Crain Communications, Inc.

By Emily Kaiser

by Greg LeRoy

Reuters

By Randy Hall
CNSNews.com
September 30, 2005                               [back to top]

(CNSNews.com) -- More than 300 labor unions and other liberal groups are joining forces for "Higher Expectations Week," a series of 1,000 events intended to pressure Wal-Mart to make reforms in such areas as "affordable health care, corporate responsibility and economic justice."

"Wal-Mart founder Sam Walton once said, 'High expectations are the key to everything,' and we agree," Andrew Grossman, executive director of Wal-Mart Watch, said in announcing the campaign, which will run across the country during the week of Nov. 13-19.

"Unprecedented in its size and scope, Higher Expectations Week unifies concerned citizens to highlight the myriad of problems Wal-Mart creates," Grossman added "Together, this national movement is moving toward making the retailing giant a better employer, neighbor and corporate citizen."

According to the Wal-Mart Watch website, labor unions taking part in the campaign include the Service Employees International Union, the International Brotherhood of Teamsters and the United Food and Commercial Workers.

Other participants in the week-long series include such liberal groups as the Sierra Club, United for a Fair Economy and Pride at Work, as well as local affiliates of the AFL-CIO, the National Organization for Women, the ACLU and NARAL Pro-Choice America.

Using fact sheets and activist toolkits from the Wal-Mart Watch and Wake-Up Wal-Mart websites, activists will hold events in such venues as churches, synagogues, mosques and neighborhoods, as well as "on the front steps of Wal-Mart's 3,600 U.S. stores."

However, the biggest event of the week will be 3,500 house parties to screen the film "Wal-Mart: The High Cost of Low Price." The movie is being produced by Robert Greenwald, the director of other self-described "guerilla documentaries" as "Outfoxed: Rupert Murdoch's War on Journalism" and "Uncovered: The War on Iraq."

As Cybercast News Service previously reported, the world's largest retailer was also the target of the "Send Wal-Mart Back to School" campaign, an effort that urged Americans not to buy their back-to-school supplies at Wal-Mart last summer.

Michael Reitz, director of labor policy for the Evergreen Freedom Foundation, told Cybercast News Service he considers such events to be part of "a smear campaign by labor organizations to pressure an employer into unionizing."

Reitz said he found the latest effort "ironic" since it's being "led by labor unions and other organizations that continually oppose higher expectations in the classroom."

Christi Davis Gallagher, a spokesperson for Wal-Mart, took a philosophical view of the campaign.

"Being the biggest makes us a natural target, and some of that just comes with the territory," Gallagher said. "And I think it's fair to say that some of our critics have legitimate concerns about smart growth, the environment, making sure people are treated fairly and the like. We try to partner closely with those folks and work things out.

"But far and away, most of the criticism is part of an expensive and carefully orchestrated campaign driven by labor unions" that are "very fragmented these days," she told Cybercast News Service. "Leadership has figured out that 'declaring war on Wal-Mart' seems to be the only thing that pulls people together and solidifies their power."

Higher Expectations Week, however, "adds absolutely no value for the rank-and-file managers and union members," Gallagher added. "They are paying for this campaign, it doesn't enhance their jobs in any way, and they are forbidden to shop at Wal-Mart. It is lose/lose/lose for them."

Gallagher was also critical of Greenwald's film on Wal-Mart.

"We haven't seen the movie, but by most of the accounts we have heard, it doesn't reflect the view of most Americans," she said. "It seems that his project is better categorized as propaganda than a documentary. If Mr. Greenwald chooses to target millions upon millions of mainstream Wal-Mart shoppers, then he'll continue to find himself on the fringe of society."

Most people, Gallagher concluded, "will see this film -- and the other events of this week -- for what they are: a sensationalized and one-sided view of our company."

Copyright © 1998-2005 CNSNews.com - Cybercast News Service

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Wal-mart eyes smaller Chinese cities

asiatimes.com                         [back to top]

BEIJING - Wal-Mart Inc, the world's largest retailer, plans to accelerate store openings in China and expand into smaller Chinese cities after the government relaxed laws on foreign retailers operating in the country, an executive said.

"With the lifting of restrictions and with the talent pool we have accumulated, we can expect that the growth will speed up a bit," James Lee, vice-president of corporate affairs for Wal-Mart China, said in a recent telephone interview from the southern city of Shenzhen.

Bentonville, Arkansas-based Wal-Mart plans to open 14 superstores this year, an increase of a third, to catch up with Carrefour SA and domestic chains in China's US$652 billion retail market. Starting in December 2004, China permitted foreign retailers to open stores without a local partner to meet pledges made on joining the World Trade Organization in 2001.

The government also eased rules restricting foreign retailers to China's biggest cities and provincial capitals, giving them full access to the market. Wal-Mart is looking at smaller cities such as Yuxi in the southern province of Yunnan, where it currently has one store in the capital Kunming, Lee said.

Wal-Mart, which opened its first superstore in the country of 1.3 billion people in 1996, has 48 outlets in 23 cities including Beijing, Harbin, Shanghai and Shenzhen. Paris-based Carrefour, the largest overseas retailer in China, had 61 stores in the nation out of a total of 6,680 worldwide as of the end of June.

Chinese companies such as Lianhua Supermarket Holdings Ltd also are expanding to shore up their market share against foreign competition. Shanghai-based Lianhua said in April it aims to add 600 stores this year, expanding outside eastern China to become a national brand. As of the end of June, it had 3,377 supermarkets and convenience stores, from 2,706 a year earlier. Beijing-based rival Wumart Stores Inc has said it's sticking to a strategy of expanding around the national capital area.

Wal-Mart is counting on faster Chinese growth as its expansion slows in the US, where higher oil prices are crimping consumer spending. The company's first-half sales outside the US rose 12.3% to $29.1 billion as domestic sales climbed 9.9% to $99.5 billion. Retail sales in China may expand 13.5% in the second half of this year, spurred by rising incomes, the Beijing-based Financial News said last month, citing the State Information Center.

A dozen large fish tanks filled with live carp, eel and other seafood dominate one wall of the fresh food section in Wal-Mart's Beijing store. Chinese customers "like to buy fresh and probably make more trips to the store than in the US or Europe, so we put more emphasis on food," said Lee. Food typically accounts for half of total revenue in the company's Chinese stores compared with 30-40% in other markets, he said. "Our customer base is also getting more sophisticated," said Ivan Ho, who managed Wal-Mart's first Chinese outlet in 1996 and is now operations manager for northern China.

Wal-Mart also runs a Shenzhen-based procurement business, sourcing goods from China for its stores worldwide. Last year, it bought $18 billion worth of goods from Chinese suppliers, up from $15 billion in 2003. About 90% of the retailer's stock in China is procured domestically, according to Ho. "China is the manufacturer to the world," he said.

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Wal-Mart top executives to switch roles

CHICAGO, Sept 30 (Reuters) - Wal-Mart Stores Inc. <WMT.N> on Friday said the heads of its U.S. and international operations would switch roles, and both men were promoted to the post of vice chairman.

The world's biggest retailer said John Menzer, who had headed Wal-Mart International, would take over major functions of the U.S. business, and Mike Duke, chief executive of the U.S. Wal-Mart Stores division, would run Wal-Mart International.

© Reuters 2005. All rights reserved.

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Wal-Mart takes control of Japanese retailer

Move will turn 400-store Seiyu into subsidiary

The Associated Press
MSNBC.com
Updated: 8:14 a.m. ET Sept. 30, 2005                [back to top]

TOKYO - Wal-Mart will raise its stake in Japanese retailer Seiyu to more than 50 percent from 42 percent by December, Seiyu said Friday, a move that will turn it into a subsidiary and expand the U.S. chain’s foothold in the world’s second biggest retail market.

Seiyu will issue new ordinary and preferred shares totaling 115 billion yen, or $1 billion, and Wal-Mart will purchase up to 67.5 billion yen, or $597 million, worth of the shares, while Mizuho Corporate Bank Ltd., a major Japanese bank, and possibly other investors will acquire the rest, the Tokyo-based supermarket chain said.

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 cuts and global-supply chain to its Japanese stores by remodeling stores and opening large-scale supermarkets, which are still relatively rare here.

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 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.

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.

Copyright 2005 The Associated Press.

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Wal-Mart raises stake in Japan unit

Fri Sep 30, 2005 4:23 AM ET                   [back to top]

TOKYO (Reuters) - Struggling Japanese retailer Seiyu Ltd. <8268.T> said on Friday it would issue 115 billion yen ($1 billion) of new shares to its U.S. parent Wal-Mart Stores Inc. <WMT.N> and Mizuho Corporate Bank, a unit of Mizuho Financial Group Inc. <8411.T>.

Of the total, Wal-Mart will take up to 67.5 billion yen of shares, raising its stake in Seiyu to above 50 percent by the end of this year from the current 42.4 percent.

Seiyu, Japan's fourth-biggest retailer, has been struggling to adopt Wal-Mart's sales strategy and posted a half-year net loss in August due to weak sales. It also reiterated its projection of a fourth straight full year in the red.

The U.S. firm, which has an option to boost its stake in Seiyu to 50.1 percent by the end of 2005, was widely expected to exercise the option and to inject fresh capital into Seiyu this year to prevent it from falling into negative net worth.

Seiyu said the capital increase is aimed at stabilizing its financial base and raising funds for capital expenditure. It added that the deal would have no impact on its earnings estimates.

The issuance will involve both preferred and ordinary stocks. Ordinary shares will be issued at 205 yen per share, a 32 percent discount to Seiyu's closing price on Friday of 271 yen.

Other details will be decided later.

The latest injection followed a capital increase by Seiyu in May with help from Wal-Mart, and $42 million in additional investment by Wal-Mart and others late last year.

Wal-Mart, the world's biggest retailer, waded into Japan's notoriously competitive and fickle market in 2002 by taking 6 percent in Seiyu.

Prior to the announcement, shares in Seiyu jumped 14.83 percent to end at 271 yen, outperforming a 0.39 percent rise in the retail sector subindex <.IRETL.T>.

© Reuters 2005.

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Wal-Mart mimics mom and pop

Wal-Mart is bringing its version of a traditional grocery store to South Florida. The retail giant plans its first Neighborhood Market for Coral Springs.

BY ELAINE WALKER
Posted on Fri, Sep. 30, 2005                          [back to top]

Looking to increase its share of the South Florida grocery market, Wal-Mart has plans to open its first Neighborhood Market.

The first South Florida location will be located in a former Winn-Dixie in Coral Springs, which closed earlier this summer as part of the company's bankruptcy restructuring. Wal-Mart received approval earlier this month from the U.S. Bankruptcy Court in Jacksonville to purchase the lease on the former Winn-Dixie in the Cypress Run Square, located at the intersection of Atlantic Boulevard and Coral Springs Drive.

The Neighborhood Market is Wal-Mart's version of a typical grocery store. Most are open 24 hours a day, offering the same low prices typically found at a Wal-Mart supercenter, but in a smaller, easier to shop location. It's a combination that analysts say makes Wal-Mart an even more formidable competitor.

''It takes away one of the points of differentiation that the supermarkets try to use against Wal-Mart,'' said Mitch Corwin, a supermarket industry analyst with Morningstar. ``It's a pretty powerful value proposition for a customer.''

A LACK OF LAND

The smaller format is expected to help Wal-Mart increase its presence in South Florida, where its expansion has been hampered by the difficulty in buying the large chunks of land needed for its supercenters.

The Neighborhood Market ''really lends itself to being more easily placed within an urban area,'' said Erick Brewer, Florida spokesman for Wal-Mart. ``The fact that the footprint is so much smaller we should be able to have a higher rate of growth in South Florida.''

Wal-Mart currently has eight Neighborhood Markets in Florida, including locations in Orlando, Tampa, Cape Coral and Tallahassee. Wal-Mart opened the first Neighborhood Market in 1998 in its Bentonville, Ark., hometown.

The typical Neighborhood Market averages about 40,000-square-feet, featuring a full line of groceries, baked goods, prepared foods, fresh produce, meat, deli, cosmetics, toiletries, pet products and hardware. Many of the stores also include a 30-minute photo processing lab, a drive-through pharmacy and liquor department.

NO SPECIFIC NUMBERS

Brewer said the company has no specific numbers for how many Neighborhood Markets it hopes to open in South Florida. The Coral Springs location could take as long as two years before it opens.

''We're trying to reach as many new customers as we can,'' Brewer said. ``People don't want to be driving long distances to pick up everyday supplies. We want to make sure our stores are as close as possible to our customers.''

While Wal-Mart is already the nation's top grocery seller and the No. 2 grocer in Florida, it remains a distant third in South Florida with 6.1 percent of the market, behind Publix at 56.2 percent and Winn-Dixie at 16.3 percent, according to the Shelby Report, an industry trade publication.

The arrival of Wal-Mart's Neighborhood Market comes as Winn-Dixie is trying to emerge from bankruptcy protection and counting on South Florida as the key to its survival.

''This is big news,'' said Stephen Bittel, chairman of Terranova, a Miami Beach real estate firm that owns and manages shopping centers. ``This is an established, powerful player entering the South Florida supermarket arena. They're not coming to do a single store. This is likely to have a devastating impact on Winn-Dixie.''

© 2005 Herald.com and wire service sources. All Rights Reserved.

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John Nichols: Win for Wal-Mart, loss for Jefferson

By John Nichols
September 29, 2005                [back to top]

The city of Jefferson provides a textbook example of what happens when a city loses control of its own affairs.

In 2001, the local meat processing plant - a 120-year-old concern with solid roots in the community - was purchased by the Tyson conglomerate. The Arkansas corporation quickly provoked a long and nasty labor dispute as part of a move to cut local pay and benefits. The long and bitter strike created serious tensions in what had once been a tight-knit and prosperous community.

Now, following a move by Wal-Mart - another Arkansas-based corporation - to elbow its way into the local retail market, the Jefferson County community of 7,338 finds itself even more deeply divided.

On Tuesday, a Jefferson alderman who stood up for local retailers and employees was narrowly recalled from his position by a candidate who was friendly to Wal-Mart.

The vote was so close that neither side can claim a mandate. Ald. David Olsen, the subject of the recall, won 815 votes, or 48 percent of the vote, while his challenger, Chris Havill, received 880 votes, or 52 percent of the total.

Still, the removal of Olsen, a local funeral director with deep roots in the community, is a boost for Wal-Mart and out-of-state retailers that have decided to radically reshape commerce in Wisconsin communities. Indeed, as Olsen said after the vote, "The real winner tonight was Wal-Mart, which shows the power of a big corporation to reach in and have a great impact on a city."

Olsen is right about that, just as he and his supporters are right to fear the impact.

Wal-Mart, like Tyson, makes its money by cutting wages and benefits for workers, forcing out locally owned competitors, and treating communities as "sources of revenue" rather than hometowns.

David Olsen had the courage to stand up to Wal-Mart, which wanted to build a so-called "supercenter" in Jefferson. That made him a marked man politically, and the powerful interests he opposes succeeded in taking him out on Tuesday.

Unfortunately, history will prove Olsen to have been correct.

Just as Wal-Mart was the winner on Tuesday, so Jefferson will be the loser in the long run.

madison.com is operated by Capital Newspapers, publishers of the Wisconsin State Journal, The Capital Times, Agri-View and Apartment Showcase. All contents Copyright ©2005, Capital Newspapers. All rights reserved.

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This is a message from Alderman David Olsen of Jefferson, WI. On Tuesday night, Olsen lost a recall election for his seat on the Common Council. The vote was 880 votes to 815. The recall election was sparked by his vote against a Wal-Mart Supercenter in his hometown of 7,500 residents. This is his story.

Dear Friends,                                                [back to top]

I lost to Wal-Mart on Tuesday night. It all started on June 6, 2005, when I allowed Wal-Mart opponents to speak at a public meeting with my fellow aldermen in Jefferson, WI. We were considering the annexing of 22 acres for a Wal-Mart superstore and although local opponents of the store were not slated on the agenda, I felt their voices deserved to be heard. Shortly after the meeting, owners of the land that Wal-Mart had its sights set on filed a complaint with prosecutors claiming that I had violated state law by allowing the opponents to speak. Soon thereafter, recall petitions were circulated. I was cleared of any wrongdoing, but the recall went on. Tuesday's election was close -- 880 to 815. It turned into a hard-fought battle over Wal-Mart, not the issue prompting the recall petitions. I lost because of fraud. The Jefferson Common Council president (a Wal-Mart supporter) was overheard last night as they counted the ballots saying, "we'll have the Wal-Mart annexation on the October 4th agenda (the date I leave the council) and this will fly through now!" And as the Capital Times wrote today, "Just as Wal-Mart was the winner on Tuesday, so Jefferson will be the loser in the long run." Don't you think it's time we stand up to Wal-Mart? Sign up to take action with me this November:

http://www.walmartwatch.com/november I was interviewed on a Madison radio station this morning. At the end of the show the radio host said, "History will read Bob LaFollette, Bill Proxmire, Gaylord Nelson, Russ Feingold, and David Olsen." I'm humbled to be mentioned in the same breath as those champions of freedoms and standing up for what's right. Wal-Mart is definitely not right for Jefferson. I stood up to them and would do the exact same thing again. And I will. My story is just one of many developing around the country. Read about threats and strong-arm tactics that Wal-Mart has employed in other local communities like Cleveland, Ohio; Flagstaff, Arizona; and Lewiston, Maine.

http://www.walmartwatch.com/shameless I'm proud to be working with Wal-Mart Watch's "Higher Expectations Week" (November 13-19) planning events in and around Jefferson. We'll be just one of hundreds (or even thousands) of towns and cities participating! Will you join me?

http://www.walmartwatch.com/november Think of Jefferson County as your home town, or any small town in America. We need your help. Please get involved, get informed and help spread the word. Your voice matters. Thanks for listening to mine. Sincerely, David Olsen www.savingdave.org

*** PS. Here are some local press clips from Tuesday's election here in Jefferson: The Capital Times: Anti-Wal-Mart alder ousted in Jefferson Milwaukee Journal-Sentinel: Alderman opposed to Wal-Mart loses recall The Capital Times: Win for Wal-Mart, loss for Jefferson

Paid for by WalmartWatch.com, a campaign of Five Stones and The Center for Community and Corporate Ethics To unsubscribe: http://walmartwatch.bluestatedigital.com/unsubscribe

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Another bid to stop Wal-Mart fails

By Dan Judge
Times-Herald, Vallejo
TheReporter.Com                              [back to top]

A community group has failed in its second attempt to halt construction of a Wal-Mart Supercenter in American Canyon.

Offering little explanation, the First District Court of Appeals in San Francisco has denied a request for a stay made by American Canyon United for Responsible Growth.

The decision means Wal-Mart can continue building the store during a new appeal by American Canyon United, with a decision on it possibly not being made until after the Supercenter is completed.

Vincent "Buzz" Butler of Lake Street Ventures, developer of the Napa Junction mixed-use project that the Wal-Mart will anchor, said he was pleased with the decision.

"The judge not granting the stay clearly means he read the case and doesn't think there's much of a case to begin with," Butler said Tuesday. American Canyon United could not be reached for comment.

The group had won a temporary stay on the project when it originally filed a lawsuit in Napa Superior Court.

That ban on construction was lifted, however, when Judge Raymond Guadagni ruled against the group in July.

The lawsuit claimed the city of American Canyon wrongfully approved the supercenter, which includes a grocery store, without considering the negative economic impact on other businesses.

It also charged that the city violated its own zoning codes by allowing the store to have a sign larger than the 50-foot limit and by not requiring a special-use permit for retail food sales.

City officials said the use permit requirement was a typographical error in the zoning code.

The suit also claimed there had been major changes in the project and argued that the courts should set aside city approvals and demand completion of a new environmental impact report.

After the Napa judge rejected the argument, American Canyon United appealed the ruling. Downplaying the environmental argument, the group is now appealing with a stronger focus on what it sees as zoning deficiencies.

"They're going after three things - signage, the conditional use permit and the internal road modifications," Butler said. "They're requesting a stay of construction because of a sign. Now it really is frivolous."

Butler said the expects the appeals process to take up to a year. In the meantime, he said Wal-Mart has about six to nine months of construction left on the project.

"I think by the time the appeals court has decided, the Wal-Mart building will be up and possibly open," Butler said.

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Wal-Mart to buy Cora?

September 29, 2005                        [back to top]

Retail giant Wal-Mart is set to take over the Cora hypermarket chain in Hungary this October, according to national daily Népszabadság. The Cora chain is owned by Belgian-French retailer Louis Delhaize.

Magyar Hipermarket Kft, employing 3,600 people, currently owns the Hungarian Cora and several Profi supermarkets, offering more than 55,000 products in its hypermarkets, with a presence in 15 counties. In early September there were reports in the Hungarian press that Wal-Mart had audited the firm, which operates a total of seven hypermarkets in Hungary. Népszabadság reports that Cora had prepared plans for a major reorganization, citing company employees who asked not to be named.

Reuters reported that Wal-Mart chief executive Lee Scott said in June that his firm was looking to expand in central and eastern Europe and that Russia, Poland and Hungary could be attractive.

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Suffolk Requires Big Stores to Help With Health Care

By JULIA C. MEAD
The New York Times
September 28, 2005        [back to top]        

RIVERHEAD, N.Y., Sept. 27 - Responding to pressure from unions and their supporters, the Suffolk County Legislature voted overwhelmingly on Tuesday to require retailers like Wal-Mart, BJ's Wholesale Club, Target and Kmart to contribute to their nonunionized employees' health insurance. The law is one of the few efforts in the country to impose such workplace rules on the warehouse-style stores.

Suffolk is now the third governmental body in the country to adopt such a measure, but in the two previous instances, in New York City and Maryland, the measure was vetoed and an override vote has not been attempted.

The Suffolk County executive, Steve Levy, a Democrat, said he had not made up his mind about the bill, although he said its spirit "is laudable, and I'm leaning towards supporting it." He said he would hold his own public hearing on Oct. 11 before deciding.

When the Legislature passed the bill to thunderous applause from a standing-room-only crowd, it became the first governmental body controlled by a Republican majority to pass such a measure. The vote was 17 to 1, and members of the Legislature's 11-member Republican majority and 7-member Democratic minority said they had more than the necessary 12 votes to override a veto.

The bill, the Fair Share for Health Care Act, applies to retailers meeting size or revenue standards and devoted at least partly to groceries and requires them to contribute at least $3 for each hour an employee works toward the worker's health coverage. The companies would be prohibited from deducting any charge from the employee's wages.

After the vote, legislators joked among themselves that it was incongruous to see Republican lawmakers backing the concept of universal health care. "Hey, it's the right thing to do," said Peter O'Leary, the majority leader and a former union president.

The lone lawmaker to vote against the measure, Allan Binder, a Republican, called it "the worst bill I've seen in my 16 years as a legislator," and added, "It's anti-taxpayer, anti-consumer, anti-business, anti-growth, and anti-Suffolk County."

Mr. Binder accused the other lawmakers of pandering to unions, which lobbied heavily for the bill's passage under the guidance of the Working Families Party and the Long Island Federation of Labor. He predicted that retailers would recoup their health care costs by firing employees or increasing prices.

Either way, he said, Suffolk residents would end up footing the bill.

In vetoing the New York City bill, Mayor Michael R. Bloomberg said the measure violated a federal law prohibiting cities and states from regulating private employer health plans. Suffolk proponents said that law did not apply to counties.

Labor organizers have had retailers like Wal-Mart in their sights, accusing the company and other giant retailers of keeping wages low while not offering health insurance or requiring employees to pay large portions of the premiums. That forces many workers to turn to Medicaid or other county-funded programs in an already overburdened public health care system, said one of the bill's cosponsors, William J. Lindsay, a Democrat.

Paul J. Tonna, a Republican, said that as a result, "Wal-Mart has profited off the public sector to the tune of billions of dollars."

The six stores in Suffolk owned by Wal-Mart employ 1,800 workers. Nationwide, the company has 1.2 million employees, none unionized.

Philip Serghini, a company spokesman, said that all employees were eligible for health coverage but that about half declined it. He said he did not know how many Long Island workers were covered.

He attributed the high portion of Wal-Mart employees who decline coverage to the 'nontraditional' makeup of the retail labor force: high school and college students who are covered by their parents' insurance, married women covered by their husbands' insurance, and the elderly covered under a retirement plan.

"We think it's unfair to target one or two companies that actually provide health care" and suggest that such targeting "does anything for the uninsured people in Suffolk County," Mr. Serghini said.

But Brian Schneck, the chairman of the Suffolk chapter of the Working Families Party, said there was a difference between offering and providing health care.

"If you only make $7, or $8, or $9 an hour," he said, "how can you come up with $50 a week or more to pay for health care?"

A few Suffolk lawmakers said they expected Wal-Mart or another retailer to file suit if Mr. Levy signed the measure into law. Mr. Serghini declined to comment on whether Wal-Mart would sue. "We are exploring all of our options," he said.

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Brazil Wal-Mart Unit Closes In On Purchase Of Sonae Chain

By Jeff Fick
Dow Jones
09-28-05                                         [back to top]

The Brazilian subsidiary of U.S. retail giant Wal-Mart Stores (WMT) was close to a deal to purchase the local supermarkets of Portuguese retailer Sonae, market watchers said Wednesday.

"Apparently, it is very close," said Marcello Milman, an analyst with investment bank BES Securities. Milman pegged the value of the deal at $700 million, slightly below previous market calculations.

A spokeswoman for Wal-Mart Brasil declined to comment, saying the company does not respond to market speculation.

However, the deal make sense for both sides, Milman said.

"Sonae doesn't have the scale in Brazil to bargain with suppliers," Milman said. "A sale is better for them because they are more of a regional retailer in Portugal."

Wal-Mart has exactly what Sonae lacks, Milman said.

"Wal-Mart already has scale. This deal will give them more coverage in the southern part of Brazil, where they are not as strong. Wal-Mart is strong in the northeast," Milman said.

Wal-Mart increased its presence in Brazil last year with its $300 million purchase of the Bompreco supermarket chain. The deal netted Wal-Mart 120 stores in northeast Brazil.

A purchase of Sonae, which is Brazil's fourth-largest supermarket chain at 148 stores, would put the heat on rival retail chains Companhia Brasileira de Distribuicao (CBD), or CBD, and France's Carrefour (12017.FR). CBD and Carrefour are the top two retailers, respectively.

"Wal-Mart is already a tough competitor, but this deal will strengthen them significantly," Milman said. Milman noted Wal-Mart's promotional policy of " Everyday Low Prices," good management and history of tough negotiations with suppliers as reasons why CBD and Carrefour should be concerned with this move by the world's largest retailer.

Wal-Mart's probable acquisition of Sonae is the latest in a series of consolidation moves in Brazil's retail industry.

Carrefour recently purchased 10 hypermarkets from Sonae for 317 million Brazilian reals ($1=BRL2.244).

Furthermore, CBD strengthened its joint venture with French retailer Casino Guichard Perrachon (12558.FR) earlier this year in a BRL1.029 billion deal.

By Jeff Fick, Dow Jones Newswires; (55 11) 3145-1481; jeff.fick@dowjones.com

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Carrollton Bancorp: Wal-Mart Stores Ends Pact For ATMs

By Ed Welsch
Dow Jones
09-28-05                             [back to top]

Wal-Mart Stores Inc. (WMT) terminated its agreement with a unit of Carrollton Bancorp (CRRB), which provides automated teller machines to some Wal-Mart stores, Carrollton said Wednesday in a regulatory filing.

Effective Jan. 22, Wal-Mart, Sam's Club and Wal-Mart Supercenters in Maryland, Virginia and West Virginia will no longer house ATMs owned by Carrollton Bank.

Carrollton Bancorp said the agreement accounted for 6%, or $60,000, of its net income and 6% of its total gross revenue for the first half of 2005.

During 2004, the agreement accounted for 1%, or $8,000, of Carrollton Bancorp's net income and 8% of its total gross revenue, the company said.

Under the agreement, begun in 1994, Carrollton Bank collected ATM transaction and processing fees and paid Wal-Mart a base rent plus a percentage on each transaction fee earned.

Wal-Mart provided Carrollton Bank with 120 days' notice of its intent to terminate the agreement.

Carrollton Bancorp is a commercial bank holding company based in Baltimore.

By Ed Welsch, Dow Jones Newswires; 202-862-1356; edward.welsch@dowjones.com

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Labor coalition seeks to organize Wal-Mart workers, those left jobless by Katrina

By Betsy Taylor
The Associated Press
Wednesday, September 28, 2005             [back to top]

ST. LOUIS — Leaders from unions that broke away from the AFL-CIO pledged yesterday to organize Wal-Mart workers and reach out to those who lost their jobs due to Hurricane Katrina.

The Change to Win Coalition met for its founding convention in St. Louis. In between official business — adopting a new constitution and electing leaders of the new labor federation — the event resembled a rally for the 460 delegates who cheered speeches by labor leaders or comments from workers who recounted their own battles.

Teamsters President James Hoffa and Unite Here President Bruce Raynor called on the coalition to organize workers at Wal-Mart. The world's largest retailer "contributes nothing to America but more poverty and they've got to be stopped," Raynor said.

Labor leaders said they weren't just repeating the same old message about Wal-Mart but making plans to help those workers gain the right to organize.

"You bet your life there's a renewed commitment," Raynor told a news conference.

Wal-Mart officials said the average employee earns twice the federal minimum wage of $5.15 an hour, and 75 percent of its store management team began as hourly workers.

"Wal-Mart is committed to making a positive contribution to working families and we do it every day," spokeswoman Christi Gallagher said. "We're disappointed that some continue to ignore the facts and fail to provide any real vision for the future."

Hoffa also said the new coalition will do what it can to help hundreds of thousands of workers who lost their jobs because of Katrina.

"We have a strategy to train workers to rebuild their communities," Hoffa said. "We must learn from this tragedy and help these workers start over. We must help our fellow Americans build new communities and new lives."

He said unions will train workers in hard-hit areas, from Teamsters training drivers to carpenters helping construction workers learn new skills.

Organizers hope the new coalition will revitalize the labor movement.

The delegates adopted a new constitution by a voice vote. The 10-member leadership council then elected the federation's leaders, official recognition for Chairwoman Anna Burger and Secretary-Treasurer Edgar Romney.

Burger said that when she was growing up, unions represented one of every three workers. Now, they represent one in 10.

"Union power puts bread on our tables, roofs over our heads. It sends our children to college, and union power helps us retire with security," Burger said.

The seven unions — including the Teamsters, Service Employees International Union, and the United Food and Commercial Workers — represent about 5.4 million workers.

The unions recently left the AFL-CIO, which has about 8.8 million members, charging that the nation's largest labor federation was unable to halt declining membership. They argued that the AFL-CIO should shift emphasis from backing political candidates to organizing new members.

The new coalition is positioning itself, in Hoffa's words, as "a lean, mean organizing machine."

The organization is calling for its leadership strength to come from its affiliates, though the federation will have an executive office, a strategic organizing center and a central organizing fund.

Its budget will come from charging its international unions 25 cents per capita for each union member. It plans to spend 75 percent on organizing and 25 percent on executive functions.

A worker attending the gathering, Georgia Lambert, 58, of Kansas City, Mo., said she liked what she was hearing about a commitment to diversity and greater organizing.

"It's a little bit different today. Everyone seems to be going forward, ready to burst, ready to go," she said.

AFL-CIO President John Sweeney said in a statement that everyone in the union movement supported the same goals.

He said the money Change to Win saved from leaving the AFL-CIO would be small compared with the cost of organizing and hadn't warranted the split.

"Their way leaves all working people weakened and vulnerable, not stronger," he said.

Copyright © 2005 The Seattle Times Company

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Wal-Mart Crashes the Fashion Party

By Pallavi Gogoi
SEPTEMBER 28, 2005                        [back to top]

Sponsoring a fashion show and running ads in Vogue may be just the first signs of upscale ambitions. Is acquiring Tommy Hilfiger next? It has been a turbulent few months in the world of fashion. First, Wal-Mart (WMT ) dropped a bombshell, with its eight-page ad insert in the September issue of Vogue, the fashionistas' bible. Now, the buzz is that the world's largest discount retailer is in talks to acquire fashion icon Tommy Hilfiger (TOM ).

Spokeswomen from both sides aren't denying the reports, only declaring they won't comment on rumors. Says Pam Danziger, founder of Unity Marketing and author of Why People Buy Things They Don't Need: "After proclaiming their entrance into the fashion world with the Vogue ad, this is a logical step for Wal-Mart."

Wal-Mart never does anything in a small way, and if the speculation is on target, this could be its latest step in an aggressive move to go upscale. CEO H. Lee Scott Jr. gave investors signals that a deal like this could be coming. At the annual meeting this year in Bentonville, Ark., Scott lamented that many customers shop for basic goods like food and paper towels at Wal-Mart but go elsewhere for apparel. "What we've got to do is make sure that those customers aren't bypassing [our] other departments," he said (see BW Online, 9/22/05, "Wal-Mart's Scott: "We Were Getting Nowhere").

BEEFING UP BRANDING. Wal-Mart's ads in Vogue are slated to run for 18 months, according to Director of Corporate Communications Gail Lavielle, who says they're "designed to show that Wal-Mart is trend-right and fashion-forward." And the chain has already started targeting the higher-income demographic by selling high-end electronics like home entertainment systems and plasma TVs.

If the Hilfiger deal comes through, some wonder if it might just be the first among several high-end brands that Wal-Mart may add to its stores. "After all, Wal-Mart has already conquered the world and put the small guys out of business. Why not move upscale now?" asks Alan Siegel, chairman of brand-strategy firm Siegel & Gale.

The retail giant is already beefing up its brand and marketing departments. In April, it promoted John Fleming to chief marketing officer. Fleming had spent 19 years at cheap-chic retailer and archrival Target (TGT ), where he was responsible for the famed fashion divisions, among other things. And on Aug. 31, Wal-Mart hired away Stephen Quinn, the chief marketing officer of PepsiCo's (PEP ) Frito-Lay division, to develop Wal-Mart's marketing strategy and brand development.

FADED TOMMY. Tommy Hilfiger would give Wal-Mart an entry into the rarefied world of designer chic, especially among the sought-after younger demographic. "Wal-Mart is certainly looking to hitch its wagon to a brand that can lead it to an upscale consumer base," says Robert Passikoff, president of strategic brand consulting firm Brand Keys.

Hilfiger was already on the auction block, having hired investment banks J.P. Morgan Chase (JPM ) and Goldman Sachs (GS ). It has been struggling to regain its luster as a cutting-edge preppy brand, but sales and profits have sagged.

"The Tommy brand has lost a bit of its luster," says Wendy Liebmann, president of WSL Strategic Retail, a retail consultant. For its fiscal year ended March 31, 2005, Hilfiger's sales topped $1.78 billion, down from $1.87 billion in the previous year. It reported income of $92 million, compared to $170 million in fiscal 2004.

JUST LIKE TARGET? Yet integrating the brands could pose a challenge. After all, women's Hilfiger cardigans average $60, while the most expensive sweater at Walmart.com is $19.94. Much would depend on how the deal is put together.

It would also be interesting to see what an acquisition would mean for the Hilfiger line, which is carried by innumerable specialty stores internationally. Hilfiger might be able to retain its licensing agreements with multiple retailers if founder Tommy Hilfiger decides to design a special line for Wal-Mart and keep his current "Tommy" brand intact, much as Isaac Mizrahi and other designers have done for Target.

Some industry observers speculate that Wal-Mart might do with Hilfiger what Target did with fashion designer Mossimo Giannulli in March, 2000. Target saved Mossimo from possible bankruptcy and guaranteed $28 million in annual royalties for several years. But a Hilfiger deal would have to be more complex. Mossimo was well known mostly in the California design circle -- unlike Hilfiger, which has worldwide renown and cachet. And Hilfiger is nowhere near bankruptcy -- it raked in $74 million in royalties alone in fiscal 2005.

STEPPING OUT. Investors are rooting for a Hilfiger sale. After sinking to $10.90 a share at the beginning of the year, the stock has rallied 55%, especially after reports that Hilfiger was on the auction block began to spread. It closed Sept. 27 at $17.25, up 26 cents in the last two days of trading since the reports of the Wal-Mart talks. The behemoth's shareholders seem to be blasé about the prospect of the megastore snatching up a new accessory -- its stock has barely budged from around $43 over the past few days.

It's too early to tell whether Wal-Mart can successfully bring some fashion runway pizzazz into its Main Street stores at a price that's both profitable and affordable. But Wal-Mart is clearly on the move. It teamed up with teen magazine ELLEgirl and sponsored a fashion show during New York's Fashion Week at Times Square Studios, where the runway spilled onto the street, allowing pedestrians to watch. Now the trick will be to get those pedestrians into Wal-Mart stores to shop for fashion at "everyday low prices."

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Delay in class-action lawsuit brought against Wal-Mart by Que. employee

Canadian Press
Tuesday, September 27, 2005            [back to top]

MONTREAL (CP) - Quebec's Superior Court has delayed handing down a decision about whether a former Wal-Mart employee can go ahead with a class-action lawsuit on behalf of 190 workers who lost their jobs when the retail giant shut their unionized outlet. Workers at the Saguenay, Que., store became the first Wal-Mart employees to unionize since a Windsor, Ont., outlet was briefly accredited in the 1990s.

Wal-Mart closed the Quebec store before the workers could obtain a collective agreement.

The class-action lawsuit calls for Wal-Mart to pay up to $20,000 in compensation to each of the store's workers for damages resulting from the store's closure.

Lawyers representing Wal-Mart argued Monday that Quebec Superior Court did not have the jurisdiction to hear the case. They said it should be up to province's labour relations board to deal with the lawsuit because it relates to elements in the Quebec Labour Code.

"The essence of the litigation surrounds the right to unionize and the rights and obligations of the employees," Alexandre Buswell, a lawyer for Wal-Mart, told the court.

Buswell pointed out that the labour board had already dealt with complaints stemming from the decision to close the outlet.

On Sept. 16, the board ruled that Wal-Mart didn't prove that the unionized store was in financial trouble when it closed last spring.

The union had argued the closure of the Saguenay store, 250 kilometres north of Quebec City, was designed to intimidate other workers who might want to unionize.

Lawyers representing the employee who filed the lawsuit told the court Monday the class-action lawsuit wasn't being filed under the province's labour code, but under its charter of rights and freedoms as well as its civil code.

The judge is expected to rule on Wal-Mart's request in the coming days.

© The Canadian Press 2005

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Region adds own spin to Wal-Mart debate

September 26, 2005                                 [back to top]

Around the country, new Wal-Mart stores have been opposed for many reasons, including the company’s anti-union reputation, its effect on downtown merchants in smaller communities, and class-action complaints on behalf of women employees.

Leave it to this region to do what it often does best: Throw in the race card.

A local developer wants to raze Wonderland Mall and create a new development anchored by a 24-hour Wal-Mart Supercenter. In August, a few Livonia residents at public meetings abandoned all pretense of political correctness and laid out concerns about crime and African-American shoppers and employees. The majority who spoke cited traffic and noise.

The controversy is healthy if it forces this region to confront the persistent racial issues and attitudes that other regions seem to have handled better and earlier.

But here’s a question for Wal-Mart Stores Inc.: Why isn’t the company building a store in Detroit in addition to blanketing the suburbs?

The company is executing an urban strategy all over the country, including in Chicago, where it’s hoping to build on the city’s South Side to complement roughly 20 stores that ring the city in inner suburbs.

Somebody at Wal-Mart should wake up to the opportunity for a huge public-relations windfall.

Budget deal shows promise

Politicians take punches in print for much that goes wrong. So it’s important to dole out praise when things go right, as they have in the give-and-take used to arrive at Michigan’s $40 billion budget. The fiscal 2006 plan takes effect Oct. 1.

As Amy Lane reports in her story on Page 1, a business-backed initiative to revamp the budget process paid dividends this year and promises even more in future years.

The Michigan Chamber of Commerce and the Michigan Association of Realtors gave $700,000 for a consulting project that helped lawmakers and the governor’s office adopt strategies espoused by authors Peter Hutchinson and David Osborne.

So the 2006 spending plan now sets pay-for-performance goals in education, requires co-pays for some Medicaid recipients and asks them to sign a “personal responsibility agreement” requiring recipients to practice specific healthy behaviors. Auditors will now examine job-creation claims from state-offered tax incentives.

The whole idea of the Hutchinson-Osborne playbook is to agree on spending limits, set priorities and let some nonessential programs fall by the wayside.

But this year, the three major parties — House, Senate and governor’s office — didn’t agree on a common set of priorities. Maybe next year.

Entire contents © 2005 Crain Communications, Inc. Use of editorial content without permission is strictly prohibited. All rights Reserved

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Workers Sue Wal-Mart Over Sweatshop Conditions

Monday, September 26                            [back to top]

From REUTERS
Published: September 13, 2005

LOS ANGELES (Reuters) - Workers in six countries filed a class-action lawsuit against Wal-Mart Stores Inc. on Tuesday, claiming the world's largest retailer overlooks sweatshop conditions at toy and clothing factories from China to Nicaragua. br> The suit, filed in California state court in Los Angeles, lists as plaintiffs 15 workers in Bangladesh, Swaziland, Indonesia, China and Nicaragua. They claim they were paid below minimum wage, forced to work unpaid overtime and in some cases even endured beatings by supervisors.

The lawsuit also lists four California plaintiffs, including two unionized workers at Kroger Co. unit Ralph's and Safeway Inc. grocery stores, who claim Wal-Mart's entry into Southern California forced their employers to reduce pay and benefits.

The suit could cover anywhere from 100,000 to 500,000 workers, according to attorney Terry Collingsworth of the International Labor Rights Fund, which represents the plaintiffs. Wal-Mart's potential liability could be in the hundreds of millions of dollars, he said.

Beth Keck, a spokeswoman for Wal-Mart's international operations, said the retailer had not been formally served with the lawsuit, but had received a copy from journalists who obtained it from the lawyers involved.

``It's really too early for us to be able to say anything about this particular complaint,'' Keck said. ``It involves a number of companies and manufacturers and we're just beginning our research to learn more. We're just at that beginning research phase.''

ALWAYS LOW PRICES

Wal-Mart became the world's largest retailer by buying cheap, foreign-made goods and selling them to consumers at rock-bottom prices every day.

Critics, however, say that low-price obsession has pressured store managers to overwork nonunion employees and the retailer has been hit with dozens of lawsuits claiming violations of wage-and-hour laws.

The company has also been the target of discrimination lawsuits. Last year, a judge said a lawsuit that charges the company discriminated against women in pay, promotions and training could proceed as a class action. That suit, the largest workplace bias lawsuit in U.S. history, covers as many as 1.6 million current and former female U.S. employees.

The mounting litigation has taken a toll on Wal-Mart's reputation and the Bentonville, Arkansas-based company has responded with a national advertising campaign aimed at repairing the image of its 5,100-store empire.

According to Tuesday's complaint, Wal-Mart breached its own agreement with foreign suppliers in its failure to monitor factory working conditions.

``Investigation after investigation of Wal-Mart's operations and suppliers reveal that Wal-Mart is an unrepentant and recidivist violator of human rights,'' the lawsuit said.

The plaintiffs allege Wal-Mart's ``vast economic power'' allows it to impose price and time requirements on supplier factories that result in sweatshop conditions.

The retailer ``knew or reasonably should have known that its suppliers would violate'' worker's rights, but continues to do business with those factories, the lawsuit said.

Wal-Mart's Keck declined to comment on the company's factory policies because of the pending lawsuit. In a statement on its Web site regarding sweatshop allegations -- though not specifically this lawsuit -- Wal-Mart said it ``strives to do business only with factories run legally and ethically'' and that it ``is helping to improve working conditions and create economic opportunity for workers around the world.''

Violations alleged to have occurred in Wal-Mart supplier factories include withheld pay, poor working conditions, reprisal firings for labor union activity and beatings.

In a Bangladeshi dress factory, a pregnant seamstress who paused on the production line was ``kicked hard in her stomach'' by her supervisor, according to the lawsuit. Another was slapped in the face with pants whenever she was unable to meet a quota of 120 pairs per hour.

In Indonesia, one worker in a facility producing ``George'' label clothing for Wal-Mart regularly saw company representatives visit the factory and overheard her supervisor saying ``with Wal-Mart, we cannot have overtime (pay).''

The foreign plaintiffs are seeking a jury trial, compensatory damages and injunctive relief. Lawyers for the workers said their clients could not seek redress in their home countries because of corruption, the lack of independent judiciaries and for fear of reprisals.

Suit Says Wal-Mart Is Lax on Labor Abuses Overseas

Reprints. By STEVEN GREENHOUSE
Published: September 14, 2005

A labor rights group filed a class-action lawsuit yesterday against Wal-Mart Stores in which apparel workers in Bangladesh, China and other countries assert that Wal-Mart violated its contractual obligations by not enforcing its code of conduct for overseas contractors.

The lawsuit, filed in state court in Los Angeles, makes the novel argument that Wal-Mart's code of conduct created contractual obligations between it and thousands of workers employed by contractors who were supposed to comply with the code.

In the lawsuit brought by the International Labor Rights Fund, workers from Bangladesh, China, Indonesia, Nicaragua and Swaziland assert that the codes of conduct were violated in dozens of ways. They said they were often paid less than the minimum wage and did not receive time-and-a-half for overtime, and some said they were beaten by managers and were locked in their factories.

"Based on its vast economic power, Wal-Mart, based on its code of conduct, can and does control the working conditions of its supplier factories," the lawsuit states. "It could use its power and position to prevent its producers from profiting from the inhumane treatment of plaintiffs."

Beth Keck, a Wal-Mart spokeswoman, said the company was studying the lawsuit. "It's really too early for us to go into any kind of detail about this complaint," Ms. Keck said. "It involves a number of countries, suppliers and factories. We will be looking into this and taking it very seriously."

Wal-Mart executives say that they have the world's largest overseas monitoring program, with more than 5,000 factories inspected by 200 full-time inspectors who visit 30 factories a day. The executives say that when inspectors find violations, they give factories several months to fix any problems before another inspection.

Last year, according to the company's ethical standards report, Wal-Mart cut off 1,200 factories for at least 90 days because serious violations were found in the second visit. Another 108 factories were permanently banned, primarily because of child-labor violations.

In the lawsuit, two male workers for Wal-Mart contractors in Shenzhen, China, asserted that they were not paid the minimum wage, not permitted to take holidays off and were forced to work overtime. They said the contractors withheld the first three months of all workers' pay, almost making them indentured servants because the company refused to pay the money if they quit.

An apparel worker in Dhaka, Bangladesh, said that she was locked into the factory and did not have a day off in her first six months. She said that she was told if she refused to work the required overtime, she would be fired. Another worker said her supervisor attacked her "by slapping her face so hard that her nose began bleeding simply because she was unable to meet" her "high quota."

The complaint tells the stories of 16 plaintiffs, but lists them as John and Jane Does, saying they need to be protected against reprisal. Several said they were fired or suspended for backing unions.

The lawsuit accuses Wal-Mart of breach of contract for wage violations, forced labor and denying workers the right to associate freely. It also accuses the company of negligence, unjust enrichment and fraudulent and deceptive practices in violating California's business code.

Terry Collingsworth, executive director of the International Labor Rights Fund, a Washington-based advocacy group, asserted that filing the lawsuit in California was appropriate because Wal-Mart had violated that state's laws. He said that if the plaintiffs had filed the lawsuit in their home countries, they would have faced arrest, physical attacks and hostile judicial systems that favored corporations.

He faulted Wal-Mart's monitoring system, contending that fewer than 10 percent of its inspections were unannounced. He said company managers often coach workers on what to tell the inspectors.

Wal-Mart executives say that they are working to improve the monitoring and that more inspections will be unannounced.

"With our growth, the challenge of ethical sourcing has become increasingly complex," H. Lee Scott Jr., Wal-Mart's chief executive, wrote in the company's 2004 Report on Standards for Suppliers. "But we have a qualified ethical standards team dedicated to verifying that factories are in compliance with local labor laws and/or Wal-Mart standards, whichever are more stringent."

An Indonesian plaintiff who said she made jackets for Wal-Mart's private-label George line complained of unpaid work hours and unpaid overtime, saying that she often worked from 7 a.m. until 8 or 10 p.m. Mondays through Fridays. She said she also had to work on Saturdays from 7:30 a.m. until 3 or 4 p.m.

Another Indonesian worker said, "Wal-Mart production quotas were far higher than quotas from previous buyers, and her supervisor regularly yelled at her and her colleagues if the work was not performed quickly enough."

An apparel worker in Matsapha, Swaziland, said he sometimes had to work from 7 a.m. to 11 p.m. and once worked all night. "He was threatened with immediate dismissal if he did not work overtime, and the factory doors were locked to ensure he did not leave," the lawsuit asserted.

Mr. Scott wrote in the ethical standards report, "It is important to recognize the reality that however strong the programs we develop, violations of our standards will occur." He added that it was a point of pride with Wal-Mart when violations were discovered, action was taken.

The plaintiffs include four unionized California supermarket workers who say that they suffered cuts in pay and benefits because of competition from Wal-Mart's low prices. They argue that those prices are attributable in part to violations of the chain's suppliers' code of conduct.

This article comes from No Sweat http://www.nosweat.org.uk/

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Recall election in Jefferson has Wal-Mart theme

Meg Turville-Heitz
Madison.com
September 25, 2005                        [back to top]

JEFFERSON - It's all about Wal-Mart.

It's a refrain being heard all over Wisconsin as municipal government decisions have divided cities, and elections have hinged on it. And now Wal- Mart is the focus of a recall election in Jefferson on Tuesday.

In Stoughton, City Council votes over a big-box ordinance swept four alders from office. Wal-Mart threatened to close its existing store if the size allowed by the ordinance wasn't made large enough for its super center. The change was made. So far, annexation votes have failed and the city council voted against putting it to referendum.

In Beaver Dam, annexation, zoning and super center approval with city concessions were handled through a development corporation that met behind closed doors.

Citizens complained that they were presented with a done deal without public input, leading to citizen lawsuits. The attorney general's office determined that a development corporation acting as an arm of city government can't operate outside the public process.

In Monroe, a proposed super center was voted down by 68 percent of voters in the April elections, but Wal-Mart officials told locals it hadn't rejected the city as a super center site.

And when Fort Atkinson turned down a Wal-Mart super center, Wal-Mart moved its efforts five miles up the road to Jefferson, where two annexation votes for a 22-acre parcel were turned down by the city council. The ensuing battle has led to the city pulling its ads from a local paper with anti- Wal-Mart views, and a recall election Tuesday aimed at ousting an alderman who would be up for re-election in six months.

Jefferson Ald. David Olsen said of the petition to recall him, "The coalition that got the signatures went door to door and said I broke open meetings law" when he allowed Wal- Mart opposition members to speak at a meeting when they were not listed on the agenda. The state has determined that the law was not violated. He said the group made it sound as if it's not about Wal-Mart.

When Charlotte Goers-Nevin, who led a recall charge against Olsen, was asked to explain what issues the recall hinged on now that Olsen had been vindicated, she stated that it was "because Mr. Olsen has not acted in the best interest of the city." When pressed, she said he was disruptive in council meetings and turned down an annexation. When asked if it was about the Wal-Mart site, she abruptly ended the interview.

Olsen's opponent, Chris Havill, general manager of Havill- Spoerl, an auto dealership in Jefferson, said he chose to step in and run because "last year I became increasingly frustrated with members of the Council who are consistently negative" about several things, "but primarily the annexation request for a large property within city limits, based on an assumption of a Wal-Mart coming in. And by turning down that, they killed all other possibilities" for development on the parcel.

Havill said that "three council members who are slated by a vocal minority" stopped it. He said Olsen misled those who voted for him into thinking he would favor the annexation. He contends it's the anti-Wal-Mart people making it about Wal-Mart when it is really about sending a message about a positive business development atmosphere.

Olsen said it is simply bad public policy to hinge a recall on a single-issue vote. Recalls should be reserved for public officials who break laws, Olsen said.

"It's all about Wal-Mart," he said."After the second vote (against annexation), Wal-Mart was quoted as saying they had walked away from that site altogether to move on to other projects. And then they renewed the option on the land. They told me, if you change your vote, you'll get the following concessions. They tried to entice me to change my vote."

Olsen said he thought the site was inappropriate for a super center and questioned Wal-Mart as a poor community citizen for a history of union busting, low wages, and discrimination against women. "There's a Wal-Mart in Watertown and one in Whitewater. It takes about 12 minutes to get there. At what point is there enough Wal-Marts?"

Havill said he hopes he is seen as a positive force for business development and that a silent majority of supporters will come out for him Tuesday.

Olsen said four "levels of anger" are likely to affect the voting: "Those who just don't want a Wal-Mart super center, those who would like one but just not in that spot, those who don't think you should recall because of a vote you don't like, and those who don't think we need Wal-Mart running the city."

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Wal-Mart's Scott: We're Not "Anti-Union"

SEPTEMBER 23, 2005                     [back to top]

In Part 2 of this Q&A, the CEO defends Wal-Mart's position on unions and explains why it's going after more affluent customers In the last three years, critics have attacked Wal-Mart Stores (WMT ) on a variety of fronts. After long remaining silent to such criticism, Wal-Mart CEO H. Lee Scott Jr. has begun to reach out to adversaries.

In an interview on Sept. 14 with BusinessWeek Chicago Correspondent Robert Berner, Scott for the first time discusses the details of Wal-Mart's public-relations offensive and what he hopes to achieve. Edited excerpts of their conversation follow. (This is Part 2 of an extended version of an interview that appears in the Oct. 3, 2005, print version of BusinessWeek. Part 1 was published on Sept. 22, 2005.)

You're reaching out to environmental and anti-sweatshop groups. Why not reach out to labor unions? I don't see any benefit to it. What I found in reaching out to these other groups is that while there are exceptions, in most cases they would like for Wal-Mart to be successful. That is fine with them. What they would like to see us do is change in a way that really makes a contribution to society.

For people who are worried about the environment it's one thing. For people who are worried about other aspects of society it's different. I do find it easy to work with those people because I believe they are sincere about what this world should look like. I don't necessarily always agree with them. I can learn from those people and learn where it is Wal-Mart can change to be a better company, more likely to be embraced or at least tolerated.

That isn't the agenda of the unions? [Silence. No answer.]

Why is Wal-Mart anti-union? Gosh, I don't think of us as being anti-union. I think of us as having a company where we have an open-door policy. In this company, you can talk to your district manger. You can talk to Lee Scott. You can talk to whoever you want to about what is happening. You don't have to go to a third party and say "here is my issue." You can get your issue resolved.

How would unions prevent that? I think historically unions exist because they believe they represent the employee. In our case, I believe I exist because I represent the associate and the customer.

Will your steps to be more environmentally sound and protect the rights of foreign factory workers change your low-cost business model? That is what you have to be careful about. There are things that change your business costs. When it comes to environment there is so much we can do as company that actually lowers our costs: reducing the amount of trash we create, which reduces the amount of transportation we have to have, which reduces the amount of fuel we have to burn.

Actually, there are years worth of work that should be adding to the bottom line and be a competitive advantage for us, not a competitive disadvantage. I think that is the appropriate place to start because you are not now dealing with does it price the customer out of the television. It is going to allow us to sell for less.

Why are you trying to capture the more affluent customer in addition to your lower-income customer base? The more money you have, the more likely you are to buy your consumables at Wal-Mart and buy other products outside of Wal-Mart. This dollar that we capture on the consumable side is the lowest margin that you have in the store. Home, apparel -- all of those things have significantly higher margins.

What do we do to cause them to shop through [our stores] in a broader way? We are not going to compete with Neiman Marcus (NMGA ) or Saks (SKS ). But when they want to buy a sweater for Saturday night, why is it we can't sell them a black sweater?

From a business standpoint, what would it mean if you did capture more affluent customers dollars? It's clearly billions of dollars.

Would a Wal-Mart that's more environmentally sensitive and more concerned with sweatshop issues resonate better with upper-income shoppers? Yeah, I think so. In many cases the people on the upper end of that spectrum are more socially active because they're not living day-to-day and figuring out how they are going to get their kids through the next three years.

They do think about [social issues] differently. If we go out and do the right thing, we remove those kinds of barriers or those kinds of alerts that cause a person to have some concern. As you do that and you give people the freedom to feel good about you, then they are more willing to take a look.

What about with Wal-Mart employees? The driving issue for me is twofold. No. 1 is our associates deserve and expect to see me out there representing this company and taking the hard knocks. And they deserve to know we're reaching out and doing something.

It's like one e-mail I got: "I know in my store I have health insurance, I have a good wage. I am treated well by my store manager. Is my store an exception?" All they know about is their store and how they are treated. That's the primary reason [for our outreach].

The secondary reason is because we as a company must be bold. We need to continue to evolve into a better company. And the only way for me to do that is to make sure that I am out there listening and understanding. How do we put the same level of energy [we put into saving money for our customer] into our approach to diversity, our approach to community interaction so that the community feels great about that Wal-Mart store being there?

I don't endorse the word polish. Our goal is not to polish our image. Our goal is to have the world understand who we are. And where we have failures or missteps [we have to] very aggressively try to say "yes, that we didn't do that as well as we should have."

By reaching out to people with environmental and anti-sweatshop concerns and not labor unions are you trying to divide your critics? We have no strategy to divide. This is about us. We have full-time job here doing this. We are not asking anyone to take sides.

All we are asking is that people look at us for what we are and share their concerns and be open to us talking to them about what we are today and what our aspirations are for this company.

Edited by Patricia O'Connell

Copyright 2000-2004, by The McGraw-Hill Companies Inc. All rights reserved. 

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Can Wal-Mart Wear a White Hat?

By Robert Berner
SEPTEMBER 22, 2005         [back to top]

After years of ignoring its critics, the retailer is embarking on a charm offensive, showing compassion and thinking green In August, seven media-savvy professionals from Edelman, a Chicago public relations firm, flew to Bentonville, Ark., for an unusual assignment. Although they remain on Edelman's payroll, the PR experts, some of them seasoned veterans of political campaigns, now run a new office deep in the headquarters of Wal-Mart Stores (WMT ).

Dubbed "Action Alley," the office -- as well as a similar one in Washington, D.C. -- acts as the nerve center of the world's largest retailer's campaign to soften its public face. Backed by Wal-Mart's own publicity staff, the team responds within hours to any new blast of criticism.

SWEET CHARITY.

The troops also try to spin positive stories about the corporate giant. As they sat facing one another around three tables arranged in a U shape one day in mid-September, Hurricane Katrina was still high on the agenda. Action Alley had scored a bull's-eye after just weeks on the job when it garnered widespread national publicity about Wal-Mart's efficient relief efforts following New Orleans' devastation.

Now the team was deep in follow-up, making press calls guided by talking points scrawled on the felt-marker boards lining the perimeter of the room: "EOC," for emergency operations center, which earned so much praise for coordinating the company's disaster response. Plus, "associate stories," referring to the experiences of individual employees during the storm, and "donation-partnership," meaning stories about Wal-Mart's charity.

Already, "we have had some great successes," exults Wal-Mart Corporate Affairs Vice-President Robert McAdam, who heads the new office.

SHARE-PRICE DROP.

H. Lee Scott Jr., Wal-Mart's tough CEO, is on a charm offensive -- and how it plays out could change perceptions of the retailing leviathan at home and abroad. For several years, Scott shrugged off relentless criticism, but he now admits the broadsides on everything from labor practices to suburban sprawl were starting to inflict real damage.

In fact, U.S. sales growth at stores open at least a year has fallen by half over the past four years, to 3% in 2004. So this year, Scott decided to speak out.

"When growth was easier, this idea of critics simply being ignored was O.K. [But] as the share price slows, you have to get to this point," Scott told BusinessWeek at his Bentonville (Ark.) headquarters, where for the first time he discussed details of the company's outreach effort.

REACHING OUT.

The outcome, he says, is the most comprehensive publicity blitz Wal-Mart has ever mounted. Early this year, sensing that bad press was undercutting the lure of low prices, the retailer launched a national ad campaign about its corporate citizenship.

Now, in addition to Action Alley, Wal-Mart has opened eight community-relations offices nationwide to answer local criticism. It also has approached two environmental groups and will soon announce a major initiative to curb waste by reducing packaging.

And Wal-Mart hired a nonprofit group to reach out to anti-sweatshop groups and improve monitoring of overseas factories. "We have to continue to evolve in how we operate and how we interface with society," says Scott.

DISCOUNTS THREATENED?

What's not yet clear is how far-reaching the changes will be. The company lost a lawsuit alleging that supervisors forced employees to work off the clock, and settled another about its contractors using illegal immigrants.

But responding to other complaints could require costly changes to Wal-Mart's core low-cost, low-price business model. For instance, the company is still battling a massive class action alleging that it discriminates against female employees in pay and promotions. At this stage, Scott is adamant that Wal-Mart continue to focus on low costs to remain competitive with other discounters.

"You can't be throwing away things that are the key to your success," he says. But Scott is all for image-enhancing efforts to broaden its appeal to affluent customers. And observers say that environmental and anti-sweatshop plans could help deflect criticism of other areas that are harder to alter, such as low wages and benefits.

CONSERVATION.

The danger, of course, is that detractors will be inflamed all the more if they perceive Wal-Mart to be better at talk than action. "Their reputation in the area of trust has been slipping, and trust was probably their greatest asset," says Chris Ohlinger, president of Service Industry Research Systems, a market research company. He says consumer surveys show that the accumulation of negative publicity has contributed to sluggish sales growth.

Yet already, Wal-Mart is being prompted to change more than Scott expected when he started down the kinder, gentler path. When the company reached out to the Natural Resources Defense Council and Conservation International, talks centered on generally reducing its impact on the environment.

But they quickly led to a concrete goal: Cut paper and plastics and save fuel by shipping more items on one truck. By reducing the packaging of 16 toys, Wal-Mart eliminated 230 cargo-ship containers.

MASSIVE POWER.

This follows the July opening of an eco-friendly store in McKinney, Tex., soon to be followed by another in Aurora, Col. The experimental supercenter receives electricity from solar panels and wind turbines. It gets heat from burning the motor oil left after lube changes and the fat used to fry chickens.

The environment, Scott says, is where Wal-Mart, with its massive market size, can make a real difference. A greener Wal-Mart could also be helpful when facing opponents in places like California, notes Patrick McKeever, a retail analyst at SunTrust Robinson Humphrey.

Wal-Mart may find it a lot tougher to make progress on the sweatshop front. Last year it began working with Business for Social Responsibility (BSR), a San Francisco nonprofit, to reach out to groups active in monitoring overseas plants.

SWEAT-SHOP CHALLENGE.

The move came a year after Wal-Mart brought in a labor expert to expand its in-house global factory-inspection program. The expert, Rajan Kamalanathuan, won respect from anti-sweatshop groups by setting up such a system at Asda Group -- a British grocery chain with suppliers in low-wage countries -- which Wal-Mart bought in 1999.

Kamalanathuan says the company hasn't yet decided how far it will go. For years, critics have asked Wal-Mart to follow Nike (NKE ), Gap (GPS ), and others by opening suppliers' factories to independent inspectors. Wal-Mart currently uses in-house monitoring, which, critics say, leaves outsiders unable to verify reforms.

Wal-Mart's campaign bears striking similarities to those undertaken by companies such as Nike. A decade ago, when the sneaker maker was first hit by sweatshop allegations, for example, it tried to quickly burnish its image and reach out to moderate critics. But the dialogue soon forced Nike to take steps management had long resisted, such as submitting suppliers' factories to random inspections by independent labor monitors.

Wal-Mart may well follow a similar course. The difference is that it has so many more issues to deal with, from sweatshops to big-box criticism to labor unions. Still, "Wal-Mart is at an early stage," says BSR President Aron Cramer, "and it's likely that they, like most companies that engage in these processes, will adapt their approach over time."

Berner is a correspondent for BusinessWeek in Chicago

Copyright 2000-2004, by The McGraw-Hill Companies Inc. All rights reserved.

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US lawmaker's bill would block Wal-Mart's bank bid

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WASHINGTON, Sept 22 (Reuters) - Commercial firms, such as Wal-Mart Stores Inc. <WMT.N>, would be blocked from controlling industrial banks under legislation introduced on Thursday as congressional auditors questioned whether these banks had enough oversight.

A Government Accountability Office (GAO) report said Congress should consider boosting the regulatory oversight of industrial banks, according to Iowa Republican Rep. Jim Leach, who released excerpts from an advance copy.

A GAO spokesman said the report was to be officially released later Thursday.

Industrial banks, also known as industrial loan corporations (ILCs), are state-chartered and state-regulated financial institutions, but commercial companies as well as financial firms can own them. They are insured and supervised by the Federal Deposit Insurance Corp. (FDIC).

Wal-Mart, the world's largest retailer, has applied to the FDIC to open an ILC in Utah, one of just five states where commercial firms may own such companies.

Under Leach's bill, any company controlling an ILC would have to become a financial holding company subject to the Bank Holding Company Act. This would block any commercial firm from controlling an ILC, but a financial company, such as an investment bank, with an ILC could keep it, Leach told a news conference.

Leach insisted his bill was not aimed at any one company. "I do not believe in mixing commerce and banking," said Leach, a former chairman of the House Financial Services Committee. "I've held this position for a decade."

Commercial companies that already have opened an industrial bank, such as Wal-Mart rival Target Corp. <TGT.N>, would have to unwind the institution if his bill became law, he said.

© Reuters 2005. All rights reserved. 

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Opposition mounts against Wal-Mart bank proposal

Retail Bulletin
Thursday September 22 2005                    [back to top]

More than 100 letters opposing Wal-Mart’s application to open an industrial loan bank in Utah have been sent to the Federal Deposit Insurance Corporation, the largest response the Washington agency has seen in recent memory, said spokesman David Barr.

Industrial loan companies and industrial banks are FDIC-supervised financial institutions whose distinct features include the fact they can be owned by commercial firms that are not regulated by a federal banking agency. These type of financial facilities do not offer checking accounts and are often used to process credit card transactions.

Wal-Mart applied for its industrial loan bank charter in July. Since then, comment letters from banks, individuals and organisations across the country have poured into the FDIC. Barr said normally the agency's regional office, in this case, San Francisco would make a decision on the application. Because of the "heightened interest" in the application, it was transferred to the Washington office.

"We do take (the letters) into consideration (in making a decision). But people need to realize that we also review the business plans, which includes some confidential information not part of the public disclosure. Plus, we go through an extensive background check," said Barr

"For an application of this complexity, and the fact that it's going to be taken care of in our Washington office, it will probably be 200 to 300 days before a decision is made. Normally, it takes less than 120 days."

All contents copyright © 2005 Retail Bulletin All rights reserved.

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Wal-Mart's Scott: "We Were Getting Nowhere"

SEPTEMBER 22, 2005                         [back to top]

It was high time to meet with critics, the CEO says, because it could no longer ignore them. But don't look for any major wage raises soon In the last three years, critics have attacked Wal-Mart Stores (WMT ) on a variety of fronts. The world's largest retailer has been accused of creating a permanent underclass by paying rock-bottom wages and being stingy on benefits. Its labor image hasn't been helped, either, by lawsuits over employees working off the clock and alleging discrimination against women workers. Its stores, meanwhile, have been criticized for doing environmental damage and creating congestion and sprawl. In California, communities have actually tried to block Wal-Mart stores.

Having long remained silent in the face of such criticism, Wal-Mart CEO H. Lee Scott Jr. has begun to reach out to adversaries. In an interview on Sept. 14 with BusinessWeek Chicago correspondent Robert Berner, Scott for the first time discusses the details of Wal-Mart's public-relations offensive and what he hopes to achieve (see BW Online, 09/22/05, "Can Wal-Mart Wear a White Hat?"). Edited excerpts of their conversation follow. (This is an extended version of an interview that appears in the Oct. 3, 2005, print version of BusinessWeek. It will run in two parts.)

Wal-Mart has aggressively started to reach out to its critics. You are starting an environmental initiative to cut down on packaging materials. You are reaching out to anti-sweatshop groups. Why the change? When growth was easier this idea of critics being ignored was O.K., because you were getting all this positive feedback from the numbers. As the share price slows [and] the critics are attacking, you have to get to this point.

Maybe not all of our critics wish us harm. Maybe some would like us to be a better company and do things differently. So you start reaching out...trying to understand what is it about us that causes them to have this concern. How much of it is legitimate? How much of it is misinformation? What is it that we need to change? What is it we can't [change] that we will hopefully be able to communicate?

Tell me about your packaging efforts? What really happens when you get large is you have to be much better to get the advantages that come with being large. That is where something like [environmental] sustainability is a wonderful opportunity because our footprint is so large. As we do the right thing we have an impact across so many industries, so many countries. And we are finding tremendous cost savings while doing better things for the environment.

Packaging is one of the simple ones, and shame on us for not having done it earlier. We just changed the packaging on 16 private-label toys. It saved 230 containers coming from overseas, which is equal to so many barrels of oil, so many trees, and all the rest of that -- and we didn't change any of the product inside. It saved more than $1 million in transportation costs [during the spring].

I think we are going to find a lot of low-hanging fruit in that area. In our energy management of our stores we have a number of things we're doing that we will be talking about publicly over the next month or two.

You have also reached out to some anti-sweatshop groups. Would you consider joining an organization like Nike (NKE ) that conducts independent monitoring of labor conditions in fore I think we're actually looking at that now, and we are doing that in a country or two. We would like to make sure it's [an organization] whose focus is really on those people and not some other agenda.

When did you step up the outreach? We really started last year -- the visible part, the press part. Certainly, the first of this year. But way, way before that I started having meetings with people who don't have a natural love for Wal-Mart.

Like whom? Former Clinton White House people. Politicians who would only meet me in secret. Just dinners and lunches and private meetings. Just talking and listening. For the most part listening.

I already know what I think. I want to hear what they think. What is their objection to Wal-Mart? What resonates with them that they hear out there?

One leading Democrat at the end of a three-hour dinner said, "your associates and your customers are the very people that we say we represent and you know more about those people" -- which I think is true because they shop with us.

What were the forces that made you turn more outward? You have board members that have different perspectives. We were getting nowhere the way we were doing it. Sam [Walton, founder of Wal-Mart] had a wonderful capacity for criticism. And for most of us, I think it is harder. We personalize it and internalize it.

It's human nature to be defensive about it. So this is a time to be entrepreneurial in a different way.

Wal-Mart has never had an outreach program like this? No. We always believed that if we sat here in Bentonville and took care of our customers and took care of associates that the world itself would leave us alone.

So what changed? The dot.com bust occurred and companies weren't as celebrated as [they had been] in the late '90s. We got stronger in food, and it became apparent to people in the food business that Wal-Mart was going to be an extremely capable competitor. The expectations of society changed.

At the same time, politics changed. Things became more bitter and divided. And I think Wal-Mart, in fact because of our size, was in the middle of that.

Didn't the labor practices you were accused of add to that? Actually, the issue of being in food and being so successful raised the profile of our labor exceptions [i.e., the lawsuits over work hours and immigrants].

You mean with the [United Food and Commercial Workers' International Union] and their interest in organizing Wal-Mart, and the fact that Wal-Mart was moving onto the union's turf? Right. Therefore, when we had these exceptions in what we should do as a company, they became very much more visible. We had the CEO of a $30 billion company in three weeks ago talking to our management team about leading, and he said, "There isn't anything you are faced with, from a class-action lawsuit to the rest of the stuff, that we are not dealing with in our company. The only difference is that yours is played out on the front page of the paper and you never read about ours."

You are reaching out to environmental groups and anti-sweatshop groups, and being a model company on those fronts. Why not be a model retail employer and set the standard in paying higher wages and benefits? I think in many ways we are.

Well, you're always being accused of paying rock-bottom wages and benefits. Sure, we're always accused of that. On the other hand, at Wal-Mart you can -- without a high-school degree -- start as a cart pusher in the parking lot and end up being a store manager, district manager, a regional vice-president. You have wonderful opportunities at Wal-Mart that are not limited by your education or your ability to ennunciate as exactly as people would like. It is a very democratic company. I think that is a model.

Why is that? We work in an industry where we compete with Target (TGT ) and Dollar General (DG ). And we cannot set employment practices that set the standard worldwide for all industries and forget that the industry we are in is a much different kind of industry.

The jobs we provide are jobs people [use] to enter the workforce. Many people join us to learn about work, learn about working in a team environment.

There are other people that have an affinity for retail and want to build a career. Companies like Wal-Mart provide them that opportunity at a competitive salary. We have 1.2 million associates in the U.S. It is extremely difficult to believe that you could have that many people working for you if you weren't [offering] for your industry very competitive benefits, 401(k) plans, profit-sharing, time off and health insurance, company-paid life insurance. You couldn't have the people there if you didn't do these things.

Why couldn't you pay wages above the industry average, like warehouse club Costco (COST ) does? I think the Costco model, their sales per square feet, and the revenue they generate per store allows them to do the things they do. They have a different model. Much fewer people. A different customer base. That model doesn't work at Wal-Mart. But it certainly works for them.

(In Part 2, Scott defends Wal-Mart's position on unions and explains why it is going after more affluent customers.)

Edited by Patricia O'Connell

Copyright 2000-2004, by The McGraw-Hill Companies Inc. All rights reserved. Terms of Use Privacy Notice

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Wal-Mart proposal OK’d by Livonia Planning Commission at contentious hearing; City Council must still approve

By Brent Snavely
September 21, 2005                              [back to top]

Schostak Bros. & Co.’s proposal to raze Wonderland Mall and build a new center that would include Target and Wal-Mart cleared a hurdle early Wednesday morning after passage by the Livonia Planning Commission despite opposition from residents and community groups.

The commission voted 6-1 at about 2 a.m. to send the site plan for Wal-Mart to the Livonia City Council with a conditional recommendation for approval. The proposal will be up for public comment during a City Council study meeting Oct. 17 and is expected to be on the council's agenda for a vote at its regular meeting Oct. 26.

The commission said that Wal-Mart can operate its store only between 6 a.m. and midnight, said Livonia Planning Director Mark Taormina. Wal-Mart wants to operate its store 24 hours a day. Although Grand Rapids-based Meijer Inc. operates a 24-hour store nearby, many residents opposed Wal-Mart’s proposed hours.

“No 24-hour store has ever existed on this property,” said Donna Mulcahy, a Livonia resident and member of Citizens for a Better Livonia, a group formed to oppose Wal-Mart. “They don’t work well for our concept of a neighborhood.”

The community group told commissioners that more than 4,000 Livonia residents have signed petitions opposing Wal-Mart.

Residents have said they are concerned about the potential for increased crime as the new center draws shoppers from Detroit.

John Walsh, the commission’s chairman, warned residents at Tuesday’s meeting against expressing opinions tinged with racism.

“The issue of race has not and will not have an affect on our decision this evening,” Walsh said. “I recommend that those harboring racist fears to keep those thoughts to themselves.”

Most residents talked about details of the site plan, including the amount of light the stores will give off, the number of daily truck deliveries, and the location of a retention pond near homes.

Robert Schostak, president of Southfield-based Schostak Bros., said the proposed shopping center includes a retaining wall and sets a high development standard for the area.

“This plan includes two of the world’s largest retailers,” he said. “There are a lot of ways to do this property less expensively, for sure.”

Schostak bought Wonderland Mall in 1983 and renovated it several times. The mall closed in 2003, though the Target store has remained open.

Schostak’s $80 million-$100 million plan calls for a 126,000-square-foot Target store, a 204,000-square-foot Wal-Mart Supercenter, an additional large unnamed tenant and about 40 specialty food and retail shops.

Entire contents © 2005 Crain Communications, Inc.

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Jeremy Warner's Outlook: Wal-Mart has gone crying to the regulator, yet Tesco has simply out-traded the retail goliath

Published: 21 September 2005                 [back to top]

Complaining to regulators about supposedly unfair competition is what business losers do best. What better place to hide, when the going gets tough, than behind Europe's dizzying cacophony of competition law, which in the name of diversity and consumer choice can usually be relied upon for protection from better managed, more innovative rivals.

This is a point of view that Wal-Mart would wholeheartedly endorse back on its own home turf in the United States, where it has swept all before it to become the most powerful retailing force in the world. In little ol' Britain, however, this bully boy of the global retailing industry has chosen to complain to the Office of Fair Trading about the growing power of our very own Tesco.

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Eating Wal-Mart's Lunch

By Alyce Lomax
TMF Lomax
09/21/2005                                 [back to top]

Some headlines that many might find unsavory plagued retail giant Wal-Mart(NYSE: WMT) earlier this week. According to allegations waged in court in California, Wal-Mart bilked its employees out of the unpaid lunch breaks they were entitled to under that state's laws -- paltry half hour that those required breaks may have been. But wait a minute, you say. Shareholders (gulp) require that companies save money and make profits, and sometimes that stands squarely in opposition of some employee benefits.

Should investors throw up their hands and dismiss a story like this because of what could be called the natural antithesis between the concepts of happy employees and happy shareholders, particularly in the retail universe?

After all, some argue that Motley Fool Stock Advisor pick Costco(Nasdaq: COST) hinders its own growth because of what might be described as an "excessive" interest in the welfare of its employees. That has caused pressure on its profit margins, and it's the reason why Wall Street and some investors have, at times, punished the stock.

Regardless, I'd argue that treating one's employees with respect and fairness doesn't have to be a drain of resources or a drag on profitability -- in fact, it can better the outlook for a company by a long shot, and not simply in terms of generating good PR. One well-known powerhouse, Whole Foods Market(Nasdaq: WFMI), jumped out at me as an example.

In Whole Foods' proxy statement (available for free from the SEC), it states: "We have a company philosophy of 'shared fate' which recognizes there is a community of interest among all our stakeholders... . We believe that happy Team Members create happy customers who grow our business and produce happy shareholders." Among the innovative ways the company does this is by providing transparency of pay scale so that all employees know what everyone else makes, and by granting stock options to employees across the board -- not just to executives. It also caps the amount executives can make over and above regular employees.

Another company that springs to mind is Starbucks(Nasdaq: SBUX). The coffee powerhouse is known for treating its employees with great respect, providing many with generous health insurance, stock plans, and other perks that many similar companies cut corners on.

Whole Foods and Starbucks are both prime examples of companies that made some socially responsible elements part of their impressive financial success. Both are known for their happy customers and happy employees, and it's arguable that people feel good about frequenting them -- and investing in them -- for these reasons.

It's OK if some of us say, "Shame on Wal-Mart" (although just as many may defend its practices, arguing that it often provides much-needed jobs in the first place). In this day and age, where more and more people realize that investing is a way to put their dollars to work for them, more and more people also realize that being a shareholder means a company is accountable to them. In that vein, it seems that many shareholders are going to begin to expect certain ethics that makes them feel at ease with their investments.

This is by no means the first time Wal-Mart has found itself in hot water because of the way it treats its employees. On the other hand, Wal-Mart deserves credit for guranteeing all Wal-Mart employees displaced by Hurricane Katrina a job in any Wal-Mart store in the country.

The thing to remember is these days, there are plenty of alternatives for investors' dollars, some of which may fulfill a more socially progressive angle.

For more on similar issues, such as Wal-Mart's track record or socially responsible investing, please see the following Foolish content:

A Better Portfolio, A Better World, by David Gardner Does Wal-Mart Deserve to Be Hated? by Stephen Simpson Wal-Mart's Bum Rap, by Chris Mallon Costco is aMotley Fool Stock Advisorpick. To find out what other companies have been singled out by David and Tom Gardner, please clickherefor a 30-day free trial.

Alyce Lomax owns shares of Starbucks but of none of the other companies mentioned.

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

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One Nation Under Wal-Mart

By Terrence McNally,
AlterNet
Posted on September 20, 2005                  [back to top]

If Wal-Mart were a nation, it would be one of the world's top 20 economies. There are now nearly 5,000 stores worldwide, over 3,500 in the U.S. A new Wal-Mart SuperCenter opens every 38 hours; with yearly sales of $288 billion, Wal-Mart employs one of every 115 workers in America. Wal-Mart has an enormous influence on all facets of business -- manufacturing, trade, communications, transportation, design, you name it. But as journalist John Dicker describes in his first book, The United States of Wal-Mart (Jeremy P. Tarcher), the backlash -- from citizens, workers, unions and governments -- has begun.

TERRY MCNALLY: You supplied the statistic -- if it were a country, Wal-Mart would rank as the 20th largest economy. Any idea what countries rank below it?

JOHN DICKER: It's bigger than Ireland, Sweden and Israel.

Fifty years ago Americans knew the phrase, "What's good for General Motors is good for the USA." Today GM's credit rating is in trouble, it's been offering its employee discount to everyone in hopes of generating sales, and Wal-Mart rules. What does this shift mean for all of us?

I think it means that corporations don't take the same sort of responsibility anymore. They can get away with a lot less. The idea that you pay your workers a living wage for a job that's also a career -- that seems to be on the decline. It obviously also signifies the switch from a manufacturing economy to a service economy. Rights that were fought for and won in union campaigns in the '20s and '30s in manufacturing have yet to be won in the service sector, retail in particular.

Wal-Mart claims it benefits millions by supplying more jobs than any other company and lower prices worldwide. What's wrong with this picture?

Well, on one level it's correct. I'm very critical of Wal-Mart's PR in this book, but one thing Wal-Mart's CEO gets right is that he continually reminds people that the heart and soul of Wal-Mart's customers live paycheck to paycheck. To serve them, Wal-Mart provides cheaper check cashing services and cheaper money wiring services. They really cater to that clientele, and that creates a very complex political dynamic.

How do you explain to a poor person that a $28 DVD player sucks? I wouldn't want to go to a checkout line and engage in that conversation. One of the things that we saw with Southern California's grocery strike: Wal-Mart is putting the pinch on. They're forcing their competitors down to their level of wages and benefits.

Retail has never been a source of incredible jobs. You've never been able to get rich working in a store as a clerk, but there used to be more of a middle ground. What you see in retail now is a certain bifurcation. On the high end, you have Whole Foods or Wild Oats, the kind of frou-frou markets where I have a piece of squash on layaway. On the lower end you have Wal-Mart.

You also have Aldi, a very interesting German hard discounter. They'll have about 800 items for sale, but you go in and there's only three people in the store working. If you want a shopping cart, you put in a dollar deposit. It's pretty ingenious. You get your dollar back when you return the shopping cart. It saves on labor, right? You don't have anyone doing parking lot reconnaissance, herding stray carts around. If you want a plastic bag, you pay for it, I think it's between 10 cents and a quarter. In exchange for these labor-saving techniques, you get significantly lower prices.

A&P did something like this recently on the East Coast. They shut down their deli and their bakery, and now you have to pay for your plastic bags, but prices went down 20 percent. Hard discounters, places like Costco or Wal-Mart, used to be novelties. Now really low prices are becoming entitlements. But they're not free. Super-low prices have social costs. This is a conversation that I think the country is slowly beginning to engage in.

How much does the Walton family make per year?

If you're a member of Sam Walton's lucky sperm club, that is if you are one of his four heirs or his wife, Helen, your annual dividend payout -- I believe Forbes reported this in November -- is about $176,000,000. That's your paycheck just for waking up Walton.

All the sibs rank in the top 10 of Forbes' richest?

I know Rob Walton, who's the chairman of the board, and his sister Alice are both up there.

In doing your research, what did you learn that most surprised you?

Wal-Mart can enter a retail category and dominate it, and the world kind of yawns. All of a sudden you discover Wal-Mart's the world's largest jeweler. You don't think of Wal-Mart and jewelry, but because of their economy of scale, they're the largest jeweler. They also quietly enter certain areas of business. You can now get a dental plan or a healthcare plan for your employees through Sam's Club. They start slowly, but eventually they perfect things and roll them out nationwide, and boom -- it's huge. They more or less use gasoline as a loss leader to drive traffic into their stores. They use petroleum as a dancing monkey.

As you point out, some of them are Wal-Mart gas stations, but a lot of them aren't. They're just charging rent. People come for the gas, stay for the shopping.

Also, if you're Wal-Mart, you want to keep customers in your store as long as possible, and that has other implications. Exclusive concerts by various bands are broadcast on Wal-Mart TV; Wal-Mart pioneered this concept, and they call it "retail-tainment." They put on events, they have in-store radio, in-store TV, special broadcasts -- all to keep people in the stores as long as possible. The more time you spend, the more money you spend. That's generally a safe ground rule for any retailer.

By the way, Garth Brooks recently announced an exclusive multiyear deal in which Wal-Mart, Sam's Club and their online outlets will be the only places his music will be sold. This multimillionaire, who's sold 105 million albums, more than all but the Beatles, Elvis and Led Zeppelin, sang at Wal-Mart's annual shareholders meeting in June wearing a blue smock and told the audience "It's great to work for Wal-Mart." You go, Garth.

From Bentonville, Arkansas to world dominance -- you'll grant that Wal-Mart has not become what it is today simply by being rapacious, won't you? The company has been one of the wisest innovators of new technologies, hasn't it? Sam Walton was famous for saying, "Try it, do it, improve it."

On a basic level, Wal-Mart is a master of data. I would love to turn loose a sociologist or an anthropologist at Bentonville's information systems department. Other retailers merchandise for Father's Day or Labor Day weekend or Back-to-School. Wal-Mart can merchandise for the weather. With the hurricanes last year in Florida, they mined data from stores in the hurricane's path to find out what people buy when they know a hurricane's approaching. They nailed it down specifically to strawberry pop-tarts.

Toaster-oven treats in general were big, but #1 -- strawberry pop-tarts. This is a company with nearly 5,000 stores worldwide, but they know in a Florida hurricane, strawberry pop-tarts. And they have the infrastructure to get those strawberry pop-tarts into stores within a day or two. Other retailers are still catching up, but they've been able to do that for years. They call it merchandising a store at a time.

They have all these people querying their databases. Two stores might be five miles apart in LA, and they'll know, "OK, this store is really close to the beach," "This store is right near a Best Buy," "This other store is near a senior citizen's home." All the demographic factors around a particular store go into the merchandising mix. It might look like they all carry the same items, but they actually don't. Wal-Mart is extremely clever at mastering data.

I assume many think that mastering data happened with Amazon and other online retailers. But these folksy folks from Bentonville, Arkansas saw the potential of this dynamic information relationship between customer and store way before anyone else, right?

Perhaps because they're from Bentonville. They weren't located in a major city, so they had to deal with distribution in a different way. They couldn't rely on a big warehouse in a big city because they weren't near one. Other companies would outsource their contract to a wholesaler who would supply them, but Wal-Mart had to do its own supplying. That meant building its own distribution centers. A lot of other companies still don't have their own distribution centers, especially for food. Wal-Mart is more vertically integrated so they can more easily implement technological changes in distribution to increase efficiency.

If you're a retailer, it's all about turning over stock. You don't want to have anything in the warehouse too long or on the shelf too long, but once it sells out, you want to make sure another one's replacing it. And Wal-Mart is genius at that.

At one point Wal-Mart prided itself on buying American. I assumed that was one of the big things that helped them grow. When did that change, and what's the case today?

Sam Walton was famous for a campaign he started in the mid-'80s to get Wal-Mart to buy from American companies. He made a big deal about one Arkansas apparel manufacturer, for instance. But even though this one particular apparel maker was making shirts in Arkansas, they still had Wal-Mart purchase their raw materials in bulk from China. So this move off-shore actually was simultaneous with the Buy America campaign.

There's a kind of myth around Sam Walton. A lot of people say that if Sam were alive today, none of this would have happened, and that's just bogus. I think the shift to overseas production transcends one company. It's complicated. On the one hand, Wal-Mart didn't start the trend, but they certainly helped push it.

"Wal-Mart is both a beneficiary and a driver of the race to the bottom in the global economy," says Alejandra Domenzain, an associate director of Sweatshop Watch. Tell us more.

Activists like the National Labor Committee and others who monitor offshore manufacturing, particularly apparel, note that, while companies like the Gap have signed on to disclose where their factories are and to let independent human rights inspectors into them, Wal-Mart refuses. They will not tell you where they're operating in China, and they won't let human rights inspectors in. I think it was the Gap a couple of years ago that released a report based on these inspections. It wasn't flattering to their own company, but they did it. They were behaving responsibly, even if what they were saying was "Hey, we're not getting it right all the time, here's what we did wrong."

Wal-Mart has never acquiesced to that, and I think that's part of the struggle right now. Barbara Briggs of the National Labor Committee out of New York told me that the question used to be: "Can we get these manufacturing jobs to come back to America?" Increasingly the answer is that's not realistic. Now the question is: "How do we pressure and lean on companies to behave responsibly in places like Southern China?"

Without getting into a plug, I've heard comparisons between Wal-Mart and its smaller rival, Costco: that Costco's not actually a bad public citizen. Is that true?

Though only about 15 percent of Costco stores are unionized, it's my understanding that being a cashier at Costco can be a career. From what I've read, if you've been there four years, you can be making around $45,000. I think 90 percent of their workers have health care and it's fully paid for. That's another model. But Costco's not the same store as Wal-Mart. It's a club store, and you're paying $40 a year in membership. Shopping there is kind of like treasure hunting. It's hard to do all your grocery shopping for the week there. And when you see how big items are, you think, God, unless I'm a family of 10, this isn't going to work. At a Wal-Mart SuperCenter you can do grocery shopping as we've grown to understand it: All I need is a dozen eggs and a half gallon of milk. Costco competes more with Sam's Club, but in many ways not with a Wal-Mart SuperCenter.

You referred earlier to the Southern California grocery workers strike. For those who didn't follow it, what happened there?

Southern California and California as a whole is huge booty for Wal-Mart because they only have their regular stores here, they don't have their SuperCenters. A SuperCenter is a traditional Wal-Mart general merchandise store with a grocery store attached to it. They're usually between 180,000 and 210,000 square feet at the top end. Since the mid-'90s this has been Wal-Mart's main growth vehicle. Next year I think they plan to open about 250 SuperCenters and only about 40 regular variety stores.

Southern California and urban markets in particular are hugely important to them, because they're really under-represented in the major metro markets. In 2002 Wal-Mart announced plans to open 40 new SuperCenters in California. That gave the unionized grocery stores -- Vons, Ralphs and Albertson's -- an excuse to go to the bargaining table and tell the unions that they'd better accept concessions because of this looming competition from Wal-Mart.

While it's true that Wal-Mart is eating the lunch of unionized stores, they weren't operating in the Southern California market yet. For a lot of reasons stores like Safeway were having their own financial difficulties, and this was a very convenient excuse to stick it to the union. It resulted in a four-month strike, and a lot of people were unhappy about the way it was run. It wasn't the most well-coordinated strike, and there were confusing messages on the picket line. Unfortunately it ended up with workers settling for a two-tier contract. People hired after the strike date get one deal, and people who were already there and stood on the picket line get another.

One of the things the workers ran into was the problem of a local union striking national companies, who can sort of "amortize" nationally whatever they lose locally during the strike.

The grocery industry developed regionally, and the United Food Commercial Workers, at least at the top executive level, never really adjusted their strategy. It was a very disheartening experience, and I'm critiquing the unions from the left here, not the right. You had the president of the UFCW, Joe Dougherty, who I think clocks about $350,000 with disbursements, declare this the greatest strike in labor history, comparing it to the Flint Michigan sit-down strike, and the next day he retires to his two homes in Colorado and Florida. This is disgraceful. I think unfortunately the United Food and Commercial Workers have lost credibility to really take on the Wal-Mart issue, because they just don't have the skills or the history of running these national campaigns.

What do you think the big message is for the future?

One of the things I talk about in the book is the fact that Wal-Mart transcends national polarization of left/right, red state/blue state. You're seeing a lot of suburban and exurban communities don't want Wal-Mart.

But they're not fighting Wal-Mart by turning it into a referendum on, "Is Wal-Mart good for America?" They're sticking to the nuts and bolts of a specific local proposal. They're analyzing Wal-Mart's particular environmental impact statement, analyzing traffic studies. They're fighting it on the nitty-gritty. If in the process they decide they don't like Wal-Mart, they're kind of sucking it up. They're making a politically mature decision to not let that color local politics -- where it's not terribly relevant.

Places like Union County, North Carolina or Monument, Colorado, which is near Colorado Springs -- places that are not hotbeds of progressive politics -- are taking on Wal-Mart, and it's a very different dynamic. It has a lot to do with the basic fact that we're "over-stored" in this country. There's a lot more retail space than ever before, and people don't need Wal-Mart as much. Basically I guess I'm advising people interested in taking on Wal-Mart to be incredibly practical.

Interviewer Terrence McNally hosts Free Forum on KPFK 90.7FM, Los Angeles (streaming at kpfk.org). For more information about the issues discussed in this interview, visit Wal-Martwatch.com and Sprawl-busters.com.

© 2005 Independent Media Institute. All rights reserved.

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Quebec Rules Against Wal-Mart in Closing of Unionized Store

By IAN AUSTEN
September 20, 2005                            [back to top]

OTTAWA, Sept. 19 - Quebec's labor relations board has rejected Wal-Mart Canada's claim that it closed a unionized store in that province for economic reasons, saying instead that there was evidence the store might reopen.

In a decision released late last week, the board said that it did not find the April closing of the store in Jonquière to be "real, genuine and definitive" under the province's law. The decision makes it possible that the company could be fined and that compensation could be ordered for about 190 former employees.

The Canadian arm of Wal-Mart Stores has vigorously denied suggestions that the store's closing, an unusual act for the company, was related to the successful drive to organize its employees by the United Food and Commercial Workers-Canada. Rather, it said, the outlet was unprofitable.

The labor board's decision did not look at the store's financial results, however. The board said it heard evidence that Wal-Mart had made no real effort to find another tenant to assume its 20-year lease on the store and that the building had neither been sold nor demolished. That, the board said, indicated that the closing was not permanent, making the dismissal of its workers illegal under Quebec law.

"The company is still the tenant," Pierre Flageole, vice president of the Quebec Labor Board, wrote in the board's decision. "Every indication is the company has left the door open to resume the same business in the same space."

In the decision, the board said it would hold additional hearings on possible compensation for the employees, though it offered no details on what that might be. Normally, the Quebec labor board would order the company to return their employees to their old jobs and pay them retroactively.

While that is not possible in this case because of the store closing, the board could possibly order Wal-Mart to give the Jonquière workers positions at its nonunionized stores in nearby cities, said Adelle Blackett, a law professor at McGill University in Montreal. She added that the company could also face substantial fines.

"We will have to see how far the board is prepared to go," Professor Blackett said. "This is the kind of decision that sends a very powerful message about respecting the integrity of Quebec labor law."

Andrew Pelletier, a spokesman for Wal-Mart Canada, said the company was surprised by the decision.

"Anybody connected to Jonquière knows how hard we tried to save the store," he said. "That store is not going to reopen."

Despite the board's finding, Mr. Pelletier said that Wal-Mart had been trying, without success, to find another retailer to take over the lease. "It's an economically marginalized region," he said of Jonquière. "So it has been challenging to find someone."

Wal-Mart will probably appeal once the final ruling is issued, Mr. Pelletier added.

The food and commercial workers union has been aiming organizing efforts at Wal-Mart stores in several parts of Canada, particularly Quebec.

The union local at the Jonquière store hoped to be the first in North America to negotiate a contract with Wal-Mart. Its closing, which was announced in February, seems to have chilled the organizing drive. Workers at Wal-Marts in Quebec and Ontario have since voted against certifying the union as their bargaining agent.

In one very modest victory for the union, eight workers in the tire shop of a Wal-Mart in Cranbrook, British Columbia, voted last week to organize, the union said. Wal-Mart is appealing that vote.

Louis Bolduc, the head of the union in Quebec, said the Jonquière decision would help organizing efforts.

"Wal-Mart will now think twice about closing another store," Mr. Bolduc said from Montreal. "And people will be less afraid of signing a union card."

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Wal-Mart Accused of Denying Lunch Breaks

Wal-Mart Accused of Depriving Employees Lunch Breaks in First of About 40 Cases Against Retailer

By DAVID KRAVETS
The Associated Press
Sep. 20, 2005                                 [back to top]

Lawyers representing about 116,000 former and current Wal-Mart Stores Inc. employees in California told a jury Monday that the world's largest retailer systematically and illegally denied workers lunch breaks.

The suit in Alameda County Superior Court is among about 40 cases nationwide alleging workplace violations against Wal-Mart, and the first to go to trial. Wal-Mart, which earned $10 billion last year, settled a lawsuit in Colorado for $50 million that contains similar allegations to California's class action. The company also is accused of paying men more than women in a federal lawsuit pending in San Francisco federal court.

The workers in the class-action suit are owed more than $66 million plus interest, attorney Fred Furth told the 12 jurors and four alternates.

"I will prove the reason they did this was for the God Almighty dollar," Furth said in his opening statement.

Nine jurors must side with the plaintiffs to prevail. Millions of dollars also are sought to punish the company for the alleged wrongdoing.

The case concerns a 2001 state law, which is among the nation's most worker friendly. Employees who work at least six hours must have a 30-minute, unpaid lunch break. If they do not get that, the law requires they are paid for an additional hour of pay.

The lawsuit covers former and current employees in California from 2001 to 2005.

Wal-Mart declined to give an opening statement, reserving its right to give one later. Its lawyers also declined comment.

In court documents, the Bentonville, Ark., company claims that workers did not demand penalty wages on a timely basis. Wal-Mart adds that it did pay some employees their penalty pay and, in 2003, most workers agreed to waive their meal periods as the law allows.

The Bentonville, Ark.-based company also says some violations were minor, such as demanding employees punch back in from lunch and work during their meal breaks. In essence, workers were provided a shorter meal period than the law allows.

The case does not claim that employees were forced to work off the clock during their lunch breaks.

The lawsuit was brought in 2001 by a handful of San Francisco-area former Wal-Mart employees, and took four years of legal wrangling to get to trial. During that time, Wal-Mart produced internal audits that plaintiffs' lawyers maintain showed the company knew it was not granting meal breaks on thousands of occasions.

That 2000 audit was given to top-level executives, according to evidence submitted to jurors Monday.

One company document called results of the audit "a chronic problem." A one-week review of company policies showed thousands of instances in which workers were not given a meal break in accordance with the law, according to the documents provided to the jury.

"This is Wal-Mart auditing Wal-Mart," Furth said.

On Tuesday, as many as three plaintiffs are expected to testify in a trial that will last weeks.

Several lawyers representing out-of-state Wal-Mart workers in class action lawsuits were in the gallery. Karin Kramer, a lawyer suing Wal-Mart on behalf of 50,000 Washington state company workers, said suing Wal-Mart is a gargantuan task.

"They can afford and do fight you on every single issue," she said.

Shares of Wal-Mart rose 14 cents to close at $44.01 Monday on the New York Stock Exchange.

Copyright 2005 The Associated Press. All rights reserved.

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Wal-Mart's 'meal pay' war

BY KAREN GULLO and JOEL ROSENBLATT
BLOOMBERG NEWS
Tuesday, September 20th, 2005                   [back to top]

Wal-Mart faces another legal challenge to its labor practices in a California courtroom, as opening arguments began yesterday in a suit accusing the company of denying employees breaks and pay for working forced overtime. The case in state court in Oakland claims 115,919 current and former workers at 186 Wal-Mart and Sam's Club stores couldn't take breaks and had to work "off-the-clock" without pay, Fred Furth, a lawyer for the workers, said.

Wal-Mart denied the allegations and said making employees work through breaks violates company policy.

Forty similar suits have been filed against Wal-Mart in other states, and companies such as California Pizza Kitchen and United Parcel Service face such claims in California. An Oregon jury awarded 87 Wal-Mart workers about $2,000 each in an overtime lawsuit last year.

"Jurors are not going to be corporate-friendly in California," said Arthur Silbergeld, an employment lawyer at Proskauer Rose in Los Angeles who isn't involved in the case. "You need a very large company with very deep pockets to take the risk of going to trial in California with any employment case."

Wal-Mart also faces a class-action lawsuit in federal court in San Francisco filed on behalf of as many as 1.6 million female employees alleging sexual discrimination. The company is appealing a decision in that case that allows the women to sue as a group.

Wal-Mart spokeswoman Christi Gallagher declined to comment on the specifics of the overtime suit. She said workers in the Oregon case recovered damages for 838 hours of missed breaks out of a total of 72,000 hours that were alleged in the complaint.

"Which shows that some of these claims can be highly exaggerated," Gallagher said in an e-mailed response to questions.

The first portion of the trial, which started yesterday, concerns the allegations regarding meal breaks. At a second phase of the trial, Judge Ronald Sabraw will review the overtime claims without a jury.

Furth said during opening statements that the workers were owed as much as $66 million in damages. A previous ruling, which excluded from the lawsuit anyone employed by Wal-Mart before 2001, eliminated as many as 75,000 workers from the case.

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Wal-Mart moves into Guatemala

Reuters
Sep 19, 2005                                [back to top]

GUATEMALA CITY (Reuters) - Wal-Mart Stores Inc. <WMT.N>, the world's largest retailer, is expanding in Central America through a partnership with a Guatemalan supermarket operator, sources close to the local company said on Monday.

Wal-Mart is buying 33 percent of Central America Retail Holding Corp., which runs two supermarket chains with a total of 250 stores, for an undisclosed amount, the sources said.

Its executives are expected to hold a press conference on Tuesday to announce the deal.

This month Wal-Mart reached a deal to purchase the assets from the Dutch firm Royal Ahold, which has divested Latin American businesses to focus on Europe and the United States, the sources said.

The Guatemalan Paiz family, which owns a major supermarket chain of the same name, had signed a joint venture agreement in 1999 with Royal Ahold <AHLN.AS>, and two years later the United Supermarkets Corporation of Costa Rica joined to form the Central America Retail Holding Corp.

Wal-Mart's Mexico unit, Walmex <WALMEXV.MX> has grown to become the nation's No. 1 retailer in the past decade, with more than 700 stores and restaurants.

Copyright 2005 Reuters News Service. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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Wal-Mart aims to keep expanding to grow sales

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Q: What kind of earnings and same-store growth do you expect from Wal-Mart?

A: "As goes General Motors, so goes the nation," was the old adage followed by investors. That could easily be replaced now by "As goes Wal-Mart (WMT), so goes the nation."

Wal-Mart, the world's largest retailer, now tops the Fortune 500 list of the USA's largest companies. GM is number three.

Wal-Mart is so big that it's mind-blowing just how much product it moves, technology it uses and transportation it commands.

Last fiscal year, the company brought in $285 billion in revenue, which is greater than the gross national products of Taiwan and Argentina.

As you can imagine, when a company gets this massive, it becomes increasingly difficult to grow.

Now that many communities have a Wal-Mart, or two, the company has to get more creative in finding ways to reach new markets and new customers.

One push the company is making is into California, which has many urban areas that lack a Wal-Mart.

The company is expected to open as many as 250 supercenters in the U.S. in the current fiscal year (160 of which would be relocations or expansions of existing stores), according to a report by Standard & Poor's analyst Joseph Agnese.

But Wal-Mart is also making a big push internationally, with plans to open as many as 165 units, Agnese says.

But to address your question directly: What does this mean for sales growth at Wal-Mart?

Agnese is forecasting Wal-Mart sales in the current fiscal year to grow 9% to $312 billion. He ex[ects same-store sales growth of 2% to 4%. His Wal-Mart sales forecast is in line with forecasts gathered by Reuters Estimates, calling for 9.7% growth this year to $316.1 billion.

Agnese also expects the company to earn $2.65 a share in the current fiscal year, which is an increase of 10% from the previous fiscal year. Agnese's forecast is in line with Reuters estimates of $2.65 a share.

But remember, these are forecasts and guesses. Many things could change in the economy to alter things.

For instance, the disaster on the Gulf Coast has already driven the price of gasoline higher nationwide. How that affects consumer spending and transportation costs will have a big influence on Wal-Mart and its growth prospects.

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Wal-Mart rides good PR, plans secret spin strategy

By Emily Kaiser
Mon Sep 19, 2005                                   [back to top]

CHICAGO (Reuters) - Wal-Mart Stores Inc. is enjoying its best publicity in years as even its harshest critics laud the retailer's Hurricane Katrina relief efforts.

But Chief Executive Lee Scott isn't resting on his laurels just yet.

For years, Wal-Mart largely ignored its image problems as customers flocked to its stores and its growth seemed nearly unstoppable. But the company acknowledges that it can no longer dismiss increasingly vocal and well-organized groups that are having some success in blocking its U.S. expansion, particularly in urban areas.

And now, Scott has started to drop hints about a secret spin strategy to counter a union-backed, anti-Wal-Mart media blitz that he says is not going to go away.

Scott -- who says his job is to defend Wal-Mart's reputation from those who contend the world's No. 1 retailer pays poverty-level wages and drives competitors out of business -- wouldn't divulge details of the new public relations plan, but he has stressed its importance.

"It is not a matter of Wal-Mart just needing to hire public relations people," Scott said in a recent speech. "This is a significant issue that we face and has to be dealt with ... internally, in the company, without allowing our plans to be public."

He estimated that Wal-Mart's critics are spending $25 million on what he calls the largest and best-financed campaign in history "directed at slowing this company down."

As more and more communities adopt restrictive zoning laws, he has asked executives to come up with ways to speed up Wal-Mart's U.S. expansion.

Scott insisted that Wal-Mart's donation of millions in cash and truckloads of goods for Katrina victims had nothing to do with getting good press. But stories of the company's generosity and reports of 11,000 people lining up for 400 jobs at a new Wal-Mart in Oakland, California, have helped turn the tide on the barrage of bad news that has dogged the retailer for years.

"Those stories become harder and harder to spin to the negative," Scott said.

DOING GOOD

Chris Kofinis, an organizer of the "Wake-Up Wal-Mart" campaign financed by the United Food and Commercial Workers union, said the company's support for Katrina victims showed that Wal-Mart is capable of doing good.

Wake Up Wal-Mart is one of two groups running media campaigns to try to get the retailer to change its labor practices.

"If Wal-Mart chose to do the right thing every day, they wouldn't need a super-secret public relations strategy," Kofinis said.

"Wal-Mart has long underestimated the serious concerns American people have about how they treat their workers, the community and the negative impact they have on the nation," he said. "As long as they continue to ignore that, the reality is they're going to have growing opposition at the local, state and national level."

Wal-Mart has responded to such criticism with a Web site that counters what it calls "myths" about its treatment of workers. It insists that it pays, on average, nearly double the minimum wage and offers affordable health insurance to many employees.

The company is also building a network of corporate affairs offices in major cities around the country to boost local lobbying and PR efforts.

"This isn't simply a public relations strategy to pretty up an image," said Wal-Mart spokeswoman Mona Williams. "Rather, it is an energetic attempt to tell our story and also become a better company in the process."

Among the company's efforts are meeting with people from different backgrounds, she said, and "we learn by listening to them."

SITE FIGHTS

But despite efforts to sway critics, the retailer faces increasing opposition as it tries to break into lucrative urban markets.

Communities are waging more sophisticated "site fights" to keep Wal-Mart out of town by hiring traffic and environmental consultants to show that a new store would prove harmful.

Scott recently asked his managers to come up with a plan to accelerate the number of new stores that Wal-Mart can open each year. It typically opens more than 200 annually.

"I think most reasonable people would say zoning will probably be more difficult in 5 years or 10 years than it is today," he said in a presentation to analysts. "And so every store we get today over what we normally would have planned might be the store that would have really been delayed in the future as zoning got tougher and tougher."

The key battlegrounds include New York City and Los Angeles. Wal-Mart recently got approval to build its first store in Chicago.

The company has recently met with local reporters throughout the New York metropolitan area in hopes of changing attitudes. For example, it distributed a survey that showed 68 percent of residents in the borough of Queens want a Wal-Mart in New York City.

"Contrary to what a vocal minority led by special interest groups imply, these results clearly show that a majority of New Yorkers are interested in what Wal-Mart can offer," said Mia Masten, Wal-Mart's director of corporate affairs for the Eastern region.

Favorable polls aside, Wal-Mart won't have an easy time breaking into New York City. The city council last month passed a measure requiring most stores that sell groceries to provide a certain level of health care coverage -- a move that many observers saw as a direct message to Wal-Mart.

Things won't get any easier this holiday season. A documentary by filmmaker Robert Greenwald is slated for release in early November, and both Wake Up Wal-Mart and Wal-Mart Watch have scheduled a national "week of action" in November to try to turn up the heat on the retailer.

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Wal-Mart CEO: Playing the spin

Lee Scott sees an opportunity to pump up the retailer's reputation.

September 17, 2005                         [back to top]

CHICAGO (Reuters) - Wal-Mart Stores Inc. is enjoying its best publicity in years as even its harshest critics laud the retailer's Hurricane Katrina relief efforts.

But Chief Executive Lee Scott isn't resting on his laurels just yet.

For years, Wal-Mart largely ignored its image problems as customers flocked to its stores and its growth seemed nearly unstoppable. But the company acknowledges that it can no longer dismiss increasingly vocal and well-organized groups that are having some success in blocking its U.S. expansion, particularly in urban areas.

And now, Scott has started to drop hints about a secret spin strategy to counter a union-backed, anti-Wal-Mart media blitz that he says is not going to go away.

Scott -- who says his job is to defend Wal-Mart's reputation from those who contend the world's No. 1 retailer pays poverty-level wages and drives competitors out of business -- wouldn't divulge details of the new public relations plan, but he has stressed its importance.

"It is not a matter of Wal-Mart just needing to hire public relations people," Scott said in a recent speech. "This is a significant issue that we face and has to be dealt with ... internally, in the company, without allowing our plans to be public."

He estimated that Wal-Mart's critics are spending $25 million on what he calls the largest and best-financed campaign in history "directed at slowing this company down."

As more and more communities adopt restrictive zoning laws, he has asked executives to come up with ways to speed up Wal-Mart's U.S. expansion.

Scott insisted that Wal-Mart's donation of millions in cash and truckloads of goods for Katrina victims had nothing to do with getting good press. But stories of the company's generosity and reports of 11,000 people lining up for 400 jobs at a new Wal-Mart in Oakland, California, have helped turn the tide on the barrage of bad news that has dogged the retailer for years.

"Those stories become harder and harder to spin to the negative," Scott said.

Doing good Chris Kofinis, an organizer of the "Wake-Up Wal-Mart" campaign financed by the United Food and Commercial Workers union, said the company's support for Katrina victims showed that Wal-Mart is capable of doing good.

Wake Up Wal-Mart is one of two groups running media campaigns to try to get the retailer to change its labor practices.

"If Wal-Mart chose to do the right thing every day, they wouldn't need a super-secret public relations strategy," Kofinis said.

"Wal-Mart has long underestimated the serious concerns American people have about how they treat their workers, the community and the negative impact they have on the nation," he said. "As long as they continue to ignore that, the reality is they're going to have growing opposition at the local, state and national level."

Wal-Mart has responded to such criticism with a Web site that counters what it calls "myths" about its treatment of workers. It insists that it pays, on average, nearly double the minimum wage and offers affordable health insurance to many employees.

The company is also building a network of corporate affairs offices in major cities around the country to boost local lobbying and PR efforts.

"This isn't simply a public relations strategy to pretty up an image," said Wal-Mart spokeswoman Mona Williams. "Rather, it is an energetic attempt to tell our story and also become a better company in the process."

Among the company's efforts are meeting with people from different backgrounds, she said, and "we learn by listening to them."

Site fights But despite efforts to sway critics, the retailer faces increasing opposition as it tries to break into lucrative urban markets.

Communities are waging more sophisticated "site fights" to keep Wal-Mart out of town by hiring traffic and environmental consultants to show that a new store would prove harmful.

Scott recently asked his managers to come up with a plan to accelerate the number of new stores that Wal-Mart can open each year. It typically opens more than 200 annually.

"I think most reasonable people would say zoning will probably be more difficult in 5 years or 10 years than it is today," he said in a presentation to analysts. "And so every store we get today over what we normally would have planned might be the store that would have really been delayed in the future as zoning got tougher and tougher."

The key battlegrounds include New York City and Los Angeles. Wal-Mart recently got approval to build its first store in Chicago.

The company has recently met with local reporters throughout the New York metropolitan area in hopes of changing attitudes. For example, it distributed a survey that showed 68 percent of residents in the borough of Queens want a Wal-Mart in New York City.

"Contrary to what a vocal minority led by special interest groups imply, these results clearly show that a majority of New Yorkers are interested in what Wal-Mart can offer," said Mia Masten, Wal-Mart's director of corporate affairs for the Eastern region.

Favorable polls aside, Wal-Mart won't have an easy time breaking into New York City. The city council last month passed a measure requiring most stores that sell groceries to provide a certain level of health care coverage -- a move that many observers saw as a direct message to Wal-Mart.

Things won't get any easier this holiday season. A documentary by filmmaker Robert Greenwald is slated for release in early November, and both Wake Up Wal-Mart and Wal-Mart Watch have scheduled a national "week of action" in November to try to turn up the heat on the retailer.

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Activists Redouble Efforts to ‘Beat’ Wal-Mart

Even as the retail empire grows and profits, an ever-expanding array of challenges rise up from the grassroots and even rain down from government officials, posing a real threat to the company’s traditional impunity.

by Andrew Stelzer
NewStandard                         [back to top]

Florida, Sep 16 - A lawsuit filed against Wal-Mart alleging its suppliers in five countries are violating human rights standards set by the retail behemoth's own code of conduct is the latest attempt to force the world's largest corporation to reform its business practices. The suit is one of several new efforts that focus on workers' rights at multiple stages of the store's supply chain.

On Monday, the International Labor Rights Fund (ILRF) filed a class-action lawsuit against Wal-Mart on behalf of workers who produce garments and toys for the retailer in Swaziland, China, Nicaragua, Indonesia and Bangladesh. The suit alleges that the foreign workers, which include sewers, mechanics, machinists and quality inspectors are forced to work overtime, denied full overtime pay, and paid below their respective countries' minimum wages. The suit also cites cases of alleged physical abuse of workers by supervisors. The plaintiffs also include California workers who accuse the company of unfair competitive practices, which have undermined worker's benefits in their state.

Wal-Mart first adopted supplier standards in 1992, mentioning them in many of its promotional materials since. The current version of those standards maintains that workers who produce goods to be sold at Wal-Mart cannot be required to work more than fourteen hours a day, more than six days a week, and shall be compensated in accordance with each home country's laws.

Terry Collingsworth, the executive director of the International Labor Rights Fund, told The NewStandard that after two years of research it became clear that "the conditions in their factories are pervasively and routinely in violation of Wal-Mart's code of conduct."

In Collingsworth's view, "Wal-Mart knows that the codes of conduct are just a public relations device."

Wal-Mart's supplier standards also include a provision labeled "Freedom of association and collective bargaining," which requires that suppliers "respect the rights of employees regarding their decision of whether to associate or not to associate with any group." But Collingsworth said the foreign workers are in fact denied the right to organize – not a surprise, considering the corporation's anti-union track record at its retail outlets in North America.

Although Wal-Mart's official position is that it allows its workers to form or join unions, the retail giant is "strongly opposed to third-party representation," and the company advises store managers to oppose unionization attempts. One of the most glaring examples is what Collingsworth describes as "pervasive anti-union action" in the US was in 2000, when a Texas Wal-Mart eliminated its meat department after eleven meat cutters voted to join a union.

Last April 2005, In Jonquiere, Quebec, Wal-Mart closed one of its stores six months after the United Food and Commercial Workers (UFCW) won the legal right to represent the 190 employees working there. Louis Bolduc, an organizer for the UFCW in Quebec, later told the Washington Post that the Jonquiere closing caused employees in a Montreal store to vote against joining a union because "people were afraid if they voted for the union the store will be closed."

Wal-Mart store managers in the United States have also been given a booklet titled "A Manager's Toolbox to Remaining Union Free" which contains passages such as the following:

In the event you find a union authorization card in your facility or hear associates are attending union meetings and signing authorization cards, it is imperative you contact the Union Hotline at 501-273-8300 immediately. Wal-Mart must respond to this type of union activity immediately in an effort to stop card signing before the required 30 percent signatures have been obtained.

In an effort to circumvent the corporation's anti-union efforts, Wal-Mart workers in Florida have begun organizing a group called the Wal-Mart Workers Association (WWA). Workers pay $5 a month in dues to the WWA, founded in Central Florida in April. Organizer Rick Smith said WWA already has over 200 members from 30 stores throughout Central Florida. An office has been established in Orlando, and Bill Lavie, an organizer with the WWA, said another chapter has begun signing up members in Dallas, Texas.

"We're essentially offering services and support to Wal-Mart associates," Lavie told TNS.

Wade Rathke of the antipoverty group Association of Community Organizations for Reform Now (ACORN), which is spearheading the WWA through its Wal-Mart organizing project, said many part-timers are paid so little they can collect unemployment. WWA will help Wal-Mart employees apply for unemployment if they are eligible in an effort to help the employees and shame the company into paying better.

According to several Wal-Mart workers in the WWA, recent changes which resulted in electronically produced schedules coming from Wal-Mart headquarters in Bentonville, Arkansas, have resulted in even more workers being cut from full time to part time.

"They can't survive on what they're being paid by the company," Rathke told TNS, adding that whether the WWA is technically a union is unimportant, but that "as more and more workers engage [Wal-Mart] around their rights, this company has no choice but to listen to them."

The public kickoff of the Wal-Mart Workers Association came on the first day of the Sitefighters conference, the first national gathering of some of the most successful anti-Wal-Mart activists in the US.

Held in St. Petersburg, Florida, organizers who have prevented Wal-Mart from opening stores in California, Illinois and other states traded ideas and best practices. Many prevailed in their hometown battles through land-use or zoning hearings, but mounted community-wide Wal-Mart opposition campaigns based on the sub-par wages and benefits paid by the massive company.

Wal-Mart often brags about how it brings new jobs into a community, but Reverend Robin Hood, an ACORN organizer who helped prevent a Wal-Mart from opening in Chicago, decried conditions under which "people that work for big-box companies can't even afford to go to the doctor."

The ILRF lawsuit also addresses the effects Wal-Mart has had on workers in the US. It includes claims on behalf of California employees of Ralph's and Safeway, who were told by their employers that they would have to take pay and benefit cuts so the stores could compete with Wal-Mart.

Under California law, if Wal-Mart advertising in which the company claims to be holding its suppliers to a code of conduct is found to be misleading, it could be ruled unfair competition.

Collingsworth hopes the plaintiffs can show they have suffered a specific economic injury as a result of Wal-Mart's misrepresentations to the public about how its stores manage to maintain such low costs, saying the suit depending on "proving that Wal-Mart knows or should know that when it tells the public that its code of conduct is being honored, that in fact that's not true."

Wal-Mart has yet to answer the complaint but has 20 days to do so.

While citizens in hundreds of towns across the country have fought to keep Wal-Mart stores from being built because of the traffic, noise and pollution that big-box stores create -- as well as the damage Wal-Mart does to nearby small businesses -- it seems that concern over labor practices are the criticism that is gaining the most public traction even among Wal-Mart's supporters.

In June, four groups of Wal-Mart shareholders called on the company to set up an independent review of its legal and regulatory controls. They said Wal-Mart's employment practices were causing concerns about negative effects on the company's stock price and reputation.

A letter from representatives of the groups pointed out that the Immigration and Customs Enforcement raided 60 Wal-Mart stores as part of an investigation that resulted in an $11 million settlement of charges that Wal-Mart exploited undocumented immigrants; that Wal-Mart settled 24 violations of labor laws in three states with the Department of Labor; and that a federal court had certified the largest class-action employment discrimination suit ever, on behalf of 1.5 million current and former female employees alleging gender bias in promotions practices.

Wal-Mart has also come under fire as a result of its restricted employee healthcare coverage. "Wal-Mart doesn't pay their associates enough to handle the [health insurance] coverage that they supposedly offer us," said Belva Witt, who has worked as a cashier for the past year and a half at a Wal-Mart in Brandon, FL. "And it's not a coverage that's worth having anyway."

With Wal-Mart avoiding paying the bills for many of its employee's basic needs, taxpayers often pick up the tab. Staff at the Democratic Committee on Education and the Workforce found that one Wal-Mart store with 200 employees could cost federal taxpayers up to $420,750 per year, which averages out to about $2,103 per employee. Those costs stem from free and reduced lunches for employees' children, Section 8 housing assistance, federal tax credits and deductions for low-income families, children's healthcare programs, and low-income energy assistance.

"We have to get Wal-Mart's attention," said Dave Newport, a former Alachua County, Florida county commissioner, who as a citizen has helped defeat five Wal-Mart proposals in the last few years. He claims a successful method is to convince government officials that voting down any particular proposed Wal-Mart store is not a vote against the chain-store, but a call for Wal-Mart to transform into a quality business that respects and benefits the community with more than just low prices and low-wage jobs.

Newport said people are sending a message to the $287 billon corporation that "We're gonna beat you – and keep beating you – until you play by the rules and stop lying and start putting integrity into your product and business operations."

© 2005 The NewStandard.

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Wal-Mart May Compensate Quebec Workers After Ruling

Frederic Tomesco
Bloomberg                                       [back to top]

Wal-Mart Stores Inc. may have to compensate former employees of a Quebec outlet that shut in April after the province's labor board ruled that the world's largest retailer failed to demonstrate it wasn't closing the store to thwart a union drive.

Quebec Labor Relations Commission Vice President Pierre Flageole accepted complaints from three former Wal-Mart workers who contested the closing. He didn't set a penalty, saying he would meet with the parties to discuss it. The ruling, dated yesterday, was posted the board's Web site today.

Wal-Mart's Jonquiere store last year became the company's first North American outlet to be organized by the United Food and Commercial Workers. Wal-Mart argued the store, about 470 kilometers (290 miles) north of Montreal, was unprofitable and that its closure had nothing to do with the union.

Company lawyers are studying the ruling and may ask the labor regulator to reconsider it, said Yanik Deschenes, a spokesman for Wal-Mart, based in Bentonville, Arkansas.

``We're surprised and disappointed,'' Deschenes said in a telephone interview from Montreal. ``The Jonquiere store never made any money. We were very transparent about this.''

Union lawyer Claude Leblanc declined to say what compensation the union will seek from the labor regulator.

``The Jonquiere closing was intended to intimidate employees, and hopefully this ruling will reverse the trend,'' Leblanc said in a telephone interview from Quebec City. ``A company has to respect the rights of the workers.''

Rekindle

Under Quebec law, Wal-Mart may have to pay a fine and could be forced to rehire the employees, though such an outcome is unlikely, University of Quebec in Montreal labor relations professor Michel Grant said in an interview.

The decision also may help rekindle a cross-Canada unionization drive aimed at Wal-Mart, Grant said.

``This will send a message to Wal-Mart employees everywhere that they shouldn't give up,'' he said. ``The union doesn't want the workers to refrain from joining because they fear for their jobs.''

About 20 organizing drives are under way at Wal-Mart locations across Canada, UFCW spokesman Michael Forman said in a telephone interview from Toronto today.

Wal-Mart opened the Jonquiere store in October 2001. Since announcing the closure Feb. 9, the retailer hasn't attempted to terminate its lease, which runs until 2021, or sublet the building, Flageole wrote.

``This is an indication that the operator is keeping the door open'' to resuming operations, he said in the ruling. Wal-Mart ``didn't convince the Commission that the closing of the store'' was definitive.

Wal-Mart's Deschenes said the company has tried to sublet the building since announcing the closure.

Wal-Mart's shares fell 45 cents to $43.87 at 4:05 p.m. in New York Stock Exchange composite trading. The stock has declined 17 percent in the past year.

To contact the reporter for this story: Frederic Tomesco in Montreal at tomesco@bloomberg.net. Last Updated: September 16, 2005 16:11 EDT

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Quebec board rules in favour of former Wal-Mart workers

September 16, 2005                    [back to top]

MONTREAL (CP) - A provincial labour board has ruled that Wal-Mart didn't prove that a unionized store in Saguenay, north of Quebec City, was in financial trouble when it closed last spring.

The U.S.-based retail giant didn't sufficiently prove the closure was "genuine, true or definitive," the Quebec Labour Relations Board said.

The Saguenay store, 250 kilometres north of Quebec City, was slated to close in early May but ceased operation in late April. About 100 employees lost their jobs as a result.

It was Wal-Mart's first North American location to unionize since a Windsor, Ont., outlet was briefly accredited in the 1990s. But the Quebec workers never obtained a collective agreement.

The union has argued the closure of the Saguenay store was designed to intimidate other workers who might want to unionize.

Wal-Mart insisted the store was closed because it wasn't profitable. Its lawyers argued before the labour board that Canadian jurisprudence recognizes an employer's right to close a location regardless of its motives.

Louis Bolduc, of the United Food and Commercial Workers, was pleased with Thursday's ruling. But he said it's too early tell what effect the decision will have on other Wal-Mart stores where employees are trying to unionize.

The labour board decision also opened the door to employees being compensated for losing their jobs at the Saguenay store. However, other hearings will be held to determine that matter.

Another decision from the board relating to Wal-Mart rejected the company's bid to get the names of employees who were in favour of the union.

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US: Wal-Mart Accused of Denying Workers' Rights

by Michael Barbaro
The Washington Post
September 14th, 2005                             [back to top]

An American labor rights group filed a class-action lawsuit yesterday against Wal-Mart Stores Inc., alleging that suppliers in five countries violated workers' rights, including denying a minimum wage, requiring overtime and punishing union activity.

The suit, filed in California Superior Court in Los Angeles, accuses Wal-Mart of failing to enforce its standards for suppliers and, in some cases, observe local labor laws in China, Bangladesh, Swaziland, Nicaragua and Indonesia.

The International Labor Rights Fund, a District-based advocacy group, filed the suit on behalf of 15 foreign workers who claimed they were subjected to illegal working conditions, and four California grocery employees who claimed that Wal-Mart's cost-cutting measures resulted in lower wages and benefits.

The suit, which must be certified by a judge before achieving class-action status, is the latest legal salvo against the discount retailer, which faces class-action suits claiming that it discriminated against black truck drivers and female store employees. If certified, the suit could represent 200,000 to 400,000 people, said lawyer Terry Collingsworth of the International Labor Rights Fund.

Beth Keck, a spokeswoman for Wal-Mart's international division, called the case "complex" and said "it's too early for us to talk about this in detail."

Collingsworth said the suit would test whether corporate codes of conduct, which retailers such as Wal-Mart require their foreign suppliers to sign, "are simply public relations devices or whether they mean what they say."

The suit could take years to move through the courts, but in the meantime, the case is expected to add to the growing debate about Wal-Mart's business model, which has shifted the manufacturing of products including clothing and toys to foreign countries to cut labor costs. Wal-Mart is based in Bentonville, Ark.

According to one assertion in the suit, a woman at a Wal-Mart clothing manufacturer in Bangladesh worked seven days a week, from 7:45 a.m. to 10 p.m., making chalk marks on pants and did not have a day off for six months.

The four California plaintiffs are employees of unionized grocery chains, such as Ralphs and Safeway Inc., that have cut wages and benefits to better compete with Wal-Mart. All four are members of the United Food and Commercial Workers Union, which is trying to organize Wal-Mart's 1.2 million U.S. employees

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Lawsuit targets Wal-Mart overseas working conditions

By GARY GENTILE,
AP Business
Wednesday, September 14, 2005                          [back to top]

A lawsuit accuses Wal-Mart Stores Inc. of failing to monitor labor conditions at overseas factories that allegedly maintained sweatshop conditions.

The suit filed Tuesday seeks class-action status and claims Southern California grocery workers were harmed because Wal-Mart's low prices — made possible by alleged substandard overseas factories — force competing grocery chains to cut wages and benefits.

Beth Keck, a Wal-Mart spokeswoman, said the company had not seen the lawsuit but had started to research the issues it raises.

"It's too early for us to talk in detail about this case," Keck said. "It's complex."

The lawsuit was filed on behalf of two classes of plaintiffs. The first includes factory workers in China, Bangladesh, Indonesia, Swaziland and Nicaragua that made garments and toys for sale in Wal-Mart stores.

It claims those plaintiffs, identified only as John or Jane Doe, could not bring similar court actions in their own countries because of fear of retribution and corrupt court systems.

The second group includes California grocery workers at stores such as Ralphs and Vons who saw their wages and benefits cut amid competition from Wal-Mart.

The lawsuit was filed in Los Angeles Superior Court under California's Unfair Business Practices Act.

The court action was organized by the Washington, D.C.-based International Labor Rights Fund, which also helped organize a lawsuit in the 1990s against Unocal Corp. alleging human rights violations during the construction of a pipeline in Southeast Asia.

Terry Collingsworth, general counsel for the group, said he and associates interviewed dozens of workers overseas to compile tales of forced overtime, denial of minimum wages and even violence against workers.

The acts violate Wal-Mart's own code of conduct, which prohibits such acts by overseas suppliers, according to the lawsuit.

The suit seeks a jury trial and unspecified compensatory damages. It alleges breach of contract for denial of minimum and overtime wages, forced labor and denial of fundamental rights to freely associate.

Workers often were kept behind locked doors to prevent them from leaving early and were prevented from associating to form labor unions, the suit alleges.

Wal-Mart's public claims that it complies with foreign labor laws persuaded California consumers to patronize the chain to the detriment of workers at competing stores, the suit states.

©2005 Associated Press

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Wal-Mart mall plan withdrawn in Jersey

Philadelphia Business Journal
September 14, 2005                              [back to top]

Plans for a Wal-Mart at an existing mall in Voorhees, N.J., were withdrawn, the developer said Wednesday.

Instead, Pennsylvania Real Estate Investment Trust said it will revamp the Echelon Mall by renaming it Voorhees Town Center and adding 200,000 square feet of "lifestyle" retail space and 450 housing units, including condominiums and apartments.

PREIT (NYSE: PEI) also said the new site plan incorporates a wide, landscaped boulevard to provide direct access to shops and restaurants. Some of the mall would be knocked down under the plan, PREIT said, while some would be made part of the new concept.

The Wal-Mart plan reportedly faced growing neighborhood opposition.

Echelon Mall, which opened in 1970, is 1.1 million square feet and was acquired by PREIT in March 2003.

"We are very excited about the new plans for Voorhees Town Center, which will serve as the shopping, entertainment and residential center for this vibrant, well-established community," said Joseph Coradino, president of PREIT Services LLC. "The revised plan includes needed service and convenience retail stores and luxury condominium and rental apartments, which have seen strong demand in this growing market."

Plans must be approved by the township.

Philadelphia-based PREIT owns 37 shopping malls, 13 shopping centers and one office property.

© 2005 American City Business Journals Inc.

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Anti-sweatshop campaigners turn up the heat on Wal-Mart

JIM STANTON
www.scotsman.com
Wed 14 Sep 2005                      [back to top]

WAL-MART, the owner of Britain's Asda chain, was today accused of turning a blind eye to sweatshop conditions at a number of factories across the globe that it sources supplies from.

The world's biggest retailer faces a class-action - a claim on behalf of a group of people - from two classes of plaintiffs, with the first seeking redress for 15 workers at factories in China, Nicaragua, Bangladesh, Swaziland and Indonesia who make toys and garments for sale in Wal-Marts.

The suit, filed in Los Angeles Superior Court under California's Unfair Business Practices Act, alleges that the store giant failed to monitor working conditions at plants it gets supplies from.

Workers involved claim they were each paid below minimum wages and did not receive overtime payments. Some of them claim they were also beaten up.

The suit further claimed that these plaintiffs could not bring court actions in their own countries because of fear of retribution and corrupt court systems.

The second set of plaintiffs are Southern California grocery workers at stores such as Ralphs and Vons. They claim their wages and benefits were cut through fierce competition because Wal-Mart was squeezing suppliers so hard.

Wal-Mart spokeswoman Beth Kath said the group was looking into the accusations. She added: "It's really too early for us to be able to say anything about this particular complaint. It involves a number of companies and manufacturers and we're just beginning our research."

The court action was organised by the Washington DC-based International Labor Rights Fund, which also helped organise a lawsuit in the 1990s against Unocal Corporation, alleging human rights violations during the construction of a pipeline in Asia.

Terry Collingsworth, general counsel for the group, said he and associates interviewed dozens of workers overseas to compile tales of forced overtime, denial of minimum wages and even violence against workers. The alleged acts violate Wal-Mart's own code of conduct, which prohibits such acts by overseas suppliers, according to the lawsuit.

Under the lawsuit, unspecified compensation is sought for alleged breach of contract, for denial of minimum and overtime wages, for forced labour and for denial of fundamental rights to freely associate.

Some workers claim they often were kept behind locked doors to prevent them from leaving early.

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Suit targets Wal-Mart labor usage

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LOS ANGELES (AP) -- A lawsuit filed Tuesday accuses U.S. retailer Wal-Mart Stores of failing to monitor labor conditions at overseas factories that allegedly maintained sweatshop conditions.

The suit seeks class-action status and claims Southern California grocery workers were harmed because Wal-Mart's low prices -- made possible by alleged substandard overseas factories -- force competing grocery chains to cut wages and benefits.

Beth Keck, a Wal-Mart spokeswoman, said the Bentonville, Ark.-based company had not seen the lawsuit but had begun researching the issues it raises.

"It's too early for us to talk in detail about this case," Keck said. "It's complex."

The lawsuit was filed in Superior Court in Los Angeles under California's Unfair Business Practices Act and was filed on behalf of two classes of plaintiffs. The first includes factory workers in China, Bangladesh, Indonesia, Swaziland and Nicaragua that made garments and toys for sale in Wal-Mart stores.

It claims those plaintiffs, identified only as John or Jane Doe, could not bring similar court actions in their own countries because of fear of retribution and corrupt court systems.

The second group includes California grocery workers at stores such as Ralphs and Vons who saw their wages and benefits cut amid competition from Wal-Mart.

The lawsuit was organized by the Washington, D.C.-based International Labor Rights Fund, which also helped organize a lawsuit in the 1990s against Unocal Corp. alleging human rights violations during the construction of a pipeline in Southeast Asia.

Terry Collingsworth, general counsel for the group, said he and associates interviewed dozens of workers overseas to compile tales of forced overtime, denial of minimum wages and even violence against workers.

The acts violate Wal-Mart's own code of conduct, which prohibits such acts by overseas suppliers, according to the lawsuit.

The suit seeks a jury trial and unspecified compensatory damages. It alleges breach of contract for denial of minimum and overtime wages, forced labor and denial of fundamental rights to freely associate.

Workers often were kept behind locked doors to prevent them from leaving early and were prevented from associating to form labor unions, the suit alleges.

Wal-Mart's public claims that it complies with foreign labor laws persuaded California consumers to patronize the chain, harming workers at competing stores, the suit states.

Copyright 2005 The Associated Press. All rights reserved.

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Suit Says Wal-Mart Is Lax on Labor Abuses Overseas

By STEVEN GREENHOUSE
September 14, 2005                     [back to top]

A labor rights group filed a class-action lawsuit yesterday against Wal-Mart Stores in which apparel workers in Bangladesh, China and other countries assert that Wal-Mart violated its contractual obligations by not enforcing its code of conduct for overseas contractors.

The lawsuit, filed in state court in Los Angeles, makes the novel argument that Wal-Mart's code of conduct created contractual obligations between it and thousands of workers employed by contractors who were supposed to comply with the code.

In the lawsuit brought by the International Labor Rights Fund, workers from Bangladesh, China, Indonesia, Nicaragua and Swaziland assert that the codes of conduct were violated in dozens of ways. They said they were often paid less than the minimum wage and did not receive time-and-a-half for overtime, and some said they were beaten by managers and were locked in their factories.

"Based on its vast economic power, Wal-Mart, based on its code of conduct, can and does control the working conditions of its supplier factories," the lawsuit states. "It could use its power and position to prevent its producers from profiting from the inhumane treatment of plaintiffs."

Beth Keck, a Wal-Mart spokeswoman, said the company was studying the lawsuit. "It's really too early for us to go into any kind of detail about this complaint," Ms. Keck said. "It involves a number of countries, suppliers and factories. We will be looking into this and taking it very seriously."

Wal-Mart executives say that they have the world's largest overseas monitoring program, with more than 5,000 factories inspected by 200 full-time inspectors who visit 30 factories a day. The executives say that when inspectors find violations, they give factories several months to fix any problems before another inspection.

Last year, according to the company's ethical standards report, Wal-Mart cut off 1,200 factories for at least 90 days because serious violations were found in the second visit. Another 108 factories were permanently banned, primarily because of child-labor violations.

In the lawsuit, two male workers for Wal-Mart contractors in Shenzhen, China, asserted that they were not paid the minimum wage, not permitted to take holidays off and were forced to work overtime. They said the contractors withheld the first three months of all workers' pay, almost making them indentured servants because the company refused to pay the money if they quit.

An apparel worker in Dhaka, Bangladesh, said that she was locked into the factory and did not have a day off in her first six months. She said that she was told if she refused to work the required overtime, she would be fired. Another worker said her supervisor attacked her "by slapping her face so hard that her nose began bleeding simply because she was unable to meet" her "high quota."

The complaint tells the stories of 16 plaintiffs, but lists them as John and Jane Does, saying they need to be protected against reprisal. Several said they were fired or suspended for backing unions.

The lawsuit accuses Wal-Mart of breach of contract for wage violations, forced labor and denying workers the right to associate freely. It also accuses the company of negligence, unjust enrichment and fraudulent and deceptive practices in violating California's business code.

Terry Collingsworth, executive director of the International Labor Rights Fund, a Washington-based advocacy group, asserted that filing the lawsuit in California was appropriate because Wal-Mart had violated that state's laws. He said that if the plaintiffs had filed the lawsuit in their home countries, they would have faced arrest, physical attacks and hostile judicial systems that favored corporations.

He faulted Wal-Mart's monitoring system, contending that fewer than 10 percent of its inspections were unannounced. He said company managers often coach workers on what to tell the inspectors.

Wal-Mart executives say that they are working to improve the monitoring and that more inspections will be unannounced.

"With our growth, the challenge of ethical sourcing has become increasingly complex," H. Lee Scott Jr., Wal-Mart's chief executive, wrote in the company's 2004 Report on Standards for Suppliers. "But we have a qualified ethical standards team dedicated to verifying that factories are in compliance with local labor laws and/or Wal-Mart standards, whichever are more stringent."

An Indonesian plaintiff who said she made jackets for Wal-Mart's private-label George line complained of unpaid work hours and unpaid overtime, saying that she often worked from 7 a.m. until 8 or 10 p.m. Mondays through Fridays. She said she also had to work on Saturdays from 7:30 a.m. until 3 or 4 p.m.

Another Indonesian worker said, "Wal-Mart production quotas were far higher than quotas from previous buyers, and her supervisor regularly yelled at her and her colleagues if the work was not performed quickly enough."

An apparel worker in Matsapha, Swaziland, said he sometimes had to work from 7 a.m. to 11 p.m. and once worked all night. "He was threatened with immediate dismissal if he did not work overtime, and the factory doors were locked to ensure he did not leave," the lawsuit asserted.

Mr. Scott wrote in the ethical standards report, "It is important to recognize the reality that however strong the programs we develop, violations of our standards will occur." He added that it was a point of pride with Wal-Mart when violations were discovered, action was taken.

The plaintiffs include four unionized California supermarket workers who say that they suffered cuts in pay and benefits because of competition from Wal-Mart's low prices. They argue that those prices are attributable in part to violations of the chain's suppliers' code of conduct.

Copyright 2005 The New York Times Company

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Californians Get Calls About Neb. Wal-Mart

Lincoln Journal Star
Tuesday, September 13, 2005                    [back to top]

Several residents of Lincoln, Calif., received phone calls last week asking for their support for a Wal-Mart in northeast Lincoln.

The only problem was that the call concerned a proposed Wal-Mart that was no where near California. It's in Lincoln, Neb.

Residents were asked to support the Wal-Mart by contacting the Lincoln-Lancaster County Planning Department.

Many Californians did — to complain about the calls.

A telemarketing company rented call machines that were used recently to promote the Wal-Mart in Nebraska, Wal-Mart spokesman Ryan Horn said.

The Wal-Mart message was not erased from one of the machines and wound up being heard by the Californians in place of the telemarketer's message.

Information from: Lincoln Journal Star

©2005 Associated Press

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Scale Back Wal-Mart Say Festival Goers

Good Politics Radio Vermont
Monday, 12 September 2005              [back to top]

ST. ALBANS, VT, (NAMC) - Interviews from those attending the Festival for a Local Vermont- the gathering of those in support of a local, sustainable Vermont and opposed to the planned 160,000 sq. ft Wal-Mart- can be heard on Good Politics Radio Vermont.

The Festival, sponsored by North West Citizens for Responsible Growth and Vermont Natural Resource Council was held on September 9, 2005 at the Hudak Farm in St. Albans, VT. The interviews can be accessed by going to www.goodpoliticsradio.com/vermont and are also available as a podcast. Some of those interviewed include State Senators Peter Welch and Vince Illuzi, former State Senator Peter Shumlin, and Representative Sara Branon Kittell.

Since Good Politics Radio Vermont is a non-partisan, internet political show, we welcome views from all sides of this issue. If interested, please contact Don or Peggy Lewellen, managers of Good Politics Radio, at 877-674-9572.

Contact: Donald Lewellen GOOD POLITICS RADIO VERMONT 802-527-0494

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Wal-Mart Appeals Denial of Gresham Supercenter, Presents Plans for New Supercenter in Cornelius

Smart Growth News                      [back to top]

In a two-prong action at the Portland metro's eastern and western flanks, Wal-Mart appealed a denial of its proposed 209,000-square-foot Supercenter in Gresham and launched a neighborhood presentation of plans for a 200,000-square-foot Supercenter in Cornelius, with both GreshamFirst and CorneliusFirst citizen groups determined to fight -- the former having hired a land-use attorney and set up a legal defense fund, the latter gathering signatures under a protest petition.

In its Gresham appeal, reports Oregonian writer Eric Mortenson, Wal-Mart argues against a city planner's conclusion that the projected 1,100 cars an hour at the Saturday shopping peak time would clog local roads, calling it ''speculative,'' citing its suggested traffic-light remedies, and expressing willingness to modify the proposal and reduce the store's size.

The Community and Economic Development Department expects a city hearings officer to decide the Wal-Mart appeal by October 29, the writer notes, finding GreshamFirst spokeswoman Javon Gilmore confident the city and her group will prevail although the case may eventually end up in the state Land Use Board of Appeals or even in the courts.

At the neighborhood meeting on the Wal-Mart plan in Cornelius' Centro Cultural, not only densely packed with local and nearby Forest Grove residents and business owners, but also attended by reporters from all area newspapers and two Portland TV stations, observes Hillsboro Argus writer Lisa Cromwell, many tried to discern ''whether Wal-Mart would provide more opportunities for Cornelius than trouble.''

Centro director Sabino Sardineta summed up the feeling this way: ''Cornelius has a need for employment and this would provide opportunities, but the other half of me wonders whether money from this store will be invested in the county.''

As Wal-Mart opponents were signing the protest petition, written by CorneliusFirst president Tracy Irvin, the writer reports, some of the few Wal-Mart supporters also had misgivings. Although ''excited'' by the proposal in general, resident Barbara Storey said, ''I'm not happy about the grocery part, because Hank's has been the backbone of the community for years. Adding another grocery to the mix will hurt local business.'' -- Oregonian, Hillsboro Argus 8/30/2005

This web site is a subset of http://www.sustainable.org, developed and maintained by the Sustainable Communities Network (SCN), and supported with funding from the US EPA. Disclaimer Copyright © 1996-2005. All Rights Reserved.

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Wal-Mart gets under way in Terramont development

Allison Wollam
Houston Business Journal
September 12, 2005                              [back to top]

Ground has been broken on a 210,000-square-foot Wal-Mart Supercenter and fuel center in the new retail development of Terramont, located at the southeast corner of Woodlands Parkway and FM 2978.

Retail parcels have also recently been sold to Monthly Income and Growth Fund II, a retail partnership fund sponsored and managed by AmReit Inc. (AMEX:AMY), and veterinarian Dr. John Bulovas, according to Greg Jordan, director of commercial land sales for The Woodlands Development Co.

The 25-acre Terramont retail site will be surrounded by a 60-foot forest buffer along Woodlands Parkway and 50-foot buffers along FM 2978 and Branch Crossing Drive.

Architectural details at the Wal-Mart Supercenter include tan brick with stone accents, brick columns every 15 feet to customize the facade, wood shutters and large-scale planters with trees in front of the center and in the parking lot.

The Wal-Mart center is scheduled to be complete next spring.

Monthly Income and Growth Fund II has purchased a 5.24-acre site in Terramont to develop 24,000 square feet of lease space and two pad sites in a stand-alone multi-tenant retail strip.

Construction on this project will begin by year's end, with an estimated completion date set for August 2006.

Bulovas, a resident of The Woodlands, has purchased a 1.66-acre site for Animal Hospital of The Woodlands, a veterinary and boarding facility.

The animal hospital will offer traditional services, as well as orthopedic and laser surgery for animals.

Previously announced tenants in Terramont include Hibernia National Bank, Exxon and Whataburger.

The Woodlands is a 28,000-acre master-planned community located 27 miles north of downtown Houston.

© 2005 American City Business Journals Inc.

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R.V. Owners Skip Camp and Park at Wal-Mart

By OTTO POHL
September 11, 2005                               [back to top]

SHERIDAN, Wyo. - Frank Sharpski Jr. surveyed the Wal-Mart parking lot near his R.V. campground on a recent afternoon. "There are six of them today," he said, counting the rigs that he figured would not be spending any time or money at his campground that night. "And that's a slow night."

R.V. campground owners like Mr. Sharpski, co-owner of the Big Horn Mountain KOA Kampground here, say they are increasingly feeling financial pain caused by the growing popularity of parking R.V.'s at nationwide chains like Wal-Mart. It is a debate pitting R.V. owners against R.V. campground operators that is played out on vast expanses of asphalt, a controversy fueled by rising gas prices and intensified by R.V.-oriented Internet chat sites.

R.V. camping is the nation's fastest-growing tourism segment and is expected to grow strongly as baby boomers retire. There are now seven million R.V.'s on the roads, and that number is expected to continue to grow, industry groups say.

Wal-Mart is not the only chain store allowing free overnight R.V. camping - Kmart, Costco, and Flying J truck stops do as well - but Wal-Mart remains the most popular destination. Campgrounds charge between $25 and $40 a night.

The growing number of R.V. owners looking for a place to spend the night has helped force the issue into the public debate in cities including Fairbanks, Alaska; Rapid City, S.D.; and Burlington, Wis. Prompted by complaints from campgrounds and others, several communities have decided to begin actively enforcing laws banning parking-lot camping.

In Sheridan, however, Mr. Sharpski's efforts to restrict the practice ran straight into the influence of Wal-Mart, he said.

"It was like banging my head against a wall," he said of a meeting last year with the Chamber of Commerce to encourage enforcement of existing parking restrictions. "They're not going to step on Wal-Mart's toes."

Mr. Sharpski did not get a warmer reception the other day from the R.V. campers at the Wal-Mart when he suggested that parking-lot camping should be banned.

"Would you shut down grocery stores if they were putting restaurants out of business?" a camper, Marvin Boehme, asked him.

Phyllis and Tom Force emerged from their 26-foot Flair R.V. to add their opinions.

"You wouldn't have to be out here if people liked your camp," Mr. Force told Mr. Sharpski.

Mrs. Force was more practical.

"The other day I needed a haircut so I went in and got one," she said. "Can't do that at a KOA."

Most Wal-Marts provide only space for the R.V.'s to park, not electrical hookups or dumping stations. The company says its invitation to R.V.'s, which has been in place for decades, is not predatory competition. "It is very simply an extension of customer service," said Sharon Weber, a spokeswoman.

Many R.V. owners agree, and Wal-Mart camping has drawn an informal but enthusiastic following.

Many belong to Wal-Mart Bound International, an R.V. club whose only requirement for membership is having camped in at least five Wal-Mart parking lots. To help these so-called Wally Worlders find the nearest Wal-Mart, a couple from Carlsbad, Calif., published a book called "Wal-Mart Locator."

Whenever restrictions loom, an R.V. owners group called the Escapees keeps its 35,000 members abreast of developments on its Web site, www.escapees.com, and by an e-mail newsletter. Communities considering a crackdown are often barraged with e-mail messages threatening a boycott by R.V. owners.

Chuck Woodbury, editor of freecampgrounds.com, believes that Wal-Mart has become the largest R.V. campground in the country. It is impossible to confirm that claim because Wal-Mart does not keep track of the number R.V.'s parking in its lots, but it would only take about three R.V.'s a night at each of Wal-Mart's roughly 4,000 North American stores to surpass the industry's biggest campground chain, KOA, which has 450 locations in the United States and Canada.

The debate about Wal-Mart camping began as early as 1999, when the Escapees Web site excoriated supposedly restrictive camping policies by the Illinois Campground Owners Association and encouraged members to avoid any campground that belonged to the group.

"We got over 800 negative e-mails; it was really miserable," says Craig Weber, co-owner of the Geneseo Campground in Geneseo, Ill., whose wife, Shari, was president of the campground owners association at the time. "There were threats saying they would come to our campgrounds, plug up our toilets and set our garbage Dumpsters on fire."

Lori Vavak, the owner of the Double Dice RV Park in Elko, Nev., has decided to fight back in court. Ms. Vavak is suing the City of Elko for refusing to enforce an ordinance that bans overnight parking-lot camping. She is suing for $1 million, seeking reimbursement for lost business, which she estimates at $250,000 a camping season for the last four seasons. She must comply with 37 rules to retain her campground license, she says, and believes that anyone offering camping should do the same.

"We are happy to compete with legal competition," Ms. Vavak said. "We cannot compete with free, illegal competition."

Ms. Weber of Wal-Mart said: "We are not a campground and haven't claimed to be. Being able to have R.V.'ers park overnight is simply a customer convenience."

In Billings, Mont., a crackdown on parking-lot camping began in July when complaints about the large numbers of R.V.'s at the local Wal-Mart spurred the city into enforcing a 1960's-era parking ordinance. Security officers hired by Wal-Mart now hand fliers to R.V. drivers who pull in for the night. Complaints from the R.V. community have been swift.

"It's been a tempest," says Nicole Cromwell, the supervisor in charge of enforcing city codes. Ms. Cromwell said the city had received hundreds of protest e-mail messages, and the local newspaper had published a steady stream of letters about the conflict.

Ken Stellmacher, a spokesman for KOA, said his company would prefer to peacefully coexist. "We've extended an olive branch to Wal-Mart to see if we can find common ground," Mr. Stellmacher said.

It is unclear that any olive branch could resolve the issue, however, and so the battle continues. And that is not likely to change anytime soon, said Mr. Woodbury of freecampgrounds.com.

"These people have a lot of time on their hands," he said of his readers.

Copyright 2005 The New York Times Company Home Privacy Policy Search Corrections XML Help Contact Us Work for Us Back to Top

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RWDSU President Stuart Appelbaum Declares Labor United in Fight to Stop Wal-Mart

PRNewswire via COMTEX                             [back to top]

NEW YORK, Sept 11, 2005 -- On Saturday, September 10, at the Labor Breakfast preceding the New York City Labor Day Parade, Stuart Appelbaum, President of the Retail, Wholesale and Department Store Union, charged that hundreds of retail workers live in poverty caused by the Wal-Martization of the retail industry. "Wal-Mart's low prices come at too high a cost," Appelbaum declared.

Addressing national leaders, New York City and State elected officials and other dignitaries at the Labor Day Parade Breakfast at Tavern on the Green, Appelbaum, who is also Chair of the 2005 Labor Day Parade, underscored a key theme of this year's parade - "Stopping the "Wal-Marting" of good jobs ... and making Wal-Mart accountable to the communities they profit from."

Appelbaum slammed retailers, big and small, who forced workers to struggle just to get by," charging that workers are being "crushed by the cost of housing and health care."

"For them, the issue isn't that they can't find work most of them have jobs. They work hard to take care of their families. They're following the rules and doing their part. The problem is that their employers refuse to do theirs," Appelbaum said.

"A strong, growing, winning labor movement," Appelbaum said, was the answer. "We transform poverty wage work into jobs with a future. That is what unions are all about."

"That which unites us is much stronger than that which divides us," Appelbaum added stressing that the labor movement is united in the fight against Wal-Mart and other anti-union employers. He added, "Wal-Mart has its value but we in the New York labor movement have ours."

The RWDSU represents 100,000 members throughout the United States and Canada, including 45,000 in New York.

Zita Allen, +1-212-684-5300, or +1-917-309-2210, for Retail, Wholesale and Department Store Union

http://www.prnewswire.com

Copyright (C) 2005 PR Newswire. All rights reserved

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Wal-Mart's Plans for Agressive Promotions Could Spell Trouble for Sears

Becky Yerak
Chicago Tribune
Saturday, September 10, 2005                     [back to top]

Sep. 10--Criticized during the 2004 holiday season for being tight with bargains, Wal-Mart Stores Inc. vowed this week not to make the same mistake this year.

"We are going to be very aggressive," Chief Executive Officer Lee Scott said.

Such fighting words from the world's biggest retailer could spell trouble for rival merchants, including the new management team at Sears Holdings Corp.

Sears Chairman Edward Lampert--a hedge fund manager--said Thursday he would raise his profile at the Hoffman Estates-based company just months before the critical holiday season begins. Lampert will direct the marketing, merchandising, design and online businesses of Sears Holdings and its Lands' End clothing unit.

The management shuffle, which coincided with disappointing second-quarter financial results, also included the promotion of Sears Holdings President Aylwin Lewis--until a year ago a fast-food industry executive--to the CEO's post, replacing Alan Lacy, a former Sears finance whiz who'll remain vice chairman.

In theory, retailers' holiday plans should be set by now. Federated Department Stores Inc., for example, last month completed its acquisition of May Department Stores Co., but analysts don't expect Federated's merchandising touches to show up in May stores until at least spring 2006.

Likewise, Lampert's "impact isn't going to be felt until next year," Morningstar Inc. equity analyst Kimberly Picciola said. "They're already done merchandising for the holiday season."

But another retail industry observer makes a case that Sears Holdings, through a more visible Lampert, is likely to push for changes in the game plan for this holiday season.

"They wouldn't know a sweater from a tank top," New York retail consultant Howard Davidowitz said of Sears' top executives. "But what they could influence strongly is how much inventory to buy and how aggressive promotions should be, and those are things Lampert will be up to his eyeballs in."

Lampert, who earned more than $1 billion last year as a hedge fund manager, bought Kmart Holding Corp. out of bankruptcy court, nursed it back to financial health and last March masterminded the acquisition of Sears, Roebuck and Co., merging the two to form Sears Holdings. As chairman of Kmart, Lampert made money for the company and a reputation for himself by cutting costs, including the discount chain's level of promotions, as well as reducing its inventories.

Now heading the $55 billion Sears Holdings, Lampert is likely to throw his weight around with vendors for the nation's third-biggest retailer.

"Can you imagine a $50 billion guy at your doorstep saying, 'I've got an $11 billion order but I'd like to make it $9 billion?'" Davidowitz said. "The vendor will salute."

Indeed, in a letter to shareholders Thursday, Lampert addressed Sears' relationships with its suppliers.

"Many of our vendors will see increased sales as a result of working with us to lower our costs and to improve our customer experience," Lampert wrote. "There'll be others who do not see their long-term interest aligned with ours, and they may see their business with us reduced or eliminated."

After dropping 5.2 percent Thursday after the earnings announcement, Sears' stock rebounded Friday, closing up 3.9 percent to $132.74.

Richard Hastings, senior retail sector analyst for Bernard Sands LLC, says he liked what he saw in the second-quarter numbers. Operating income jumped 26 percent to $658 million, he noted.

"That's what matters most: whether Sears-Kmart can generate more cash from operations," Hastings said.

But while the company's gross profit margins rose from 26 percent to 27.2 percent, margins at Kmart were pressured by higher markdowns, a trend that could continue into the holiday season.

"It's likely that retailing will generally be more promotional and price competitive this season, and that will put more pressure on Sears and Kmart," Hastings said.

Davidowitz said Wal-Mart's decision not to pull its punches this year on holiday pricing--plans outlined by Scott during a Prudential Equity conference in Boston on Wednesday--doesn't bode well for Sears, which competes with Wal-Mart for buyers of such products as sporting goods and electronics.

"Lampert's strategy is reducing promotions and being profit-oriented," Davidowitz said. "If he continues on this strategy, he'll be in a terrible spot because customers have choices."

To see more of the Chicago Tribune, or to subscribe to the newspaper, go to http://www.chicagotribune.com.

Copyright (c) 2005, Chicago Tribune

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Union seeks to overturn Labour Board's refusal to reopen Wal-Mart store

Fri Sep 9, 9:07 PM ET                           [back to top]

MONTREAL (CP) - The union representing workers at the closed Wal-Mart store in Saguenay, Que., is going to court in its latest battle reopen the location.

The Food and Commercial Workers Union went to Quebec Superior Court to overturn two Quebec Labour Relations Board decisions concerning the closure.

In its request, the union wants the court to order the board to reconsider its rulings.

On May 11, the board rejected a request for a provisional injunction to order the store reopened. On July 7, three commissioners rejected a union appeal of that decision.

The store, 250 kilometres north of Quebec City was slated to close May 6, but ceased operation a week early on April 26.

It was the retail giant's first North American location to unionize since a Windsor, Ont., outlet was briefly accredited several years ago.

The union has argued the closure of the Saguenay store was designed to intimidate other workers who might want to unionize.

Wal-Mart insisted the store closed because it wasn't profitable. Its lawyers argued before the labour board that Canadian jurisprudence recognizes an employer's right to close a location regardless of its motives.

The union's request before the Superior Court argued the labour board abandoned its responsibilities by failing to rule on the legality of closing the store.

It also said the closure of a location in a chain

of stores can't be viewed the same way as a single store.

"It's not about an employer deciding to stop his operations, but rather about sacrificing a unionized location in order to prevent the unionization of other locations."

Copyright © 2005 Canadian Press

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Urge Wal-Mart to Follow Competitor, Target, and End Animal Sales!

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The pet-trade industry’s failure to provide animals with proper food, water, and care is nothing new. Sadly, neither are reports of animals who are suffering in Wal-Mart locations across the country.

PETA caseworkers have long fielded complaints about hideous conditions for fish in the company’s stores. Our requests to meet with corporate officials to discuss this issue have gone unanswered. Far from listening to its customers’ calls to end the sale of live animals, Wal-Mart has begun to peddle even more animals like trinkets, including live fish and insects who can be purchased from a vending machine.

This picture depicts hermit crabs on display and deprived of food, water, a heat source, or any semblance of humidity levels necessary for their well-being. Hermit crabs—whose natural life expectancies of up to 30 years are reduced to 4 years when they are kept as “pets”—are wild animals who are shy and fragile, love to climb, and live in large groups in the wild.

Please write to Wal-Mart CEO Lee Scott Jr. and ask that he follow the example of Wal-Mart’s competitor Target Stores and finally discontinue marketing and selling living beings.

Our campaign will suffer if correspondence is impolite:

H. Lee Scott Jr.,
CEO & President
Wal-Mart Stores, Inc.
702 S.W. Eighth St.
Bentonville, AR 72716-8611
1-800-WAL-MART
479-273-4329 (fax)
E-mail Wal-Mart

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Urge Gov. Schwarzenegger to Sign the "Wal-Mart Accountability" Bill

Assembly Bill 89 (Horton) would begin to hold those corporations who don’t provide healthcare for their workers accountable. The bill would require the state to collect the names of companies like Wal-Mart that abuse public programs by forcing taxpayers to pay for health care for their workers. This bill is now on the Governor’s desk.

Wal-Mart is a big contributor to the Governor and may pressure him not to sign this legislation. Ask Gov. Schwarzenegger to stand up to his corporate donors and sign the “Wal-Mart Accountability” bill!

http://www.unionvoice.org/campaign/AB89?rk=PpSK1p41Eqb6W
 

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No Wal-Mart In Miramar; Depot Headed To Pines

Thu Sep 8,12:37 PM ET                        [back to top] 

Wal-Mart won't be arriving in Miramar, at least not anytime soon.

Commisioners voted 4-1 Wednesday night not to approve plans for the store on Flamingo Road and Miramar Parkway.

Residents said they believed the store would bring down the value of their homes and cause traffic nightmares.

Meanwhile, Pembroke Pines residents will get a Home Depot.

Commissioners there gave the go-ahead for a new store to be built on Pines Boulevard and Hiatus Road.

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Wal-Mart eyes smaller cities

Hugo Miller
2005-09-08 05:51                  [back to top]

Wal-Mart Inc, the world's largest retailer, plans to accelerate store openings in China and expand into smaller Chinese cities after the government relaxed laws on foreign retailers operating in the country, an executive said.

"With the lifting of restrictions and with the talent pool we have accumulated, we can expect that the growth will speed up a bit," James Lee, vice-president of corporate affairs for Wal-Mart China, said in an interview on September 2 by telephone from the southern city of Shenzhen.

Bentonville, Arkansas-based Wal-Mart plans to open 14 superstores this year, an increase of a third, to catch up with Carrefour SA and domestic chains in China's US$652 billion retail market. China in December let foreign retailer open stores without a local partner to meet pledges made on joining the World Trade Organization in 2001.

The government also eased rules restricting foreign retailers to China's biggest cities and provincial capitals, giving them full access to the market. Wal-Mart is looking at smaller cities such as Yuxi in the southern province of Yunnan, where it currently has one store in the capital Kunming, Lee said.

Wal-Mart, which opened its first superstore in the country of 1.3 billion people in 1996, has 48 outlets in 23 cities including Beijing, Harbin, Shanghai and Shenzhen. Paris-based Carrefour, the largest overseas retailer in China, had 61 stores in the nation out of a total of 6,680 worldwide as of the end of June.

Chinese companies such as Lianhua Supermarket Holdings Ltd also are expanding to shore up their market share against foreign competition. Shanghai-based Lianhua said in April it aims to add 600 stores this year, expanding outside eastern China to become a national brand.

As of the end of June, it had 3,377 supermarkets and convenience stores, from 2,706 a year earlier.

Beijing-based rival Wumart Stores Inc has said it's sticking to a strategy of expanding around the Beijing.

Wal-Mart is counting on faster Chinese growth as its expansion slows in the US, where higher oil prices are crimping consumer spending. The company's first-half sales outside the US rose 12.3 per cent to US$29.1 billion as domestic sales climbed 9.9 per cent to US$99.5 billion.

Retail sales in China may expand 13.5 per cent in the second half of this year, spurred by rising incomes, the Beijing-based Financial News said last month, citing the State Information Centre.

A dozen large fish tanks filled with live carp, eel and other seafood dominate one wall of the fresh food section in Wal-Mart's Beijing store. Chinese customers "like to buy fresh and probably make more trips to the store than in the US or Europe, so we put more emphasis on food," said Lee.

Food typically accounts for half of total revenue in the company's Chinese stores compared with 30 per cent to 40 per cent in other markets, he said. "Our customer base is also getting more sophisticated," said Ivan Ho, who managed Wal-Mart's first Chinese outlet in 1996 and is now operations manager for northern China.

Wal-Mart also runs a Shenzhen-based procurement business, sourcing goods from China for its stores worldwide.

Last year, it bought US$18 billion worth of goods from Chinese suppliers, up from US$15 billion in 2003.

About 90 per cent of the retailer's stock in China is procured domestically, according to Ho. "China is the manufacturer to the world," he said.

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Wal-Mart CEO vows aggressive discounts

Reuters
Sep. 7, 2005                              [back to top]

Wal-Mart Stores Inc. <WMT.N> set the stage for a fiercely competitive holiday shopping season on Wednesday, vowing to aggressively cut prices after drawing criticism last year for keeping them too high and driving some customers away.

Chief Executive Lee Scott said the retailer set the pace for low prices in the current back-to-school shopping season and the discounts were very successful in drawing customers into its stores.

"We were extraordinarily aggressive," he said in a presentation at Prudential Equity Group's consumer conference, referring to back-to-school pricing. "I think it sets the tone for what the holiday is going to be like. We are going to be very aggressive."

Scott said the retailer was looking to strike the right balance between sales and profits -- something Wal-Mart has struggled to do in the past two holiday seasons.

In 2003, Wal-Mart slashed prices on toys, prompting complaints that the company was trying to drive competitors out of business, he said.

Last year, Wal-Mart reversed course and kept discounts to a minimum, but sales suffered and analysts criticized the strategy. Wal-Mart's November 2004 sales growth was just 0.7 percent at stores open at least a year -- down from a 3.9 percent gain in November 2003.

"They've learned the lessons from last year and are intent upon not repeating the same mistakes," said Bill Dreher, retail analyst with Deutsche Bank.

"It's going to be a combination of sharp pricing and cool new gifts, particularly electronics, that should allow Wal-Mart to have a good Christmas," he said.

Dreher pointed to items such as an exclusive MP3 player that Wal-Mart touts as the world's smallest. The mobiBLU Cube measures one inch, has a capacity of 1 gigabyte, and is sold only on Wal-Mart's Web site.

PRICE WAR?

Scott stressed that the retailer would protect profits even as it cuts prices, saying that the discounts would not be made "in a way that is detrimental to shareholders."

Still, Wal-Mart's holiday strategy could spell trouble for retailers that sell commodity goods, or those that cater to low-income shoppers, Dreher said.

"Those retailers that are successfully differentiated -- such as Target <TGT.N> with their 'cheap chic' philosophy -- will be a destination for gift-giving," he said.

Dollar stores in particular felt the pain from Wal-Mart's aggressive back-to-school pricing. Dollar General Corp. <DG.N> last week blamed aggressive pricing for a disappointing 0.9 percent increase in its August same-store sales.

Wal-Mart sent retailing stocks tumbling last month when it warned that steep fuel prices were curbing consumer spending and dampening second-half prospects. The retailer is considered a good indicator of consumer spending because it draws more than 100 million shoppers per week.

Wal-Mart has long tracked what it calls the paycheck cycle, where spending at its stores increases around the first and 15th of each month when paychecks arrive. A strong paycheck cycle is an indicator that customers are living on a tight budget, holding off on purchases until the next check arrives.

But Scott said the steep oil prices were squeezing household budgets even tighter, and the retailer was seeing a sharper drop-off in discretionary spending at the end of each month as the money runs out.

Demand for consumables such as food or cleaning supplies remained steady, but nonessentials like DVDs sold well only at the beginning of each month, he said.

Shares of Wal-Mart were down 18 cents, or 0.4 percent, at $45.51 in midday trading on the New York Stock Exchange.

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 zooms in on Mexico's small towns

By Lorraine Orlandi
Wednesday 7 September 2005                         [back to top] 

MEXICO CITY, Sept 7 (Reuters) - After conquering Mexico's major cities, Wal-Mart is setting its sights on the nation's small towns and on lower-income customers as its nonstop expansion south of the border accelerates.

Eduardo Solorzano, chief executive of Wal-Mart Mexico, told analysts on Wednesday that, while the retail powerhouse continues to gain market share in cities, it can also capitalize on the needs of small towns.

Rural markets in Mexico often offer a limited assortment of merchandise at relatively high prices.

"We have discovered that we have a huge opportunity in the rural markets in Mexico," he said in a presentation at Goldman Sachs in New York that was broadcast on the Internet.

"We are really happy with the returns in these small towns," he said.

Executives see 371 cities as potential sites for expansion, he said. Solorzano, who took the company's helm in February, had earlier said it was eyeing 200 cities for growth.

The shares of the company, known as Walmex (WALMEXV.MX: Quote, Profile, Research) and among the most popular in Latin America with investment funds, surged 3.74 percent on higher than average volume to close at 50.47 pesos on Wednesday. The stock is up 32 percent so far this year, compared with about 18 percent for the leading IPC index as a whole.

The retailer, controlled by Wal-Mart Stores Inc. (WMT.N: Quote, Profile, Research), has used low prices and aggressive expansion to become Mexico's No. 1 retailer by a wide margin in the past decade, with 722 stores and restaurants in various formats across the country.

The company said this week it had boosted its expansion program for this year, with plans to open 90 new stores, 20 more than originally planned.

Most of the additional units are Bodega Aurrera stores, which are designed for smaller towns and lower-income shoppers rather than the giant Supercenters, or more upscale Superama grocery stores. Many will be built in rural areas.

Company officials declined to say how much will be invested in the new locations. In February, Wal-Mart de Mexico said it would spend around $737 million to open 70 new stores. The expansion program represents an increase of 14 percent in installed capacity.

GROWING MARKET SHARE

Mexico's largest private employer, Walmex has plowed profits into expansion to take a growing share of the market.

Efficiency due to its size and technology have helped the company consistently undercut rivals' prices and boost sales, even in the face or rising competition or economic slowdowns.

Solorzano said on Wednesday that the company continues to cut costs and has reduced employee turnover by about 40 percent in the past six years.

As part of a strategy to expand its client base among lower-income shoppers, Walmex is building a credit program financed by BBVA-Bancomer bank that now has 1.8 million cardholders, Solorzano said.

"We believe we need to develop credit ... to attend to lower-income people," he said.

Walmex also has an agreement with Moneygram International Inc. (MGI.N: Quote, Profile, Research) to receive money transfers at its stores from Mexicans living abroad, a lucrative business given the large population working in the United States and other countries.

It launched a new department within its stores called Prichos, offering cheaper items similar to dollar stores.

(Additional reporting by Gabriela Lopez)

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Albertson's, Ahold Miss Estimates, Hurt by Wal-Mart

Bloomberg
Sept. 7                            [back to top]

Grocers Albertson's Inc. and Royal Ahold NV said second-quarter profits were below analysts' estimates, hurt by discounter Wal-Mart Stores Inc. Shares of the companies fell.

Net income at Albertson's, which put itself up for sale last week, increased 2.9 percent on lower costs while sales were little changed. Zaandam, Netherlands-based Ahold, owner of U.S. supermarkets including Stop & Shop, said in a statement today that it earned 130 million euros ($162 million) as sales declined 1 percent.

Both grocers are battling Wal-Mart's lower prices. Albertson's, owner of chains including Shaw's and Sav-on, narrowed its profit margin after cutting prices on basic items such as paper towels. Ahold, which gets about 70 percent of revenue in the U.S., is refurbishing stores and adding products such as books and DVDs to gain market share.

``Wal-Mart is killing these companies,'' said Sean Egan, managing director for bond rating firm Egan-Jones Ratings Co. in Haverford, Pennsylvania. ``They're facing a double whammy. One is the increased competition from Wal-Mart, and two is increased gasoline prices.''

Ahold shares fell 53 cents, or 7.7 percent, to 6.65 euros in Amsterdam at 4:11 p.m. local time. It's the biggest drop in more than a year. Shares of Boise, Idaho-based Albertson's, which operates 2,500 stores in 37 states, declined 25 cents to $23.16 at 10:09 a.m. in New York Stock Exchange composite trading. Before today, they dropped 7.4 percent in the past year.

Albertson's, the second-largest U.S. grocery chain, was expected to earn 34 cents, the average estimate of 13 analysts surveyed by Thomson Financial. Analysts surveyed by Bloomberg expected Ahold, which also owns the Giant chain, to earn 143 million euros.

Albertson's

Albertson's said today in a statement that net income increased to $107 million, or 29 cents a share, from $104 million, or 28 cents, a year earlier. It recorded $10.2 billion in sales, the worst performance in more than a year.

Identical-stores sales, which exclude results at new, closed and replacement stores, fell 0.1 percent. Gross margin, or the portion of sales left after subtracting the cost of goods sold, narrowed to 28.03 percent from 28.24 percent a year earlier.

Albertson's had a $3 million loss from discontinued operations compared with $21 million a year earlier related to closing or selling 21 stores. The company reaffirmed that profit from continuing operations will rise to $1.37 to $1.47 a share from $1.27 last year.

The grocer has not recovered from a 20-week strike in Southern California. Sales as of June had not returned to levels before the strike began in October 2003.

Company Sale

The company is also losing customers in markets such as Dallas/Ft. Worth to Wal-Mart, analysts said. Wal-Mart, the world's biggest retailer, has more than 1,000 U.S. supercenters that sell groceries.

Albertson's ``failed to come up with a winning strategy to fend off the competition at the low end with Wal-Mart and at the high end,'' said David Dietze, president of Summit, New Jersey- based Point View Financial, which manages about $95 million, including Albertson's shares. ``There is no strategy other than cutting costs.''

In addition to a sale of the company, Albertson's is considering selling more stores. The grocer has been exiting markets, such as New Orleans, Omaha, Nebraska, and Jacksonville, Florida, where it isn't a market leader.

``We are now at the point in our turnaround where we are clarifying our end game ... preparing to exit even more underperforming markets in order to monetize their embedded real estate and business value,'' Chief Executive Larry Johnston, 57, said in the statement.

Ahold

Ahold's profit compares with a 28 million euro net loss a year earlier, Chief Executive Officer Anders Moberg said on a conference call. The company on Aug. 4 said second-quarter sales dropped to 10.4 billion euros because of the decline of the U.S. dollar.

Operating income at the Stop & Shop and Giant-Landover chains, which account for more than half of Ahold's stores in the U.S., fell 6.5 percent in local-currency terms. The outlets are mostly in eastern states including Massachusetts, Connecticut, Rhode Island and New Jersey.

Higher oil prices may pose additional challenges, the CEO said today. ``We're working hard to deliver our targets, but the recent events in the U.S. will have an impact on the economy and impact on consumer behavior,'' said Moberg, 55.

Wal-Mart, based in Bentonville, Arkansas, on Aug. 16 cut its full-year earnings forecast, citing the effect of record-high gasoline prices.

Moberg also said the company has chosen a successor to Chief Financial Officer Hannu Ryopponen, who is leaving for paper company Stora Enso Oyj on Aug. 31. The appointment will be announced in the next two weeks.

``Rising fuel prices are likely to increasingly affect U.S. retail, while further price investments and store upgrades are needed,'' wrote Patrick Roquas, an analyst at Rabo Securities in Amsterdam. He has a ``neutral'' rating on Ahold.

To contact the reporters on this story: Josh Fineman in Princeton at jfineman@bloomberg.net and Angharad Couch in London at acouch2@bloomberg.net.

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CEO Says Wal-Mart Has Plan To Combat Bad Publicity

By Greg Edwards
Dow Jones Newswires
09-07-05                              [back to top] 

Wal-Mart Stores Inc.'s (WMT) chief executive said Wednesday that 15 of the company's stores remain closed, "principally in New Orleans," as a result of Hurricane Katrina.

That's down from 17 stores Tuesday and 126 originally. Wal-Mart, Bentonville, Ark., has 3,725 stores.

Lee Scott, president and chief executive, said nine of the stores have major damage, including one reduced to "half a wall and the safe." He spoke at the Prudential Equity Group Back-to-School Consumer Conference in Boston.

Scott also said the company has a strategy to deal with negative publicity. He said efforts directed against Wal-Mart are "the largest, most well financed corporate campaign in the history of business."

"It's not directed at organizing our workers," Scott said. "It is directed at slowing this company down."

Scott said Wal-Mart will not "publicize" the specifics of the strategy, but said it includes making sure "we are the kind of company that we should be so we are not giving the people who don't like us ammunition."

Scott noted that a Wal-Mart store that opened in California recently received 11,000 employment applications.

"Those stories become harder and harder to spin to the negative," he said.

"We have allowed to exist the idea that only the poorest Americans shop at Wal-Mart," Scott said. "Shame on us. We have people from all walks of life who shop at Wal-Mart stores."

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Wal-Mart to cut prices for the holidays

Execs address issues including slowing same-store sales, targeting more customers and inflation.

CNN/Money
September 7, 2005                                 [back to top]

NEW YORK  - Wal-Mart executives vowed Wednesday to cut prices for the holidays, continue building new stores near existing ones, target more middle and higher-end customers, and perhaps make new acquisitions.

Chief Executive Officer Lee Scott said the world's biggest retailer would aggressively cut prices in the vital holiday season after drawing criticism last year for keeping them too high.

"This year we are setting the pace (in pricing) both in back-to-school and in the holiday season," Scott said in a presentation to analysts at Prudential Equity Group's consumer conference in Chicago.

In a separate conference in New York, Wal-Mart (Research) Chief Financial Officer Tom Schoewe said the company would continue with its strategy of opening stores near existing ones.

While he said some analysts call the strategy "cannibalism," Schoewe said the move increases the company's overall sales despite the drop in same-store sales growth.

"We think (comparing same-store sales) doesn't paint the entire picture," he said. "Overall growth is very important."

Schoewe also said the retailer will try to attract middle and upper-end customers, but will retain its focus on its core entry-level customers.

And he said rising inflation, triggered by higher fuel prices, may present some "opportunities" for the company, perhaps in the form of acquisitions.

-- from staff and wire reports

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Wal-Mart de Mexico beefs up expansion plan

Reuters
Wednesday 7 September 2005               [back to top]

MONTERREY, Mexico, Sept 6  - Wal-Mart de Mexico, by far the country's largest retailer, said on Tuesday it expects to open 90 new stores this year, 20 more than originally planned.

The company (WALMEXV.MX: Quote, Profile, Research), which has gained a lead in Mexican retailing in recent years with low prices compared to its smaller competitors, said its revised growth plan would require it to open 62 stores by year end.

"The expansion program represents an increase of 14 percent in installed capacity," said the company, which operates 722 stores and restaurants under various names across Mexico.

The retailer, controlled by Wal-Mart Stores Inc. (WMT.N: Quote, Profile, Research), did not say how much it would invest in the new locations.

In February Wal-Mart de Mexico had said it would spend around $737 million to open 70 new stores.

"With this revision they are looking at favorable consumer spending, and they have the resources to be more aggressive in expansion," said Mauricio Brocado, an analyst at Actinver mutual fund company in Mexico City.

© Reuters 2005. All Rights Reserved.

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Wal-Mart feels competition's heat

UPI
BENTONVILLE, Ark.
September 05, 2005                           [back to top]

U.S. retail giant Wal-Mart Stores may be worrying about competition for its British unit from Britain's market leader Tesco in food retailing.

H. Lee Scott Jr. head of the retailer known for its own aggressive marketing ways to handle competition in the United States, recently said in London that British authorities should be concerned about Tesco having too much market clout, the Los Angeles Times reported.

Tesco, Britain's largest supermarket, has a 30 percent market share, while Wal-Mart's Asda Group Ltd., has 16 percent of the market in that country, the report said.

As you get over 30 percent and higher, I am sure there is a point where government is compelled to intervene, particularly in the U.K., where you have the planning laws that make it difficult to compete, Scott told the Times of London.

Nick Agarwal, an Asda spokesman in London, said Scott was not referring specifically to his firm's rival but was speaking generally about the dangers of market concentration.

Tesco said British authorities had already investigated the retail market and found that it operates in the consumer interest.

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'He's Being a Bully,' Little Wal-Mart Cries

By Heather Timmons
THE NEW YORK TIMES
September 4, 2005                               [back to top]

Wal-Mart makes no apologies about dominating the American retail landscape and resists fiercely whenever anyone tries to put pesky things like zoning or labor laws in the way of its expansion.

So it would seem odd, to put it mildly, if the company ever started whining like some fragile mom-and-pop store about a big bad rival being too powerful.

But that's sure what it sounded like last week, when H. Lee Scott Jr., Wal-Mart's chief executive, said regulators should investigate one of his British rivals. Mr. Scott told The Sunday Times of London that the British government should take a closer look at the supermarket chain Tesco, after a recent survey found that Tesco controlled 30.5 percent of the local food market.

"As you get over 30 percent and higher I am sure there is a point where government is compelled to intervene," Mr. Scott was quoted as saying.

Wal-Mart's British business, known as Asda, with 16.7 percent of Britain's food market, is in a distant second place to Tesco, according to recent figures from the research firm TNS. Tesco contends that the market-share survey excludes department stores that also sell food.

Mr. Scott's complaining is part of a bitter fight between Asda and Tesco. Earlier in August, Britain's advertising regulators forced Asda to withdraw a campaign in which it claimed to be "officially Britain's lowest-priced supermarket," after Tesco complained that the ads were misleading. The ads were based on a survey that didn't include discount supermarkets, the Advertising Standards Authority ruled.

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Wal-Mart, UPS deny stopping pay post-Katrina

Firms say employees still getting salaries despite newspaper report

Sept. 4, 2005                        [back to top]

NEW YORK - Both Wal-Mart Stores Inc. and United Parcel Service Sunday denied they have stopped paying their employees who were left out of work in the U.S. Gulf Coast region devastated by Hurricane Katrina.

The New York Times reported Sunday that both had stopped paying affected employees entirely because of the storm.

"We did not stop their salary because of the storm," Wal-Mart spokeswoman Andrea Rader told Reuters.

She said employees of affected stores, whether or not they had been scheduled to work, were receiving "prorated pay" at various levels. Affected employees were also immediately eligible for a $250 cash payment and could fill out a form to receive another $750, Rader said.

UPS said half of its 2,200 employees at affected facilities in the region were already back to work, but of the rest, "we've got several hundred, quite frankly, who we haven't been able to find yet," spokesman Norman Black said.

Black said the company sent paychecks for last week to employees it had been able to find and was offering them no-interest loans.

Both companies also said they are putting displaced employees to work wherever they may have been evacuated.

The other company cited in the Times story was McDonald's Corp. Spokesman Walt Riker confirmed employees were not receiving salaries at the 130 or so restaurants closed by the storm but said the company was focusing on housing assistance and other measures for displaced staff.

(c) Reuters 2005. All rights reserved.

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Wal-Mart Admits V.P. Confessed

Michael Barbaro
washingtonpost.com
Friday, September 2, 2005                         [back to top]

Jared Bowen, a former Wal-Mart Stores Inc. vice president who claims he was fired for exposing the misuse of Wal-Mart funds by a superior, confessed to submitting a falsified college transcript back in 1998, a fact that the retailer had previously denied, according to documents released by the company.

Wal-Mart, which says Bowen facilitated former vice chairman Thomas M. Coughlin's improper spending, released the false transcript and an official version with a lower grade point average two months ago to undermine Bowen and a Labor Department complaint he filed against the retailer. At the time, Bowen maintained that he had confessed earlier to doctoring the transcript.

Wal-Mart spokeswoman Mona Williams said the company is "sorry we did not find this earlier."

Bowen's attorney, Steve Kardell, said Wal-Mart's announcement is "an embarrassing about-face."

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Wal-Mart Workers Are Finding a Voice Without a Union

By STEVEN GREENHOUSE                        [back to top]

TAMPA, Fla., Sept. 1 - Having failed to unionize any Wal-Marts, American labor unions have helped form a new and unusual type of workers' association to press Wal-Mart Stores Inc. to improve its wages and working conditions.

With its first beachhead in Central Florida, the two-month-old group is already battling Wal-Mart, the nation's largest corporation, over what it says is the company's practice of reducing the hours that many employees work, often from 40 a week to 34, 30 or even fewer, jeopardizing some workers' health benefits.

Belva Whitt, a cashier who earns $7.40 an hour, said she had joined the new group, the Wal-Mart Workers Association, largely because she was unhappy with her wages and because her hours were reduced to part time from full time many weeks.

"I'm a single mother trying to raise my son, so not having that money makes it hard," said Ms. Whitt, 30. "Sometimes I have to decide, am I paying the rent or will I have food on the table?"

The association says it has nearly 200 current and former Wal-Mart workers and is growing by 30 workers a week. Members pay dues of $5 a month. In Florida, its membership includes workers from 30 stores in the Tampa, Orlando and St. Petersburg areas, and it is also seeking to enlist Wal-Mart employees in Texas.

The group's sponsors include the United Food and Commercial Workers Union, the Service Employees International Union, and Acorn, an advocacy group for low-income people. It has also received support from the Marguerite Casey Foundation, which helps low-income families, and the Nathan Cummings Foundation, which promotes social justice.

"We are building something that's never been seen; it's neither fish nor fowl," said Wade Rathke, a top Acorn official who is the chief organizer for the association. "We're focusing on Wal-Mart because it is the largest employer in the area - and in the whole nation - and is setting standards that affect communities and employment relations across the nation."

The association's workers, Mr. Rathke said, would seek to "aggressively engage the company on their rights and how they are treated."

The group is urging the State of Florida to grant unemployment benefits to workers whose hours have been cut back by Wal-Mart. It is arguing that workers who quit Wal-Mart because the reduced hours meant they were not earning enough to live on deserve jobless benefits. It also wants supplemental jobless benefits for workers with reduced hours who remain at Wal-Mart.

Dan Fogleman, a Wal-Mart spokesman, defended the company. "Our wages are competitive within the retail workplace," Mr. Fogleman said. "We work hard to make health care premiums affordable."

He said the company's associates, as Wal-Mart calls its workers, were free to form such an organization. But he said that Wal-Mart hoped employees would feel free to bring any concerns to upper management through what the company calls its open-door policy.

As for the reduction of hours, Mr. Fogleman said, "For years we have had a scheduling system in place that is designed to match associates' work schedules to projected customer flow to our stores."

Warren May, a spokesman for the Florida agency in charge of unemployment benefits, said Wal-Mart workers who remained on the job might qualify for unemployment compensation if their hours were cut sharply. Mr. May said those who quit their jobs because of a reduction in hours might have a harder time winning benefits.

Carl Jones, one of the leaders of the new group, said Wal-Mart's pay was too low, pointing to the $9.40 an hour he earns after five years as the lead shopping cart pusher at a Wal-Mart in Apopka, outside Orlando.

"It's really hard for me and my wife to make ends meet," Mr. Jones said. "They treat workers like we're just something there to be used and to get as much out of us as they can."

The association says Wal-Mart is betraying the desire of its founder, Sam Walton, to maintain a family-friendly company.

Ms. Whitt and several other members of the association say that Wal-Mart's health plan has such high premiums and deductibles that they cannot afford to join it. As a result, Ms. Whitt and thousands of other Wal-Mart workers receive health coverage through Medicaid.

The Marguerite Casey Foundation has granted $250,000 to an Acorn-backed project that is in turn giving much of that money to the new association.

"We want to broadly support economic justice," said Chantel L. Walker, the foundation's director of programs. "We believe that Wal-Mart could really make a difference because of the size of their work force and because of the leadership role they play."

The association is the latest attempt by labor and community groups to squeeze at Wal-Mart's pressure points. In the past month, the food and commercial workers have led an effort, joined by the nation's two big teachers unions, urging consumers not to purchase school supplies at Wal-Mart. Another group, Wal-Mart Watch, plans to announce a week of demonstrations and meetings nationwide in November to criticize Wal-Mart's wages and benefits.

Labor leaders say they support the nonunion Wal-Mart Workers Association because with the company fighting aggressively against unionization, they recognize that it will be extremely hard to unionize any Wal-Marts.

"This dovetails nicely with what we're doing," said William McDonough, organizing director of the food and commercial workers, which has sought unsuccessfully to unionize several Wal-Marts. "Our role is to help Wal-Mart workers get a voice on the job."

Mr. McDonough said his union hoped that Wal-Mart workers would grow so emboldened and that community support would grow so strong that unions could succeed at organizing some Wal-Marts in a few years.

The new association is not urging shoppers to boycott Wal-Mart.

"I like Wal-Mart, I enjoy working for them," Ms. Whitt said. "But what they're doing is wrong. They need to fix it."

Copyright 2005 The New York Times Company

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BATTLING GOLIATH

Unions appeal to public in Wal-Mart campaign Labor tries grass-roots effort after traditional methods fail

By MICHAEL KAHN
Reuters News Service
HoustonChronicle.com
Sept. 1, 2005, 8:36PM                          [back to top]

SAN FRANCISCO - The battle to organize Wal-Mart workers has moved from the shop floor to the public domain as labor unions struggle to achieve their first victory in organizing the world's largest retailer.

Groups targeting Wal-Mart Stores have broadened their efforts by putting public pressure on the retailer rather than trying to organize individual stores.

Labor experts say this strategy of using the Internet, the media and a grass-roots campaign has helped unions frame their debate and win some initial skirmishes in the court of public opinion.

The new push comes after the United Food and Commercial Workers union failed to organize a single Wal-Mart store and highlights the need to try new tactics, such as media campaigns aimed at winning the public's hearts and minds.

The Holy Grail Harley Shaiken, a professor at the University of California, Berkeley, said Wal-Mart represents the unions' Holy Grail — the pivotal company to organize — because of the retailer's influence on labor practices throughout the world.

Shaiken and others said targeting Wal-Mart's reputation might lead to changes, but they caution that no one really knows what will work against a company that so far has managed to keep unions at bay. The key, they say, is employing a range of tactics, which unions are starting to do.

"What they have been able to do so far is impressive, and they have actually created a broader public atmosphere that Wal-Mart has responded to," Shaiken said. "The new tactics have been successful, but it is going to be a long march, not a sprint."

Web site attacks The two unions with the biggest stake in the United States — the UFCW and the Service Employees International Union — have bankrolled Web sites attacking Wal-Mart, which they hope will galvanize communities against the retailer.

Echoing a host of critics, the unions accuse the company of mistreating workers and depressing pay across the industry. They say Wal-Mart pays poverty-level wages that force employees to rely on public assistance to support their families.

But Wal-Mart disputes the charges, saying unions are unwanted and unnecessary for its 1.2 million U.S. workers, whom it calls "associates." The company says it is unfairly stigmatized because it is such a large employer.

Wal-Mart spokeswoman Christi Gallagher said the retailer provides low prices for consumers, opportunities for its employees and money for charities as well as for economic development in local communities.

But the UFCW is trying to convince Americans that Wal-Mart's low prices come with a steep cost to the average consumer. The Wake up Wal-Mart.com campaign — led by a veteran of Howard Dean's presidential bid — started last April and has begun to gain steam.

The SEIU-funded group Wal-Mart Watch also kicked off its campaign in April with full-page ads in major newspapers that focused on what it called low-level wages the retailer pays to its workers.

Change in tactics Chris Kofinis, a spokesman for the UFCW campaign, said the shift from traditional organizing to a grass-roots public campaign was necessary because of Wal-Mart's ability to block union efforts.

In April, for example, the company closed a store in Quebec, Canada, after its workers voted to join the UFCW.

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Wal-Mart Wanted What?

By W.D. Crotty
www.fool.com
09/01/2005                                    [back to top] 

I usually scour the percentage gainers and losers to see where the action is in the market. The big action today is in Host America(Nasdaq: CAFE).

Most people know Host America as a food services company. You may have noticed its name at an employee cafeteria, a senior facility, or on a local vending machine. But what sent the stock into 6-bagger territory in less than a month was a July 12 press release revealing that the company's energy-management business was preparing to install its fluorescent lighting system in 10 Wal-Mart(NYSE: WMT) stores.

Momentum players jumped on the stock. From a closing price of $3.12 a share the day before the announcement, the stock more than doubled to close at $6.35 the next day. In five more trading days, the stock reached $16.88 a share! The stock had just hit its 52-week low of $2.69 less than a month before.

As Foolish writer Seth Jayson pointed out a few weeks ago, the company has had only one profitable year -- 1998 -- since its initial public offering at $5. While the press was talking about the Wal-Mart announcement, insiders were selling in earnest. It was mostly upward until the SEC started asking questions on July 20, and on July 22, the stock's trading was suspended -- until today.

Yesterday, the company announced that its agreement with Wal-Mart was oral (there was no written and signed agreement), and that Host America has never even received a list of 10 stores to be surveyed. Yikes. If the class-action filings didn't have enough fuel for a fire before, they certainly do now.

Even worse for current shareholders, the Nasdaq Stock Market Listing Investigations staff has recommended the stock be delisted for "public interest concerns." Simply put, the Nasdaq has had enough chancery and wants this company to go packing.

There are plenty of lessons to be learned here. Even if the Wal-Mart deal was signed, sealed, and delivered, it was only an investigative purchase. Why was the company worth $82.5 million because of that? And then there is the risk of following the momentum stocks. Yes, it is nice to own a stock that produces the top percentage gainer day after day. But where is the justification in orders and profits -- the meat and potatoes that should be fueling any stock that an investor owns?

And here's the question that really has me stumped. Host America has egg on its face -- lots of it. It now has a reputation that is in tatters. Why is the stock still nearly 50% higher than its June low? In this observer's book, this company is damaged goods. Whoever is currently buying this stock at $4 a share must be a big-time optimist.

Fool contributor W.D. Crotty does not own shares in any of the companies mentioned. Clickhereto see the Fool's disclosure policy.

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

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Wal-Mart's Urban Romance

Eager to remake its image, the retailer is courting a potent but unlikely ally--black America. How one city was won over

By TA-NEHISI PAUL COATES
Thursday, Sep. 01, 2005                      [back to top]

On a summer afternoon in Chicago, Margaret Garner, CEO of the Chicago construction firm Broadway Consolidated, took a ride to Chicago's poverty-stressed 37th Ward. Dressed immaculately in a multicolored blouse, black pants and red steel-toe work boots, she had an appointment with a field of dirt and dreams. Garner surveyed the 11-acre site, where an old factory had recently been demolished, and proclaimed the future: "This will be Wal-Mart No. 5,402. But I can guarantee you, it won't be anything like Wal-Mart No. 5,401."

Garner is the first black woman ever hired by Wal-Mart to build a store. In the summer of 2003, when Wal-Mart began looking at Chicago's West Side, the company went searching for contractors to build stores in the city. Wal-Mart was looking for someone who could lay down a solid foundation, both on site and in the surrounding West Side community of Austin, where high unemployment and high retail prices prevail and the labor supply, while plentiful, has a few dents in it. "The community aspect is not something Wal-Mart has typically had to deal with," says Garner. "Coming to a city and having to deal with ex-offenders, for instance. These aren't the sorts of problems that Wal-Mart typically deals with. They were looking to defer the risk."

Wal-Mart decided to rely on Garner's local knowledge, contracting Broadway Consolidated first to demolish the old factory and then to build the 150,000-sq.-ft. superstore that will employ as many as 300 people. Garner says that the work will produce between 150 and 200 construction jobs, half of which will go to minorities. Half of those minorities will be African Americans, including black men who often have the hardest time finding jobs: ex-cons. In a city whose building trades are dogged by allegations of racism and in which the unemployment rate for black men is 11.8% (double that of white men), those job promises are huge, and not just for the community.

In the past decade, the world's biggest retailer has been portrayed as a brutal giant, accused of wiping out small businesses, union busting, discrimination against female employees, employing illegal immigrants--not to mention the knock, vehemently disputed by the company, of being a low payer. But recently one of America's most embattled corporations has found an ally in one of America's most embattled demographics. No longer content to let its profits do the talking, Wal-Mart is trying to remake its image, in some measure with the aid of inner-city African Americans. The math is simple: Wal-Mart offers stores and jobs to poor black communities that are hemorrhaging both. Meanwhile, those communities extol the virtues of Wal-Mart, offering a buffer against the company's critics. Wal-Mart CEO Lee Scott is well aware of what a business partner like Garner does for the company's profile. "I like the image," he says. "In one part of Chicago you have ... an African-American woman who demolished the existing building ... and her team, which is largely minority business subcontractors, is going to be building a new store."

Beyond that local effort, Wal-Mart has taken its romance national, setting up scholarships for minorities, donating to the United Negro College Fund and writing checks for several black Congressmen. Patronage has its benefits. In May Black Enterprise, the venerable periodical of Afro-America's business class, announced that Wal-Mart would be a sponsor of its 10th Annual Entrepreneur's Conference. In its June issue, Black Enterprise listed its "30 Best Companies for Diversity." Guess who made the cut?

But Wal-Mart's move into the inner city has set off a debate in the black community about economic development. Traditional activists see the company as a corporate parasite. "Desperate people do desperate things. People would rather have a supermarket than not," says Jesse Jackson, whose Rainbow/PUSH Coalition is headquartered in Chicago. "But the point is that employment and development must go hand in hand. We need work where you can have a livable wage and health insurance, and retirement."

But an emerging cadre of more market-oriented community leaders dismisses that as so much noisy rhetoric. If you don't have a better plan for bringing jobs, they ask, then what's your point? Jackson is "entitled to his opinion, but he's never been involved with the West Side. He doesn't even come on the West Side," says Melvin Bailey, a local activist. "You'll hear a saying around here, and that is that a little bit of something is better than a lot of nothing." Denise Carter, 63, who lives in West Chicago and is disabled and retired, sees Wal-Mart as a salvation. "I'm happy Wal-Mart is coming," she says. "We need more bargains, and we need more jobs. I'm hoping I can take my grandson and granddaughter up there."

With a site on Chicago's West Side, in the impoverished Austin neighborhood, Wal-Mart has improved its score in the inner-city market. Last year Wal-Mart tried to put two stores in Chicago, both in black neighborhoods--one in Austin and another on the South Side, in more middle-class Chatham. The middle-class community, less desperate for the jobs, voted against the Wal-Mart store. The outcome in some ways duplicated Wal-Mart's split decision in California, where it lost a bid to open in Inglewood in Los Angeles County but succeeded in Oakland. Wal-Mart is also pushing for a store on Staten Island in New York City. While not exactly the "inner" city, a Staten Island location would give Wal-Mart a foothold in New York. In the long run, Scott believes, the company will win more often than not.

When Emma Mitts, an alderwoman in West Chicago, was appointed in 2000, retail in her 37th Ward consisted of corner stores. Mitts vowed to upgrade the options. In 2003, at a conference sponsored by the International Council of Shopping Centers, Mitts met with Wal-Mart officials who informed her that they had tried once before to put a store in Chicago but had been stiff-armed. "The unions stopped them," said Mitts. "But the unions weren't an issue for me."

Chicago is a union town. But in Mitts' ward--and among many poor blacks--some unions rank only a couple of notches above the Ku Klux Klan. Black leaders in Chicago have repeatedly charged that the building-trades unions, traditionally controlled by whites, are keeping a grip on jobs. While 37% of Chicago is black, only 10% of all new apprentices in the construction trades between 2000 and 2003 were black, according to the Chicago Tribune. The unions that most vociferously oppose Wal-Mart are not in the building trades but represent retail workers, such as the United Food and Commercial Workers (UFCW), which has long welcomed blacks. Still, Mitts and many in the 37th Ward conflated the two and had no problem allying themselves with Wal-Mart.

What Wal-Mart also found in West Chicago was nothing short of a natural extension of its corporate philosophy. Wal-Mart built a $285 billion corporation by going where its competitors are not. That used to be small towns or underserved suburbs. Chicago's 37th Ward, with its scant retail options, is an urban village, a first cousin to the sorts of communities Wal-Mart had always targeted. Combine the lack of jobs and stores with a strong antiunion streak, and the West Side is perfect for Wal-Mart. "If you're going to pick a spot, why wouldn't you go to the West Side?" asked Ronald Powell, president of the UFCW Local 881, which opposed Wal-Mart's entry into Chicago. "I don't think that there's any question that in the city we need jobs. But in the long term, for every one job Wal-Mart creates, they take away two."

By the the time it got to Chicago, Wal-Mart had learned something from its bad experience in Inglewood, where the retailer attempted to circumvent the city council by pushing for the necessary rezoning through a ballot referendum. Wal-Mart had then donated $65,000 to the Los Angeles Urban League and mounted a $1 million p.r. blitz. The locals got turned off by the attempted end-around play, and Wal-Mart lost the vote, with 60% of residents rejecting the store. Humbled, Scott changed the company's urban policy from one of remote maneuvering to direct community engagement--and made himself the point man. In 2003 Wal-Mart began its Good Jobs campaign, a series of ads featuring people, many of them minorities, extolling the virtues of Wal-Mart to the community (208,000 of Wal-Mart's 1.2 million workers are black).

Scott did an interview with black talk-show host Tavis Smiley, whose public-television show the company underwrites. Smiley concedes that Wal-Mart has issues, but says his relationship with the company--and particularly with Scott--has allowed him to raise those issues in private. "You need a good inside game and a good outside game," says Smiley. "I don't begrudge anybody in black America for working their outside game."

Over the past three years, Wal-Mart has set up minority scholarships for journalism at various universities, and in May Wal-Mart underwrote a documentary, on black soldiers who served in segregated units in different wars, that appeared on TV-ONE, a small cable channel geared to African Americans.

Wal-Mart also inserted itself into political races, to the unions' great irritation. The company donated money to the campaigns of black Congressmen Harold Ford, Charles Rangel and Albert Wynn. And after Wal-Mart gave a lunch for a few members of the Congressional Black Caucus, a small brouhaha between labor and the black caucus erupted. The Service Employees International Union fired off a letter accusing the Representatives of betraying labor. The head of the caucus, Democratic Congressman Mel Watt of North Carolina, bristled at the criticism. "I'm not defending them--I think a lot of their practices are abysmal," says Watt. "But I don't think you change those practices by refusing to meet with them. This was not one of those cozy I-love-you meetings."

Yet even the willingness of top black politicians to meet with a corporation that only last year was lambasted by Democratic presidential candidates shows that the lines of battle are shifting. In Chicago the unions tarred Wal-Mart with criticism that 10 years earlier would have rallied black leadership against the company. Many of those opposing Wal-Mart in Chicago were black, but the presence of an equal--or greater--number of black supporters took the subject of race off the table. To the extent that it was a topic, race worked to Wal-Mart's favor in that it was used as a club to batter the unions.

At a community meeting on the South Side in May, according to the Tribune, Wal-Mart presented Eugene Morris, who runs an advertising firm in Chicago, to offer an endorsement. Morris praised Wal-Mart, noting that the company had brought him $20 million in business. Alton Murphy, a black district manager for Wal-Mart, assured the audience that most of the jobs would be local. "You won't go in and pay your hard-earned money to someone who doesn't look like you," Murphy told the crowd.

Store builder Garner is unconcerned with Wal-Mart's corporate critics. "I think when you're the biggest and the best at what you do, people want to come after you," she says. Before Garner scored her contract with Wal-Mart, she flew to Wal-Mart's head office in Bentonville, Ark. Garner was on her own personal fact-finding mission. She had read much of the press on Wal-Mart and concluded that the company had got a raw deal. She returned convinced that Wal-Mart could be a great partner for the black community. "You know what I liked more than anything? Wal-Mart has a 10-foot rule, where if a customer comes within 10 feet of an employee, you have to ask them if they need any help," said Garner. "A lot of our young people walk around with a chip on their shoulder, and I thought I'd love to bring [this new] attitude to them, to our community."

In Wal-Mart, local residents have found a partner of the moment with which they hope to prove a point. "I'm impressed by all these young people who haven't had access to jobs, who are now excited about the opportunity," says Mary Tuff, who lives in the 37th Ward. "They say that all our young people do is just hang on the corner, but it's not true, and now we have a chance to show them." Arguments about the supposed low wages, expensive health plans and gender discrimination are almost beside the point in the 37th Ward. "If it's good enough for the suburbs, why isn't it good enough for the city?" asks alderwoman Mitts. "Why isn't it good enough for us?" --With reporting by Bill Saporito/Bentonville

Copyright © 2005 Time Inc. All rights reserved.

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Wal-Mart opts to pass on Downtown

Crossing Unions, residents, city councilor were set to oppose chain

By Jenn Abelson
Globe Staff
September 1, 2005                      [back to top]

Wal-Mart Stores Inc. yesterday confirmed the company met with Boston officials about opening a store in Downtown Crossing, but said it is not interested in the location.

The statement comes about a month after Wal-Mart executives approached the city to discuss moving into one of the massive buildings on Washington Street due to be vacated next year by Federated Department Stores Inc.

''We're not interested in that location at this time," said Wal-Mart spokesman Philip Serghini, who declined to explain why the world's largest retailer does not want to move into Downtown Crossing.

''In the long term, we will be looking at Boston," Serghini added. ''We see no reason why our customers in Boston should be denied access to our low-priced goods."

Still, as unions, politicians and residents learned yesterday about Wal-Mart's meeting with Boston officials, the possibility of the giant discounter opening in the middle of the struggling shopping district set off a firestorm of opposition.

''The Greater Boston Labor Council will do everything in its power to stop Wal-Mart from moving into Downtown Crossing," said Rich Rogers, the executive secretary-treasurer of the regional labor organization, which represents 90,000 workers. ''We will be calling on our community allies and elected officials to join us in opposing Wal-Mart."

His comments follow about two weeks after Rogers and a coalition of labor leaders, healthcare advocates, and workplace safety activists organized a Wal-Mart protest in Boston as part of a nationwide back-to-school boycott of the retail giant. The coalition, which urged parents to shop elsewhere for school supplies, blasted Wal-Mart for breaking child labor laws, paying low wages, and discriminating against women. Wal-Mart has fought union attempts to organize workers at its stores.

Serghini, the Wal-Mart spokesman, said the labor groups are engaging in ''a national campaign to vilify our company, and they certainly don't care about our employees or our consumers. The one and only thing the unions care about are their own special interests."

Meanwhile, Boston City Councilor Felix D. Arroyo yesterday said he had planned to write letters to other councilors and the Boston Redevelopment Authority, which oversees projects in Downtown Crossing, to express his opposition to a Wal-Mart in the middle of Boston.

''We don't need that kind of neighbor," Arroyo said.

The Downtown Crossing site has garnered increasing attention since Federated Department Stores, a Cincinnati-based company, said last month that it planned to vacate either the Macy's or the Filene's building on Washington Street. Federated, which on Tuesday completed its $17 billion acquisition of May Department Stores Co., has said it plans to retire the Filene's brand and close its flagship store in Downtown Crossing.

Federated officials say they have not decided whether to keep Macy's at its current location, or move it across Washington Street to the Filene's building.

So far, discounter Target Corp. has expressed interest in occupying one of the buildings in Downtown Crossing, Mayor Thomas M. Menino has said. Other retailers, including Home Depot Inc., Jordan's Furniture, and Kohl's Corp., have also approached the city about the sites.

In a Boston.com poll conducted yesterday, Nordstrom and Target were the people's choices. The unscientific sampling, which attracted 3,351 online responses, asked people what they would like to see in Downtown Crossing after Filene's closes.

According to the results as of 6 p.m., about 38 percent favored upscale department store Nordstrom and 31 percent preferred Target. Meanwhile, Jordan's Furniture placed third with 7.1 percent of the vote, ahead of Wal-Mart with 6.8 percent. About 4 percent of the responses favored Old Navy, while Home Depot received 1.9 percent of the vote.

A Nordstrom spokeswoman this week said the company wants to open a store in Boston but is not considering the Downtown Crossing site. A spokeswoman for Gap Inc., which owns Old Navy, said the company does not comment on real estate strategies.

''As to who specifically will move down there, it's all speculation at this point," said Meredith Baumann, a spokeswoman for the Boston Redevelopment Authority.

''Our goal is to bring a retailer that has a wide appeal to the diverse population that visits Downtown Crossing today, and one that is a good community neighbor."

Jenn Abelson can be reached at abelson@globe.com.

© Copyright 2005 The New York Times Company

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Wal-Mart looks at downtown site

Giant retailer reaching out to urban markets

By Thomas C. Palmer Jr.
Globe Staff
August 31, 2005                                 [back to top]

Wal-Mart Stores Inc. has expressed interest in moving into Downtown Crossing next year after Federated Department Stores Inc. vacates one of its two huge buildings in the shopping district, according to a local executive and an official.

Wal-Mart executives met about a month ago with Boston officials to discuss opening a store in the struggling retail area on Washington Street after Federated eliminates the Filene's brand and shutters the flagship store.

''They're interested in the downtown location," said an official briefed on the discussion, emphasizing that the talks are preliminary.

Philip Serghini, a Wal-Mart spokesman, said he could not confirm the Bentonville, Ark., company is interested in Downtown Crossing.

Seth Gitell, a spokesman for Mayor Thomas M. Menino, declined to comment.

A number of retailers are eyeing the Downtown Crossing location since Federated disclosed last month that it plans to vacate either the Macy's or the Filene's building on Washington Street. Federated, which yesterday completed its $17 billion deal to buy Filene's parent, May Department Stores Co., said it had not decided whether it would keep Macy's at its current location or move it across the street to the Filene's building.

Discounter Target Corp. was one of the first to express interest in the location, according to Menino. Since then, a person involved in the talks has said Home Depot Inc., Jordan's Furniture, and Kohl's Corp. have approached the city about moving into the Downtown Crossing site.

Federated spokesman Jim Sluzewski would not identify retailers that have approached the company about the Downtown Crossing location, except to say, ''Our sites across the country are generating a great deal of interest."

For Wal-Mart, Downtown Crossing represents another opportunity to move into an urban location. Over the past year, the world's largest retailer has opened several stores in downtown locations, including in New Orleans and Salt Lake City. Another Wal-Mart is under construction in Chicago. But unlike the company's other urban stores, which have parking garages or parking lots near the sites, the Downtown Crossing building in Boston has no parking.

In a previous interview, Wal-Mart spokeswoman Daphne Moore said the company started in rural areas where people didn't have the same options as urban residents.

Now, the ''flip side is true," Moore said, and Wal-Mart is reaching out to ''mini-urban markets" where consumers have less access to low prices and wide selection, compared with those who live in suburban and rural communities.

Suzanne Mulvee, a real estate economist with Property & Portfolio Research Inc. in Boston, said that space constraints make it difficult to construct anything large in Boston, much less a structure to house a big-box retailer like Wal-Mart or Target.

Mulvee said Wal-Mart is ''definitely feasible, but unlikely to move into Downtown Crossing" because of opposition that the retailing giant often faces when it moves into new communities. Currently, there are about 18 Wal-Marts in Massachusetts. The closest one to Boston is in Quincy.

''It's a lot more politically friendly to say we're bringing in a Target than we're bringing in a Wal-Mart," Mulvee said.

Moreover, she said that Target is more likely than Wal-Mart to bring the kind of face lift that Downtown Crossing needs. A Target spokeswoman did not return calls seeking comment. But in previous interviews she has said the company is not involved in negotiations for the Downtown Crossing location.

The two department store buildings at Downtown Crossing are in fact quite different. The Filene's building, closer to Government Center, was built in 1912. Across Summer Street to the south, the Macy's building was built as a Jordan Marsh store building in 1949.

The Filene's building, now owned by Federated Department Stores, is slightly smaller, and has as a tenant another retailer with a familiar name, Filene's Basement. (Filene's Basement is a separate company.) The Macy's building is owned by Markley Group LLC, of Los Angeles, and has many telecom tenants on the upper floors.

Last month, Federated said it planned to turn all remaining Filene's stores into Macy's stores and close 68 stores nationwide, including about a dozen in New England.

The Cincinnati company said yesterday that it would divest itself of an additional seven department stores, including a Filene's in Hyannis. In total, these 75 stores accounted for about $2.1 billion in sales last year.

These changes come as Federated tries to position Macy's more broadly as a national retailer to better compete with rivals; the combined company operates about 950 stores.

Also yesterday, Federated agreed to a settlement with Massachusetts and four other states that requires the company to allow rivals, such as Nordstrom or Neiman Marcus, to fill its vacancies in malls if competing retailers are interested and they make reasonable offers.

The five mall locations in Massachusetts are Braintree, Brockton, Burlington, Hyannis, and Peabody.

Jenn Abelson can be reached at abelson@globe.com; Thomas C. Palmer Jr. can be reached at tpalmer@globe.com.

© Copyright 2005 The New York Times Company

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Host America Says No Wal-Mart Deal

Associated Press
08.31.2005, 05:09 PM                                [back to top]

Host America Corp., an operator of employee cafeterias and an industrial equipment retailer, said Wednesday that it never had a formal agreement to survey Wal-Mart stores for its lighting products and placed its chief executive on leave without pay.

The company is being investigated by the Securities and Exchange Commission for a statement issued last month saying that it planned to start surveying 10 Wal-Mart stores in the Southwest, "in preparation for installation of its LightMasterPlus on the fluorescent lighting system of each store." The product aims to increase energy savings.

Host America's stock rose significantly over the 10 days following the announcement.

The company said Wednesday that while it believes there was an "oral understanding" with Wal-Mart, there was never a formal, written agreement. Host America said it has not received a list of stores to be surveyed from the retailer and there is no agreement for the installation of the LightMasterPlus product.

Host America placed its president and CEO, Geoffrey Ramsey, on administrative leave without pay pending the completion of an investigation. Chief Financial Officer David Murphy was appointed acting president and CEO starting yesterday, the company said. Ramsey also resigned as chairman and a member of the company's board.

The SEC suspended trading on Host America shares on July 22, when it started its ongoing formal investigation. The Nasdaq has threatened to delist Host America shares and the company faces a hearing before the exchange on Thursday. The stock last traded at $14.25.

In a separate statement, the Nasdaq said the company is scheduled to resume trading on Thursday morning.

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L.A. County Gets Its First Wal-Mart Supercenter

By Natasha Lee and David Pierson
latimes.com
August 31, 2005                                             [back to top]

For three years, local politicians, labor unions and community activists have fought Wal-Mart's efforts to bring a supercenter store into Los Angeles County.

But with little fanfare — and few protests — the county's first supercenter is scheduled to open today in Palmdale.

The desert community 70 miles north of downtown L.A. has become the latest beachhead in Wal-Mart's campaign to bring to California as many as 40 supercenters, combination department stores and grocery markets. The stores have come under fire from labor organizations and other groups that say the stores would put competitors out of business, including traditional supermarkets, which are unionized and generally provide better benefits and pay.

Wal-Mart's decision to place the first L.A. County store in Palmdale underscores the retail giant's strategy of opening its first supercenters in fast-growing, outlying areas where city leaders support new development and where unions are not as strong.

Most of the other supercenters are in Inland Empire suburbs. And Palmdale is in the heart of the north L.A. County region, where the population is expected to rise from 614,500 to 1,179,228 in the next 25 years.

"There's not a lot of grocery stores here … and the jobs are few and far between out here, so I think it's a good place to open," said Joy Hobberchalk, manager and a floral arranger for White's Florist, near the new Wal-Mart.

The supercenter will also have a floral section, but Hobberchalk is not worrying about the competition. Instead, she's working on contracting with Wal-Mart to train its employees in floral design, a practice she's done previously with local Sam's Club and Stater Bros. stores.

"I'll be sending them flowers on their grand opening day," she said.

Wal-Mart has received a decidedly more chilly reception elsewhere in the county. The L.A. City Council last year passed an ordinance requiring economic impact studies for supercenters and other extra-large stores. Last April, Inglewood voters overwhelmingly defeated an initiative that would have allowed such stores to be built without normal planning processes, such as traffic studies and public hearings. The vote was a rare defeat for Wal-Mart, which spent more than $1 million pushing the initiative.

Wal-Mart won approval last fall from the Rosemead City Council to build a supercenter less than 20 miles east of downtown Los Angeles. City Council members said they needed the tax revenues. The supercenter became a centerpiece of last November's election, when two union-backed supercenter foes were elected to the council. The election result has not blocked the supercenter but the issue is far from resolved.

On Tuesday, supercenter opponents presented the city of Rosemead with more than 4,800 signatures calling for a special election to recall two council members who supported the opening of a supercenter. The county needs to verify 3,536 of those signatures in order for the city to hold a special election, which would likely take place early next year, said Assistant City Manager Don Wagner.

Wal-Mart foes argue that cities embracing the supercenters might see short-term sales tax gains but that, ultimately, the stores would put traditional grocery stores out of business, taking with them higher-paying jobs.

In Palmdale, labor leaders chose not to aggressively fight construction of the store but rather to encourage residents not to shop there.

"I don't think the city fathers made it a public hoopla and I think there wasn't as much opposition because people didn't really know about it, it was not that advertised," said Rod Diamond, secretary-treasurer for United Food and Commercial Workers Local 770. "The message is educating the public. We have a website and we're encouraging people to look at it and to tell their friends and family not to shop there."

The only real protest occurred in June, when vandals caused roughly $88,000 in damage to the Wal-Mart construction site. The vandals spray-painted walls with phrases such as "Don't swallow the lies" and "Wal-Mart slavery," and pushed several scissor lifts off a loading dock, according to the L.A. County Sheriff's Department. The vandals have not been arrested.

Palmdale officials said the supercenter will bring added tax revenues to the city coffers and provide more shopping options for residents.

"In general, every new center that is opened is well-received," said Councilman James Root. Residents "are looking for some services and outlets."

Added Mayor Jim Ledford, "We'll take it, but I'm not sure it means much other than we're the first ones. It's really not a big deal for the folks here."

Supercenters typically generate $500,000 or more annually in city tax revenue, said Wal-Mart spokeswoman Cynthia Lin, adding the Palmdale store will create about 300 jobs.

Retailing experts said it's no surprise that Wal-Mart chose Palmdale.

"If you've got a strong union base, they'll fight Wal-Mart tooth and nail," said Richard Giss, a consumer business analyst for Deloitte & Touche. "In Palmdale, you don't have local governments that are as entrenched with union support."

Roxana Tynan of the Los Angeles Alliance for a New Economy, which helped oppose Wal-Mart in Inglewood, downplayed the significance of the supercenter opening.

"In urban areas, they continue to be stymied," Tynan said, adding that she and other opponents have been focusing on keeping supercenters out of L.A., Inglewood, Rosemead, Huntington Park and other areas closer to downtown.

"I don't think we expect to prevent every supercenter in the country. They're the largest corporation in the world," she added. "But the fact that the opposition has stopped many of these supercenters … is really shocking and exciting."

In Palmdale, some residents are more excited about the prospect of checking out the new store. "It's a closer drive for me," said Alison VanGelder, who usually drives 25 minutes to a Stater Bros. grocery store across town.

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Wal-Mart Cries Foul

By Rich Smith
08/29/2005                      [back to top]

In one of the clearest cases of delicious irony in recent memory, megaretailer Wal-Mart(NYSE: WMT) yesterday urged the British government to investigate the growing market dominance of leading U.K. grocer Tesco.

A survey published last week by market research firm Taylor Nelson Sofres reported that in the U.K., Wal-Mart's Asda subsidiary controlled just 16.7% of the nation's grocery market. Wal-Mart has reason to be shocked and appalled at that information. After all, the company paid nearly $11 billion to acquire Asda just six years ago, so it has a lot of money riding on the chain's success. Last year, Wal-Mart's British grocer boasted a 26.6% market share -- meaning that it's lost nearly 10% worth of market share in just 12 months.

Meanwhile, Tesco has roared ahead. The same Taylor Nelson Sofres survey put Tesco's market share at 30.5%. For the record, Tesco, too, seems nervous about the survey's results (albeit for opposite reasons) and argues that the "30.5%" number does not factor in the portion of the market held by upscale rivals such as Marks & Spencer.

Whatever the true number is today, it seems that Asda's market share may take another dive tomorrow. A recent ruling by Britain's Advertising Standards Authority has held that an Asda marketing campaign misleads consumers by asserting that it is "officially Britain's lowest-priced supermarket." While Asda cited survey results from trade industry magazine Grocer in support of its claim, the authority faulted Grocer's survey results for relying on too small a sample in pricing goods. A survey published by Goldman Sachs(NYSE: GS) backs up the authority's finding and argues that Tesco is actually the country's cheapest grocer.

Dueling surveys aside, there's a bigger issue to consider here: corporate hypocrisy. Wal-Mart is, after all, the world's biggest retailer, with all the pricing power and market-dominating potential that such a title implies. The company's annual turnover exceeds most nations' GDPs. In the grocery segment, Merrill Lynch(NYSE: MER) put Wal-Mart's U.S. market share at 15% in 2003, and at least one research report argues that the company is on track to control a 35% share of the U.S. grocery market by 2007. Yet here it is, whining that it's a helpless, hapless victim of big, bad Tesco?

Get a grip, Wal-Mart. You're still the big kid on the block, even if you're having a bad year. You don't need to enlist the government to fight your battles. All you need to do is what you do best: compete.

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

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Wal-Mart calls for probe into dominant Tesco

Richard Fletcher
Bentonville, Arkansas
August 28, 2005                                     [back to top]

THE increasing dominance of Tesco in Britain needs to be probed by the government, Lee Scott, president and chief executive of Wal-Mart has declared.

Figures published last week by TNS, the market-research company, showed that under Sir Terry Leahy Tesco’s share of the food market had increased to a record 30.5% over the past three months.

In an interview with The Sunday Times, Scott, who owns Asda in Britain, said that it was time for the government to act.

“As you get over 30% and higher I am sure there is a point where government is compelled to intervene, particularly in the UK, where you have the planning laws that make it difficult to compete,” said Scott.

“At some point the government has to look at it,” he added.

Scott’s comments are likely to be taken seriously by the government, with which Wal-Mart has a good working relationship. Asda is Britain’s No 2 supermarket group with 16.7% of the food market.

Concerns about Tesco’s dominance have been growing in recent months.

Last month Sir Ken Morrison, chairman of the Wm Morrison supermarket chain, told City analysts that Tesco was using selective discounts to lure shoppers from his newly refurbished stores. Sir Ken cited the example of the Isle of Wight, where, after the opening of a new Morrisons store, Tesco had sent vouchers giving shoppers £15 off every £40 spent — a discount of almost 40%.

Local pricing — where consumers in areas with little competition subsidise people in more competitive areas — is frowned on by competition regulators.

Tesco is also facing battles with groups representing consumers opposed to the development of new stores.

In June Leahy hired David Yelland, former editor of The Sun, to help advise on public relations.

In the interview Scott also revealed that Asda is looking at the possibility of opening smaller convenience stores in an attempt to tackle the growth of the Tesco Metro format.

“A lot of Tesco’s growth has come from the small convenience chain. Andy (Bond, the chief executive of Asda) and his team have got to look and see where the opportunity is for us with that kind of space,” he said.

“There are no limits, all we want to do is serve customers. We run multiple formats in different countries. In Mexico we are the second-largest restaurant operator,” he added.

If Asda does push ahead with the new format, it is certain to test the concept first. Some have speculated that Wal-Mart plans to buy the Somerfield supermarket chain.

Lucy Neville-Rolfe, corporate and legal affairs director and company secretary at Tesco, said: “Previous Competition Commission inquiries have found that the market — and Tesco — operates in the consumer interest. It is a competitive market. The consumer is the winner.”

In America Wal-Mart has 10% of the retail market.

Copyright 2005 Times Newspapers Ltd.

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CapitaLand May Tie Up With Wal-Mart, Other Retailer in Japan

Bloomberg
Aug. 26                                   [back to top]

CapitaLand Ltd., Southeast Asia's largest property developer, may tie up with Wal-Mart Stores Inc. or another retailer in Japan to speed up expansion of its business in the country, said Liew Mun Leong, chief executive of CapitaLand.

CapitaLand, which partnered with Wal-Mart in acquiring 15 retail malls in China this year, may form alliances with retail chains in Japan to expand at a faster pace, Liew said in an interview in Tokyo.

``Most malls are owned by retailer chains in Japan. Now they've realized that it's not cost effective for them to own their malls,'' said Liew. ``Wal-Mart is very concentrated on retail, not on the real estate, so if there is an opportunity, we will definitely look into it.''

CapitaLand has two real estate funds in Japan as part of an overseas expansion into real estate in China and Australia. Real estate prices in central Tokyo rose for the first time last year as the country's economy, the world's second largest, expanded at an annual 1.1 percent in the second quarter, the third straight quarter of gains.

The Topix real estate index rose 15 percent this year, outperforming the Topix's 10 percent gain. The Tokyo Stock Exchange REIT index has risen 7.6 percent.

``Japan is firmly on a recovery trend. We think it is the right time to go into property fund management in Japan as property prices are recovering,'' said Liew.

REIT Listing

CapitaLand said it may list a real estate investment trust in Japan or Singapore in the next 2 to 3 years when the siz