.

"The opportunities for online deliveries is increasing every quarter," Flickinger says. Safeway, for example, has been developing a system using local stores with limited delivery areas, he says. It's already offering online shopping in five Western states.

The idea is patterned after privately held ShopRite, a grocer in the Northeast that has had success with online delivery, Flickinger says.

"What ShopRite is doing is shifting a lot of consumers away from Wal-Mart," he says. The company is competitive on price, takes coupons, and has found that customers use online delivery about 70 percent of the time. About 30 percent of the time they go to the stores, especially if they're buying meat or produce.

I called Randalls to ask about its plans, if any, for online delivery, but I didn't hear from the company by deadline.

No escape One thing is clear. Grocers can run from Wal-Mart, but with its $285 billion in annual sales, no one is going to hide for long. So far this year, rural grocer Winn-Dixie has gone bankrupt, and Albertsons is on the block.

Safeway, meanwhile, may be hoping to snatch victory from the jaws of retreat.

Loren Steffy is the Chronicle's business columnist.

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Scott Warns China Wal-Mart Suppliers Re 'Standards'

Greg Levine,
10.20.05                                        
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It's not easy being green? Perhaps not--but Wal-Mart's leadership says the alternative is unacceptable.

Chief Executive H. Lee Scott Jr. spoke to suppliers at a Thursday business conference, where the CEO declared that his firm has a lot of people to answer to--and he wasn't speaking of investors.

Earth's No. 1 retailer naturally draws a lot of attention; of late, it's felt the heat from organized foes, ired over issues including the ecological and labor standards of the low-cost manufacturers that supply the chain. With industrial titans like General Electric (nyse: GE - news - people ) settling environmental claims, it's an issue that won't be swept under the carpet.

Scott said the discount giant would be more involved in its overseas suppliers' businesses, to be sure they are accountable. He said Wal-Mart Stores (nyse: WMT - news - people ) will work with them to hone in on new products that meet demand for higher standards, such as new apparel lines based on organically grown cotton the chain plans to sell next year.

Scott was quoted by The Associated Press as posing a series of rhetorical questions to the room: "Are you running your factories in a way that promotes environmental sustainability? Are you sourcing from people that causes there to be inclusion and opportunity for women and minority owned businesses?"

The CEO then took a strident tone towards its Pacific pipeline. "The factories in China are going to end up having to be held up to the same standards as the factories in the U.S.," Scott said. "There will be a day of reckoning for retailers. If somebody wakes up and finds out that children that are down the river from that factory where you save three cents a foot in the cost of garden hose are developing cancers at significant rates--so that the American public can save three cents a foot--those things won't be tolerated, and they shouldn't be tolerated."

Scott said he would fly to Shanghai on Wednesday, to visit Wal-Mart's fast-growing store operations in the billion-person Middle Kingdom. Will Beijing listen?

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Wal-Mart to Start Equity Fund to Help Diversify Its Suppliers

By MICHAEL BARBARO
October 19, 2005                         
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Wal-Mart Stores, which is fighting the nation's largest sex discrimination lawsuit, will set up a $25 million private equity fund to support businesses owned by women and members of minority groups over the next five years, the retailer said yesterday.

The fund will invest in businesses that offer merchandise and services to retailers with the goal of diversifying the industry's suppliers. Of Wal-Mart's 61,000 United States suppliers, 5,200 are owned by women and minority group members, the company said.

Creation of the fund, which will be managed by Aldus Equity Partners, based in Dallas, comes as Wal-Mart wrestles with a class-action lawsuit representing 1.6 million current and former female workers. The lawsuit, filed in 2001, accuses the chain of systematically paying women less than men and offering women fewer chances for promotion.

In July, two black truck drivers filed federal lawsuits against Wal-Mart, arguing that the chain discriminated against them by denying them jobs because of their race. Lawyers in the case are seeking class-action status.

Asked if there was a connection between the lawsuits and the establishment of the fund, a Wal-Mart spokeswoman, Linda Blakely, said "absolutely not."

"This is not something that we just started doing," said Ms. Blakely, who added that businesses owned by women and members of minorities now supply the chain with $3 billion worth of goods, up from $2 million in the mid-1990's.

Facing criticism that Wal-Mart has not adequately promoted women and minority group members to management levels, the retailer recently appointed a chief diversity officer, increased leadership training for female workers and has tied executive bonuses to diversity goals.

Joseph M. Sellers, a partner at Cohen, Milstein, Hausfeld & Toll in Washington, one of the law firms representing the women in the sex discrimination suit, praised the fund but said its timing suggested "it could very well be an initiative intended to improve Wal-Mart's standing" with women and minority groups.

Copyright 2005 The New York Times Company 

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Wal-Mart appeals to labour board, court in dispute with union

Canadian Press
Wednesday, October 19, 2005                   
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MONTREAL (CP) - Wal-Mart Canada is challenging a pair of recent decisions by Quebec's labour board favourable to unions.

The U.S.-based retail giant has lodged appeals at both the Quebec Labour Relations Board and Quebec Superior Court, according to court documents obtained by The Canadian Press on Tuesday.

The board ruled last September the retailer failed to prove the closure of its store in Saguenay, Que., last spring was "genuine, true or definitive."

It rejected Wal-Mart's claim the decision was due to financial troubles at the outlet, opening the door to compensation for about 100 employees who lost their jobs.

The workers' union, the United Food and Commercial Workers (UFCW), had also argued the closure in late April was designed to intimidate workers.

Wal-Mart is also appealing another decision by the board denying its bid to get the names of employees at the outlet who were in favour of organizing.

The Saguenay store, 250 kilometres north of Quebec City, was one of Wal-Mart's first outlets to unionized. But the workers there never obtained a collective agreement.

In its first set of appeals, Wal-Mart is asking Superior Court to annul the labour board's decision that the store closure was a sham and reject the compensation claims.

The labour board had noted in its decision that Wal-Mart was still renting the building housing its Saguenay store several months past the closure, suggesting the corporation may have planned to re-start the operation.

But Wal-Mart said in its appeal the Saguenay store was "completely dismantled." It said it took down its signs, removed its equipment and boarded up the windows.

It is also claiming there is "no proof which demonstrates the closure was a plot" against the union.

In its second set of appeals, Wal-Mart argues it needs the names of the workers who agreed to join the union to question them for its own defence that it did not wage an anti-union campaign.

It is also claiming that a section of the province's Labour Code giving people the ability to join associations anonymously does not apply in this case and is contrary to Quebec's Charter of Rights.

The UFCW has maintained the closure of the Saguenay store stymied its campaign to organize workers at other Wal-Marts.

© The Canadian Press 2005

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Wal-Mart Bank Proposal Ripped By Bankers

By Leslie Wines
Report October 18, 2005                   
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NEW YORK (Dow Jones) - A proposal by retail giant Wal-Mart Stores Inc. to open an industrial bank in Utah is opposed by community bankers around the country who are lobbying the Federal Deposit Insurance Corporation against the idea, The New York Times reported on Saturday.

A chief executive of a North Dakota bank predicted a "dangerous and unprecedented concentration of economic power," while a Colorado banker said the move would create "unacceptable risk to the banking system," according to the report.

In July, Wal-Mart (WMT) filed an application with the FDIC to open a Utah bank to process credit and debit applications for its 3,500 U.S. stores. The move was aimed at saving the retailer from having to pay national banks for processing work.

A public comment period for the FDIC application, which ended on Sept. 23, produced an unprecedented 1,100 letters. Generally the FDIC receives no more than six written comments on applications, the Times said.

Some of the bankers fear that Wal-Mart eventually would open retail bank branches, but Janet Thompson, president of Wal-Mart Financial Services, told the newspaper that was not the intention.

A coalition was formed to keep Wal-Mart out of banking. Members include the Independent Community Bankers of America, The National Grocers Association, the National Association of Convenience Stores, and the United Food and Commercial Workers union, which is attempting to unionize Wal-Mart workers.

U.S. Congressmen Paul Gilmor of Ohio and Barney Frank of Massachusetts have asked the FDIC to hold hearings on the matter.

An FDIC ruling on the application is expected by July, 2006, the Times said.

Copyright (c) 2005 Dow Jones & Company, Inc.

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Wal-mart Consumer Complaints

Posted: October 16, 2005                               [back to top]

In this section we discuss Wal-mart business practices and how their policies impact their consumers. Not all Wal-mart shoppers are happy ones.

Dear Annette:

I am at the receiving end of a $44 overcharge by Wal-mart Vision Center at the Commerce Township store.

I had an eyeglass exam and a contact lens exam done at this store about a month ago. My insurer covers both exams after a $5 copay, which is my responsibility. At the register, after the exam, the Wal-mart Assistant told me that her computer showed that only one exam was covered under the policy, not both. Therefore, I had to pay the $49 retail price for the eyeglass exam. Ten days ago, I received the Explanation of Benefit Statement (EOB) from my insurer that corroborated that my copay should have been a total of $5 for both exams.

I took the EOB and the receipt to the Walmart Vision Center at Commerce Township for a refund. The assistant at the counter said that she could not help me that day, since the manager of the Vision Center was not working that day. She took a copy of my EOB and asked that I call the following day.

That, I did only to be told that the manager was in a meeting and she will call me back ASAP. Of course, no one called.

I waited and called again the following morning since I was told that the manager is more accessible in the morning. She was not there, her assistant took down my message so that the manager could return my call... yada yada yada.

The sun rose and set on Orchard Lake that day too without a call return from "the manager."

So, I called the Walmart Customer Service desk the following day. The phone "greeter" started to squeak a little after the initial affable tone when I conveyed the issue with the dismally irresponsive service from the Vision Center. When he started to hint at my possible lack of awareness of my vision benefits I had to slip a little secret in -- it should not matter; but, it probably does -- that my insurer is also my employer. That seemed to work as he understood the issue right away and admitted that he could not gurantee as to how long it would take for (what now became) "a manager" to resolve my issue with the overcharge and the refund. Nonetheless, that someone will call.

The Vision Center manager called within two hours saying that she will take care of the refund, no problem. It has been two days since the promise. Today I received a message on my home phone from the manager who went on to state that it is beyond her control to refund the $44 as a over the counter refund. It will have to be handled by the Walmart District Office and er, unspoken but, it could take some more time before I could get my money back.

I know that I will recoup the money. But, buyers of the Vision Center beware of the Wall in that Mart!!! Interesting that this Wal-mart represented anything but what is in the name of the township where it is located.

A great website, BTW!!!

Sincerely, Ty

Dear Ty,

Thank you, I'm so glad you are enjoying this website. I have to say it's been a challenge to answer some of the inquiries I've received and a pleasure being able to assist you all.

Anytime you have an insurance issue and you even suspect that you are in the right, always have the provider call and verify your coverage before making payment beyond your co-pay. It's always easier to get the charges correct right from the start than to get an overcharge corrected. It should also be noted that providers who fail to accurately follow the terms of their contracts, can be suspended or terminated for breach of contract by the insurance company. Since insurance is the primary source of income for many of these companies, this is a really bad move for them.

Thanks for sharing your story. ~Annette

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Michigan: Right To Work State Posted: October 14, 2005

Our local Wal-Mart store overcharged an employee shopping on her off the clock time and was told store employees were not eligible for the 10X rebate. Is this correct?

This is not true, there is no exemption in the law for employees. Just remember that Michigan is a right to work state. They can fire her for no reason at all or for any reason and I can tell you from experience that it's hard to fight.

I was working for Subway and said Merry Christmas to some customers. I was later pulled aside and told that I wasn't allowed to wish customers a Merry Christmas, so I called Subway's Corporate office for clarification and was informed that that was not Subway's policy but the owners policy.

The next day I went into work and was terminated. Of course I couldn't get an attorney to help me fight my wrongful termination and when I called the Michigan Department of Labor - Wage, Labor and Hour division, I was told that they could fire me because I was an at-will employee and there was nothing I could do about it.

Simply put she needs to weigh her job against what the law allows and if she can live with her decision.

Thanks for asking, ~Annette

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Wal-mart Refund Policy Posted: October 6, 2005

I went into Wal-mart yesterday in Michigan. I purchased two sets of different items. One of each of the items rang up wrong. When I returned to the courtesy desk, she refunded my $1.98. As I stood there, I asked if this has anything to do with the Michigan Scanning Law. She almost growled at me and said "yeah". For some reason she needed to see my ID, which I had already taken out to the car.

As she did the paperwork I went to get my ID. She then gave me $5.00. I said I don't get it for the two different items. She said no you only get one $5.00 per receipt. I work in retail, I went to work today and asked if that was true. They of course said no, you get it for each different item.

Please let me know who is right.

Thank you, Patty

Dear Patty,

The law does not require you to provide the store with any identification what-so-ever. This is a store policy, one that you can legally refuse.

As for your other issue. According to Section 445.360a(2) you have cause to bring legal action against Wal-mart. The choice is yours, you may either return to the store with your receipt (within 30-days) or bring a legal case against Walmart for violating Michigan Law, which states:

If the loss is suffered by 1 buyer within 1 transaction on 2 or more identical items, the amount to be tendered by the seller shall be the difference on each item, plus an amount equal to 10 times the difference on a single item but which is not less than $1.00 and not more than $5.00. If the seller does not tender this amount, the buyer may bring or join in an action as provided in section 10(2).

Thanks for writing, ~Annette

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Mr. Retail: Lou Puim, director of marketing, Wal-Mart

Lou Puim has done the seemingly impossible - made Wal-Mart resonate with Canadians

by Annette Bourdeau
Strategy Magazine
October 2005                                    
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All the cool kids shop at...Wal-Mart? It may sound funny now, but don't doubt Lou Puim's ability to shift perceptions.

After all, he's the man who made the big bad American retail bully relevant to Canadians through his clever strategy of using "real" Canucks in his ads. And, he's recently taken the tactic a step further, reaching out to not only youth, but also various demos, as well as ethnic groups across the country with culture-specific TV spots in different languages.

A couple of recent campaigns exemplify this strategy. One is February's launch of the George men's clothing line, which was featured in strategy's Creative section and scored laughs by featuring London men running around in their knickers. And August's youth-oriented promotion for the chain's 725 apparel label, which employed stylized, illustration-based animation, resonated with teens by tapping into their desire for independence and control. Meanwhile, a new campaign for the George fall line launches this month, playing on the established "Fashion, taken from the streets of London" theme.

The Mississauga, Ont.-based director of marketing "understands creative on an intuitive level," says Duncan Bruce, CD of Wal-Mart's Toronto-based AOR Publicis. "He knows what each piece of his communication is going to do to move the brand forward."

In the past few years Puim has reached out to ethnic Canadians, by featuring members of various communities speaking in their native languages about their experiences shopping at Wal-Mart. The TV spots run on Omni Television across the country in six different languages, including Mandarin, Spanish and Italian. "Are we doing enough? No, but

at least we're trying," says Puim. "It's about treating these groups with the respect they deserve."

Puim has spent his entire career trying to figure out what Canadian consumers want. A true retail man, his ascent to his current role began right out of high school, when he joined Woolworth's management training program in 1976, earning a marketing degree from Wilfred Laurier University on the side. He's seen his company change hands twice - first to Woolco and later to Wal-Mart - but his impact has been constant.

Part of the key to Puim's staying power is certainly his ability to thrive with change. When Wal-Mart Canada bought out Woolco's 122 Canadian stores in 1994, the chain's honchos were impressed enough with Puim's track record to keep him in his post as director of marketing. But, while his title stayed the same, everything else had changed.

"It was a bit of a tough transition for the first two years," Puim recalls. With the Wal-Mart name came the unfavourable reputation of an American bully set to muscle out local businesses. "The biggest challenge was to communicate that we're a Canadian company." He quickly developed an approach that addressed both the need to Canadianize the brand, and promote Wal-Mart's "the customer is the boss" mentality, and launched a new campaign

in 1994. "Using real people [in ads] was unheard of back then," he says. "Before [the buy-out,] Alan Thicke was basically a talking head [for Woolco]."

Today, Wal-Mart's customer testimonial approach seems natural. "The real people strategy made it really Canadian," says Bruce. The agency has even hired journalism school grad Clair Galea to travel and talk to customers full-time in search of stories to bring back to Puim. "I'm always really excited to make Lou proud - he instills that in us," she says. "He's never come across as being intimidating, even though his job is. He's very down-to-earth."

Another challenge that came with the takeover was convincing Canadians that Wal-Mart's "Everyday Low Prices" (ELPs) were just that. Puim explains that Canadians were used to waiting for things to go on sale, and were skeptical about the ELP concept. "It probably took about three to four years before people realized this was the way Wal-Mart does it," he says.

Along with his ability to Canadianize Wal-Mart, Puim's strong leadership skills have no doubt contributed to his staying power. Bruce describes Puim as trusting. "He gives us clear direction, then lets us go. Although he still has a firm hold on everything," notes Bruce.

"I clearly know where I stand in Lou's mind."

Favourite current TV show: I don't watch any TV - when I get home my wife and I just talk.

Favourite vacation spot: The Algarve in the south of Portugal. First of all, I'm Portuguese. I think it has all the best of Europe.

Favourite TV commercial of all time: The Canadian Tire spot with the little boy looking at the Canadian Tire catalogue ["A Bike Story."] I've always enjoyed it.

Most useful business book, and why: The 7 Habits of Highly Effective People, by Stephen R. Covey. It has so many things that relate to Wal-Mart.

Greatest strength: I probably don't have any! I guess being adaptable to change - I get really excited about things changing.

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Wal-Mart bank bid gets record comments, FDIC says

By Jonathan Stempel               [back to top]

NEW YORK, Oct 13 (Reuters) - The Federal Deposit Insurance Corp. said Wal-Mart Stores Inc.'s <WMT.N> bid to open a bank in Utah has generated more than 1,000 comments, more than any other application subject to public commentary.

In a letter dated Thursday to members of the House of Representatives' Committee on Financial Services, FDIC Chairman Donald Powell said the agency would look into whether holding public hearings on the application by the world's largest retailer is in the public interest.

He also said the FDIC excludes most applicants' financial and business information from the public file and that Wal-Mart should not be treated differently.

"I am aware that there is a great deal of public interest in the Wal-Mart Bank application; however, I believe it is important that the application be processed in a manner that is consistent with current law," Powell said in the letter.

An FDIC spokesman confirmed the letter's contents.

Wal-Mart, based in Bentonville, Arkansas, applied to establish an industrial bank primarily to handle electronic payment processing, saving it from having to out-source the work. It has failed in previous attempts to open a bank, although rival Target Corp. <TGT.N> has succeeded. Five states have allowed commercial companies to own industrial banks.

Some in Congress fear Wal-Mart might use a bank as a base to offer a much wider array of services.

"What Wal-Mart is asking for here is special treatment, which in fact some other commercial companies have," Rep. Paul Gillmor (R-Ohio), who sits on the financial services committee, said in an interview.

"The basic principle is not to mix commerce and banking," he continued. "To control a financial institution, you need to be at least 85 percent financial and Wal-Mart clearly is not that. Wal-Mart should not be permitted to play by different rules from financial institutions."

Industrial banks, also known as industrial loan corporations, are state-chartered and state-regulated, under FDIC supervision, and can be owned by commercial as well as financial companies.

Rep. Jim Leach (R-Iowa) last month introduced legislation to block commercial companies such as Wal-Mart from controlling industrial banks. Under his bill, any company controlling an industrial bank would have to become a financial holding company subject to the Bank Holding Company Act.

Rep. Barney Frank (D-Mass.), the ranking Democrat on the financial services committee, who with Gillmor received the letter from Powell, was not immediately available for comment.

© Reuters 2005. All rights reserved.

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Pr. George's Move Clears Way For a Wal-Mart Inside Beltway

By Ovetta Wiggins
Washington Post
Wednesday, October 12, 2005                  
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The Prince George's County Council approved legislation yesterday that opens the way for Wal-Mart to build what would be the chain's first store inside the Capital Beltway.

The measure also clears the way for another Wal-Mart in the county, outside the Beltway near Upper Marlboro, but places restrictions on other projects that the discount retailer might want in Prince George's.

Wal-Mart had threatened to pull its plans to build at the Capital Plaza Mall in Landover Hills if it was unable to sell food at the store. Originally, the council had considered legislation to bar any big-box store larger than 125,000 square feet from selling food.

Yesterday's 7 to 2 vote ended a fight that began this year between Wal-Mart and local unionized grocery stores over the expansion and locations of Wal-Mart stores. Council members Tony Knotts (D-Fort Washington) and Douglas J.J. Peters (D-Bowie) voted against the bill.

"It's a satisfactory victory," said Rhoda Washington, a spokesman for Wal-Mart. "We'll be able to proceed with the [two] existing proposals we have."

Council members delayed voting on the measure immediately after a public hearing to discuss possible amendments in a closed-door session.

Council member Thomas R. Dernoga (D-Laurel), after meeting with lobbyists for Wal-Mart just outside the council chamber, offered an amendment that excluded Wal-Mart's two current proposals from the restrictions.

Knotts and Peters objected to that action, saying it was unfair to call for a vote on an unwritten amendment.

"I need to have a better understanding of what I'm voting on," Knotts said.

L. Anthony Perez, government affairs coordinator for United Food and Commercial Workers Union Local 400, told the council during the public hearing that "any amendments would be considered unfriendly" to the union.

Similar fights have played out elsewhere in the region.

Montgomery County restricted the location of stores larger than 120,000 square feet with a full-service grocery and pharmacy. The District is considering a bill to prohibit stores with more than 80,000 square feet that plan to devote 15 percent of their space to food and other nontaxable items.

In Prince George's, several council members, including Knotts and Peters, signed on to provisions in the bill that place restrictions on stores larger than 125,000 square feet.

The amendment requires future projects to file a detailed site plan with the county's Planning Board and prohibits stores larger than 125,000 square feet from selling food.

"I still have a concern about the lack of design standards for facilities that are this large," Dernoga said.

For years, Prince George's has courted retailers to bring the jobs and the tax revenue that generally follow. Many in the business community said the restrictions are contrary to those efforts.

The Prince George's Chamber of Commerce opposed the legislation, arguing that it would "have the effect of discouraging those who would seek to locate here and invest in this county by enacting onerous zoning requirements."

Wal-Mart has two stores in Prince George's, both outside the Beltway, in Clinton and Bowie. It has been working on plans in Landover Hills for years and recently has eyed a property at the the Beltway and Ritchie Marlboro Road, just outside Upper Marlboro, as a potential site.

© 2005 The Washington Post Company

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Former Exec Seeks Wal-Mart Suit Dismissal

By MARCUS KABEL
Associated Press 
Oct 11, 6:57 PM EDT                 
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BENTONVILLE, Ark. (AP) -- A lawyer for former Wal-Mart Stores Inc. vice chairman Tom Coughlin argued Tuesday for the dismissal of a lawsuit by the world's largest retailer, saying his client had an agreement with the company that it would not take punitive action against him after he retired.

Benton County Circuit Judge Jay Finch is to decide in a couple of weeks whether to allow Wal-Mart to go forward with its lawsuit filed this summer against its former No. 2 executive.

Wal-Mart sued Coughlin over his alleged misappropriation of hundreds of thousands of dollars to benefit himself. The company claimed Coughlin conspired with others, beginning in 1997, to defraud Wal-Mart of money for purchases such as alcoholic beverages, food, clothing, family trips, and all-terrain vehicles.

Coughlin retired in January but remained on the company board of directors. He resigned from the board in March, when the company disclosed it was handing documents over to the Justice Department showing that $500,000 had been misspent.

A federal grand jury is now investigating.

Coughlin appeared with his attorneys Tuesday, while his wife and family sat in the courtroom. Coughlin made no comments.

His lawyer, William Taylor of Washington, D.C., argued that his client and Wal-Mart had a mutual agreement exempting Coughlin from any punitive action related to his work for the company. In a September court filing, Taylor said the company signed a release in January when Coughlin retired, forgiving him for anything he did while employed by Wal-Mart.

P.K. Holmes, an attorney for Wal-Mart, told the court that Coughlin, as an officer of the company, had a fiduciary duty to disclose information about how Wal-Mart funds were being used.

"Coughlin as an officer of the company cannot fraudulently sign a release and then rely on the release for protection from prosecution," Wal-Mart spokesman Marty Heires said.

The company wants Coughlin to return compensation he received from the retirement agreement and any money he misappropriated. Wal-Mart also wants Coughlin to return $400,491.90 that the company says he received April 12 as the result of a calculation error.

© 2005 The Associated Press. All rights reserved.

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Wal-Mart Can Hide, But It Can't Run

Don Hazen
Disinfo.com
Tuesday, October 11                             
[back to top]

Wal-Mart is about to find itself in the spotlight again. Robert Greenwald's new documentary film, Wal-Mart: The High Cost of Low Price, rolls out in November, with thousands of house parties, and an array of journalistic reports in the progressive media. (Full disclosure: Robert Greenwald is a member of the board of trustees of the Independent Media Institute, AlterNet's parent organization.) In concert with this media effort, SEIU and hundreds of community and religious groups have organized a "Wal-Mart Week" to expose the truths about the company to the greater public.

'Greenwald's film is pioneering an amazing model of film distribution, with supporters already signed up for 3,300 house parties around the globe. The method allows for a mass audience without waiting to see if the corporate movie theater chains will show it, and it also allows the documentary to go from production to distribution in a matter of weeks.' (AlterNet article).

This article comes from Disinformation http://www.disinfo.com/site/

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Wal-Mart to go in Middletown Station

Brett Corbin
Business First of Louisville
October 10, 2005                                   
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After sitting mostly vacant since Bigg's Hypermarket closed in 2000, Middletown Station finally has a big-box retail anchor tenant to fill the void.

After more than nine months of negotiations with Hagan Properties Inc., Wal-Mart Stores Inc. has agreed to purchase 20.4 acres of the 60-acre Middletown Station land from Middletown Partners LLC. Hagan Properties manages the 60 acres for Middletown Partners.

The majority owner of Middletown Partners is Scott Hagan, chairman of Hagan Properties.

Gas station included in development Plans obtained by Business First for Middletown Station call for the world's largest retailer to build a 207,000-square-foot, free-standing "supercenter," with a Wal-Mart fueling station in the eastern corner of the 1,000-space parking lot.

Terms of the agreement between Wal-Mart and Hagan were not disclosed. The terms still must be approved by a real estate committee at Wal-Mart headquarters in Arkansas.

Kevin Flanery, president of Hagan Properties, a Louisville-based real estate management firm, said the timeline now consists of Wal-Mart breaking ground on the location in the first quarter of 2006, with the building to be completed five to six months after construction begins.

But before Wal-Mart can begin building, about 75 percent of the former Bigg's building will be torn down to clear a space for Wal-Mart to build a facility to its specifications.

After demolition, that will leave about 100,000 square feet of the original Bigg's building that still will belong to Middletown Partners, with Hagan Properties as the manager. Flanery said the building that is left will be refitted with a new facade.

Estimates on how much the demolition and facade replacement will cost were not available, Flanery said, given the early stage of the project.

The current tenants in Middletown Station are Burlington Coat Factory, which occupies 64,000 square feet, and Hagan Properties, which has 7,400 square feet of office space.

The 100,000 square feet or so of space that is left over after the demolition will be available for Burlington.

More buildings for other tenants are planned as other tenants are signed.

Development to resemble outdoor mall Flanery said the entire 60-acre site known as Middletown Station will look very different than it does now.

He said eventual development will resemble an outdoor mall similar to Shelbyville Road Plaza, as opposed to the current enclosed mall space that was occupied by Bigg's and other, smaller retailers.

Hagan Properties also redeveloped Shelbyville Road Plaza.

About the same time the Wal-Mart building should be completed, Flanery said, a 12,000-square-foot spec building on the western side of the Hagan property will be completed.

No tenant has been signed yet for that building, but it would be suitable for a bank.

Three big-box retailers envisioned And there will be room for other tenants as well.

The final plans for the refurbished Middletown Station call for about 500,000 square feet of retail space, including smaller, free-standing Hagan properties closer to Shelbyville Road.

There also is a string of retail locations that border Shelbyville Road but are not owned by Hagan Properties.

"This plan contemplates three large-format retailers," said Mark Sneed, a senior retail developer with Hagan Properties. But he added that the property has space for six large retailers.

"With a typical center like this, you'd expect home improvement stores, office supply stores, pet-supply super stores, off-price apparel stores" to be attracted to the site, he said. "And those kinds of tenants will be our target tenants."

He said the space also would be a good fit for Burlington.

"We are optimistic they'll want to remain here," Sneed said about Burlington.

Area's demographics are strong The current demographics around Middletown Station give strong indications that the development will be a success, Flanery said.

Bigg's might have been too early, Flanery said, because development and demographics have improved significantly in the past two or three years, making the success of a Wal-Mart very likely.

The last traffic count study was performed in 2001, and development in the area hasn't slowed since then.

The 2001 traffic study found that 314,000 people live in a 10-mile radius of Middletown Station. And the study estimated that 31,500 cars passed the shopping complex each day.

Middletown Mayor happy to have tenant Residents in Middletown often have asked Middletown Mayor Byron Chapman about filling the space left when

Bigg's closed. The constant questions were stressful, Chapman said.

"My response was, 'Believe me, everybody is working as hard as they can,' " Chapman said. "The truth of the matter is that once an area goes down, it continues to go down."

With the announcement of a new tenant, Chapman said, he would like to see a development with a facade that varies in height and appearance to avoid the commonly complained about look of a big-box retailer.

(Renderings posted on the Hagan Properties Web site, www.haganpropertiesinc.com, show the kind of dynamic appearance that Chapman described. Such a look also was used by the new Wal-Mart at the former Bashford Manor Mall site.)

Chapman added that he thinks Wal-Mart's wide variety of inventory will appeal to residents in the area because there isn't a big-box retailer nearby.

Success in Middletown would be third for Hagan If successful, this will be the third time that a Scott Hagan company has brought new tenants and a new look to a lackluster retail location.

Hagan Properties was formed in the summer of 2004, after Hagan and long-time development partner Benton Seay parted ways in an amicable split.

Before the split, the partners' former company, Hagan Seay Properties Inc., was successful in redeveloping the Shelbyville Road Plaza in St. Matthews and Jeffersontown Commons at 9501 Taylorsville Road.

As part of the split, Scott Hagan, as majority owner of Middletown Partners, purchased Seay's portion of Middletown Station.

And as majority owner of Shelbyville Road Plaza LLC, Hagan also bought Seay's portion of Shelbyville Road Plaza.

Seay now runs Seay Properties LLC and focuses on leasing and managing smaller commercial properties.

© 2005 American City Business Journals Inc.

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Wal-Mart seeks to supersize

Peter Van Allen
Philadelphia Business Journal
October 10, 2005                                    
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A new Wal-Mart SuperCenter in South Jersey could be a test for whether the region will see more of the big retailer's stores that include supermarkets.

But the retailer's vision of future stores would not include unionized workers.

"Our associates have repeatedly said, 'Unions are not right for us,'" said Mia Masten, director of corporate affairs, based in Washington, D.C.

Nonetheless, the battle lines have been drawn over Wal-Mart stores that contain supermarkets. The so-called SuperCenters average 200,000 square feet and feature standard store features, as well as supermarket and tire-and-auto lube under one roof. The stores have spiraled outward from the central United States, but as yet are still uncommon in Philadelphia.

Labor unions have taken this as a sign of success after spending millions of dollars to fight the stores at the township and city level. Unions have had a longtime lock on supermarket labor in the region.

Still many of Wal-Mart's competitors in different fields are non-union, Masten said, citing Target, Staples, Home Depot, Gap, Office Max, Wegman's and Whole Foods. Because of that, the retailer said it has to stay competitive.

Wal-Mart's first SuperCenter in the area will open in the next month in the Turnersville section of Washington Township, Gloucester County. The store is a conversion of what was also the region's first Wal-Mart, opening in 1991. The expansion takes over space that was used for a SuperFresh store next door.

The store will reflect Wal-Mart's changing product mix. Reflecting the competition of Target, the store will have higher-end household goods and upgraded clothing -- much of which was thought up by the "new trend office" in New York. Decor will include better signage, wider aisles, concrete floors and sky lights.

"We've gone from what people need to what people want," Masten said.

But with that increased specialization, Wal-Mart says, it has brought its renowned buying power.

In Pennsylvania alone, Wal-Mart buys $4.2 billion worth of goods from its suppliers. In New Jersey, it bought $9.9 billion worth of goods last year, the company said.

Wal-Mart claims its SuperCenters are 15 percent cheaper than its supermarket competitors.

Masten says the cost savings also come from things like having a forklift haul grapefruits into the store in a crate, from which the customer picks up individual fruit. In a standard supermarket, Masten said, a worker would place each grapefruit on a rack individually.

Labor unions contend that the retailer saves money by offering lower wages and a thinner health plan -- charges the retailer denies.

Unions say their legal battle has kept the SuperCenters out of Philadelphia. Meanwhile, legislation is increasingly cropping up limiting the size of stores.

In March, the late Philadelphia Councilman David Cohen introduced legislation barring stores larger than 90,000 square feet that dedicate more than 10 percent of space to nontaxable items such as food, cosmetics, soaps, over-the-counter drugs and toiletries. Last year, New Jersey lawmakers introduced a bill prohibiting stores of more than 135,000 square feet. Neither bill passed, but similar "big box" laws have been debated in Vermont, California, Oregon, Maryland and other states.

Wal-Mart claims labor unions have spent $25 million to fight the retailer's policy of not hiring union workers. United Food and Commercial Workers Local 1776, which has 22,000 workers in the Philadelphia region, has said it spent $7 million between 1990 and 2000 battling Wal-Mart at the local level.

Wal-Mart, however, said it is not labor or legislation that is an obstacle. Rather, it is the difficulty of finding urban sites large enough to accommodate the 200,000-square-foot stores. Further, it has to develop a network of wholesalers to supply goods.

"We can't just build SuperCenters without a distribution network. SuperCenters are still new to the East Coast," said Masten. "Wal-Mart's expansion came about where space was available."

Aside from the Turnersville store, Wal-Mart has three other stores in the Philadelphia region. More could be on the way, but the company is considering formats that are not a cookie-cutter design.

Wal-Mart envisions stores in Philadelphia adapted to the environment -- built on brownfields, in a multistory format and in a design befitting an urban setting. Newer stores in different markets have taken on the look of log cabins, industrial-style warehouses, Cape Cod-type architecture and Miami style, Masten said.

"Cities are experiencing a renaissance. Cities are becoming thriving. People there need cheap deodorant and toothpaste. We want to be there," she said.

It claims it has spurred its rivals to be more competitive. Shop Rite, for instance, now offers deliveries, a service Wal-Mart has no plans to match, Masten said.

"There's room for all of us," she said.

© 2005 American City Business Journals Inc.

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Will Women Wear Wal-Mart?

By Alyce Lomax
www.fool.com
10/10/2005                            
[back to top]

Can Wal-Mart(NYSE: WMT) recreate itself as a viable stop for fashion? That's the retail giant's aim as it plans to launch a new line of urban-inspired clothing called Metro 7. I'd call the concept pretty far-fetched, myself, and I would imagine many people might feel the same way. Nonetheless, Wal-Mart is undaunted, having gone so far as to advertise its new line of apparel in the high-fashion magazine Vogue.

Wal-Mart conducted an 18-month survey to try and discover the reason women tended to avoid buying clothing when they stopped in for specific items, such as food and other household necessities. According to USA Today, Wal-Mart respondents said that the retailer didn't have the clothes that met its shoppers' needs.

I'd also argue that clothing is not something many women are willing to skimp on. If you think about it, folks of all demographics purchase lots of low-priced items at Wal-Mart that are the exact same products one can buy elsewhere. Not so with the threads. It stands to reason that women on tight budgets might often use the money they save on household goods, for example, to go and shop at more upscale locations for clothes.

Wal-Mart has made quite a name for itself with low prices, but when it comes to its clothing, "cheap" has been a stigma, not the draw it has been for so many other items. I would imagine it's similar to the way many shoppers felt over the years about the apparel over at Kmart, which, of course, is now owned by Sears Holdings(Nasdaq: SHLD).

On the other hand, most of us know that Target(NYSE: TGT), while a discounter, has done a much better job of carrying fashionable clothing at low prices. It has convinced women that its inexpensive clothing can be hip, which may well contribute to the fondness with which many women have dubbed the store "Tar-jay."

Given Wal-Mart's less-than-hip reputation when it comes to clothing, the Vogue advertising blitz seems rather outlandish too. One might wonder if the women who read Vogue are really the women who could be convinced to turn to Wal-Mart for apparel in the first place. I would guess not.

At any rate, Wal-Mart's Metro 7 line apparently consists of hip fashions that will be refreshed more frequently than its previous lines of clothing, to keep up with trends. It will include decorated denim jeans, velvet jackets and skirts, and silk camisoles, for example. Last week, it debuted in 500 stores, and it will be available in 1,000 stores this coming spring. It's being introduced primarily in Wal-Mart's urban-market stores for now.

If true, the rumor that Wal-Mart was recently eyeing struggling Tommy Hilfiger(NYSE: TOM) as a possible acquisition makes sense. (That was another concept I found far-fetched, as you can see in this article.) It would certainly fit with a bid to lure more customers in for higher-end fashion.

Wal-Mart seems to be launching Metro 7 instead. It's understandable that Wal-Mart might want to bolster an area that has plenty of room for improvement. Whether it can pull it off is a different matter. In my opinion, there's a great deal of consumer psychology surrounding the Wal-Mart brand -- and its association with apparel -- that the company will have to carefully overcome.

For more recent Foolish content centered around Wal-Mart, please see the following articles:

Wal-Mart gets into some hot water over lunch breaks. Is it possible -- Wal-Mart gets even bigger? One Fool recently asked if you should short Wal-Mart. Or, if you'd prefer, talk to other Fools about Wal-Mart on our busy Wal-Mart discussion board.

Alyce Lomax does not own shares of any of the companies mentioned.

©1995-2005 The Motley Fool. All rights reserved.

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Anthropologie Sues Wal-Mart for Stealing Boho Chic

by Donna Wentworth
October 10, 2005                         
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David Bollier on the news that Anthropologie and its parent company, Urban Outfitters, are suing Wal-Mart over allegedly copying the design of two skirts: "In its complaint, Anthropologie claims that Wal-Mart 'has embarked upon a conscious strategy of copying the designs of others as part of its effort to build its "cheap chic" line.' It cites the fact that Wal-Mart opened a 'trend office' in New York’s garment district to track of the latest fashion trends. Pretty alarming, eh?"

Wal-Mart, selling cheap knock-offs of trendy, high-end clothing. The nerve.

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For Local Grocers, Understanding Customers Holds Key To Competing With the Wal-Marts

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PITTSBURGH -- Tepper School of Business Research Provides In-Depth Analysis of Mega-Retailer Impact

It's every local retailer's worst nightmare: a new mega-store is opening just up the street. But, new research from the Tepper School of Business at Carnegie Mellon University suggests that small businesses can compete effectively by using their existing customer data to develop new sales and marketing strategies. The research also identifies several key characteristics of customers that tend to switch to a mega- retailer, allowing local retailers to aggressively target those customers who are likely to defect.

Researchers analyzed customer behavior for a small-town supermarket on the East Coast for a period of 20 months, before and after a Wal-Mart Supercenter moved in two miles away. The study is one of the first to quantify the impact of a mega-retailer on a traditional grocery chain. When Wal-Mart opened, the local retailer lost more than 17 percent of sales volume, reflecting a $250,000 monthly decline in revenue.

"We looked at customer data in the store's robust frequent shopper program," said Vishal Singh, assistant professor of marketing at the Tepper School and lead author. "The information captured more than 85 percent of transactions and represented more than 10,000 households." The data included products purchased, date and time of sales, and the geographic location of customer residence in relation to the store.

"We found that roughly 70 percent of the lost revenue was attributed to only 20 percent of the store's customers," said Singh. "We then looked to find out why customers defected and why some remained loyal. With this information, retailers can make decisions about the types of products they carry and how to better price and promote them."

By analyzing purchase behavior of customers who moved their purchases to the mega-retailer, the researchers determined that typical defectors tended to be "large basket" consumers who were likely to have an infant and pet in the family.

In addition, likely defectors tended to shop more on weekends and frequently bought lower-priced store brands rather than name brands. Singh noted previous research has shown that store-brand buyers tend to be more price sensitive, reinforcing why they would move to a mega-retailer that has economies of scale in its favor.

In contrast, customers less likely to move purchases to the mega-retailer tended to spend a large proportion of grocery expenses on fresh produce, seafood and home meal replacement items such as salad bars or "ready-to-eat" food selections.

In addition, Singh discovered that geographic proximity to the local grocer had little impact on whether a customer was likely to defect. The study also found that the majority of losses at the local store were due to fewer store visits by the group of key customers, but that actual basket size (or amount of goods purchased) remained relatively the same if those customers could be lured back to the store.

"The limited impact on overall basket size suggests retailers would benefit from focusing on specific sales and marketing tactics that bring these customer back into their store," said Singh.

Beyond weekly circular specials or in-store events, other tactics could include select competitive pricing on key items that draw defectors to Wal-Mart-even at the risk of cutting into individual product margins-in order to drive store traffic. Because these customers return with comparable purchase levels, they will help mitigate or overcome the overall volume of sales that was lost.

According to Singh, many small businesses assume they are doomed when a big box competitor comes to town. But because new mega-store openings are usually known in advance, local retailers can use existing data to identify likely defectors and take pre-emptive action.

"In many cases, local retailers already possess the information they need to be potent competitors," said Singh. "The challenge is to figure out how to best use this data to improve performance and compete effectively." The study, "Impact of Wal-Mart Supercenter on a Traditional Supermarket," will appear in a forthcoming edition of Marketing Science and was co-authored by Karsten T. Hansen and Robert C. Blattberg of the Kellogg School of Management at Northwestern University.

Founded in 1949, the Tepper School of Business at Carnegie Mellon is a pioneer in the field of management science and analytical decision making. The school's notable distinctions include a unique contribution to the intellectual community including six Nobel Prizes in economics and a consistent presence in the top tier of business school rankings including being named the No. 3 business school in the United States and internationally by The Wall Street Journal.

What's in your basket?

Shoppers likely to defect to Wal-Mart are large-basket consumers who buy quantities of:
diapers baby
food dog/cat food
cat litter

Shoppers less likely to defect to Wal-Mart tend to seek:
fresh produce
fresh seafood
specialty or custom-cut meat
"home-meal replacement items" (e.g., ready-to-eat and salad bar offerings)

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Legal Wal-Mart Can't Clean Up

Michael Maiello
Forbes.com                         
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Wal-Mart Stores fended off a racketeering charge on Friday, but a U.S. judge decided that a lawsuit brought against the behemoth retailer by the undocumented workers who once buffed its superstore floors can proceed. Wal-Mart will have to answer to charges of not paying these workers fair wages and overtime, and that its store managers locked the doors on overnight cleaning crews, keeping them prisoner until the doors were opened the next morning to let in bargain-hunting shoppers.

New York City labor lawyer James Linsey, who represents several hundred illegal workers in their lawsuit against Wal-Mart (nyse: WMT - news - people ), promises to resubmit the racketeering allegations. But he says he is pleased that the heart of his complaint--that the workers were underpaid and mistreated--withstood Wal-Mart's motion to dismiss.

In March, Wal-Mart agreed to pay $11 million to end a four-year-old U.S. government criminal investigation into its hiring practices (see: "It's Not Over For Wal-Mart"). But it still faced a massive class-action suit filed on behalf of the workers. Linsey said at that time that the accusation of racketeering--that Wal-Mart had deliberately conspired to hire illegals on a national basis--carried such a stigma that it might motivate the retailer to settle with his clients. Now, even if the racketeering accusations are brought back into the case, Linsey no longer seems hopeful about a settlement. Wal-Mart has fought the workers' case for 16 months.

U.S. District Judge Joseph Greenaway's decision to let stand the wage charges, which were brought under the Fair Labor Standards Act, helps explain the court's thinking about the claims of undocumented workers. First, he rejected Wal-Mart's argument that because the workers are illegal, they can't seek relief from the law. Greenaway wrote, "This court only joins a growing chorus acknowledging the right of workers to seek relief for work already performed under the Fair Labor Standards Act."

Next, he rejected Wal-Mart's assertion that since the janitors worked for contractors rather than Wal-Mart directly, Wal-Mart was not their employer. Greenaway also rejected Wal-Mart's claim that the wage issue should be dismissed because it had paid above minimum wage to some of the workers and "near" minimum wage to several others. "Simply put," Greenaway wrote, "payment of 'near' the lawful minimum wage is not payment of the minimum wage."

On the allegations of false imprisonment, the workers will have the opportunity, as a class, to sock Wal-Mart with punitive damages, should they win this issue at trial. Linsey says he'll be able to present testimony not only from workers who were locked into the stores but from their friends, family members and neighbors who sometimes couldn't find the workers because of their confinement.

"This is potentially more costly [than other aspects of the case]," says Linsey. "Punitive damages are based on the type of punishment it would take to get the attention of someone who did something very bad."

The Wal-Mart trial will continue to wind on slowly. Linsey has 45 days to resubmit his racketeering claim, and then Wal-Mart will have another go at getting it dismissed.

Wal-Mart didn't return calls for comment.

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Board: Wal-Mart proposal doesn't comply with town regulations

October 9, 2005                          [back to top]

BENNINGTON, Vt. --A proposal to more than double the size of Vermont's first Wal-Mart doesn't comply with at least three sections of the town's land use regulations, a town board said.

The Development Review Board said the proposal by Jonathan A. Levy plan to build a 112,000-square-foot store and a 10,000-square-foot retail building falls short in three areas: building location, design and landscaping.

Levy said he disagreed with some of the board's findings. Nevertheless, he said he was optimistic he could bring the plan into compliance.

"We're very disappointed with the general tenor of it (the memorandum)," he said. "(But) we're very much hopeful we'll be able to work with the town and these thresholds they established."

In a six-page memo issued this week, the review board said the proposed buildings fail to create a streetscape or screen the parking lot. The design of the smaller building should be revised to be more compatible with the proposed Wal-Mart building, to avoid "blank walls" visible from the street and parking lot.

The board also said Levy was required to submit a more detailed site plan, including a landscaping proposal for the entire plaza, which includes a Price Chopper and a Wendy's restaurant.

The board is requiring Levy to obtain the Vermont Agency of Transportation's written endorsement of a traffic study he submitted to the town and show plans that a bike path will be built as part of the project.

Planning Director Daniel W. Monks said the DRB hasn't decided whether or not to issue a permit for the project. Monks said the town expects that Levy will return with the required materials or provide reasons why he doesn't need to fulfill the requirements.

In April, Bennington voters rejected a proposal that would have capped the size of big-box retailers in town. The vote was seen by some as an unofficial referendum on the plans to increase the size of the Wal-Mart.

© Copyright 2005 The New York Times Company

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Wal-Mart's Giant Sucking Sound

By Leo Hindery Jr.
OCTOBER 7, 2005                          
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That's what one hears as the giant retailer sops up the vitality from middle-class families, local communities, and the national economy Using a multimillion-dollar ad campaign, Wal-Mart's (WMT ) executives are defiantly blasting back at opponents who have criticized the retail giant's shoddy labor practices. But most people and even Wal-Mart's critics are missing the real crisis, which is that the behemoth from Bentonville, Ark., with its nationally destabilizing business model, is a dangerous detriment to America's local and national economies and to the middle class.

When H. Ross Perot ran for President back in 1992, he coined a memorable political phrase. The passage of the North American Free Trade Agreement, he said, would create "a giant sucking sound" -- the sound of jobs escaping out of the U.S. and into Mexico.

Today, if you listen carefully, you can hear a second giant sucking sound: Wal-Mart sopping up the vitality from middle-class American families, local communities, and the national economy.

EMPTY DOWNTOWNS. This happens in three different but related ways. First, there's the clobbering of Main Street: Wal-Mart moves in on the edges of towns, and the much smaller downtown merchants, unable to match its prices, soon go under. Second, there's the miserable wage and benefits package offered by Sam Walton's creation. And third, there's Wal-Mart's purchasing strategy, which seems to be about buying American-made products only as a last resort -- to the point that today Wal-Mart, by itself, is China's eighth-largest trading partner!

You could make the case that we are well on our way to becoming "Wal-Mart Nation." But maybe we don't have to be. Consider Costco (COST ), Wal-Mart's most notable competitor –- whose much more sensitive and noble business model actually serves as a boost to the national economy and to its shareholders.

Costco's pay scale begins at around $10 per hour and averages $16. After four years, a Costco cashier can earn $44,000 (counting bonuses), which is significant purchasing power. In comparison, Wal-Mart's average hourly wage is a miserly $9.68. To appreciate the impact of this 65% difference in average wages, University of California at Berkeley researchers recently concluded that in 2003 Wal-Mart's low wages and benefits for its employees in California compelled taxpayers there to give these employees $86 million in food stamps, health-care, and housing subsidies just to stay above water.

UNCOVERED WORKERS. Overall, only 38% of Wal-Mart's nonsupervisory workers receive health-care benefits, according to the United Food & Commercial Workers Union. The company won't disclose how much of its total workforce receives company benefits. It does say 56% of employees in the core U.S. Wal-Mart unit, which excludes operations such as Sam's Club, receive company benefits. Judging by any reasonable standard, it's clear Wal-Mart has left American taxpayers the burden of picking up a huge tab for its uncovered health-care costs.

Wal-Mart has gone so far as to actively instruct its employees on how to apply effectively for government health-care programs like Medicaid. Costco, on the other hand, covers 85% of its employees' health-care costs. Costco is even pilot-testing a program offering discounted health-care plans to its customers in California who are either self-employed or cannot get coverage at work -– about 1.5 million people.

Not surprisingly, Costco's employee turnover is only about one-third that of Wal-Mart's, and Costco's customers are loyal almost beyond measure.

And yet Costco has operated this way while also satisfying Wall Street investors. Wal-Mart, of course, dwarfs Costco in size -– heck, it dwarfs even General Electric (GE ) and Microsoft! (MSFT ) -– but Costco may in fact be the much better-run company. Wal-Mart operates 5,332 stores with annual sales of $288 billion, or $54 million per store. Costco has 452 stores with annual sales of $48 billion, or $106 million per store.

WAKE-UP CALL. Costco is a living example that a company can be extremely profitable and competitive and at the same time not destroy everything and everyone in its corporate path.

Wal-Mart's success has come at an enormous and painful cost to our national and local economies. From its boarding-up of Main Streets to its failure to pay workers fairly, to its imposing on taxpayers welfare costs for its underpaid employees, to its material contribution to our obscene ballooning trade deficit with China, this "Wal-Martization" of America is leaving us with an economy increasingly characterized by a gaggle of cheap imported consumer goods, shoddy employee practices, and insensitivity to communities.

It is beyond time for all Americans to wake up from this nightmare and support those companies –- Costco, for example –- that believe that companies and their CEOs have as much responsibility to employees, customers, and the nation as to shareholders. And it is way beyond time for us to take our support away from those companies that believe otherwise and do more to aggrandize management than to serve employees and their communities.

Copyright 2000-2004, by The McGraw-Hill Companies Inc. All rights reserved.

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Federal judge refuses to dismiss Wal-Mart janitors' lawsuit

October 8, 2005, 4:57 PM EDT                           [back to top]

NEWARK, N.J. -- A federal judge has allowed a group of illegal immigrant janitors to proceed with a lawsuit seeking overtime pay from discount retailer Wal-Mart.

U.S. District Judge Joseph Greenaway on Friday threw out a motion from Wal-Mart lawyers to dismiss the collective action suit filed by the janitors, who were among those rounded up in immigration raids at Wal-Mart stores two years ago.

While allowing claims on overtime pay and paying below the minimum wage to stand, Greenaway did dismiss three other claims against Wal-Mart, including one that alleged workers were subject to involuntary servitude.

The judge also tossed out a charge that the company violated federal racketeering laws but gave the plaintiffs 45 days to submit more evidence to support their claim.

Their lawyer, James Linsey, planned to refile the charges.

Linsey said the original lawsuit was filed by 17 workers in New Jersey, but now includes "several hundred" who worked in stores nationwide.

Wal-Mart spokesman Marty Hires declined to comment until attorneys for the company could examine the ruling.

Last May, Wal-Mart agreed to pay an $11 million civil fine to end a federal probe into the use of illegal immigrants at stores in 21 states, including New Jersey.

Copyright 2005 Newsday Inc.

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Ripon Residents Head Off Early Wal-Mart Plans with Petition Drive

Written for the web by Alan Marsden, Producer                  [back to top]

Although a formal application has yet to be submitted, a group of Ripon residents is already hard at work trying to stop a proposed Wal-Mart Supercenter from being built in their San Joaquin County town.

The proposal for a 210,000-square-foot Wal-Mart store at State Route 99 and Jack Tone Road was presented to the Ripon Development Committee earlier this week. Opponents say such a store, which would also sell groceries and a wide variety of other items, would put other chain stores out of business and increase traffic and crime in the area.

"This is a small town environment, that's why we moved here," said Al Sanchez, who lives near the proposed site. "[Building a Wal-Mart] will bring more traffic and put it right in my back yard."

Wal-Mart opponents have been collecting signatures for the past three days, hoping to convince city leaders to pass a an ordinance against the siting of so-called "big box" stores in Ripon. So far they have 500 signatures, and this weekend volunteers will go door-to-door with a goal of getting half of all city residents to sign the petition.

At Stockton's Wal-Mart Supercenter, some customers predicted that many Ripon residents will not oppose the new store, which they say offers low prices and convenience. So far, theres no word on when a formal application for construction will be submitted to the city of Ripon.

Ripon is the one of two Central Valley towns currently considering a Wal-Mart Supercenter. Galt is now taking input regarding environmental impact concerns.

Created: 10/7/2005 4:16:33 PM Updated: 10/7/2005 5:51:00 PM

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Wal-Mart set back in Canada

By G. Dunkel
Published Oct 4, 2005                     
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The Quebec Labor Relations Board has ruled that Wal-Mart did indeed close its store in Jonquière, Quebec, in order to break the union there, a local of the United Food and Commercial Workers.

Meanwhile, in British Columbia, the Labor Board has just certified another UFCW local at a Wal-Mart Tire & Lube Express in Cranford. BC labor officials are considering applications for UFCW certification at two other Wal-Mart Tire & Lube Express outlets. Wal-Mart is challenging those applications.

Three stores in Quebec are bargaining with Wal-Mart for an initial contract. Under Quebec law, if a first contract is not reached, the Labor Relations Board has the right in some circumstances to impose one on both parties.

The UFCW has 20 active organizing campaigns against the giant U.S. retailer throughout Canada. These widely reported successes are going to be a big boost for all of them, even though Wal-Mart earlier managed to beat back two union-certification votes—in Quebec and Ontario.

UFCW Canada's national director, Michael Fraser, said in a statement that the union will continue to organize Wal-Mart employees. "Wal-Mart says that, given a chance to vote, their employees always reject the union," said Fraser. "Those days are over."

UFCW Local 503, which represents the workers at Jonquière, sees the Labor Relations Board's decision as a step forward. The president of the Quebec Council of UFCW, Yvon Bellemare, said: "Wal-Mart clearly closed this store because the workers succeeded in unionizing. The Labor Relations Board's decision once again exposes the multinational's anti-union attitude. The momentum is picking up. Wal-Mart employees now realize that if they want a union in their store, Wal-Mart may attempt to but can't stop them."

Some of the workers at Jonquière have filed a class action suit demanding that Wal-Mart pay their salary for the time they've been unemployed, plus $10,000 each for the stress the closing caused and $10,000 exemplary damages for its "illicit" act. Others want to see Wal-Mart forced to reopen the store.

Wal-Mart, like many other big U.S.-based retailers, wants to expand in Canada because markets in the United States are saturated and expansion is more difficult. The North American Free Trade Agreement eased many restrictions on the movement of capital. But companies like Wal-Mart are finding that the anti-worker political atmosphere in the United States doesn't carry across the border. The working class movement is stronger there and faces less restrictions on organizing.

This article is copyright under a Creative Commons License. Workers World, 55 W. 17 St., NY, NY 10011 Email: ww@workers.org Subscribe wwnews-subscribe@workersworld.net Support independent news http://www.workers.org/orders/donate.php

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California pesticide regulators warn Wal-Mart

Russell J. Dinnage
Pesticide & Toxic Chemical News
October 3, 2005                                     
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The California Department of Pesticide Regulation (DPR) has accused  Wal-Mart of failing to pay required state taxes on the sale of many  pesticide products, and also of selling some products illegally. In a  letter sent to Wal-Mart General Counsel Bill Putnam Sept. 13, the agency threatened to audit the company unless it agrees to comply with California law.

DPR spokesman Glenn Brank told Pesticide & Toxic Chemical News that Wal-Mart attorneys responded last week to DPR's allegations by acknowledging "they had been remiss in failing to respond" to numerous attempts by the department to resolve the conflict, and that "they pledged to cooperate fully."

According to DPR, California assesses a fee on all pesticide sales  called a mill assessment, which is levied at the point of first sale  into the state. A "mill" is equal to one-tenth of a cent. In 2004, the "mill assessment" was 21 mills, or 2.1 cents per dollar of sales. Mill  assessment revenues are then placed in a special fund used to support the state's pesticide regulatory program.

In the letter sent to Putnam, DPR Staff Counselor Jodi Clary wrote that "Wal-Mart's failure to file quarterly reports of its sales of pesticides  and pay the mill assessment on a number of products [is a] violation of Food and Agriculture Code Section 12841." Clary also pointed out that repeated requests were sent by the department beginning in February, and that only partial documentation was sent back in response. That response was "inadequate to determine the actual pesticide sales," Clary wrote.

According to Brank , "the penalties for unpaid mill fees and  unregistered pesticides can range up to $5,000 per violation, and a  single sale may constitute one violation."

The DPR letter also claimed that the department had conducted numerous inspections between February 2001 and August, 2005 in which unregistered pesticides were found to be on sale. The department discovered that, despite requests to Wal-Mart to report sales figures on Eliminator Lawn Insect Killer Granules with Sevin , Ortho Weed-B- Gon Max (Ready Spray), and Worryfree Slug and Snail Bait, the company had continued to sell the products "unlawfully." It was not immediately clear in the letter sent to Wal-Mart by DPR whether or not the company also owed mill assessment fees for the products sold illegally.

According to DPR, in addition to EPA registering pesticides for use  nationally, California conducts its own registration process, which  often leads to pesticides being legal in other states, but banned for  use in California . Additionally, only certified applicators or trained  persons working under their supervision can use these "restricted  materials," and then only with a permit from County Agricultural  Commissioners, who regulate pesticide use locally.

"DPR considers Wal-Mart's failure to cooperate [in both cases] as bad  faith," Clary wrote, pointing out that "DPR intends to schedule a  complete audit of all Wal-Mart's pesticide sales into and within  California for the past four years beginning this fall." According to  Brank , Wal-Mart's pledge to cooperate with DPR's demands "does not mean that the potential audit is off."

"Wal-Mart and our counsel agree that an audit may be necessary to get the information we need," Brank said. Wal-Mart did not return PTCN' s  request for comment on the DPR allegations. 

A California bill (A.B. 1011) designed to make retailers register and act as independent pesticide brokers to report sales and pay required  assessments, thus assuming many DPR duties and acting as overseers in the pesticide product-monitoring process, passed out of the state  legislature Sept. 8 and was sent to Governor Arnold Schwarzenegger's (R) office for signature or veto.

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Wal-Mart Workers Form Grievance Group

Florida employees start the association as a way to air complaints, and the campaign aims to add members elsewhere.

Associated Press                     [back to top]

TAMPA, Fla. — It's not a union, but some Wal-Mart workers say it might be the next best thing.

Searching for a voice in their work lives, employees of some central Florida Wal-Mart stores have formed a group to collectively air complaints about what they claim is shoddy treatment by the retail giant.

About 250 employees and former employees from 40 central Florida stores have joined the fledgling Wal-Mart Workers Assn., spurred by what they say is a reduction of hours and schedule changes recently that may jeopardize healthcare benefits for some. Organizers say the word-of-mouth campaign is attracting 15 to 20 new members every week.

The members say they hope their efforts will persuade the company to listen to its workers and make some changes.

"Management seems like they don't really respect the associates," said Carl Jones, acting chairman of the new group, who makes $9.40 an hour as the lead cart pusher at a store outside Orlando. "We don't have a voice. We don't have any rights at all."

The company, however, says most of its associates are happy, and characterized the effort in Florida as another attempt by the unions to get their hands in the pockets of some of its 1.3 million workers in the U.S.

"It's within [employees'] legal rights to do that, but this group is a wolf in sheep's clothing," Wal-Mart spokeswoman Christi Gallagher said. "This is a labor organization attempting to masquerade as something else."

The largest and most profitable retailer has heard the complaints before. Stores around the U.S. have been accused of such things as paying poor wages, locking workers inside overnight and discriminating against women, while foiling attempts by labor groups such as the United Food and Commercial Workers to organize workers.

The food workers union is among the sponsors of the new association, along with the Service Employees International Union, and the Assn. of Community Organizations for Reform Now, an advocacy group for the poor. Central Florida was chosen for the launch because of Wal-Mart's expansion there.

Nine Wal-Mart Supercenters have opened in Florida this year, adding to a dozen new stores last year, according to the company. In the state, the company has 170 Supercenters and discount stores, 39 Sam's Club stores, eight neighborhood markets and six distribution centers. More than 92,000 people work in the company's Florida facilities.

"Florida is like Wal-Mart central," said Rick Smith, state director of the Wal-Mart Alliance for Reform Now, a coalition of labor, anti-poverty and environmental groups trying to change the way Wal-Mart does business. Smith is spearheading the workers association project, which is also being launched soon in the Dallas area with hopes of expanding it to other cities.

"It was carefully formulated," he said. "This is not the traditional unit we have now in terms of collective bargaining or having an election. This is about what sort of problems Wal-Mart employees are having at work and what can they do to make their lives better at work."

The group has already helped some who've had their hours cut apply for partial unemployment benefits, Smith said.

Claire Middleton, 70, said she worked a full-time day job for four years, taking in returns at a Wal-Mart Supercenter in Pinellas Park near St. Petersburg. The store changed her schedule in July, telling her she would have to be available from 7 a.m. to 11 p.m. seven days a week if she wanted to keep getting shifts.

Her bad eyes make it difficult to drive after dark and she's afraid of losing her healthcare benefits if she doesn't work enough hours. She makes $8.56 an hour.

Rveva Barrett, 61, was working as the community involvement coordinator at the same store, even appearing in a national Wal-Mart commercial last year with community leaders. Her job was eliminated recently and she was told she could take another position with a $200-a-month pay cut or leave.

Both women have joined the workers association, paying the $5-a-month dues.

"This is a really bad thing that's happening to all the people at Wal-Mart," Barrett said. "Unless we do something about it now, it's going to get worse."

Gallagher, the Wal-Mart spokeswoman, said the incidents were isolated. She said the company urges associates to talk over any problems with managers. That works for most, she said, noting that associates have shunned chances to unionize.

"We regularly receive thousands of applications for 400 jobs when we open new stores," she said. "I think that certainly would be an example that we are seen as a benefit to a lot of our associates

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Testimony of Robert Baugh, Executive Director, AFL-CIO Industrial Union Council, on WalMart and Outsourcing

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Good morning. My name is Robert Baugh. I am the Executive Director of the AFL-CIO Industrial Union Council. The unions of the IUC represent the millions of manufacturing workers across the nation that work in everything from basic metal and assembly to electronics, chemicals and food processing.

Our unions and their members have grave concerns about the future of manufacturing and the economy. There is something fundamentally flawed with the business practices of our largest corporations.

Over the past decade a dominant business model, supported by government trade and tax policy, has emerged in the American economy that promotes the outsourcing/offshoring of American manufacturing. The loss of our manufacturing capacity – the intellectual and technical capability to make things – is a profound threat to the nation’s economy and our national security.

WalMart, the largest corporation in America, has been a leading practitioner of this flawed business model. The report we have submitted this morning, WalMart Imports From China, Exports Ohio Jobs, documents the cost of these practices to the state of Ohio and profiles the experience of four Ohio manufacturers: Huffy, Rubbermaid, Mr. Coffee and Thomson Industries (RCA televisions). Carla Henthorn, a former Rubbermaid worker and USW member is here to share the story of what happened to this company.

The Cost of a Flawed Business Model

These firms are representative of the tidal wave a manufacturing job losses that have occurred in Ohio and states across the country.

Over the past four years the U.S. lost more than 2.9 million manufacturing jobs Between January 2001 and July 2004 Ohio lost more than 170, 000 manufacturing jobs -- a loss of one in six or nearly 17% of all the manufacturing jobs in the state (chart 1 Ohio report) Cleveland accounted for lost more than 40,000 manufacturing jobs There is a direct relationship between the loss of 2.9 million manufacturing jobs (chart 1) and the fact that today there are five million more Americans without health insurance than in 2001. State health care systems and employers with good coverage are paying the cost for those who have lost their jobs or for large employers like WalMart that provide only limited benefits and coverage.

The trade picture (chart 2) tells the other side of the employment story. It is a disaster. The 2004 $666 billion goods trade deficit is headed toward $700 billion – more than 6 per cent of the GDP. Each deficit dollar represents lost jobs and opportunities for our economy and Ohio communities. It’s outrageous, unsustainable and dangerous.

Over the past five years our so-called free trade policy with the Chinese government has resulted in the largest bilateral trade deficit between any two countries in the history of the world (chart3). The Economic Policy Institute estimates it has cost us 410,000 manufacturing jobs in the past two years. The 2004 $162 billion trade deficit with China is on target to exceed $200 billion in 2005. Today, if empty cargo containers were a product they would be our largest export to China.

This comes as no surprise. China’s entry into world trade has been built upon an export strategy supported by the systematic violation of workers’ rights, weak environmental standards, currency manipulation and illegal subsidies. The U.S government chooses to ignore these violations of trade law while WalMart and large manufacturers exploit them.

Today, this low wages and no benefit environment is both a magnet for outsourcing and a sledgehammer used to pound vendors and the American working class into line. WalMart is a firm that actively engages in both all in the name of competition and consumers.

The Wal-Mart Model

WalMart used to advertise that their products create American jobs. Today over 60 per cent of their products are made in China. In 2004 WalMart imported $18 billion in goods from China, more than 12% of that trade deficit (chart 2 Ohio report). They require their vendors to manufacture overseas so the smiley face can bring us lower prices. Huffy, Rubbermaid, Mr. Coffee and Thomson and many more Ohio firms have felt the squeeze.

WalMart also squeezes their workers. They pay lower wages and offer less work hours than comparable competitors -- 28 hours is considered full time work. Fewer workers are insured at WalMart, 41 percent vs 66 percent in large firms, and they must pay for more of their premiums than at other large firms. The company spends less than half of what most firms do for health insurance even in the retail industry.

They also want to make sure they keep it that by aggressively opposing any union organizing effort domestically and internationally. Under our weak and ineffective labor laws WalMart workers are easily intimidated and fired. In Canada they closed a store organized by the UFCW. In China, Li Jianming, the head of the government sponsored All-China Federation of Trade Unions admitted that workers “are not willing to risk their employment at Wal-Mart by asking for a union. Basically they are afraid of losing their jobs.”

WalMart will oppose any effort to give workers the right to organize and bargain collectively here and abroad. They will oppose the Employee Free Choice Act currently before the U.S. Congress. They will oppose and subvert any attempts to enforce our existing trade laws regarding workers’ rights (section 301 of the U.S. Trade Act) or to impose enforceable labor standards in trade agreements. The WalMart model is a low road one. Dr. Gary Gereffi a Professor of Sociology and Director of the Markets and Management Studies Program at Duke University described the model on PBS’s Frontline last fall:

Wal-Mart is one of the major companies that’s been promoting a global race to the bottom. It’s like we’re on a bus with an accelerator pedal with no brakes. We’re going in this global sourcing, global efficiency direction, and it’s pushing everybody’s costs down to the floor, but suppliers are complaining about this model because they can’t make profits. They can’t pass higher costs on to Wal-Mart; because Wal-Mart is so big, it holds the fate of any one of its suppliers in its hand …

Wal-Mart is bad for America because it's hurting jobs in the United States. It's hurting jobs in two ways. Wal-Mart is putting a lot of pressure on the jobs of its suppliers, who are finding that they can't meet Wal-Mart prices, so Wal-Mart goes offshore. Those suppliers go out of business.

Wal-Mart is also having a negative impact on employment in the retail sector. Wal-Mart is the largest employer in the United States after the federal government. But Wal-Mart is also very well known for being a non-union company and pushing non-union conditions on its workforce. ... It pays its workers at a minimum pay scale with very few fringe benefits. Because Wal-Mart's the largest private employer in the United States, whatever Wal-Mart does in terms of the labor market, all other businesses have to follow. So Wal-Mart is really determining the direction in which the U.S. labor market is moving.”

That is the Ohio story … Huffy in Celina, Rubbermaid in Wooster, Mr. Coffee in Glenwillow, Thomson in Circleville, World Kitchen in Massilon, Ohio Arts and more are all part of the list of WalMart casualties. It is a story that has been repeated across the country.

It seems that the WalMarts of the world now dictate our national interest. Their outsourcing is a virulent disease that is crippling manufacturing and spreading to other industries. The entire economy is paying the price but no one seems to be asking the big questions.

Should the “free market” ideology trump common sense?

Is the exploitation of workers from one side of the globe to the other a morally and economically justified business model?

Does this business model work for Ohio and the nation?

I can tell our answer … No!

Do American working families deserve better …Absolutely!

A New Model

Our union members and the communities they live in know that manufacturing means good jobs and healthy communities. They know that our nation’s economic security and national security are dependent upon a strong manufacturing base.

There is a simple truth that the working families of this nation understand … if we don’t make things we have nothing to trade and if we have nothing to trade can never solve the trade deficit.

They also understand that the loss of skilled workers, R&D, engineering, design, etc. means the next best idea, the next innovation, the next generation of products, the next investment will be made in somewhere else, not here.

They can see that the seed corn of our future is being planted in other nations.

The AFL-CIO Industrial Union Council recommend the following steps be taken revitalize manufacturing, restore the nation’s trade balance and ensuring economic and financial stability:

§ Stronger labor laws domestically and internationally to prevent employer suppression of workers’ freedom to form unions and bargain collectively. Passage of the Employee Free Choice Act by Congress is a priority. I would also like to thank you Congressman Brown and Jones for cosponsoring this bill.

§ Revised tax laws that eliminate incentives for corporations to move production overseas and punish those that do.

§ Action at the state and the federal level to require that large employers are paying for their fair share of health benefits.

§ Fair trade policies that reduce the U.S. trade deficit, protect U.S. trade laws and require inclusion of enforceable workers’ rights and environmental standards in trade agreements.

§ Immediate intervention to address the unfair trade practices of China and other nations, including legislation to ensure China meets its international obligations regarding fair currency (HR1498), market access, and government subsidies.

In summary, this nation is suffering from the outsourcing business model that the WalMarts of the world have imposed. It is flawed, it is wrong and is dangerous for our economic and national security. Unless something is done the casualty list of Ohio manufacturers and workers who have lost their jobs will continue to grow. It is time to act.

The IUC would like to thank the distinguished members of the U.S. Congress and Ohio legislature for holding this hearing. In addition, we would like to encourage that other members organize similar hearings in their districts to make plain the damage done and the alternatives.

Copyright © 2005 AFL-CIO

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Wal-Mart to Boost Its Stake in Seiyu

By YURI KAGEYAMA
The Washington Post Company                    
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TOKYO -- Wal-Mart Stores Inc., the world's biggest retailer, will raise its stake in the Japanese retailer Seiyu to more than 50 percent from 42 percent at a cost of as much as nearly $600 million, Seiyu said Friday. The move will make Seiyu a Wal-Mart subsidiary and expand Wal-Mart's influence in the world's second biggest retail market.

Since arriving in Japan in 2002, Bentonville, Ark.-based Wal-Mart has been gradually raising its stake in Seiyu, which operates more than 400 stores here.

Under a partnership with Seiyu, Wal-Mart has been gradually introducing its computerized systems, cost cutting program and global-supply chain to its Japanese stores by remodeling stores and opening large-scale supermarkets, which are still relatively rare here.

Seiyu will issue new ordinary and preferred shares totaling 115 billion yen ($1 billion), and Wal-Mart will purchase up to 67.5 billion yen ($597 million) worth of the shares, while the Japanese bank Mizuho Corporate Bank Ltd. and possibly other investors will acquire the rest, the Tokyo-based supermarket chain said.

The capital investment is subject to shareholders' approval in December 2005, according to Seiyu.

The move reflects Wal-Mart's commitment to the Japanese market at a time when Seiyu has been struggling and losing money.

Seiyu's losses for the fiscal first half widened nearly fourfold from a year ago to 10.59 billion yen ($94 million) due to sliding sales. It is forecasting a loss for the full fiscal year, although it had hoped to return to the black this fiscal year.

"This investment is intended to give Seiyu increased financial stability and continue strengthening Wal-Mart's presence in the second largest retail market in the world," John Menzer, president and chief executive of Wal-Mart International, said in a statement.

Seiyu shares jumped 35 yen, or nearly 15 percent, to 271 yen on the Tokyo Stock Exchange Friday. While the announcement was made after the market closed, word of a possible deal seemed to have spread beforehand. Wal-Mart shares slipped 13 cents to $43.41 in morning trading on the New York Stock Exchange.

Seiyu Chief Executive Noriyuki Watanabe said becoming "a full member of the Wal-Mart family" will offer a stable financial base, allowing Seiyu to accelerate remodeling stores and opening new ones. It will also bring cheaper prices, he said.

"Seiyu will grow by providing great value of quality fresh food and other everyday necessities for our customers and making sure we cater to their local needs," he said in a statement.

Watanabe, who became chief executive this year after his predecessor resigned to take responsibility for the losses, said he expected no management overhauls as a result of the planned changes. Details of the new share issues will be decided in early November, Seiyu said. Watanabe served as president of Seiyu from 1998 to 2001.

Wal-Mart has widespread international operations, including Mexico, Germany, South Korea and Canada. But it has not scored a big hit yet in Japan, where the retail market is extremely competitive and shoppers tend to be finicky.

Carrefour SA of France, the world's No. 2 retailer, abandoned the Japanese market earlier this year after it failed to woo buyers.

Once a total novelty in Japan, Wal-Mart-style gigantic stores are becoming gradually more accepted in this nation, which had been dominated by mom-and-pop stores for decades. Some Japanese retailers are starting to imitate Wal-Mart methods.

Wal-Mart has also learned that it needs to cater products to the local market, and some of its fashion items, for example, have not done as well as they have elsewhere.

Wal-Mart officials have said success in Japan will take time.

© 2004 The Washington Post Company

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Wal-Mart workers band together

Central Florida group talks issues at its meetings

By MITCH STACY
Associated Press
Oct. 1, 2005, 6:30PM                          
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TAMPA, FLA. - It's not a union, but some Wal-Mart workers say it might be the next best thing.

Employees of some central Florida Wal-Mart stores have formed a workers group to collectively air complaints about what they claim is shoddy treatment by the retail giant.

About 250 employees and former employees from 40 central Florida stores have joined the fledgling Wal-Mart Workers Association, spurred by what they say is a reduction of hours and schedule changes recently that may jeopardize health care benefits for some. Organizers say the word-of-mouth campaign is attracting 15 to 20 new members every week.

The members say they hope their efforts will persuade the company to listen to its people and make some changes.

"Management seems like they don't really respect the associates," said Carl Jones, acting chairman of the new group, who makes $9.40 an hour as the lead cart-pusher at a store outside Orlando. "We don't have a voice. We don't have any rights at all."

The company, however, says most of its associates are happy, and it characterized the effort in Florida as another attempt by the unions to get their hands in the pockets of some of its 1.3 million workers in the United States.

It is within employees' legal rights to hold the meetings, Wal-Mart spokeswoman Christi Gallagher said, "but this group is a wolf in sheep's clothing."

"This is a labor organization attempting to masquerade as something else."

The world's largest and most profitable retailer has heard the employees' complaints before. Stores around the United States have been accused of everything from paying lousy wages and locking workers in overnight to discriminating against women, while foiling attempts by labor groups such as the United Food and Commercial Workers Union to organize workers.

The food and commercial workers union is among the sponsors of the new association, along with the Service Employees International Union, and ACORN, an advocacy group for the poor. Central Florida was chosen for the launch because of Wal-Mart's aggressive expansion here.

"Florida is like Wal-Mart central," said Rick Smith, state director of the Wal-Mart Alliance for Reform Now, or WARN, a coalition of labor, anti-poverty and environmental groups trying to change the way Wal-Mart does business.

Smith is spearheading the project, which is also being launched soon in the Dallas area with hopes of expanding it to other cities.

The group has already helped some of the employees who've had their hours cut apply for partial unemployment benefits, Smith said.

Rveva Barrett, 61, was working as the community involvement coordinator at the same store, even appearing in a national Wal-Mart commercial last year with community leaders. Her job was eliminated recently and she was told she could take another position with a $200 a month pay cut or leave.

"This is a really bad thing that's happening to all the people at Wal-Mart," Barrett said. "Unless we do something about it now, it's going to get worse."

HoustonChronicle.com

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Florida Wal-Mart workers start to organize - without union

MITCH STACY
Associated Press
Posted on Sat, Oct. 01, 2005                      
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TAMPA, Fla. - It's not a union, but some Wal-Mart workers say it might be the next best thing.

Searching for a voice in their work lives, employees of some central Florida Wal-Mart stores have formed a workers group to collectively air complaints about what they claim is shoddy treatment by the retail giant, which is known to take a dim view of organized labor.

About 250 employees and former employees from 40 central Florida stores have joined the fledgling Wal-Mart Workers Association, spurred by what they say is a reduction of hours and schedule changes recently that may jeopardize health care benefits for some. Organizers say the word-of-mouth campaign is attracting 15 to 20 new members every week.

The members say they hope their efforts will persuade the company to listen to its people and make some changes.

"Management seems like they don't really respect the associates," said Carl Jones, the group's acting chairman, who makes $9.40 an hour as the lead cart-pusher at a store outside Orlando. "We don't have a voice. We don't have any rights at all."

Wal-Mart, however, says most of its associates are happy, and characterized the effort in Florida as another attempt by the unions to get their hands in the pockets of some of its 1.3 million workers in the United States.

"It's within (employees') legal rights to do that, but this group is a wolf in sheep's clothing," said Christi Gallagher, spokeswoman for the Bentonville, Ark.-based retailer. "This is a labor organization attempting to masquerade as something else."

The world's largest and most profitable retailer has heard the employees' complaints before. Stores around the United States have been accused of everything from paying lousy wages and locking workers in overnight to discriminating against women, while foiling attempts by labor groups such as the United Food and Commercial Workers Union to organize workers.

The food and commercial workers union is among the sponsors of the new workers association, along with the Service Employees International Union, and Acorn, an advocacy group for the poor. Central Florida was chosen for the launch because of Wal-Mart's aggressive expansion here.

"Florida is like Wal-Mart central," said Rick Smith, state director of the Wal-Mart Alliance for Reform Now (WARN), a coalition of labor, anti-poverty and environmental groups trying to change the way Wal-Mart does business. Smith is spearheading the workers association project.

"It was carefully formulated," he said. "This is not the traditional unit we have now in terms of collective bargaining or having an election, this is about what sort of problems Wal-Mart employees are having at work and what can they do to make their lives better at work."

The group has already helped some of the employees who've had their hours cut apply for partial unemployment benefits, Smith said.

Claire Middleton, 70, said she worked a full-time day job for four years taking in returns at a Wal-Mart Supercenter in Pinellas Park near St. Petersburg. The store changed her schedule in July, telling her she would have to be available from 7 a.m. to 11 p.m. seven days a week if she wanted to keep getting shifts.

Her bad eyes make it difficult to drive after dark and she's afraid of losing her health-care benefits if she doesn't work enough hours. She makes $8.56 an hour.

Rveva Barrett, 61, was working as the community involvement coordinator at the same store, even appearing in a national Wal-Mart commercial last year with community leaders. Her job was eliminated recently and she was told she could take another position with a $200 a month pay cut or leave.

Both women have joined the workers association, paying the $5-a.m.onth dues.

"This is a really bad thing that's happening to all the people at Wal-Mart," Barrett said. "Unless we do something about it now, it's going to get worse."

Gallagher, the Wal-Mart spokeswoman, said the incidents are isolated. She said the company has an "open-door policy" and urges associates to talk over any problems with managers. That works for most, she said, noting that associates themselves have shunned opportunities to unionize.

"We regularly receive thousands of applications for 400 jobs when we open new stores," she said. "I think that certainly would be an example that we are seen as a benefit to a lot of our associates."

© 2005 AP Wire and wire service sources. All Rights Reserved.

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Fighting Wal-Martization 25min. (2005)

A new video by The Labor Video Project 25 min. (2005)

Wal-Mart is now the largest private employer in the United States and has the same impact that General Motors had nearly 50 years ago. This 26-minute video shows why working people and trade unionists are fighting back and what Wal-Mart has in store for the communities it is seeking to build stores in. "Fighting Wal-Martization" is a hard hitting documentary that looks at how the constant price cutting not only drives local small businesses out of the community but how this ends up driving down the living conditions of the very people who shop at Wal-Mart. The video also looks at the healthcare crisis and how Wal-Mart increases its profits by sending it¹s employees to public hospitals to get treatment thereby shifting costs back onto the taxpayer. This video can be used at union meetings, community meetings and on cable TV to get the message out about the Wal-Martization of America and what it means to every working person.

Please mail your check of $20.00 and order form to

Labor Video Project
P. O. Box 720027,
San Francisco, CA 94172

For more info: lvpsf@labornet.org, (415) 282-1908

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