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 issu