Retail goliath’s spread meets resistance locally and across the state.

The Associated Press        
June 30, 2003

HILLSBORO — Somewhere in America, a Wal-Mart store opens almost every day. During the next 18 months, the retail giant plans to add eight to the 27 already in Oregon.

Six more Oregon stores are scheduled for expansion.

However, some towns are digging in their heels against the spread, saying the stores are unsightly, add to traffic, are out of character with their communities and run local business out, contributing little but low-paying jobs.

The world’s largest retailer thinks that Northwest consumers want the stores and their low prices.

In four Oregon cities, opponents have won land-use battles or stalled plans for the stores.

Opponents have organized schoolchildren, created Web sites and allied themselves with competing grocers and their unionized workers.

Wal-Mart doubled the size of its store in Woodburn this year, and has plans to do the same to its store on Lancaster Drive NE in Salem. The company also is planning to build a 203,000-square-foot Supercenter next to Lowe’s on Turner Road SE.

In the past two months, planning commissions in Hillsboro and Oregon City have rejected Wal-Mart proposals. In Hood River, opponents have delayed Wal-Mart’s plans and in Lebanon, opponents have taken the company’s plans to the Oregon Land Use Board of Appeals. Wal-Mart also faces opposition in Salem, La Grande and Central Point.

The Arkansas company had nearly $245 billion in worldwide sales last year.

“Wal-Mart is almost like a political party: Either you love them or you hate them,” said Allan Miller, a professor of marketing at Towson University in Maryland.

The Hillsboro store would be 142,865 square feet and could expand to more than 210,000.

Vincent Dimone, whose house backs the property, launched the opposition by going door-to-door with 500 fliers.

Dimone and other opponents got a crash course in Oregon land-use law and found that the loss of their property value was not considered under state law.

Instead, opponents should stress noise, traffic, loss of trees and other development criteria.

Parents, teachers and students of a nearby private school joined the fray against the store, and students picketed.

Wal-Mart sent 30,000 mailers to Washington County residents and hired a public relations firm.

The two major issues for the Hillsboro Planning Commission became compatibility with the neighborhood and traffic.

Commissioners unanimously rejected the plan in May. The retailer has appealed to the city council.

In Hood River, where the company is proposing a 185,000-square-foot Supercenter to replace an existing store, opponents formed the nonprofit Citizens for Responsible Growth.

The store would be the first thing motorists driving from Portland would see of Hood River, the group says.

Kate Huseby, co-chairwoman of the opponents’ group, says she doesn’t want Hood River to lose hometown businesses to an international behemoth. They have raised $53,535 for their struggle.

Wal-Mart wants to build a 188,000-square-foot Supercenter in Lebanon on the Santiam Highway along the Santiam Wagon Road, a pioneer trail.

The owners of two local grocery stores and Friends of Linn County primarily focused their opposition on sprawl and the loss of grocery jobs that pay $13 to $14 per hour to Wal-Mart jobs that pay little more than minimum wage.

The planning commission and city council approved the land-use applications. Opponents have appealed to the state’s Land Use Board of Appeals.

Oregon City opponents included neighborhood associations, the owners of nearby Hilltop Mall and the United Food and Commercial Workers unions. They, too, contended that traffic would flood crowded roads while the city would lose housing, family-wage jobs and livability.

Wal-Mart flooded households with fliers.

The Planning Commission rejected Wal-Mart’s plans, saying that the company failed to show that Oregon City needs the store and had not adequately addressed the traffic question.

Wal-Mart plans an appeal.

As long as Wal-Mart continues to grow in Oregon, legal battles are not likely to stop. Central Point city officials say they feel bullied by Wal-Mart.

“I don’t like being run roughshod by people who think they know what’s best for us,” said Tom Humphrey, city planning director.

Copyright 2003 Statesman Journal, Salem, Oregon. To purchase a back issue (available 30 days after print date), call (503) 399-6769 or go to the StatesmanJournal.com Store.

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Women and Wal-Mart

Ruth Rosen                              
Monday, June 30, 2003
(SF Chronicle)

WHEN BETTY DUKES first learned about Sam Walton, the founder of Wal- Mart, in a sociology class, she never imagined she'd become the lead plaintiff in a sex-discrimination suit against the giant retailer. "I learned in that class that Sam Walton had a profound vision and started Wal-Mart on a faith venture. I have always deeply appreciated his visionary spirit and his efforts to reach for the stars." As an employee at the Pittsburg store, Dukes had great dreams for her own future. She would work hard and take seriously the challenge to get "all the training and tools to reach your goals with a great company like Wal-Mart." But that's not what happened. "I was denied the training I requested to obtain promotions within the company. When I complained about unfair treatment, I was unfairly disciplined, demoted and forced to accept a pay cut. Moreover, I observed men receive promotions to positions over and over again." Dukes' name is now associated with what may turn into the largest employment discrimination case ever brought against a private employer, in this case, the world's biggest retailer. On April 29, lawyers for women suing Wal-Mart asked the U.S. District Court in San Francisco to certify the case (Dukes vs. Wal-Mart Stores, No. C-01-2252 MJJ) as a class-action suit that would represent a whopping 1.7 million women who have worked at Wal-Mart since Dec. 26, 1998. A hearing on the motion for class certification is scheduled for July 25. "I am participating in this case," Dukes writes in her sworn testimony, "in order to insure that young women such as my nieces and other women are treated fairly at every Wal-Mart store. The time has surely come for equality for women . . ." Wal-Mart employs more than 1 million people who work in more than 3,400 U.S. stores. Although women make up more than 72 percent of the Wal-Mart sales force, they hold only one-third of the management jobs. Men hold 90 percent of Wal-Mart's store manager positions and only one woman is among Wal-Mart's 20 top officers. Is this just a coincidence? Dukes doesn't think so. Nor do the other 110 women who have contributed sworn statements to the lawsuit and worked in 184 different stores in 30 states. They charge Wal-Mart with systematic discrimination against women in pay, promotion and job assignments. The suit also accuses the giant retailer of paying women 37 cents an hour less than men for identical jobs. Reading these women's complaints is like visiting a corporate culture stuck in the 1950s: Male managers force their female counterparts to attend meetings at strip clubs or Hooters restaurants; they tell female employees they don't need promotions or equal pay because "men need to support their families;" and senior management regularly refers to women employees as "little Janie Qs" and "girls." In keeping with its conservative policies, the health insurance Wal- Mart offers its employees doesn't cover contraception. Women consumers suffer limited choice as well: The store refuses to dispense emergency contraception, or the "morning-after-pill." Fortunately, the women of Wal-Mart have an ally in their battle. On June 22, the National Organization of Women, which has dubbed Wal-Mart a "merchant of shame," kicked off an "adopt a store" campaign to educate shoppers about Wal- Mart's exploitation of its women employees. Thousands of NOW members are visiting stores, wearing buttons that read "Wal-Mart Always Discriminates"-- a play on the retailer's famous slogan, "Wal-Mart -- Always the Lowest Prices." NOW activists are also handing out palm-size cards to shoppers that ask: "Wal- Mart: Always Low Prices, But Who Pays?" Kim Gandy, President of NOW, says, "Consumers across the country need to be able to spend their dollars with a clear conscience. Wal-Mart doesn't afford us this option." Joining NOW is the Coalition of Labor Union Women, which has mobilized its 20,000 members to participate in the campaign. Also involved is the United Food and Commercial Workers' Union, whose members work at competing retail stores and earn $2 to $3 an hour more than Wal-Mart workers with equivalent jobs. The union is all too aware of Wal- Mart's union-busting tactics. During the last four years, the National Labor Relations Board has filed 40 complaints against Wal-Mart, accusing managers in nearly 30 stores of coercing, intimidating and firing employees who showed any interest in joining a union. Susan Phillips, UFCW vice president, calls the women's campaign a "direct way to bring an economic message both to consumers and workers in the stores." That way, "shoppers will make informed choices about whether they want to support that kind of discrimination." For most women, working at Wal-Mart offers a dead-end job that barely covers the necessities of life. On average, a "sales associate" earns $6.10 an hour, or $13,688 annually if she works full time. Not surprisingly, many Wal- Mart workers live below the poverty level, use county pulic health services and -- at least half of them -- qualify for the federal food-stamp program. In other words, taxpayers subsidize Wal-Mart's profits by paying for the federal, state and county assistance that Wal Mart's workers require to survive. Women are not the only workers who are underpaid. Men are, too. With any luck, the growing battle against sex discrimination and for union representation will force the giant retailer to grasp that womens' and workers' rights, are, in the new millennium, called human rights.

E-mail Ruth Rosen at rrosen@sfchronicle.com.

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Union Blues at Wal-Mart

By John Dicker, The Nation          
June 28, 2002

"Got any nachos ready?"

That's what Joe Hendrix said to the folks at the Radio Grill, his employer's in-house snack bar. Hendrix was on his way to punch out from his shift in the meat-cutting department at the Wal-Mart Supercenter in Jacksonville, Texas; eight months earlier, in February 2000, he'd voted yes in the first successful election for union representation at a US Wal-Mart store. For failing to pay when placing his nacho order, he was fired.

Seventy-two-year-old Sidney Smith also voted yes; he got axed for eating a pre-weighed banana on the checkout line. Such were the excuses offered by management as union supporters were systematically routed from their jobs. But this was well after the real damage had been done, when Wal-Mart announced two weeks after the Jacksonville vote that it was switching to case-ready, or pre-cut, beef and would be eliminating meat-cutting operations in 180 stores. Wal-Mart claimed its decision had nothing to do with the organizing drive, but the union filed a complaint with the National Labor Relations Board. Although the board ruled in the union's favor, the timing of the news contained a chillingly clear message to Wal-Mart workers nationwide: This is what you can expect if you try to organize.

Wal-Mart's legendary ferocity in such situations has, until recently, kept unions from trying to make inroads in its million-strong work force. But after more than a decade of pussyfooting, the United Food and Commercial Workers union and the Teamsters are gearing up to take on Wal-Mart Stores, Inc., with the former taking the retail stores and the latter handling 100-plus distribution centers. For the UFCW, this undertaking is less the result of newfound militancy than it is about mere survival. Seventy percent of the union's 1.4 million members work for national groceries like Kroger and Safeway, as well as smaller, regional chains. With a strong presence in the top 100, mostly urban, markets, the big chains can hold steady in the face of Wal-Mart encroachment. The regional chains, however, are getting walloped. And with Wal-Mart circling on the fringes of larger markets, its lower wages and benefits will likely erode those enjoyed by UFCW members.

In its 40-year reign Wal-Mart has amassed a jaw-dropping trophy rack of titles – "world's largest retailer," "world's largest private employer" and the recently acquired "world's largest corporation," edging out ExxonMobil for the top spot in this year's Fortune 500. The chain accounts for 6.4 percent of the nation's retail sales. With K-Mart, until recently its closest rival, now in bankruptcy, the path is clear to ever greater domination.

The only Wal-Mart store to unionize successfully was in Ontario, Canada, abetted in no small measure by the province's once-progressive labor laws. But the fledgling union was broken by the company's flat-out refusal to recognize the contract. While a climber at Mount Everest base camp can point to the many individuals who have summited and lived, a Wal-Mart worker trying to join a union knows no such consolation. Two unions, neither a paragon of union democracy or member mobilization, face an employer that has been growing by 15 percent each year, recession and all: In the context of a labor movement that has not been weaker since the 1920s, with a legal system seemingly rigged against it, this is an Everest ascent with no Sherpas in sight.

Wal-Mart manifests itself in three main forms: The traditional Wal-Mart retail store, which peddles everything from panties to Pennzoil and averages about 90,000 square feet; SAM's Club, a warehouse club store where "members" pay an annual fee to receive greater discounts on dry goods and groceries; and Supercenters, the company's biggest growth vehicle, a combination retail and grocery store clocking in at 190,000 square feet. This year, Wal-Mart plans to open a new one every other day.

"Wal-Mart's strategy is very similar to Mao Zedong's," says retail analyst Burt Flickinger. "Conquer the countryside first and take the cities second." If this sounds alarmist, consider the Neighborhood Market. It's a prototype grocery store roughly the size of three 7-Elevens. In the past few years Wal-Mart has deployed them for greater market saturation in its urban strongholds like Oklahoma City and Dallas. While zoning laws and real estate costs impede the development of most forms of Wal-Mart in the larger metro areas, the trim Neighborhood Market might squeeze into places a Supercenter could never dream of occupying.

SAM Walton built his empire on a belief that rural America saw more business than anyone in the corporate world was recognizing. This vision – combined with a zealot's dedication to low overhead, undercutting the competition through lower profit margins and higher sales volumes, investment in technology and aggressive growth-blazed a trail for an imperial corporation that now operates in nine countries.

Walton has been dead for a decade, but he lives on as a deity, the customer-service superego of Wal-Martians nationwide. So entrenched is the myth of "Mr. Sam" as a benign patriarch that rather than contradict it, the UFCW plays along, with campaign messages about "restoring Sam's vision." Unfortunately, Walton's vision never included unions. As Wall Street Journal reporter Bob Ortega chronicles in his book In Sam We Trust, Walton was bent on maintaining low labor costs, paying workers subminimum wages when he could get away with it and showing no qualms about threatening store and warehouse closures to beat back union campaigns. The company's trumpeted profit-sharing plan and "open door policy" for addressing grievances were all born out of the pleading of Walton's unionbusting consigliere, John Tate. Tate believed that Walton could circumvent labor problems by convincing his workers that he was on their side. For Walton, this turned out to be a winning strategy – a full-time union-prevention program.

Sam drove a pickup truck, shot quail and probably spent more time studying KMart than KMart's own executives. He embodied a peculiarly American paradigm that endures at company headquarters in Bentonville, Arkansas, to this day. He was a self-made, rock-em-sock-em, capitalist cowboy in an industry devoted to peddling every fathomable consumer good, and yet he remained puritanically frugal in his personal and corporate expenditures.

Unlike the Gap or Starbucks, Wal-Mart is not selling brand lifestyle. Its aesthetics in architecture and advertising are decidedly no-frills, its corporate offices stark. Executives pay for their own coffee, and even CEO Lee Scott has been known to share a hotel room on business trips. Wal-Mart's subordination to the bottom line permeates all levels. For instance, to curtail frivolous energy consumption, lights, heat and air conditioning at all 3,289 US Wal-Marts are controlled from Bentonville. Not surprisingly, this ethos hits those at the bottom of the food chain the hardest.

Managers are under considerable pressure to keep profits up, and one of the few ways they can achieve this is by cutting operational costs, of which labor comprises about 50 percent. Former managers and employees attest to an unofficial policy of putting experienced "associates" – as the Wal-Martian wage slave is eloquently titled – out to pasture through firing for minor infractions or pushing them to quit by other means. Why pay $10.50 an hour when a new hire can be culled from the street for $7?

A perpetually churning work force offers the added benefit, from management's perspective, of keeping the union out. By its own admission, Wal-Mart burns through 70 percent of all new hires each year, a considerable number in a work force of over a million. As Bernie Hesse of UFCW Local 789 in the Twin Cities explains it, the paradox of retail organizing is "I'm working retail, this job sucks. If I don't like it I'll go get another job that pays $6.50 an hour." While many retail workers don't see their jobs as being worth a long, arduous battle for representation, they also cower at the real consequences of supporting a union: demotions, reduction in hours and "got any nachos ready"-style firings.

ALThough the union faces skepticism and fear among workers, it has discovered a few potent organizing issues – most notably, healthcare. Effective January 1, a full-time associate with two children and no spouse would pay $36 a week for basic coverage and $3.50 for dental, in addition to a $350 deductible for each individual on the plan. This tallies out to more than $3,000 a year for someone earning less than $16,000. Should it be any surprise that only 38 percent of Wal-Mart associates elect to have coverage? When the company announced a 30 percent hike in premiums this fall, it gleefully noted that associates had a "CHOICE to elect what will be done with 1/2 of the Wal-Mart contribution to our 401(k) account." One of these so-called choices was to "direct it toward paying health care rates." This change was illuminated in a video so slick that SAM's Club cashier Alan Peto said, "If I didn't know any better I really would have thought they had done me a big favor."

Just for shits and giggles, dial (501) 273-8300. That's Wal-Mart's twenty-four-hour "Union Hotline," designed for store managers to call on the first whiff of union activity. Your kind message will activate the beeper of an associate in Wal-Mart's "People Division." Assuming you are a store manager (and not a pinko prankster), your call will be promptly returned. If your associates are talking union, a flying column of unionbusters will be quickly dispatched to put out the fire.

Since the UFCW began talking to meat-cutters en masse in 1999, the People Division has increased from 12 employees to nearly 70. In terms of preparedness, though, Wal-Mart has always trumped the unions. Before any national campaign was afoot, Wal-Mart was publishing and distributing manuals like "A Manager's Toolbox To Remaining Unionfree," producing videos and running two-day workshops for store managers stressing their role as the "first line of defense" against a union campaign.

On paper Wal-Mart stays within the bounds of how an employer can legally respond to a union drive. "They're cosmetics," says unionbuster-turned-union-adviser Martin Levitt. "The company will wave them like a flag to show that they know the law, but once management and supervisors have been pulled into one-on-one meetings with the unionbusting forces, they are carefully programmed on how to break the law and told clearly that their very job depends on doing so."

While a store manager has likely been briefed on extralegal maneuvers, the dirty work is often delegated to nonsalaried department managers with no knowledge of labor law. Gretchen Adams, a co-manager at a Las Vegas Supercenter, was instructed by her district manager not to hire anyone with union experience, while Stan Fortune, a former department manager and security guard, was told to solicit grievances from union supporters, implementing raises and promotions to buy their loyalty. "I never knew I was breaking the law," he says. Wal-Mart spokeswoman Jessica Moser Eldred said the company follows all state, federal and local labor laws. "In no circumstance do we deviate from them."

Part of Wal-Mart's strategy is to deny contact between workers and the union. When it owns the land on which its store sits, it will invoke trespassing laws. "It got to the point where as soon as the organizers got out of their cars, the security guards would be in the parking lots telling them to leave," says Alan Peto.

In other cases, managers or security guards shadow organizers throughout the store, making it impossible for them to speak to workers. Organizers from the UFCW international staff are currently barred from all Wal-Marts under an injunction that forbids solicitation. The company has infuriated shoppers suspected of being union organizers by ejecting them; they've even booted Girl Scouts and Salvation Army bell ringers for fear that contradicting its no-solicitation policy will give the union an inroad.

Faced with the inevitable litany of unfair-labor-practice charges from the union in response to its illegal maneuverings, Wal-Mart can count on the glacial pace of the labor board to stall the campaign. If the board rules in the union's favor, the company suffers a slap on the wrist, posting a notice of company malfeasance in the break room. This is union organizing still haunted by the ghost of the 1947 Taft-Hartley Act.

The UFCW is now attempting to build a case before the NLRB arguing that Wal-Mart's violations are not the result of a few rogue store managers but part of a systematic policy of illegal intimidation, surveillance and terminations, all designed to keep workers from organizing. The union has filed forty complaints against Wal-Mart in twenty-four states, resulting in forty complaints issued by the NLRB against the company.

The UFCW hopes ultimately to attain remedies like "affirmative workplace access," a corrective ruling from the board that allows organizers to talk to workers in break rooms and to rebut management's captive-audience meetings, where workers are deluged with anti-union speeches and videos. Rulings for affirmative access are rare, and they typically take many years to attain. But they have been delivered with great success to UNITE at Fieldcrest Cannon and SEIU at Beverly Nursing Homes. Given a labor board stacked with Bush appointees and Wal-Mart's legal motto of WDWDW (What did we do wrong?), however, chances of an imminent victory are remote.

IN THE 14 years since Wal-Mart opened its first Supercenter, the UFCW has run a damage-control campaign bent on stemming the tide of expansion and sullying the company's image. The union has helped call attention to Wal-Mart's use of sweatshops and child labor overseas, as well as its bogus "Buy American" program, where the company wrapped itself in a "made in the USA" flag until it was revealed that most of its apparel was made in overseas sweatshops. The union also forged coalitions with antisprawl activists to stem Wal-Mart's growth.

All of these are noble pastimes, but without a strategy to organize workers, about as effective as pummeling the Taliban with passages from The Betty Friedan Reader. Until recently, it was hard to tell if the UFCW was boycotting Wal-Mart, organizing it or simply functioning as a thorn in its side. The mixed messages provide the People Division an opportunity to inoculate its associates with videos like "Wal-Mart Under Attack," which shows footage of UFCW rallies with members chanting "Wal-Mart: Not in My Neighborhood" and highlights various local efforts to get union members to sign pledges not to shop at Wal-Mart. When many associates openly identify with the company, the message that the union is against Wal-Mart packs a punch.

In the past year, however, the UFCW seems to have developed a more focused approach. Their line in the sand is Las Vegas, a city with a strong union presence in the service sector. While unionized groceries enjoy 90 percent of Vegas's market share, Wal-Mart is making headway with five Supercenters, five retail stores and four SAM's Clubs. Since March of last year, the union has been organizing in Las Vegas, with some activity in northeast Ohio and Texas. In Vegas, the UFCW hosts a radio show and maintains a Web site, which chronicles Wal-Mart's anti-union campaign and offers a needed arena for counterarguments and open communication among workers. (However, 12 percent of the website's hits come from Bentonville.)

This past November, workers at Las Vegas SAM's Club Store 6382 were set to vote in the third storewide election at a US Wal-Mart. But as the election approached, the company went into a hiring frenzy, disrupting the laboratory conditions required by the NLRB. Watching its support ebb as the company packed the unit with new hires-all of whom were subjected to anti-union videos and meetings-the union filed charges, which resulted in the board's decision to block the election; on March 28, the NLRB issued a complaint against the company, but the best the union is likely to get is another election with little to guarantee that Wal-Mart won't do the same thing again.

And what of the Teamsters? So far, their activity has been limited to two locals in California and Missouri. At a San Bernardino distribution center, a recent election was lost by a swing margin of 28 votes – an impressive result considering management was promising $3 raises in the week preceding the election and that the campaign was the work of a single organizer. Since Wal-Mart's distribution systems are models of efficiency and integral to the company's success, the Teamsters and UFCW might give Bentonville a run for its money if they coordinated their efforts, applying simultaneous pressure by engaging both truckers and retail workers, thus stretching the capacity of the People Division. But in light of Teamsters organizing director John Murphy's stated goal of transforming his department into "a desk and a telephone," and the union's overall stagnation under Jimmy Hoffa, it's hard to imagine they're going to attempt such a conquest anytime soon.

THE UFCW, for its part, has taken a largely top-down approach to the campaign, which has been guided by pressure tactics coming from union HQ in Washington-with some exceptions. "I get members asking me how it's going, how many people have signed cards, and I say what's the point? Why go through a regular election just to get knocked down?" says UFCW organizer Bernie Hesse. "I'm not trying to go store by store; I'm trying to build a social movement." Hesse's Local 789 has launched a campaign called "You Are Worth More" for retail workers in the Twin Cities. Rather than home in on one particular company, Hesse's local is planting roots in the community, establishing itself as a presence among a multiracial work force at metro-area Targets, KMarts and Wal-Marts.

There's no single war-winning strategy for bringing the union to Wal-Mart workers. Given the UFCW's history of bowing to hostile employers and suppressing its own dissidents, it remains to be seen whether the union is movement building or just circling wagons around its most endangered markets. At risk of excessive parade pissing, consider that even if SAM's Club 6382 wins an election, there are still 3,288 more to go. Wal-Mart is likely to be a decades-long struggle, fought by a largely female work force with no union experience. The struggle is now being waged by a vanguard of union lawyers. Ultimately they will have to take a back seat to shop-floor workers, member organizers and, most significant, the communities where workers live. When the lines between union and community collapse, an employer's traditional mode of attack – labeling the union an alien third party – disintegrates, and the campaign becomes less dependent on legal wrangling. Then, when Wal-Mart denies workers access to the union, wrecks an election or fires activist workers, the outrage does not come from a lone UFCW mouthpiece but from a movement.

Given this campaign's stakes – both real and symbolic – a movement is what Wal-Mart workers need. "If these retailers are going to be the jobs of the future, if we've really switched from a production to a service economy, than what is so revolutionary about insisting that they pay a living wage?" asks Bernie Hesse. Millions of associates and citizens may have to ask this question a million more times before a movement becomes something tangible, and not just a feel-good progressive mirage.

John Dicker is a freelance writer based in Brooklyn, New York.

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Mishandling check costs Wal-Mart $130,000
WOMAN WINS LAWSUIT OVER $34

By Bill Estep SOUTH-CENTRAL KENTUCKY BUREAU
27 June 2003
The Lexington Herald Leader

Problems with the handling of a $34 check resulted in a lawsuit verdict of $130,000 against a Wal-Mart store yesterday.

A federal jury in London awarded the money to Mary Waddle of Pulaski County to compensate her for emotional distress and other damages she suffered because of problems that started after her check to the Wal-Mart store in Somerset was returned, said her attorney, Thomas Carroll of Monticello.

Carroll said Waddle, a pharmacy technician at the Wal-Mart, wrote the check to the store in September 2000. The store's bank incorrectly stamped the draft with the notation that Waddle had no account and returned the check, her attorney said.

Waddle did have an account and showed Wal-Mart that the check had been returned in error. The store ran the check back through and got paid, Carroll said.

However, Wal-Mart had reported the returned check to database services that keep track of bad checks as a resource for businesses. A year later, another business refused to take a check from Waddle, showing that Wal-Mart had not rescinded or corrected its report, Carroll said.

Waddle spoke to Wal-Mart managers about correcting the database. But managers later testified that once a check was paid, the store had no way to get into the system and correct mistakes, Carroll said.

Waddle sued the store under the federal fair credit reporting act. The store has an obligation to be as accurate as possible, Carroll said.

Waddle had never bounced a check, Carroll said, and she suffered emotional distress that required medical treatment and medication because of the incident. She took medical leave and has not gone back to the store.

The jury ruled Wal-Mart had willfully violated the federal law and awarded Waddle money to cover her emotional distress, injury to her reputation, lost wages and impairment of her ability to earn money, Carroll said.

"I think it was a fair verdict," Carroll said.

Wal-Mart's attorney in the case, Jim Roark of Hazard, was not available for comment on whether the store will appeal.

Management at the Somerset Wal-Mart referred questions to the Bentonville, Ark., headquarters, but a spokesman was not available yesterday.

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Wal-Mart poised to take on apparel sector

CHICAGO, June 26
(Reuters) -

Down the hall from the office of Wal-Mart Chief Executive Lee Scott, a poster tacked to the wall reads: "Who is taking our business? Kohl's."

Not Target Corp. (TGT.N), the second-largest U.S. discount chain, or Paris-based Carrefour (CARR.PA), the world's second-biggest retailer, but mid-priced department store chain Kohl's Corp. (KSS.N) -- a company whose annual revenues are smaller than U.S. sales taxes paid by Wal-Mart Stores Inc. (WMT.N).

Wal-Mart, the world's biggest company by revenues, has always made a point of keeping a close eye on competitors -- even much smaller ones.

"They are maniacally focused on the consumer and the competition," said Michael Collins, a partner with consulting firm Bain & Co.

But singling out Kohl's could spell trouble for the fast-growing department store chain, and it signals a brewing price war in the U.S. clothing sector, analysts say.

"Wal-Mart indicating that Kohl's is stealing their business means that they are intent on going after the apparel retailing market just as they've gone after the food and drug retailing markets," said Bill Dreher, retail analyst with Deutsche Bank.

Dreher rates Kohl's shares "sell," and Wal-Mart's "buy."

Kohl's did not return calls seeking comment.

Wal-Mart has built up an arsenal of name-brand clothing to compete with Kohl's and other department stores, many of which are already struggling with slack demand and diminishing traffic at shopping malls.

This month, Wal-Mart is rolling out an exclusive line of low-priced Levi's jeans, and it has a deal with Carter's for baby and children's clothes. Both are major brands for Kohl's.

Wal-Mart said the most expensive pair -- the "plus"-sized denims -- will sell for just under $25. That compares with around $29 for the lowest priced pair available on Kohl's Web site. Internet stores were offering Levi's classic 501 blue jeans for as little as $39.95.

In another ominous sign for the apparel industry, Wal-Mart is opening two stand-alone clothing stores in Britain this fall to showcase its George fashion line, which is already being sold in stores in the United States and elsewhere. The retailer said it will study the two stores for at least a year before deciding whether to open more.

CRUSHING COMPETITION

Competing with Wal-Mart is rarely a pleasant experience because the world's biggest retailer uses its size to exert pressure on suppliers and buy goods cheaper than most of its competitors can.

Only a decade after getting into the grocery business through its supercenters, Wal-Mart is the largest player and has crushed competitors' profits. Toy retailers and drug stores are also feeling the pinch as Wal-Mart undercuts them.

Wal-Mart founder Sam Walton offered some advice to competitors in his autobiography published in 1992, the year he died: "They need to avoid coming at us head-on, and do their own thing better than we do ours," he wrote. "It doesn't make any sense to try to underprice Wal-Mart on something like toothpaste."

Indeed, Kmart Holding Corp. (KMRT.O) tried to match Wal-Mart's prices and ended up in bankruptcy court. It emerged from Chapter 11 protection this spring and vowed to stick to its pricing strategy of offering steep discounts on selected items every week, but not challenging Wal-Mart head-on.

COSTCO NEXT

Wal-Mart's strategy relies on building a dominant market position and using its size to squeeze lower prices out of suppliers. But that's a tricky proposition when Wal-Mart isn't the biggest player.

Its Sam's Club warehouse stores trail Costco Wholesale Corp. (COSTCO), and Wal-Mart seems determined to change that. In a presentation to analysts this month, Wal-Mart said it was in the process of "establishing price leadership" at Sam's -- corporate speak for a renewed price war, analysts said.

Wal-Mart is turning up the heat even more by combining Wal-Mart and Sam's buying power on purchases from suppliers. Buyers for Sam's and Wal-Mart stores are negotiating deals together for the first time, a move Wal-Mart thinks will bring down prices even further.

In one early example of the new team effort, Sam's Club stores will carry Levi's classic red tag jeans, a deal worked out as part of Wal-Mart's negotiations for lower-priced Levi's at its discount stores.

Richard Galanti, Costco's chief financial officer, declined to comment on whether the company noticed increased pricing pressure, but said Costco was up to the challenge.

"We've competed with Sam's and Wal-Mart for 20 years effectively and will continue to do so," he said in a telephone interview. "We continue to grow our business." Thursday, June 26, 2003 (SF Chronicle)

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Wal-Mart wars

Ruth Rosen
June 26, 2003

WOULD YOU LIKE a Wal-Mart "supercenter" store to move into your community? Think of the low prices and the convenience of one-stop shopping! You just park once and get whatever you need -- groceries, drugs, plants, toys, dog food, even eyeglasses. Sounds great, doesn't it? So why have nearly 200 communities refused to allow such big-box stores to enter their lives? Do they know something we don't? To find out, I embedded myself in the Wal-Mart wars that have recently broken out in Contra Costa County. What I learned, in a nutshell, is that Wal- Mart's nonunion, big-box stores drag down other workers' salaries, destroy downtown businesses, prevent smart-growth development and increase traffic congestion. What really surprised me though is that we, the taxpayers, end up subsidizing Wal-Mart stores by paying for the health and retirement needs of its workers. Wal-Mart has announced its intention to open 40 new supercenter stores -- each the size of four football fields -- in such fast-growing California suburban areas as Contra Costa County. But Contra Costa County has fought back. A year ago, Martinez prevented a traditional Wal-Mart store from expanding into a supercenter that could sell groceries. On June 3, the county Board of Supervisors voted to ban such supercenter stores from unincorporated areas of the county. In making its decision, the board cited a study done by the San Diego County Taxpayers Association (SDCTA), a nonprofit, nonpartisan organization. It found that an influx of big-box stores into San Diego would result in an annual decline in wages and benefits between $105 million and $221 million, and an increase of $9 million in public health costs. SDCTA also estimated that the region would lose pensions and retirement benefits valued between $89 million and $170 million per year and that even increased sales and property tax revenues would not cover the extra costs of necessary public services. "Good jobs, good pay, and good benefits should be the goal of an economy," SDCTA concluded, "and supercenters are not consistent with that objective." Wal-Mart, as is its custom, has launched a counterattack against Contra Costa's ordinance. The company parachuted in platoons of signature-gatherers who are stationed outside discount stores and asking shoppers to sign a petition that would place the board's decision on a ballot. If they collect 27, 000 legitimate signatures, Wal-Mart could reverse the board's ban. In response, a coalition of community groups have mobilized to defeat Wal- Mart's counterattack. But they face a formidable enemy. Over the last 40 years, Wal-Mart has grown into the nation's biggest employer and the world's largest retailer. Every two days, Wal-Mart opens another superstore. It has more people in uniform than the U.S. Army. Last year, it banked about $7 billion in profits. The troops fighting Wal-Mart's invasion of Contra Costa County include the Gray Panthers, small businesses, dozens of churches, the National Organization for Women, and environmental and smart-growth activists. Young people, recruited by the Association of Community Organizations for Reform Now (ACORN), fan out daily to discount stores and try to convince shoppers not to sign Wal- Mart's petition. They even carry cards that allow voters to withdraw their signature if they have already signed the petition. The generals in charge of this community resistance are union leaders. John Dalrymple, director of the Contra Costa Central Labor Council, admits they face an uphill battle. The giant retailer is infamous for its take-no- prisoners, anti-union policies. Wal-Mart's ability to offer such low prices, as any union member will tell you, has been achieved by paying its workers -- or "sales associates" -- low wages, offering unaffordable health coverage and no retirement benefits and importing most of its products from developing countries, some of which use child and prison labor. The United Food and Commercial Workers (UFCW) Local 1179, located in Martinez, is headquarters for the war against Wal-Mart. Barbara Carpenter, the union's president, comes from a family whose members have worked for decades at retail companies that provided decent wages, affordable health benefits and pension plans. "It's about saving the American dream," she told me. Wal-Mart, she points out, lowers wages among working families and crushes family businesses. "It not only pays workers less than most of its retail competitors, two-thirds of workers don't have health-care coverage -- a cost taxpayers are picking up across the country." Did she say taxpayers? That's right. We, the customers, get such low prices and convenient shopping because we, the taxpayers, subsidize Wal-Mart profits by paying for county public health services, food stamps and social services for its retired employees. So should you shop at Wal-Mart? To make up your mind, consider this: If you earn a livable wage or are protected by a union, you can probably buy all your monthly needs at Wal-Mart. But that's because the average Wal-Mart employee, who earns about $15,000 a year, cannot do the same. Convenience and cheap prices, it turns out, come with hidden costs. E-mail Ruth Rosen at rrosen@sfchronicle.com

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Wal-Mart at critical juncture Sex bias plaintiffs seek class status

By Sue Reisinger SPECIAL TO THE NATIONAL LAW JOURNAL
Monday, June 23, 2003

Lawyers for Wal-Mart Stores Inc. and a group of women employees are engaged in a courtroom fight that, if the employees win the upcoming round, could result in the largest sex discrimination suit ever.

If certified as a class action, the case would include 1.5 million Wal-Mart employees and could theoretically result in compensatory and punitive damages totaling hundreds of billions of dollars, according to lawyers on both sides.

"No court has ever certified such a class," Wal-Mart said in a 60-page brief filed on June 12 in U.S. district court in San Francisco. "If this court were to certify anything like the requested class it will be in uncharted waters, going where no court has ever gone."

U.S. District Judge Martin J. Jenkins will hold a hearing and is expected to rule on the certification issue on July 25.

Seven California women—who all worked at Wal-Mart stores in California—claim in a 2001 suit that Wal-Mart, including its Sam's Club division, systematically discriminates against its female employees by denying them promotions, access to training and equal pay. The lead plaintiff is Betty Dukes, who worked part time, then full time as a cashier in Wal-Mart's Pittsburg, Calif., store and then was promoted to customer service manager in 1997. She claims Wal-Mart discriminated against her by passing her over for promotion and then demoted her when she complained. Dukes v. Wal-Mart Stores Inc., No. C-01-2252 MJJ.

Wal-Mart is asking that if Jenkins grants certification he immediately allow an appeal to the 9th U.S. Circuit Court of Appeals.

Wal-Mart is the world's largest business, with 3,244 U.S. stores, more than $230 billion in annual revenue and 1.3 million employees. The suit could affect not only wages in the retail industry but also the entire U.S. economy, according to lead plaintiffs' counsel, Brad Seligman.

Seligman said his studies found that "the patterns of discrimination at Wal-Mart are remarkably uniform throughout the country—urban and rural, the deep South and North, every one of 45 regions of Wal-Mart, in every state." Seligman is executive director of the Impact Fund, a nonprofit group in Berkeley, Calif., that supports litigation on civil and human rights, the environment and poverty.

The plaintiffs' studies claim that some 70% of Wal-Mart's hourly employees are female but women hold fewer than 33% of store management jobs, and fewer than 15% of store manager positions. Women make up an average of 56% of management positions at Wal-Mart's main competitors, the plaintiffs contend.

Wal-Mart's lead counsel, Nancy L. Abell, a partner in the Los Angeles office of Paul, Hastings, Janofsky & Walker, did not return repeated messages, nor would Wal-Mart's legal department comment.

Mona Williams, vice president of corporate communications, said from company headquarters in Bentonville, Ark., "Our company prohibits discrimination of any kind. While there may be isolated instances of unfairness in any large organization, there is no basis for finding systemwide discrimination at Wal-Mart."

More than 100 other women workers from 34 states have added their declarations of alleged discrimination to the plaintiffs' pleadings. The court has accepted complaints from former employees going back to Dec. 26, 1998.

Williams said that for every plaintiff's claim, she could furnish a female Wal-Mart employee to say the company treats women fairly.

Commonality is key

Federal courts have long held that a motion for class certification should not involve examination of the merits of the case, most recently in a decision by the 2d Circuit in Caridad v. Metro-North Commuter R.R., 191 F.3d 283 (1999). In the Caridad case, which involved allegations of sex and race discrimination, the court reaffirmed that plaintiffs seeking class certification must meet each of the requirements of Federal Rule 23—the three so-called "nexus" requirements of commonality, typicality and adequacy in Rule 23(a) and the requirement of manageability under Rule 23(b).

Most of Wal-Mart's brief addresses those four requirements. It argues that the suit lacks commonality because the class of plaintiffs is too broad and diverse: Most of the plaintiffs are, or were, hourly employees who worked at different jobs, at different stores and under different managers. It also says the potential class of employees presents different issues as to why they felt discriminated against.

The brief states that Wal-Mart is really nine different businesses ranging from supercenters to neighborhood markets, with different management structures and diverse pay plans. It says none of the seven plaintiffs, for example, worked in the grocery division, listed as one of the nine separate businesses.

Wal-Mart also claims there is no typicality because there is no "typical" class representative who shares a common experience with all members of the class. It then argues there is no adequacy because in some cases female supervisors were both the victims and the perpetrators of alleged discrimination.

And the Wal-Mart brief claims numerous manageability problems, especially in determining damages: "Plaintiffs here ask for back pay for 1.5 million people. Such an undertaking cannot possibly be manageable." It adds that a demand for punitive damages presents similar manageability problems and would require examination of each individual's case.

On the other side, the plaintiffs argue that there are questions of law and fact involving Wal-Mart's policies and practices common throughout the company's stores, and that these practices cause women at Wal-Mart to be paid less and to be promoted less often than similarly situated male employees.

The 'same' interests

The seven plaintiffs claim they adequately represent the class because their interests and the interests of the class are the same—proving the existence of Wal-Mart's general practice of gender discrimination in compensation and promotion. And, they argue, typicality is satisfied where the plaintiffs have suffered from the defendant's general policy of discrimination in compensation and promotions.

The plaintiffs also argue that class treatment is manageable and superior to other methods of litigation because, "it would be far more costly for each individual female employee of Wal-Mart separately to seek discovery of Wal-Mart's policies, obtain data concerning personnel decisions, and have a multitude of different experts analyze such data for each individual case. Moreover, separate lawsuits would require analysis of the same evidence by a multitude of courts and juries."

With commonality such a key issue, Wal-Mart went on to claim in its brief that its store managers are autonomous, and that its own statistical analysis concludes that in four of the stores where plaintiffs worked, women succeeded at a higher, not lower, rate than men in comparable positions.

But, Seligman said, Wal-Mart's own data show that there is commonality and grounds for class certification. He said the data reveal that women in every major job category at stores across the country have been paid less than men with the same seniority in every year since 1997, even though the female employees, on average, have higher performance ratings and less turnover than men.

"The judge doesn't have to decide which statistical model is correct, only that there is a question about statistics that justifies class certification," Seligman said.

Wal-Mart's defense that every store is autonomous "is so beyond what everyone knows about Wal-Mart that it is incredible....Wal-Mart is uniquely centralized. It is fanatic about control of the stores—from the thermostat of every single store, to the music it plays, to its inventory and employee records," he said.

While corporate defense attorney Heather Gatley said the factual claims should deeply concern Wal-Mart's counsel, she predicted that the plaintiffs will have an uphill battle in getting the case certified as a class action.

"Decisions were made by different managers in different locations," said Gatley, vice chairwoman of the labor and employment practice at Miami's Steel Hector & Davis, who is not involved in this case. "There is a huge time period, multiple kinds of claims and a huge geographic area. If I were a judge, I would not certify this case." She predicted that any decision to certify would be overturned on appeal, especially in the current political climate that has Congress looking at ways to restrict class actions.

But another attorney, also not involved in the litigation, said numbers and geography alone don't preclude a class action.

Judson Miner, a plaintiffs' attorney with Chicago's Miner, Barnhill & Galland, said, "The fact that decisions impact each person differently doesn't matter. The key is common issues. Does the policy permeate the system? Is there evidence to link the stores together?"

Besides the suit's charges, Wal-Mart is also battling its own reputation as a somewhat ruthless employer and litigator. For example, since 1994, the U.S. Equal Employment Opportunity Commission has filed 16 suits against Wal-Mart for violating the Americans With Disabilities Act—the most against any U.S. company, according to a spokesman.

The EEOC would not disclose if it has any sex discrimination complaints pending against Wal-Mart. An EEOC spokesman said the agency granted the California plaintiffs the right to sue Wal-Mart shortly after they filed an EEOC complaint. Attorneys said it is not unusual for plaintiffs with a strong case to proceed in court before any EEOC investigation.

Win or lose in court, many observers believe that the plaintiffs' suit could forever change how Wal-Mart deals with its female employees.

But Seligman wants to ensure that change. "The single most important thing is winning class certification," Seligman said. "It's either seven women or 1.5 million women. If it's seven, then that is nothing to Wal-Mart."

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Wal-Mart collects ink for county referendum

By Sandy Kleffman
24 June 2003

Wal-Mart has begun gathering signatures in the hope of overturning a Contra Costa County ordinance barring super-size retail centers from opening full-service grocery stores in unincorporated areas.

The firm will spend about $100,000 trying to qualify a referendum for the ballot, said Wal-Mart community affairs manager Amy Halley Hill.

"It's a matter of principle," she said. "These types of ordinances are anti-competitive and anti-consumer and we will fight them tooth and nail."

The dispute mirrors battles throughout the country over retail giants.

Supporters like the bargain prices and convenience. Opponents counter that those benefits often come at the expense of smaller retailers and employees who receive low wages.

"They just shouldn't have a super center that's the size of 15 football fields," said Liz Perlman, an organizer for the East Bay Alliance for a Sustainable Economy, which opposes the Wal-Mart petition drive.

County supervisors approved an ordinance June 3 that applies only to retailers with stores in excess of 90,000 square feet in unincorporated portions of the county.

It bans such super centers from devoting more than 5 percent of their floor space to the sale of nontaxable items such as groceries.

The measure, similar to restrictions approved by Martinez, won strong backing from labor unions and social-justice groups.

But Wal-Mart and other opponents accused county supervisors of being discriminatory, harming consumers and interfering with the free market.

Wal-Mart must turn in 26,487 valid signatures by July 3 to qualify a referendum.

County supervisors would then have the option of repealing the ordinance or placing it on the ballot, probably for the March 2004 election.

Supervisors John Gioia and Mark DeSaulnier said Monday they believe the board would place it on the ballot if the petition drive qualifies.

"I think we'll fight them very vigorously," DeSaulnier said. "I think when people in Contra Costa hear the whole story, they won't be terribly sympathetic."

DeSaulnier predicted that grocery chains and labor unions would campaign to uphold the ordinance.

Wal-Mart hired National Petition Management, a Sacramento company, to gather the signatures.

On Sunday, Gioia went to Wal-Marts in Martinez, Pittsburg and Antioch to listen to what the petition circulators are saying.

Some gathered signatures for or against a recall of Gov. Gray Davis at the same time they circulated the Wal-Mart petitions, he said.

He added that several people gave out wrong information by stating that the ordinance applies countywide or would ban existing Wal-Marts from selling groceries.

Instead, the ordinance applies only to areas that lie outside city limits and thus are governed by the county. It would not apply to existing stores within city boundaries.

"They're being a bit loose with the facts," Gioia said. "It's clear that people signing the petitions are not being told the full and accurate story."

EBASE and ACORN, community groups that support the ordinance, have been monitoring the petition drive and setting up their own information tables alongside the signature-gatherers.

"We've been representing our side of the story," Perlman said. "They've got these paid signature-gatherers from out of town. They're basically carpetbaggers."

Although Wal-Mart has no plan to open a store in unincorporated Contra Costa, the company wants to keep its options open, Hill said.

She noted that in Nevada's Clark County, commissioners repealed a similar ordinance after Wal-Mart qualified a referendum.

"We would never enter into this unless we believed there was a real opportunity for us to be successful on the ballot."

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Wal-Mart Supercenters spread across Wisconsin

11:58 PM 6/22/03
Marv Balousek Wisconsin State Journal

RICHLAND CENTER - Bev Fink, who has run Ed's Family Foods with her husband, Ed, for 15 years, said she wasn't prepared for the volume of business they lost when the Wal-Mart Supercenter opened in Richland Center several years ago.

"We were really surprised at how much we did drop," she said, adding that a comfortable living turned into a struggle for survival. Promotions, discounts and home delivery for the elderly have since kept Ed's open, she said.

Supercenters with groceries, pharmacies, vision centers and sometimes gas stations represent Wal-Mart's second wave. Supercenters have opened this year in Delavan, Green Bay, Manitowoc, Oshkosh and Wausau. Another Wal-Mart Supercenter will open soon in Portage. More are planned in places that include Jefferson, La Crosse, Neenah-Menasha - and Stoughton in Dane County.

Wal-Mart has an option to buy property just outside Stoughton, but the company hasn't yet filed any papers to move the project forward.

If the company does move ahead, it could face a lot of local opposition. Stoughton Mayor Helen Johnson said Sunday that the City Council will look at a moratorium on the development of "big-box stores" in the next few weeks.

Johnson, who is opposed to a Supercenter, said the city wants time to write ordinances that would require impact studies by developers who want to bring big stores to the city. She worries most about the non-economi mpacts of a Superstore, including how it might change the atmosphere of the city of roughly 12,000.

"People have concerns about small businesses, but we can't legislate competition," she said. "My biggest concern is traffic and storm-water runoff."

Johnson said she and city planner Rodney Scheel will meet this week with Wal-Mart officials to plan a public meeting on the proposal.

A group called Uff Da Wal-Mart has formed to oppose the project.

Nationwide, the company plans to open more than 200 Supercenter stores during its current fiscal year.

Critics say the first wave of smaller Wal-Mart stores that sprouted across America during the 1980s and early 1990s drove smaller hardware and clothing stores out of business. They fear Supercenters will be the same death knell for local grocery stores and pharmacies.

A 1999 impact study of a proposed Wal-Mart Supercenter in a Virginia community by economist Thomas Muller estimated the store would increase community property values by $3.5 million, while threatening the property of competitors worth $8 million to $10 million. He said the store would create about 246 mostly part-time jobs while threatening 248 jobs, many full time, at other businesses.

With nearly a million employees, Wal-Mart is the nation's largest private employer. It's also Wisconsin's largest employer with 21,271 workers, according to the Wisconsin Chamber of Commerce Foundation and the company.

During the fiscal year ending in January 2002, the company spent about $918 million with in-state suppliers, paid $23 million in state and local taxes and accounted for $128 million in sales taxes, according to company statistics.

John Bisio, Wal-Mart regional community affairs manager, said the company has no master strategy of where it will open Supercenters. Instead, he said, store locations are based on point-of-sales data that map where the customers are - when a store is serving too many customers, it's time to build another one.

Proposed Supercenters have aroused vocal opposition in communities like Stoughton, Jefferson and Viroqua, where a Supercenter is operating. Zoning restrictions and the city's master plan kept a Supercenter out of Fort Atkinson. But Bisio said the company faces opposition in a minority of its target locations.

"Even where there's outspoken opposition, we've found there's a pretty significant number of folks - the silent majority - that does recognize the merits of the project," he said. "I think some of this reserve is good. I think people want to be sure they have certain guidelines in place."

Bisio, who's based in Indianapolis but plans to visit southern Wisconsin this week to work on the Stoughton project, said Wal-Mart stores bring many more customers to towns, which benefits other merchants.

"Instead of predicted bankruptcies and foreclosures, Wal-Mart has had a very positive effect on communities," he said. "It helps a community become more of a hub for retail and services."

That's not much comfort to Linda Peterson, who runs Trappings, a gift and clothing store in downtown Richland Center. Peterson said she's careful about the books she carries because Wal-Mart sells some of them for less than she can, despite the discounts she gets from suppliers.

Janet Neefe of The Clothes Horse said she's able to compete with Wal-Mart by offering a different quality of clothing.

Before the smaller Wal-Mart store opened, Richland Center had downtown hardware, discount general merchandise and small department stores. Those have been replaced with specialty shops like Trappings or The Clothes Horse.

"I don't think it does a small town any good," Neefe said of Wal-Mart.

- Matt Hagengruber contributed to this report.

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Can $250 Billion Wal-Mart Think Small?

Sat June 21, 2003 05:11 PM ET
By Emily Kaiser BENTONVILLE, Ark. (Reuters)

From its nondescript headquarters in a remote corner of Arkansas, Wal-Mart Stores Inc. WMT.N decides whether to buy T-shirts made in Guatemala or Guangdong Province, and if stylish clothes from its British stores will sell in Brazil.

Love or loathe it, Wal-Mart is the world's biggest company by revenues, and the decisions made in Bentonville affect economies on five continents and dictate prices at other discounters, department stores and grocery chains.

Economists say Wal-Mart single-handedly lowers U.S. inflation by driving down prices at its stores. The company says it raises the standard of living by saving customers billions of dollars that they can spend elsewhere.

"They are the driving force behind what is a natural economic rule -- which is, over time, the price of goods and services come down," said Michael Collins, a partner with consulting firm Bain & Co.

Wal-Mart's strategy is simple: buy and sell goods cheaper than the competition. Unlike most retailers, it doesn't run sales, instead promising its lowest price at all times.

Its stores do so much business that the register tape for one day's sales would stretch 2,670 miles -- or almost from New York to Los Angeles. More than 130 million customers worldwide visit a Wal-Mart store each week.

Wal-Mart accounts for roughly 9 cents out of every retail dollar spent in the United States, excluding autos. The U.S. Federal Reserve phones Wal-Mart executives to check up on sales as a gauge of the nation's economic health.

But critics contend Wal-Mart squeezes its suppliers so hard that they can't afford to pay workers a living wage, and its anti-union stance makes it a top target for labor groups.

Wal-Mart faces dozens of U.S. lawsuits, alleging that the world's largest private-sector employer forces people to work unpaid overtime and discriminates against women.

Its massive supercenters -- some the size of four football fields -- have drawn fire from environmental groups and anti-sprawl activists who say the stores contribute to flooding and gobble up green space.

DOES SIZE MATTER?

Analysts estimate Wal-Mart's sales could top $600 billion by 2011, and some say $1 trillion is not out of the question. For its fiscal year that ended in January 2003, sales were $244.5 billion, three times its nearest competitor's.

But size may prove to be Wal-Mart's Achilles heel. Founder Sam Walton worried about his company becoming so large it could no longer function efficiently.

"The folks who come after me are eventually going to have to face up to this question. Even by thinking small, can a $100 billion retailer really function as efficiently and productively as it should? Or would maybe five $20 billion companies work better?" Walton wrote in his autobiography, published in 1992, the year he died.

Jay Allen, a Wal-Mart spokesman, said it's hard to know what Walton really meant when he wrote that, but the idea of thinking small is still alive and well in Bentonville.

"He left that on the culture. The leadership and people who are successful here still focus on what needs to be better today," Allen said.

Wal-Mart executives regularly quote from Mr. Sam's -- as they still refer to him -- book, and his philosophies remain an integral part of the corporate culture: the customer always comes first, treat your people well, think small, drive down costs.

ALL ROADS LEAD TO BENTONVILLE

So far, Wal-Mart has proved it can manage its massive operations from Arkansas.

All of Wal-Mart's U.S. regional managers are based in Bentonville, but every Monday, they board one of Wal-Mart's 27 airplanes and head out to visit stores -- something Sam Walton, a pilot, used to do regularly.

The managers return to headquarters for a 7 a.m. Thursday sales meeting in a conference room with a dozen chest-high tables and no chairs. Removing the chairs -- an idea Wal-Mart picked up from its British Asda division -- cut meeting times in half because no one got too comfortable.

Every Saturday morning at 7:30, managers review the week's performance and go over any new products or marketing ideas that could affect sales. Stores implement changes over the weekend, when most other company headquarters are closed.

But there are indications that the personal touch of Sam Walton's age is fading as Wal-Mart's reach extends around the globe, with stores in 10 countries and suppliers in many more.

The discrimination lawsuits and tales of union-busting and poor working conditions all tarnish the founder's image of small-town, good Christian values.

Ironically, the company that prides itself on good values has angered religious investors over what they consider to be poor treatment of employees and those who work in its suppliers' factories.

The Rev. David Schilling, director of global corporate accountability for religious investors group International Council on Corporate Responsibility, said Wal-Mart has a responsibility to be a good corporate citizen, and that means treating its people better.

Nitin Nohria, a professor at Harvard Business School and author of a recent book on successful management methods, said the company still reflects Sam's values -- for now.

"As we go through multiple generations, CEOs who had no contact with Sam, then this much power in the hands of someone who doesn't share in the values of the company can be a problem," he said.

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Protesters Rally Outside Wal-Mart

by Aruna Jain Staff Writer
June 19, 2003

A coalition of community and labor activists gathered near the Wal-Mart in Bowie Thursday afternoon to protest what they assert is the retailer's anti-union policies, low wages and poor employee benefits.

Members of United Food and Commercial Workers Local 400, who are not employees of Wal-Mart, but who represent 40,000 workers in the mid-Atlantic region, organized the protest to urge Wal-Mart to agree to collective bargaining. Local 400 president Jim Lowthers said that Wal-Mart is a poor corporate citizen as opposed to what it portrays in its marketing efforts.

"They discriminate against women in promotional opportunities, two-thirds of their employees don't have health insurance and [employees'] wages are so low that they can't really raise families," Lowthers said. Lowthers also said that Wal-Mart has anti-union policies.

The management of Wal-Mart at Bowie declined to comment on the protesters, however its Web site addresses the issue of unions: "…Because we believe in maintaining an environment of open communications, we do not believe there is a need for third-party representation."

County councilmen Thomas R. Hendershot (D-Dist. 3) of New Carrollton and Douglas J.J. Peters (D-Dist. 4) of Bowie were also present. Councilman Peters told protesters that the Prince George's had a pro-union county council.

"We ask Wal-Mart to respect our county and respect our laws and respect the right for employees to organize," Peters said.

After the speeches, many of the protesters wearing anti-Wal-Mart T-shirts separated into groups of two or three and walked into Wal-Mart.

Publicly held Wal-Mart has topped Fortune 500 list and is the largest retailer in the world. The company's recorded sales of $244.5 billion for the fiscal year ended January 31, 2003

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Wal-Mart Loses Appeal In Drug Death

Story by The Associated Press Posted
6/19/2003

Wal-Mart Stores Incorporated has lost its appeal of a 1.27 million dollar jury award to a Texas woman whose husband died after a Wal-Mart pharmacist gave him the wrong prescription medicine.

On Thursday, the Arkansas Supreme Court rejected the argument of the world's largest retailer and pharmacist Russell White that there was insufficient evidence as to the cause of John Tucker's death.

The company argued that the awards to Tucker's widow and daughter were improper.

Tucker died September 4, 1997, after being given the medication Ziac, a high blood-pressure medication. But the medicine was in a prescription bottle labeled for Zaroxolyn, a diuretic. The prescription was filled at a Wal-Mart pharmacy in De Queen.

Court papers say the medication, which Tucker took for two and a half months, allowed fluid to accumulate in his body and caused severe weight gain. Doctors said he died of congestive heart failure.

A doctor testified at the trial in Sevier County that the mistake contr