Rand Wilson
Jobs with Justice

By HOWARD W. FRENCH
The New York Times

Walmart Under Fire

Big News Network.com 

Wal-Mart suffering at its own hands

By Jennifer Waters,
CBS.MarketWatch.com

By Mark McSherry
NEW YORK (Reuters)

Wal-Mart loses in Sask.

By MSN Money staff

Posted by timothy on
Slapshot

Wal-Mart's Next Victims

Reuters

How women pay for Wal-Mart's success

By Naomi Aoki,
Globe Staff

Anti-Wal-Mart protesters climb pyramid

Associated Press

Wal-Mart finds a friend in Stockton

Wal-Mart Finds Union at Its Back Door

New York Daily News                    [back to top]
http://www.nydailynews.com
Friday, December 31st, 2004

EVANSVILLE, Ind. - They blamed it on the boss, but two Wal-Mart workers in Indiana were briefly jailed for following their manager's orders to shoot and kill a stray cat. The pair, both assistant managers, repeatedly shot the homeless kitty with a pellet gun from the store until it died the following day, authorities said.

A truckdriver who reported the incident said he saw store employees placing what he believed to be a dead animal in shrinkwrap a day after he heard workers joking about shooting the cat.

The world's biggest retailer said all managers at the Wal-Mart Supercenter involved in the shooting have been suspended without pay pending an internal investigation and could be fired.

"We were outraged when we learned of this incident. This kind of action is completely inconsistent with the way we do business," company spokeswoman Sharon Weber said.

Christopher Anderson, 29, and Jeffrey Hardin, 21, told Vanderburgh County sheriffs on Wednesday that the store's manager ordered them to get rid of the animal, which was living in a storage trailer behind their store.

According to a police report, store manager Darrel Weitzel told sheriffs he did instruct some of his employees to get a gun and get rid of the cat after attempts to coax it from the trailer failed.

Anderson and Hardin are due back in court on Tuesday on charges of felony animal cruelty.

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Ruling Allows Wal-Mart Janitors to Expand Lawsuit

SmartMoney                 [back to top]
December 30, 2004

A federal judge in New Jersey ruled that illegal immigrants who contend they were underpaid when they worked for contractors as janitors in Wal-Mart stores can begin expanding their lawsuit to include potentially thousands of similar plaintiffs, Friday's Wall Street Journal reported.

U.S. District Judge Joseph A. Greenaway Jr. took an initial step toward certifying the janitors' lawsuit against Wal-Mart Stores Inc. (WMT) as a "collective action," a classification that would mean that any contract janitors who worked at Wal-Mart stores since January 2000 could take part in the suit. He ordered Wal-Mart to help prepare a notice letting potential plaintiffs know of their legal option and to provide contact information so that notice can be widely disseminated.

James L. Linsey, the lead counsel for the 17 former janitors who are plaintiffs in the suit, estimated there are "tens of thousands" of former contract janitors who could join the suit. He said the suit would seek "many millions of dollars" from the retailer.

David Murray, an outside lawyer representing Wal-Mart in the case, said the ruling is "just a very standard preliminary step." Although the ruling begins the process of notifying more potential plaintiffs of the lawsuit, he said, Wal-Mart will be able to argue later that the case should be limited to a much smaller number of plaintiffs.

The suit was filed in November 2003, a few weeks after a federal raid of 61 Wal-Mart stores in 21 states rounded up 250 illegal immigrants working as contract janitors in the stores. The raid also sparked a federal grand-jury investigation into violations of federal immigration laws.

Wal-Mart stopped using contractors to provide janitors in its stores about a year ago, Mr. Murray said.

Collective-action status in a lawsuit resembles class-action status, except in a collective action each plaintiff must individually opt into the case. In a class-action suit, all eligible plaintiffs are considered part of the suit unless they opt out.

Wall Street Journal Staff Reporter Jeffrey Ball contributed to this report.

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Contract workers at Wal-Mart gain in overtime case

Judge says immigrants can file lawsuit collectively

By ANDREW DUNN          [back to top]
Bloomberg News
Dec. 30, 2004, 8:54PM

A federal judge gave undocumented Wal-Mart Stores contract workers the right to seek out colleagues and form a group to collectively sue the company for unpaid overtime and minimum wage violations.

U.S. District Judge Joseph A. Greenaway of Newark, New Jersey, gave lawyers for Wal-Mart janitors six months to notify eligible workers that they may join the suit against Wal-Mart. Greenaway will determine next summer whether the group comprises workers with similar enough claims that they can sue collectively.

The ruling will allow potentially "tens of thousands" of former Wal-Mart employees from countries including Mexico, Mongolia and the Czech Republic to participate in the suit, said lawyer James Linsey, who brought the case.

Wal-Mart's lawyer, David Murray of Willkie Farr & Gallagher in Washington, called the number "way off the mark."

U.S. officials arrested more than 250 suspected illegal immigrants in raids on 61 Wal-Mart stores in October 2003. Federal prosecutors in Pennsylvania are investigating whether Bentonville, Arkansas-based Wal-Mart, the world's biggest retailer, knowingly hired contractors who used illegal immigrants to clean its stores. The New Jersey suit was filed a month after the raids.

Wal-Mart didn't immediately return a call seeking comment placed after business hours.

Plaintiffs often seek to sue as a group because it is cheaper than suing individually and gives them more leverage to negotiate a settlement.

The order also requires the company to "produce the names, addresses and nationalities of all Wal-Mart former and current contract janitors since January 2000" and to provide information on relevant contracts.

The judge excluded employees of Wal-Mart unit Sam's Club from the group. After the parties have reviewed the evidence, the judge will consider whether collective treatment should be granted permanently, Murray said.

Linsey said his firm would notify potential claimants through a Web site and ask for permission to post notices at Wal-Mart stores. He said he has also visited Warsaw and Prague to find eligible former Wal-Mart employees.

By allowing the group to sue collectively, Greenaway rejected a motion by Wal-Mart to dismiss the labor-law count of the four-count suit.

Greenaway has yet to decide whether to dismiss three other counts, which allege that Wal-Mart engaged in racketeering, violated workers' civil rights and falsely imprisoned the workers. Linsey said the case could produce "well over $100 million" in damages.

"It is very routine for judges to allow for notice and not argue about the number and scope," said Murray.

After looking at the records, "the judge will take full arguments on whether collective treatment should or should not be granted."

The company has also been sued by six women claiming they were paid less and offered fewer promotions than male employees. In June, a federal court in San Francisco allowed 1.6 million other workers who may have similar claims to join the case, making it the largest class action ever approved in a private discrimination suit.

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Wal-Mart Workers Accused of Shooting Cat

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EVANSVILLE, Ind. (AP) - Two Wal-Mart employees who police say followed a manager's orders to shoot and kill a stray cat have been charged with federal animal cruelty.

The men, both assistant managers at the Supercenter, were arrested and released after a court appearance Wednesday. Christopher Anderson, 29, and Jeffrey Hardin, 21, told police the store's manager ordered them to get rid of the animal that was living in a storage trailer behind their store.

All managers potentially involved in the incident have been suspended without pay pending an internal investigation and could be fired, said Wal-Mart spokeswoman Sharon Weber.

"We were outraged when we learned of this incident. This kind of action is completely inconsistent with the way we do business," she said.

A truck driver who reported the incident said he saw store employees placing what he believed to be a dead animal in shrink wrap a day after he heard workers joking about shooting the cat.

Store manager Darrel Weitzel told police he had told some of his employees to get a gun and get rid of the cat after attempts to coax it from the trailer failed, according to a police report.

Anderson and Hardin were scheduled for a hearing Jan. 4

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Wal-Mart's China operation a study in contrasts

Workers at many of the factories that supply goods to the stores can't afford to shop there 

Vanessa Hua, Chronicle Staff Writer        [back to top]
Wednesday, December 29, 2004

Dongguan, China -- Inside this toy factory in southern China, childhood memories are born. Cuddly bears, soft pastel bibs, blankets are midwifed by migrant workers who see their own babies but once a year.

Row upon row of workers at Germton Enterprises in this huge new industrial area of China make thousands of such products. Most are bound for Wal-Mart and other retailers around the globe that rely on this cheap labor.

Just a few miles away, middle-class shoppers cruise Dongguan's brightly lit, well-stocked Wal-Mart. Here they find American products like Pantene shampoo, Johnson's baby milk-bath and Disney infant clothes. Yet here, too, shoppers pick up medicinal deer antler, live turtles and Greatwall Cabernet Sauvignon.

The Wal-Mart illustrates China's paradox: The global chain stocks its shelves with goods churned out by Chinese manufacturers like Germton, yet few of its factory workers can afford to shop there. In the past two decades, the standard of living in China has risen dramatically after the government began economic reform. But progress has been uneven, divided along geographic and social lines.

Dongguan, two hours north of Hong Kong in the Pearl River Delta of Guangdong province, is thick with thousands of factories that line the roads. Dongguan, with a population of 7 million, has more than 14,000 companies backed by foreign investment and 8,000 domestic enterprises. For 2002, total exports from the area reached $23.7 billion.

In two decades, the farming area has been transformed into factories, gated housing developments, golf courses and upscale shopping malls.

In 1989, Andy Hung, Germton's general manager, and a business partner set up the Dongguan factory at a cost of $2 million.

Germton, whose name in Chinese means fertilized land, makes goods sold at Wal-Mart and Kmart, churning out toys for companies such as Mattel, Play- skool, Fisher Price, the Learning Curve, Baby Einstein and Tiny Love. Today, Hung's factory has about 4,000 employees who work six days a week -- 3,500 factory workers and 500 management and administrative staff. The factory workers earn about $120 per month, while managers and others earn $300 to $2, 000 per month. The average monthly wage for factory workers in the coastal province is about $100, economists say.

This year, Germton is expected to reach $30 million in sales, with about $8 million to the United States.

Germton opened its first U.S. sales office in 1995 in South San Francisco. By having offices here, the company can keep track of trends and maintain better relations with its buyers, Hung said.

Hung picked the Bay Area because a cousin he grew up with immigrated here and could help him set up the office. A framed oil painting of the Marin redwoods, purchased at Fisherman's Wharf, hangs in his office in Hong Kong.

United Commercial Bank in San Francisco opened a line of credit for Germton, a key to the company's expansion.

Germton's factories, dormitories, medical clinic, library, ping-pong tables, traditional shrine, and English and management training classes are all behind a gate. Across the street are vegetable fields ringed by more factories.

Inside the factory, workers labored over sleeping mats, stuffed animals, tiny colorful socks, blankets covered in leaping sheep -- the most intimate items of childhood.

A man stuffed fluff into a deflated brown bear. A chain of Tiggers sprang from another sewing machine. Another man stamped yellow buttons onto bibs trimmed in red. A line of masked workers silk-screened layer upon layer of color, until the image emerged -- Winnie the Pooh, lying on his belly, shaded by a circus tent.

Worker Yang Chui-Ping, 37, earns between $84 and $96 per month sewing stuffed animals. She sends about $604 home each year to support her two teenage daughters and husband, who runs a men's clothing store in Sichuan province, about 40 hours away by train.

Yang has heard of Wal-Mart, but said she has never has been there. But she's proud that many products sold worldwide are made in her homeland.

"China is developing and become more and more powerful," she said in Mandarin over lunch in the company's cafeteria.

Her family has a television, and her husband even has a cell phone. Someday, maybe in the next three to four years, Yang said, she can return to open a shop with her husband. She is saving to buy a beautiful house, she added, to replace the concrete one where the family now lives.

In 2003, Wal-Mart purchased $15 billion worth of Chinese goods made by factory workers like Yang. The retailer accounted for about 10 percent of China's exports to the United States. Within the next five years, Wal-Mart expects to buy $25 billion to $30 billion worth of products from China.

With China's entry into the World Trade Organization, foreign investment is expected to flow into less-developed areas of China as companies seek new areas to build factories. Some worry that the new development will drive down wages in factory centers such as Dongguan.

At the same time, low-cost agricultural imports such as soybeans from the United States are likely to cut into peasant income, creating more pressure for farmers to seek employment in the cities. Their migration will expand the labor pool and could cause wages to decline, labor advocates say.

China's middle class traces its roots to the mid-'70s, when economic reforms began. In the countryside, new policies dissolved communes and increased the price of agricultural products, narrowing the gap between urban and rural residents. Urban reforms included closing many state-owned enterprises, along with reducing job security, medical care and pensions. But at the same time, both state and foreign investment has enriched cities.

Urban professionals are prospering in real estate, communications, engineering, advertising and other emerging fields, with opportunities for good pay and quick promotions.

"They have a chance to expand their life," said Xiaobo Hu, a research fellow at Stanford University's Hoover Institution.

On a rainy Saturday afternoon in Wal-Mart, Niu Zhi-Yuan, 28, shopped for children's socks. The prices and quality are good, the accountant said through a translator. The service is also better than at other retailers.

"More smiles," she said.

She and her husband, a finance manager, moved from Jiangxi province about seven years ago, because Dongguan had more opportunities and higher wages.

Niu shops at Wal-Mart once a week. Her son and his grandmother go to Wal- Mart every day to walk around because there are no playgrounds nearby and she thinks the store is a safe, familiar place.

In the grocery section, Zhao Ying, 31, fished for live prawns with his 4- year-old son, Do Do.

Behind him, a butcher hacked away at a pig hanging on a meat hook while buyers called out their orders.

Wal-Mart is not the cheapest option, Zhao said, but he likes the convenience and the parking. His son also likes the toy factory on the top floor of the mall, Zhao said.

Wal-Mart is betting on this growing class of shoppers. The retailer now has 43 stores in 20 cities in China, with 21,000 employees. It plans to open an additional 10 to 12 stores in 2005.

In 1996, Wal-Mart opened its first store in China, in Shenzhen. Although the stores feature the familiar red uniforms and smiley-face logo, the quintessential American retailer is also learning to do as the Chinese do.

In the United States, Wal-Mart's signature greeters are often senior citizens. But in China, where there is great respect for the elderly, the greeters are much younger. In southern China, customers like to eat turtle soup during the winter, so there are big bubbling tanks of it in the stores, just like the markets in San Francisco's Chinatown.

About 95 percent of Wal-Mart's products in its China stores are locally made.

"We have a small number of stores compared with the customer base. We see huge growth potential," said James Lee, vice president of corporate affairs in China, citing the country's population of 1.3 billion. "We're excited."

Much of that growth is likely to come from the emerging middle class, like the staff and management at the Germton factory.

After a six-day work week, three women employees feasted on huo guo, or hot pot, dipping mushrooms, slices of beef, chicken, rice noodles, fish balls and green vegetables into the boiling spicy broth.

After dinner, they headed to a club where they clinked bottles of San Miguel beer.

These young women in their 20s can have meat whenever they want. It's a contrast to their childhoods, when they ate meat only once a year, at Chinese Lunar New Year. Angel Fu, 25, moved to Dongguan after graduating from college because she heard the city had jobs. The daughter of factory workers, she rode 44 hours by train, in a seat instead of a sleeper to save money. She is an executive who oversees workers and training. She summed up China's economic gains in her lifetime:

"Yi qian, wo men chi bao. Xian zi wo men chi hao," she said.

"In the past we ate our fill. Now we eat well."

E-mail Vanessa Hua at vahua@sfchronicle.com

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Radio-tag adoption slower than expected at Wal-Mart

NY TIMES NEWS SERVICE              [back to top]
Tuesday, Dec 28, 2004,Page 12

Advertising A year and a half ago, Wal-Mart served notice that it expected its top 100 suppliers to be shipping goods to it with new radio tagging technology by Jan. 1, 2005. While it may still be true, as the saying goes, that the best way to predict the future is to create it, Wal-Mart's experience so far has served as a reminder that creating the future is not all that easy.

With Jan. 1 just days away, the technology is not yet ready to meet the needs of either Wal-Mart or its suppliers. The tags, which are typically about the size of a credit card and contain an antenna and microchip encased in plastic, receive query signals from scanning devices called readers. Using the energy captured from those signals, they broadcast a snippet of code identifying the goods to which they are attached.

To date, most of Wal-Mart's suppliers have not figured out inexpensive ways to automate the printing and application of the tags. Although read rates are improving, no one who uses the technology has systems that can reliably read the information 100 percent of the time in factories, warehouses and stores; Wal-Mart said the rate was about 60 percent in its stores.

Nor is the data currently integrated well enough with other technology to initiate changes in manufacturing or shipping sched-ules that could actually save the large sums of money that would make the investment worthwhile.

"The progress has been much slower than many people anticipated, and in some cases it's stalled," said Andrew Macey, vice president of the Sapient Corp, a technology consulting firm in Cambridge, Massachusetts.

Wal-Mart's official position is that it is working closely with suppliers, meeting its goals and learning valuable lessons that will pay off as the technology continues to roll out. But analysts who regularly survey major consumer goods companies said that most participants were cooperating with Wal-Mart out of fear of offending the retailer and were, as much as possible, putting off investments in the technology.

"The big manufacturing companies have advocates for the technology who are very positive, but the people on the floor who are implementing it are much more negative," Kara Romanow, an analyst at AMR Research, said.

Wal-Mart's goal was to wring billions of dollars from the supply chain by using the tags to keep shelves filled with whatever consumers were buying, cut back on shipments of other goods and combat theft.

The mandate was soon defined in narrower, more practical terms as supplying tagged cartons and pallets, not individual items, to a limited number of stores through just three Texas distribution centers by the Jan. 1 deadline.

Wal-Mart said recently that more than 100 suppliers would be tagging bulk shipments to the three Texas centers next month. But only 40 will be tagging everything they send. Of the remainder, two have been so tied up in a complete overhaul of their entire information technology infrastructure that they have put off attempting to introduce radio tagging. Some suppliers will be tagging as little as 2 percent of the goods going to the centers.

"We think the average supplier will be tagging about 65 percent of the volume they ship to the three centers," Linda Dillman, the chief information officer of Wal-Mart, said.

Although the progress toward adoption has been slow, it has an air of inevitability.

Radio tagging, known as RFID (for radio frequency identification), has been spreading through the economy for decades in applications like automated toll collection, tracking tags for animals and wireless cards controlling access to buildings.

Copyright © 1999-2004 The Taipei Times. All rights reserved.

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Homer, Alaska, Restricts Large Retail Stores

Dec. 23, 2004            [back to top]

After two years of consideration---including a review by a city council-appointed task force, numerous public hearings, and a voter referendum---the town of Homer, Alaska, has adopted an ordinance that limits stores to no more than 45,000 square feet and requires retail development projects larger than 15,000 square feet to undergo a community impact review.

Homer has a population of about 5,000 and is located on the Kenai Peninsula.

Under the size restrictions, no building housing primarily retail uses may have a footprint in excess of 66,000 square feet. This allows for larger buildings provided they are multi-story. Furthermore, individual stores within these buildings are capped at between 25,000 and 45,000 square feet, depending on the area of town in which they are located.

Retail development projects larger than 15,000 square feet must undergo a community impact review and obtain a conditional use permit.

"Large retail and wholesale development can result in substantial impacts to the community, such as, but not limited to, noise, traffic, community character, environment, and the local economy," the ordinance notes. "The purpose of this section is to address these impacts and provide for detailed review of such uses."

In addition to traffic, site design, and architectural requirements, the impact review considers the proposed store's impact on employment and wages; the cost of municipal services; and the health of the downtown. It also weighs any change in the volume of "locally retained profits" resulting from the development and its impact on existing businesses.

The cost of all independent studies and investigations required to complete the review are to be paid by the developer.

The new rules were originally prompted by the supermarket chain Kroger's interest in building a 94,000-square-foot Fred Meyer superstore in Homer. Concerned that a store of that size could drive all competing grocery stores out of business, harming the local economy and leading to higher consumer prices, the city council enacted a temporary moratorium on large-scale retail stores in 2003.

Kroger has now proposed a 45,000-square-foot Fred Meyer store, which would be the smallest in the chain. The proposal will be the first project subject to Homer's new community impact review process.

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Wal-Mart Elected "Grinch of the Year" for 2004

Cintas and Comcast Runners-Up in National Contest to Determine Who Did the Most Harm to Workers and their Families this Year

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WASHINGTON -- December 22 -- The retailing giant Wal-Mart was named 'Grinch of the Year' in a national online poll held between December 6 and December 22 by Jobs with Justice.

Wal-Mart is a fitting recipient of the Grinch title. As the United States' largest retailer and largest employer, Wal-Mart is a driving force in setting wage standards wherever its stores are located. Despite nearly $9 billion in profits, its wages are so low that many employees are eligible for food stamps. Even so, local taxpayers often finance Wal-Mart's expansion through tax breaks and development incentives.

Wal-Mart has created such high barriers to qualify for its health care benefits, that many workers are left dependent on publicly financed medical services, a largely hidden taxpayer subsidy. According to a research study in California, Wal-Mart workers seek $86 million a year in state aid because of inadequate wages and benefits. In effect, Wal-mart cleverly shifts a portion of its labor costs to the public.

Earlier this year, Wal-Mart admitted that it routinely locked overnight workers in its stores. Wal-Mart was also sued this year in the largest sex-discrimination case in history, brought on behalf of about 1.6 million current and former employees.

Around the country, Jobs with Justice coalitions have been in the middle of many community-based campaigns calling attention to the impact of Wal-Mart by demanding agreements from this giant corporation to improve its hiring and employment practices. Local Jobs with Justice coalitions in Chicago, IL, St. Louis, MO, Buffalo and New Paltz, NY, Washington, DC, Eugene and Bend, OR, and Toledo, OH have held rallies and hearings on Wal-Mart, published reports about its potential impact on communities, and pushed for comprehensive 'Big Box' store ordinances to help communities gain more leverage in the development process.

"The overwhelming vote to name Wal-Mart 'Grinch of the Year' reflects the growing concern that working families have with this mega-corporation," said Fred Azcarate, Executive Director of Jobs with Justice. "Jobs with Justice and our many allies are building a movement to challenge Wal-Mart’s low road strategy." Over sixty percent of the more than 2,300 votes cast in this year's election were for Wal-Mart.

Wal-Mart has more than 3,500 stores and 1.3 million employees. The company is based in Bentonville, Arkansas. Learn more about how Wal-Mart is harming working families at www.walmartwatch.com.

Cintas, the largest uniform provider and industrial launderer in the nation, was runner up in the Grinch contest. Cintas workers have been injured and killed on the job as a result of illegal and unsafe working conditions. It has been charged with over 100 violations of health and safety standards, many for repeated violations that could lead to "death or serious physical harm." Cintas workers have routinely been disciplined or fired after reporting their injuries or filing worker's compensation claims, a serious violation of workers' rights.

Despite lucrative profits, Cintas has pushed increased health insurance costs onto its employees, making it impossible for many workers to afford insurance. To make matters worse, many employees of Cintas report being paid below the federal poverty line.

Cintas operates 351 facilities in the U.S. and Canada, including 15 manufacturing plants and seven distribution centers that employ more than 28,000 people. The company is headquartered in Cincinnati, Ohio. Learn more about how Cintas is harming workers at www.uniformjustice.org.

Comcast, the nation's largest cable TV and broadband Internet company, won third place in the poll. Like Wal-Mart, Comcast has adopted a low road approach to its employees. "Comcast acts like a bully, refusing to adhere to the rules or community standards," said former maintenance technician Shannon Kirkland, who worked for Comcast for 11 years. "Comcast uses its disproportionate power to deny workers their rights."

Earlier this year, Jobs with Justice's National Workers' Rights Board released a report "This is Comcast: Silencing Our Voice at Work" documenting its widespread pattern of abuse of workers' rights and illustrating why the United States' 75 year-old labor laws need to be modernized.

Comcast is headquartered in Philadelphia, Pennsylvania and employs 68,000 people in 4,000 communities. Learn more about how Comcast is harming workers at www.comcastwatch.com.

Each year JwJ coalitions across the country hold local 'Grinch of the Year' elections to determine the most deserving greedy Grinch in their hometowns. This year's local winners included: Missouri Governor Bob Holden in St. Louis and Ed Hickey of Add Temps in Providence.

To learn more about the Grinch awards and the other companies nominated to have most harmed working families in 2004, visit www.jwj.org/Grinch/2004Vote.htm.

Jobs with Justice is a national network of more than 40 local coalitions of unions, community groups, faith-based organizations, and student groups working together to fight for social and economic justice. Over 100,000 individual activists have taken the Jobs with Justice Pledge to be there five times a year for someone else's fight as well as their own.

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Down and Out in Discount America

By Liza Featherstone,
The Nation
Posted on December 22, 2004  [back to top]
 

This article is adapted from Liza Featherstone's 'Selling Women Short: The Landmark Battle for Workers' Rights at Wal-Mart' (Basic).

On the day after Thanksgiving, the biggest shopping day of the year, Wal-Mart's many progressive critics – not to mention its business competitors – finally enjoyed a bit of schadenfreude when the retailer had to admit to "disappointing" sales. The problem was quickly revealed: Wal-Mart hadn't been discounting aggressively enough. Without low prices, Wal-Mart just isn't Wal-Mart.

That's not a mistake the big-box behemoth is likely to make again. Wal-Mart knows its customers, and it knows how badly they need the discounts. Like Wal-Mart's workers, its customers are overwhelmingly female, and struggling to make ends meet. Betty Dukes, the lead plaintiff in Dukes v. Wal-Mart, the landmark sex-discrimination case against the company, points out that Wal-Mart takes out ads in her local paper the same day the community's poorest citizens collect their welfare checks. "They are promoting themselves to low-income people," she says. "That's who they lure. They don't lure the rich.... They understand the economy of America. They know the haves and have-nots. They don't put Wal-Mart in Piedmonts. They don't put Wal-Mart in those high-end parts of the community. They plant themselves right in the middle of Poorville."

Betty Dukes is right. A 2000 study by Andrew Franklin, then an economist at the University of Connecticut, showed that Wal-Mart operated primarily in poor and working-class communities, finding, in the bone-dry language of his discipline, "a significant negative relationship between median household income and Wal-Mart's presence in the market." Although fancy retailers noted with chagrin during the 2001 recession that absolutely everybody shops at Wal-Mart – "Even people with $100,000 incomes now shop at Wal-Mart," a PR flack for one upscale mall fumed – the Bloomingdale's set is not the discounter's primary market, and probably never will be. Only 6 percent of Wal-Mart shoppers have annual family incomes of more than $100,000. A 2003 study found that 23 percent of Wal-Mart Supercenter customers live on incomes of less than $25,000 a year. More than 20 percent of Wal-Mart shoppers have no bank account, long considered a sign of dire poverty. And while almost half of Wal-Mart Supercenter customers are blue-collar workers and their families, 20 percent are unemployed or elderly.

Al Zack, who until his retirement in 2004 was the United Food and Commercial Workers' vice president for strategic programs, observes that appealing to the poor was "Sam Walton's real genius. He figured out how to make money off of poverty. He located his first stores in poor rural areas and discovered a real market. The only problem with the business model is that it really needs to create more poverty to grow." That problem is cleverly solved by creating more bad jobs worldwide. In a chilling reversal of Henry Ford's strategy, which was to pay his workers amply so they could buy Ford cars, Wal-Mart's stingy compensation policies – workers make, on average, just over $8 an hour, and if they want health insurance, they must pay more than a third of the premium – contribute to an economy in which, increasingly, workers can only afford to shop at Wal-Mart.

To make this model work, Wal-Mart must keep labor costs down. It does this by making corporate crime an integral part of its business strategy. Wal-Mart routinely violates laws protecting workers' organizing rights (workers have even been fired for union activity). It is a repeat offender on overtime laws; in more than thirty states, workers have brought wage-and-hour class-action suits against the retailer. In some cases, workers say, managers encouraged them to clock out and keep working; in others, managers locked the doors and would not let employees go home at the end of their shifts. And it's often women who suffer most from Wal-Mart's labor practices. Dukes v. Wal-Mart, which is the largest civil rights class-action suit in history, charges the company with systematically discriminating against women in pay and promotions.

Solidarity Across the Checkout Counter

Given the poverty they have in common, it makes sense that Wal-Mart's workers often express a strong feeling of solidarity with the shoppers. Wal-Mart workers tend to be aware that the customers' circumstances are similar to their own, and to identify with them. Some complain about rude customers, but most seem to genuinely enjoy the shoppers.

One longtime department manager in Ohio cheerfully recalls her successful job interview at Wal-Mart. Because of her weight, she told her interviewers, she'd be better able to help the customer. "I told them I wanted to work in the ladies department because I'm a heavy girl." She understands the frustrations of the large shopper, she told them: "'You know, you go into Lane Bryant and some skinny girl is trying to sell you clothes.' They laughed at that and said, 'You get a second interview!'"

One plaintiff in the Dukes lawsuit, Cleo Page, who no longer works at Wal-Mart, says she was a great customer service manager because "I knew how people feel when they shop, so I was really empathetic."

Many Wal-Mart workers say they began working at their local Wal-Mart because they shopped there. "I was practically born in Wal-Mart," says Alyssa Warrick, a former employee now attending Truman State University in Missouri. "My mom is obsessed with shopping.... I thought it would be pretty easy since I knew where most of the stuff was." Most assumed they would love working at Wal-Mart. "I always loved shopping there," enthuses Dukes plaintiff Dee Gunter. "That's why I wanted to work for 'em."

Shopping is traditionally a world of intense female communication and bonding, and women have long excelled in retail sales in part because of the identification between clerk and shopper. Page, who still shops at Wal-Mart, is now a lingerie saleswoman at Mervyn's (owned by Target). "I do enjoy retail," she says. "I like feeling needed and I like helping people, especially women."

Betty Dukes says, "I strive to give Wal-Mart customers one hundred percent of my abilities." This sentiment was repeated by numerous other Wal-Mart workers, always with heartfelt sincerity. Betty Hamilton, a 61-year-old clerk in a Las Vegas Sam's Club, won her store's customer service award last year. She is very knowledgeable about jewelry, her favorite department, and proud of it. Hamilton resents her employer – she complains about sexual harassment and discrimination, and feels she has been penalized on the job for her union sympathies – but remains deeply devoted to her customers. She enjoys imparting her knowledge to shoppers so "they can walk out of there and feel like they know something." Like Page, Hamilton feels she is helping people. "It makes me so happy when I sell something that I know is an extraordinarily good buy," she says. "I feel like I've done somebody a really good favor."

The enthusiasm of these women for their jobs, despite the workplace indignities many of them have faced, should not assure anybody that the company's abuses don't matter. In fact, it should underscore the tremendous debt Wal-Mart owes women: This company has built its vast profits not only on women's drudgery but also on their joy, creativity and genuine care for the customer.

Why Boycotts Don't Always Work

Will consumers return that solidarity and punish Wal-Mart for discriminating against women? Do customers care about workers as much as workers care about them? Some women's groups, like the National Organization for Women and Code Pink, have been hoping that they do, and have encouraged the public not to shop at Wal-Mart. While this tactic could be fruitful in some community battles, it's unlikely to catch on nationwide. A customer saves 20-25 percent by buying groceries at Wal-Mart rather than from a competitor, according to retail analysts, and poor women need those savings more than anyone.

That's why many women welcome the new Wal-Marts in their communities. The Winona (Minnesota) Post extensively covered a controversy over whether to allow a Wal-Mart Supercenter into the small town; the letters to the editor in response offer a window into the female customer's loyalty to Wal-Mart. Though the paper devoted substantial space to the sex discrimination case, the readers who most vehemently defended the retailer were female. From the nearby town of Rollingstone, Cindy Kay wrote that she needed the new Wal-Mart because the local stores didn't carry large-enough sizes. She denounced the local anti-Wal-Mart campaign as a plot by rich and thin elites: "I'm glad those people can fit into and afford such clothes. I can barely afford Shopko and Target!"

A week later, Carolyn Goree, a preschool teacher also hoping for a Winona Wal-Mart, wrote in a letter to the Post editor that when she shops at most stores, $200 fills only a bag or two, but at Wal-Mart, "I come out with a cart full top and bottom. How great that feels." Lacking a local Wal-Mart, Goree drives over the Wisconsin border to get her fix. She was incensed by an earlier article's lament that some workers make only $15,000 yearly. "Come on!" Goree objected. "Is $15,000 really that bad of a yearly income? I'm a single mom and when working out of my home, I made $12,000 tops and that was with child support. I too work, pay for a mortgage, lights, food, everything to live. Everything in life is a choice.... I am for the little man/woman – I'm one of them. So I say stand up and get a Wal-Mart."

Sara Jennings, a disabled Winona reader living on a total of $8,000, heartily concurred. After paying her rent, phone, electric and cable bills, Jennings can barely afford to treat herself to McDonald's. Of a recent trip to the LaCrosse, Wisconsin, Wal-Mart, she raved, "Oh boy, what a great treat. Lower prices and a good quality of clothes to choose from. It was like heaven for me." She, too, strongly defended the workers' $15,000 yearly income: "Boy, now that is a lot of money. I could live with that." She closed with a plea to the readers: "I'm sure you all make a lot more than I. And I'm sure I speak for a lot of seniors and very-low-income people. We need this Wal-Mart. There's nothing downtown."

From Consumers to Workers and Citizens

It is crucial that Wal-Mart's liberal and progressive critics make use of the growing public indignation at the company over sex discrimination, low pay and other workers' rights issues, but it is equally crucial to do this in ways that remind people that their power does not stop at their shopping dollars. It's admirable to drive across town and pay more for toilet paper to avoid shopping at Wal-Mart, but such a gesture is, unfortunately, not enough. As long as people identify themselves as consumers and nothing more, Wal-Mart wins.

The invention of the "consumer" identity has been an important part of a long process of eroding workers' power, and it's one reason working people now have so little power against business. According to the social historian Stuart Ewen, in the early years of mass production, the late nineteenth and early twentieth centuries, modernizing capitalism sought to turn people who thought of themselves primarily as "workers" into "consumers." Business elites wanted people to dream not of satisfying work and egalitarian societies – as many did at that time – but of the beautiful things they could buy with their paychecks.

Business was quite successful in this project, which influenced much early advertising and continued throughout the twentieth century. In addition to replacing the "worker," the "consumer" has also effectively displaced the citizen. That's why, when most Americans hear about the Wal-Mart's worker-rights abuses, their first reaction is to feel guilty about shopping at the store. A tiny minority will respond by shopping elsewhere – and only a handful will take any further action. A worker might call her union and organize a picket. A citizen might write to her congressman or local newspaper, or galvanize her church and knitting circle to visit local management. A consumer makes an isolated, politically slight decision: to shop or not to shop. Most of the time, Wal-Mart has her exactly where it wants her, because the intelligent choice for anyone thinking as a consumer is not to make a political statement but to seek the best bargain and the greatest convenience.

To effectively battle corporate criminals like Wal-Mart, the public must be engaged as citizens, not merely as shoppers. What kind of politics could encourage that? It's not clear that our present political parties are up to the job. Unlike so many horrible things, Wal-Mart cannot be blamed on George W. Bush. The Arkansas-based company prospered under the state's native son Bill Clinton when he was governor and President. Sam Walton and his wife, Helen, were close to the Clintons, and for several years Hillary Clinton, whose law firm represented Wal-Mart, served on the company's board of directors. Bill Clinton's "welfare reform" has provided Wal-Mart with a ready workforce of women who have no choice but to accept its poverty wages and discriminatory policies.

Still, a handful of Democratic politicians stood up to the retailer. California Assemblywoman Sally Lieber, who represents the 22nd Assembly District and is a former mayor of Mountain View, was outraged when she learned about the sex discrimination charges in Dukes v. Wal-Mart, and she smelled blood when, tipped off by dissatisfied workers, her office discovered that Wal-Mart was encouraging its workers to apply for public assistance, "in the middle of the worst state budget crisis in history!" California had a $38 billion deficit at the time, and Lieber was enraged that taxpayers would be subsidizing Wal-Mart's low wages, bringing new meaning to the term "corporate welfare."

Lieber was angry, too, that Wal-Mart's welfare dependence made it nearly impossible for responsible employers to compete with the retail giant. It was as if taxpayers were unknowingly funding a massive plunge to the bottom in wages and benefits – quite possibly their own. She held a press conference in July 2003, to expose Wal-Mart's welfare scam. The Wal-Mart documents – instructions explaining how to apply for food stamps, Medi-Cal (the state's healthcare assistance program) and other forms of welfare – were blown up on posterboard and displayed. The morning of the press conference, a Wal-Mart worker who wouldn't give her name for fear of being fired snuck into Lieber's office. "I just wanted to say, right on!" she told the assemblywoman.

Wal-Mart spokespeople have denied that the company encourages employees to collect public assistance, but the documents speak for themselves. They bear the Wal-Mart logo, and one is labeled "Wal-Mart: Instructions for Associates." Both documents instruct employees in procedures for applying to "Social Service Agencies." Most Wal-Mart workers I've interviewed had co-workers who worked full time for the company and received public assistance, and some had been in that situation themselves. Public assistance is very clearly part of the retailer's cost-cutting strategy. (It's ironic that a company so dependent on the public dole supports so many right-wing politicians who'd like to dismantle the welfare state.)

Lieber, a strong supporter of the social safety net who is now assistant speaker pro tempore of the California Assembly, last year passed a bill that would require large and mid-sized corporations that fail to provide decent, affordable health insurance to reimburse local governments for the cost of providing public assistance for those workers. When the bill passed, its opponents decided to kill it by bringing it to a statewide referendum. Wal-Mart, which just began opening Supercenters in California this year, mobilized its resources to revoke the law on election day this November, even while executives denied that any of their employees depended on public assistance.

Citizens should pressure other politicians to speak out against Wal-Mart's abuses and craft policy solutions. But the complicity of both parties in Wal-Mart's power over workers points to the need for a politics that squarely challenges corporate greed and takes the side of ordinary people. That kind of politics seems, at present, strongest at the local level.

Earlier this year, labor and community groups in Chicago prevented Wal-Mart from opening a store on the city's South Side, in part by pushing through an ordinance that would have forced the retailer to pay Chicago workers a living wage. In Hartford, Connecticut, labor and community advocates just won passage of an ordinance protecting their free speech rights on the grounds of the new Wal-Mart Supercenter, which is being built on city property. Similar battles are raging nationwide, but Wal-Mart's opponents don't usually act with as much coordination as Wal-Mart does, and they lack the retail behemoth's deep pockets.

With this in mind, SEIU president Andy Stern has recently been calling attention to the need for better coordination – and funding – of labor and community anti-Wal-Mart efforts. Stern has proposed that the AFL-CIO allocate $25 million of its royalties from purchases on its Union Plus credit card toward fighting Wal-Mart and the "Wal-Martization" of American jobs [see Featherstone, "Will Labor Take the Wal-Mart Challenge?" June 28].

Such efforts are essential not just because Wal-Mart is a grave threat to unionized workers' jobs (which it is) but because it threatens all American ideals that are at odds with profit – ideals such as justice, equality and fairness. Wal-Mart would not have so much power if we had stronger labor laws, and if we required employers to pay a living wage. The company knows that, and it hires lobbyists in Washington to vigorously fight any effort at such reforms – indeed, Wal-Mart has recently beefed up this political infrastructure substantially, and it's likely that its presence in Washington will only grow more conspicuous.

The situation won't change until a movement comes together and builds the kind of social and political power for workers and citizens that can balance that of Wal-Mart. This is not impossible: In Germany, unions are powerful enough to force Wal-Mart to play by their rules. American citizens will have to ask themselves what kind of world they want to live in. That's what prompted Gretchen Adams, a former Wal-Mart manager, to join the effort to unionize Wal-Mart. She's deeply troubled by the company's effect on the economy as a whole and the example it sets for other employers. "What about our working-class people?" she asks. "I don't want to live in a Third World country." Working people, she says, should be able to afford "a new car, a house. You shouldn't have to leave the car on the lawn because you can't afford that $45 part."

Liza Featherstone is a New York City-based journalist. In 2002, she co-authored 'Students Against Sweatshops: The Making of a Movement' (Verso).

© 2005 Independent Media Institute. All rights reserved. 

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Mom Sues Wal-Mart Over Daughter's Suicide

Mother of Suicide Victim in Texas Sues Wal-Mart Over Gun Sale, Says Daughter Was Mentally Ill

The Associated Press                 [back to top]
Dec. 21, 2004

Near the end of her short life, Shayla Stewart, a diagnosed manic-depressive and schizophrenic, assaulted police officers and was arrested for attacking a fellow customer at a Denton Wal-Mart where she had a prescription for anti-psychotic medication.

Given all those signs, her parents say, another Wal-Mart just seven miles away should have never sold her the shotgun she used to kill herself at age 24 in 2003.

Her mother, Lavern Bracy, is suing the world's biggest store chain for $25 million, saying clerks should have known about her daughter's illness or done more to find out.

The case, filed earlier this month, has reignited a debate over the confidentiality of mental health records and the effectiveness of background checks on would-be buyers of guns.

"We know that if they had so much as said, `Why do you want this?' we would not be having this conversation because Shayla would have had a meltdown," said her stepfather, Garrett Bracy.

The Bracys said Wal-Mart's gun department could have checked Wal-Mart's own security files or the pharmacy department's prescription records before selling her the weapon.

Wal-Mart spokeswoman Christi Gallagher declined to comment on the lawsuit.

But pharmacy prescription records are confidential under a 1996 federal law, so stores cannot use them when deciding whether to sell a gun.

Also, Wal-Mart did a background check on Stewart, as required under federal law, but through no fault of its own, her name did not show up in the FBI database. The reason: The database contains no mental health records from Texas and 37 other states.

Texas does not submit mental health records because state law deems them confidential, said Paul Mascot, an attorney with the Texas Department of State Health Services. Other states have not computerized their record-keeping systems or do not store them in a central location for use by the FBI.

Federal law prohibits stores from selling guns to people who, like Stewart, have a history of serious mental illness.

Would-be buyers must fill out a form that asks about mental health. On Stewart's form, a box that asked whether she had been involuntarily committed to an institution or declared dangerously mentally ill by a judge was incorrectly marked no. (Her mother's attorneys question whether Stewart filled out the form herself or a clerk did it for her.) Wal-Mart ran a background check anyway, as required by federal law.

Michael Faenza, president and chief executive of the National Mental Health Association, applauds Texas' refusal to share information with the FBI database. He said it would not be fair to violate patients' privacy when there is no data to support claims that mentally ill people are more violent than others.

"The tragedies that families face when people are killed is terrible. And frankly I wish handguns were not so available in this country," he said. "But it's not right, in our minds, to make social policy based on just a few cases."

Garrett Bracy couldn't disagree more.

He and his wife watched his stepdaughter's six-year decline from straight-A high school student to violent and unpredictable stranger. She was hospitalized five times, twice under court orders. Her longest hospitalization, lasting a month, came in 2002 after she refused to leave her room or take her medication.

The suggestion that Wal-Mart should have checked prescription records infuriates Erich Pratt, a spokesman for the Virginia-based group Gun Owners of America.

"Does that mean mental illness prevents everyone on Prozac from owning a gun? Or women with PMS?" he said.

Rep. Carolyn McCarthy, D-N.Y., who ran for Congress after her husband was killed and son wounded in 1993 by a gunman on a Long Island Rail Road train, wants to strengthen the federal background check system by encouraging states to share mental health records. She has introduced legislation that would give states grants to automate and turn over the information.

She drafted the bill after a priest and a parishioner were shot to death by a schizophrenic man in a New York church in 2002. He, too, should not have been allowed to buy a gun.

"When you see these deaths that could have been prevented it's a shame," McCarthy said.

As the Bracys prepare for another Christmas without their daughter, they are urging lawmakers to support McCarthy's bill and dealers to conduct their own background checks.

"Lavern went to the store the other day to buy over-the-counter headache sinus medication and they limited the amount of sinus medication she could buy at one time," her husband said, his voice trembling with emotion. "But Shayla can walk into a store and buy a gun and they could care less. That's got to change."

Copyright 2004 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

Copyright © 2004 ABC News Internet Ventures

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Analyst: Wal-Mart's RFID Suppliers Are Resisting

Wal-Mart's attempt to force its suppliers to comply with its RFID program is running into stiff resistance from its top suppliers, a researcher says.

By W. David Gardner, TechWeb News           [back to top]
Dec. 21, 2004
URL: http://www.informationweek.com/story/showArticle.jhtml?articleID=55801427

Wal-Mart's attempt to force its suppliers to comply with its Radio Frequency Identification (RFID) program is running into stiff resistance from its top 100 suppliers who view the program as being light on benefits, according to a report released Tuesday.

The AMR Research report examines Wal-Mart's January deadline for implementation of initial stages of its RFID program.

"This implementation is not going as well as expected," said Kara Romanow, AMR research director and author of the report. "(The top 100 suppliers) are going along because Wal-Mart is their biggest customer. It's not optional for them."

"Many of Wal-Mart's suppliers are more convinced than ever that there is no ROI, and even worse, consider their technology investments to be a throwaway thus far. Because of this, they've only spent the bare minimum needed to comply."

Romanow, who counts several Wal-Mart suppliers as AMR clients, said she is in frequent communication with Wal-Mart suppliers. She found many are distressed by the giant retailer's mandate that the top 100 suppliers' cases and pallets be RFID-tagged by the end-of-January 2005 deadline. In addition to the top 100 suppliers, 37 smaller suppliers volunteered for the Wal-Mart RFID program, Romanow said.

A nagging problem for suppliers is the relatively high cost of implementing Wal-Mart's RFID program. "Many suppliers can't afford to put a 35-cent tag on items," she said. "But they can start tagging some (higher-priced) individual units." Romanow explained that it is too expensive to tag inexpensive consumer items like toilet paper and toothpaste, although it may make sense to tag higher-priced items such as DVDs and other consumer electronics products.

"The cost of hardware and software, including tags and readers, is still higher than the industry anticipated," she said. "The ROI equation is heavily skewed toward the high cost of tag."

However, suppliers are attempting to be technically compliant with Wal-Mart's mandates by tagging a modicum of products, hoping to please Wal-Mart and hoping that the cost of RFID technology drops enough in the future to make its implementation worthwhile, Romanow said.

Romanow said Wal-Mart's top suppliers have spent between $1 million and $3 million each on RFID so far for tags, readers, and minimal software while AMR's research indicates that each supplier would have to spend from $13 million to $23 million on the technology for it to be fully effective.

Copyright © 2004 CMP Media LLC

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Parents say Wal-Mart hit wrong note

A Maryland couple sues the retailer for failing to follow its own policy of labeling CDs that contain profanity.

By Marilyn Gardner | Staff writer     [back to top]
The Christian Science Monitor
December 20, 2004 

Until last month, Melanie and Trevin Skeens regularly relied on Wal-Mart to help them screen music for their two children. They appreciated the store's family-friendly policy of refusing to stock CDs and DVDs that carry parental advisory labels warning about explicit lyrics.

But that policy failed the couple when their 13-year-old daughter bought the CD "Anywhere But Home," by the rock group Evanescence. As they played it in the car on the way home, with their 7-year-old son also listening, they were shocked to hear profanity in the song "Thoughtless." When they asked the store to take the CD off its shelves to protect other families, it refused.

Now the Skeenses, of Brownsville, Md., are suing Wal-Mart. They claim it deceived customers by carrying a CD with obscenities, violating its own promise to stock only clean music. They want the company to remove the music from its Maryland stores or censor the lyrics. The lyrics are already censored on the company's website.

Despite their objections to the explicit lyrics, the Skeenses say they like the band Evanescence. They also enjoy listening to music with their children. Until recently, Mr. Skeens, a drummer, had played in a popular band in nearby Hagerstown.

"He loves rock music and heavy metal music," Mrs. Skeens says. "We're avid music fans. It's not about censorship. We're not trying to change the words this band is putting out. We just want proper labeling of this CD."

"We don't want Wal-Mart to have to screen everything that comes into their store - that's absurd," says their lawyer, Jon Pels of Bethesda, Md. "However, we believe Wal-Mart knew it was offensive. If you went to the website to sample the song, you would hear no explicit language." When you go to [a store], the words are not dubbed out on the CD." The song also contains a reference to rape, he notes.

Wal-Mart defends its policy. "We set very high standards on what we carry," says Karen Burk, a spokeswoman for the company in Bentonville, Ark. "It wouldn't be possible to eliminate every word or image that an individual finds objectionable. What is objectionable to you might not be objectionable to me. So we rely on the industry to put these parental advisory labels on the music. This was an incident where there was not a label on it. We are certainly looking into the situation."

Parental advisory labels voluntary The recording industry introduced parental advisory labels in 1990 to identify music containing explicit lyrics, including references to violence and sex. Recording companies voluntarily label their music.

That ad hoc approach troubles Mr. Pels, the father of four children. "These parental advisory labels are not enforced the way they should be," he says. "You can reasonably rely on a rating of G for a movie. I don't feel you get the same kind of assurance with these CDs. The industry either doesn't take it seriously, or they purposely like to put out these albums."

Wind-Up Records in New York, the recording company that decided not to place a parental advisory sticker on the Evanescence CD, refused to comment on the case. So did the Recording Industry Association of America and the National Association of Recording Merchandisers.

Although the suit seeks damages up to $74,500 for customers who bought the CD in Wal-Mart's Maryland stores, that figure is simply a disclaimer common in consumer class-action suits, Pels notes. In reality, damages could simply reimburse each buyer for the cost of the CD. He insists that the legal action is not motivated by money.

Supporters and detractors The suit is provoking controversy, pointing up the challenges parents face in keeping children from being exposed to profanity, sex, and violence in music. Pels has received nearly 300 e-mails, some containing threats and calling him names. The Skeenses have also received negative mail.

Some critics regard the suit as an effort to censor music. Others charge that screening music is a matter of personal responsibility for parents, not a task for retailers. Still others think the Skeenses have overreacted.

"People will say, 'As if their 13-year-old child hasn't heard the f-word," Pels explains. "We're not claiming there's any emotional damage to the child. But there was also a 7-year-old in the car."

But he is gaining supporters, too. Parents as far away as California, Colorado, and Texas have called Pels to relate similar experiences in buying the Evanescence CD at their local Wal-Mart. Some want to join the suit.

Calling the parental advisory labels "in large part a fraud," Pels says, "I hope to expose that. These recording companies and Wal-Mart need to know that people rely on the labels."

He adds, "The Skeenses thought that Wal-Mart would have said, 'Thank you for bringing this to our attention. We'll do what we can about this.' "

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CITIZENS FILE SUIT AGAINST WALMART

Pueblo West Residents Upset Over Plans For A Wal-mart Distribution Center Head For Court

by News 13 Team        [back to top]
12/18/2004

A GROUP OF PUEBLO WEST RESIDENTS UPSET WITH THE PROSPECT OF A GIANT WAL-MART DISTRIBUTION CENTER NEARBY ARE HEADING TO COURT DEMANDING MORE INFORMATION ABOUT THE DEAL BEFORE ITS DONE.

THE PUEBLO CHIEFTAIN IS REPORTING THEY ARE HOPING TO GET MORE INFORMATION ABOUT NEGOTIATIONS BETWEEN WAL-MART, THE PUEBLO WEST METRO DISTRICT AND THE PUEBLO ECONOMIC DEVELOPMENT CORPORATION.

THE GROUP OF TWELVE RESIDENTS CLAIMS IN ITS PLEADING TO THE COURT THAT THE NEGOTIATIONS HAVE BEEN BEHIND CLOSED DOORS WHICH VIOLATES STATE LAW.

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Privacy Concerns Surround the RFID Plans of Wal-Mart and Other Retailers

Michael Dominy Research and Consulting    [back to top]
The Yankee Group
Dec 18, 2004

The privacy paranoia and anxiety surrounding the use of EPC RFID in the supply chain are overblown and misplaced RFID-related laws and regulations must focus on securing and protecting consumer information, not limiting the use of RFID to track inventory in the supply chain. Alone, the Electronic Product Code (EPC) and RFID tags provide no consumer-specific data. RFID tags contain information about the object to which they are attached. A network of computers called the EPCglobal Network enables authorized supply chain partners to access limited information associated with a specific RFID tag. The data shared is simple supply chain information such as date, time, location and EPC number (a string of numbers composed of the product identification: UPC number and a serial number). Manufacturers and retailers will use the data to improve supply chain management through better inventory management and more cost-effective logistics.

Today, consumers willingly provide mountains of personal information to retailers and consumer goods manufacturers in the form of loyalty cards, mail-in prizes, rebates and warranty data. Retailers and manufacturers use some of that information to understand which items to stock and which coupons to send to consumers in specific ZIP codes each week. The retailers and consumer goods manufacturers do this for one reason: to provide the right goods at the right place, the right time and the right price. That is good supply chain management, not an invasion of privacy.

RFID is about product data and inventory management—the data is not tied to consumers. The only way retailers or manufacturers could link consumers to a product with an RFID tag is if consumers purchase the product using a credit card. The retailer, manufacturer and possibly others would know who bought a specific item, when and where. If consumers pay cash, there is no association unless they use a store loyalty card. However, even without using RFID, manufacturers or retailers that combine credit card and personal information with sales transactions will know exactly what was purchased, where, when and for how much. The point of sale (POS) scanner reads bar codes on every product sold. Today, every retailer can know exactly how many bags of potato chips an individual shopper purchases if the retailer associates POS data with credit card or loyalty card data—without using RFID.

The privacy guidelines and laws should focus on keeping customer data secure—with specific rules defining how and when manufacturers and retailers may tie together customer data and the product. For example, it would make sense to link certain consumer and warranty data. This information can even be stored on the RFID tag provided the tag is encrypted, sensitive data is omitted and the consumer can choose to omit personal information from the tag. An additional or alternative level of protection would involve enabling the consumer to “kill” or remove the RFID tag altogether.

The Bottom Line The best solution to the privacy issue is to mandate the option for consumers to easily remove all RFID tags at the item level and enact laws to define the measures companies must take to secure consumer information that resides within enterprise systems.

© Copyright 1997-2002. All Rights Reserved. The Yankee Group. 31 St. James Avenue, Boston, MA 02116-4114 ph: 617-956-5000

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Wal-Mart Sells Out

By Robert Kruger           [back to top]
Dec 17, 2004

Sam Walton would not be impressed.

Mr. Walton, the founding father of Wal-Mart, had the beautiful vision of building an empire controlled by one person... the customer. A simple and honest ambition based on the good old days of knowing customers personally, and providing them with great value for the goods they’re looking for…

“There is only one boss. The customer,” Walton said. “And he can fire everybody in the company from the Chairman on down, simply by spending his money elsewhere.”

Clearly this ethos has helped in driving Wal-Mart to become America’s largest retailer, and even with such a large amount of customers, it seemed as though they were still interested in knowing (and valuing) their customers on a relatively personal level. After some years of investment in progressive and intelligent marketing programs, Wal-Mart has made industry-leading headway in the quest to understand its customers, their needs and their behavior.

In 2002 Wal-Mart boldly, and somewhat controversially, shifted its advertising and marketing focus away from traditional mass-media spends like expensive TV spots and newspaper ads. Angering the advertising community, Wal-Mart chose to invest its influential budget in getting to know the customers personally and marketing to them accordingly. The strategy was simple: give today’s complex consumers more than basic mass media could offer. Deliver marketing messages when and where customers want them and target the message towards their unique and evolving needs. Wal-Mart would do this by developing marketing initiatives such as predictive and targeted communications. Basically, this works by understanding customers, their lives, interests, what they have, what they want… to the point where you can start to predict what they’re going to buy and when. Depending on what your objectives are, you can even target communications so uniquely to individual customers that they all receive a unique marketing message, with unique promotions tailored for each person. The consumer would feel as if he was a valued and well-known customer in Sam Walton’s very first store. Of course, this kind of marketing is based on complex algorithms and data warehouses, but it still revolves around the information the customer offers, and the permission he gives to use that information.

It’s all about placing the customer at the helm, just the way Sam Walton would want it.

But…the present-day guardians of this man’s dream lost sight of Mr. Walton’s aspirations when they made a strategic U-turn to blow a big chunk of advertising budget on last-minute mass-media advertising. A rushed nationwide newspaper and television campaign recently ensued, aimed at sucking American consumers in to do more holiday shopping at Wal-Mart. By doing so, the company effectively admits that it’s chosen to succumb to cheap gimmicks like holiday promotions designed to woo consumers during the most frenzied shopping season of the year.

As far as I’m concerned, Wal-Mart just decided to show its true corporate colors. No longer interested in steadily growing a lasting bond and a close understanding of its customers, the company just wants a quick fix of your attention. Just long enough for you to boost Wal-Mart’s revenues and to help its leaders reach their holiday bonus. By resorting to purely reactive advertising, Wal-Mart is simply saying that it no longer cares when the customer wants to be advertised to, or even what the customer actually needs. Wal-Mart just wants its customers (who are typically of a low-income demographic) to spend as much money as they can this holiday season, or more!

***

A couple of years ago, Wal-Mart wasn’t the first retailer to begin investing in more inventive ways to speak to the consumer, but it was definitely the largest. Consequently, the community of traditional advertising agencies and publishers were left with dwindling sales in media space and air time. Agencies feared that with a giant like Wal-Mart admitting to the wavering effectiveness of mass marketing, the others would soon follow. Surely, they did follow. Companies such as Gap and Hewlett-Packard have also spent millions of their advertising/marketing budgets on developing unique ways of speaking to each customer individually. The result is a growing trend in one-to-one marketing programs which are proving to be successful in today’s competitive market space. Put simply, one-to-one marketing works like this: If you know your customers well enough, they will allow you to advertise to them. In turn you’ll know how often he buys new jeans, that she typically buys items when they go on sale, or when he will need more toner for his HP Inkjet printers. If you visit the Gap or Hewlett-Packard website, and give the company permission to send you marketing information, you will find out just how much that company wants to get to know you – and possibly how much that company already knows about you.

This approach to reaching consumers is not rocket science; however, if you ask these companies what the toughest element in the one-to-one marketing formula is they would probably answer, “Patience.” Gap and Hewlett-Packard have both discovered that if you could reach a point in the relationship with customers where they share their products and preference with you, you can in turn maximize the effectiveness of one-to-one messaging, increase customer loyalty, and increase sales. This sounds like a winning equation. So it seems to me that Wal-Mart’s recent spam-like campaign of television and newspaper ads is testament to the fact that it’s grown short on patience and now wants to make a fast buck before the end of the year.

***

There is certainly a fog looming over today’s advertising industry due to the declining effectiveness of mass communications (e.g. TV spots and newspaper ads). Meanwhile, increased government regulations surrounding telemarketing and spam are forcing retailers to look at new ways to reach out and touch the customer without getting their hands slapped. Ultimately, consumers find themselves in an unprecedented state of independence as they realize more and more that Sam Walton was right; the customer is in charge. Nevertheless, I don’t see many organizations taking the risks necessary to adapt to this shift in consumer behavior. The few that do have the patience and the guts will be rewarded with the only remaining unpartisan vote in America – sales.

Wal-Mart’s new cavalier approach to communicating with its customers may not be much more than a panic-attack reaction to its less-than-spectacular Thanksgiving weekend sales. After all, this is business and who can blame Wal-Mart for wanting to do everything it can to coerce its customers to come for the “roll-backs” made by its yellow-smiley mascot? My problem with this approach is that not only does it undermine Wal-Mart’s impressive move in 2002 to get to know its customers better, but in turn it goes against Sam Walton’s inspiring mantra.

Tragically, I have little doubt in my mind that America’s bargain-hunting consumers will fall prey to the oldest trick in the book as they skip merrily into the jaws of a Wal-Mart store searching for honest savings. Just be careful. When Wal-Mart gets you through those doors for the 69-cent jar of generic cranberry sauce you saw advertised in the newspaper or on prime-time television, you might get a lot more than you bargained for. You could end up spending thousands on Wal-Mart’s new line of must-have electronic goods that it’s suddenly devoted an unusually high amount of floor space to.

But either way, we’ll know soon enough whether Sam was right and Wal-Mart customers decide to cast their consumer vote elsewhere, or if they allow themselves to be sucked into the mass marketed campaign trail… again.

Copyright © 1998-2004 The Simon.com

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Workers Demand Union at Wal-Mart Supplier in China

By HOWARD W. FRENCH    [back to top]
December 16, 2004 

HENZHEN, China, Dec. 15 - The scene on the street did not look like much, just the comings and goings of small groups of women from their factory dormitory, with a few lingering here and there in knots to discuss their situation.

Since Friday, though, work has stopped inside the Uniden factory's walls here, where 12,000 workers, mostly young women from China's poor interior provinces, make wireless phones, which the Japanese manufacturer supplies in large number to the giant American retailer Wal-Mart.

China's laws tightly proscribe public demonstrations, so the women found another way to vent their anger over their wages, and what they said were many other abusive work conditions. They met secretly to draw up a list of demands, and then walked off the job.

Wal-Mart has been much in the news recently in China, with the government insisting that the retailer do what it refuses to do in the United States: allow all its workers to join unions.

But what the scene at the Uniden plant here in Shenzhen, the very heartland of China's export-led resurgence, reveals is a situation much more typical in this country's booming new economy, where the government has been reluctant to enforce laws that would oblige foreign companies to allow unions, for fear of losing overseas investment.

The hordes of young women employed here say they are required to work 11-hour days, including three hours of mandatory overtime, to earn a basic monthly salary of 484 yuan, or about $58.

The women say they must spend nearly half their wage on the drab company dormitories where, as migrants, they must live. They laughed ruefully when asked if they were able to save any money, or send money back to their families.

"No, I haven't been able to save any money," said Liu Shuangyan, outside the factory gates. "You have to eat. You buy a few clothes, and then there's nothing left."

"If you get sick," added Ms. Liu, a native of Hunan Province, "they won't give you leave unless it is very serious."

A friend and fellow worker from Hunan, Wang Lifang, then spoke up to say, "They have a small clinic, but you have to pay, and the medicines they give you are much more expensive than outside."

Other young women said that many minors were employed in the plant, and that most of the employees had been forced to pay 200 yuan under the table as a job-finder's fee in order to be hired.

Some women said they had little idea what a union was, but yearned for some kind of representation that could serve as their advocate. Others said with certainty that no union existed, and ascribed their plight in large part to this fact.

"If there were a union, things would be fairer for us," said one 32-year-old woman from Henan Province. "Right now, one person says one thing, another complains about another, and the boss doesn't listen to anything."

Workers said the strike began when a senior Japanese manager was overheard saying to a Chinese supervisor that the employees would be foolish to accept the terms of a new contract being offered them. Others said it was caused by abusive dismissals of workers with seniority to make way for cheaper, more pliable replacements.

Japanese officials at the company, reached by telephone, refused to comment, passing the phone to a Chinese manager. The manager, who declined to identify himself, said, "A group of workers' contracts have reached termination, and the company, in conformance with labor laws, did not offer them a new contract."

Believing the questions were coming from a caller in New York, the Chinese manager said the strike had ended, early in the afternoon, and the situation had returned to normal.

"If you could get into a spaceship right now and come over, you'd see for yourself," he said, laughing.

Meanwhile, plainclothes security agents milled outside of the plant. As soon as a foreigner began taking photographs of the continuing work stoppage, they called the police.

Analysts of China's labor scene say strikes like this are becoming far more common as younger migrant workers exposed to the wealth of China's relatively rich eastern cities grow increasingly angry over what many see as their exploitation. Although few are unionized, communication and coordination among them is growing, often through the sending of coded messages to each other by cellphone.

"The migrant workers have learned to protest with their feet, they are more capable of negotiating, and they can choose not to work," said Liu Kaiming, who studies conditions of migrant workers in Guangdong Province. "That has especially been true recently, with a lot of the migrant workers who were born in the 1980's entering the workforce. They've had a better education, they're young and emotional, and they've been emboldened by media reports about their conditions to demand their rights."

All the women interviewed seemed determined to press their demands, the most important of which, they said, were shorter work hours and enforcement of minimum-wage laws.

Asked if they were afraid of losing their jobs, they scoffed at the idea, saying workers were in short supply in Shenzhen's vast manufacturing zone.

"If we were men, there would have been a strike a long time ago," one woman said. "Women are easier to bully, but we have hearts of steel."

Copyright 2004 The New York Times Company

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California court voids approvals for two big-box projects

Hometown Advantage Newsletter        [back to top]
Dec. 15, 2004

In a ruling that could have broad implications, a California appeals court this week nullified zoning approvals given to two big-box shopping centers by the city of Bakersfield. The court held that the environmental impact reports (EIRs) prepared for the projects were insufficient and did not adequately address the potential for urban decay and associated ecological effects that could be caused by extensive new retail development.

The ruling orders the city to complete new impact studies and public hearings, and reconsider the projects.

In the interim, a lower court is to determine whether both shopping centers---which include two partially constructed Wal-Mart supercenters, as well as a Lowe's, a Kohl's, and several smaller stores that are already open---should halt further construction, cease store operations, or be torn down completely. Conducting EIRs and hearings is expected to take up to one year.

The lawsuit against the city and the developers was filed in March 2003 by a local citizens group, the Bakersfield Citizens for Local Control (BCLC). They won a partial victory from a lower court in February. The appeals court awarded them legal fees and court costs.

The court determined that the EIRs certified as complete by the city failed to consider the projects' "potential to indirectly cause urban/suburban decay by precipitating a downward spiral of store closures and long-term vacancies in existing shopping centers."

The developers asserted that economic and social impacts are outside of the scope of an environmental review as mandated by California state law.

But ample case law by state courts has concluded that the potential for a project to cause deterioration of a community's downtown or other existing shopping districts is an indirect environmental impact that must be analyzed.

In its effort to block the two projects, BCLC commissioned an analysis by San Francisco State University economist C. Daniel Vencill. He found that four existing shopping centers and malls would be adversely impacted by the new big-box developments. This could lead to store closures, persistent vacancies, and blight.

The appeals court further ruled that the reviews had not weighed the cumulative impacts of both projects. Each project was analyzed in isolation without reference to the other. The EIRs, the court wrote, "are defective because they did not treat the other shopping center as a relevant project or consider the combined environmental impacts of the two shopping centers."

The court concluded that the inadequacy of the EIRs "cannot be dismissed as harmless or insignificant defects. As a result of these omissions, meaningful assessment of the true scope of numerous potentially serious adverse environmental effects was thwarted. . . These deficiencies precluded informed public participation and decision making."

Once new EIRs have been completed, the city may choose not to re-approve the projects, in which case they will be torn down. It may also opt to impose mitigation measures, including requirements that some completed portions of the projects be altered or removed.

The ruling will likely affect a similar case involving a Wal-Mart supercenter in the town of Lodi. The citizens group there, Lodi First, contends the city also accepted an incomplete EIR. They are represented by the same firm, Herum Crabtree Brown, that argued the Bakersfield case.

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Right Reality: Is Wal-Mart Good for Us?

Ford vs. Wal-Mart: A Tale of Two Companies 

By David Batstone and David Chandler       [back to top]
(SojoNet Syndicate)

The AFL-CIO has launched a major campaign to draw attention to the business practices of Wal-Mart. "The biggest corporation in America today has a business plan that lowers standards, first among its own employees and ultimately for all Americans," says John Sweeney, president of the AFL-CIO.

Is Sweeney's assessment fair and accurate? Wal-Mart, with over $250 billion in annual sales, is more often praised for its streamlined business model. Its inventory system and distribution network are beyond compare in the retail industry.

Wal-Mart's recipe for success, however, does depend as well on squeezing labor costs. The majority of its hourly workers earn less than $8.50 an hour, which means that a full-time sales clerk at Wal-Mart falls under the official U.S. poverty level for a family of four.

Nearly a century ago, Henry Ford planned for his employees to be his best customers. Challenging the conventional wisdom that the best way to maximize profits was to tailor your product to the wealthiest segment of society, Ford decided to market his black Model T as "America's Everyman car."

For Ford, mass production went hand-in-hand with mass consumption. He established a simple benchmark for worker compensation: His workers should be able to buy the product they were making. Ford promised a $5-a-day minimum wage for all his workers--twice the prevailing automobile industry average.

Doing so, Ford created a virtuous circle. Workers flocked to his factory to apply for positions. If they managed to secure a coveted job, then in time they too would be able to afford one of his cars. The company flourished on these twin pillars--a desirable product and a highly motivated employee base. By the time production of the Model T ceased in 1927, Ford had sold more than 15 million cars--half the world's output.

Compare Ford's virtuous cycle with Wal-Mart's dual strategy of ruthless cost-cutting and "Everyday low prices." On the surface, the goal is the same--produce goods that consumers want and can afford to buy. The result in implementation, however, is vastly different.

While Ford's business model helped lay the foundation for a rising middle class in America, the Wal-Mart model reinforces downward mobility. Wal-Mart today is the largest commercial employer of labor in the United States. In 2002, 82 percent of American households bought something at Wal-Mart. Americans must love to shop at Wal-Mart; on the other hand, maybe they have no choice. A sizeable percentage of Wal-Mart's sales come from low-income households.

The effort to minimize production costs is a legitimate business strategy; no argument there. But does Wal-Mart realize that the employees whose wages they squeeze are often the customers upon whom they rely to fuel their business?

While Ford created demand and wealth with a new and innovative product, Wal-Mart displaces existing demand--siphoning consumption from elsewhere by under-cutting prices. Wal-Mart sets the pricing agenda in whichever market it enters. Suppliers and competitors are squeezed--forced either to push jobs overseas themselves, or forced out of business altogether. For every Wal-Mart supercenter that opens in the next five years, two other supermarkets will close.

Now that it has reached the bargain basement on domestic production costs, Wal-Mart is increasingly turning to overseas operations to stock its shelves. Wal-Mart's domination of the U.S. retail economy has ramifications beyond its own profit margin.

Many economists present Wal-Mart as a net-positive for the U.S. economy. The popular interpretation of anti-trust law today holds that large companies are only a threat to the community if their dominance results in rising prices for consumers. Hence, Wal-Mart escapes regulation because the company's domination of the retail sector delivers lower prices, across the board. Little long-term thought is given to the wider implications of the methods the company uses to produce those lower prices..

The single-minded pursuit of economic growth can exact a heavy toll on a community. Our economic goal of creating wealth should coincide with our ideals of human and societal development. In today's business environment dominated by Wal-Mart, Henry Ford's ideas would be as revolutionary as they were when they were first applied.

David Batstone is author of Saving the Corporate Soul, Senior Editor of Worthwhile magazine, and Executive Editor of Sojourners magazine.

David Chandler is the Associate Director of the Center for Non-Profit Management at the University of Miami (FL).

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Flight attendants rally at White House to denounce wages, benefits

By Susan Walsh, AP               [back to top]

WASHINGTON (AP) — Airline employees, rallying outside the White House, accused the Bush administration Tuesday of siding with airline managers who the attendants said are claiming financial hardship to deny their employees a decent living.

"Our airlines are Wal-Mart with wings," AFL-CIO President John Sweeney told demonstrators.

"We will strike when the first bankruptcy judge throws out a flight attendant contract," Patricia Friend, president of the Association of Flight Attendants-CWA, said at a rally by 200 airline workers at Lafayette Park across from the White House.

Flight attendants, pilots, maintenance workers and their supporters marched in biting cold to protest what they called a long deterioration in working conditions, accelerated by efforts at airlines such as United and US Airways to use the bankruptcy process to cancel union contracts and impose deep pay cuts.

"Bankruptcy is not a license to steal," said Ed Wytkind, president of the AFL-CIO's Transportation Trades Department.

Friend faulted the White House and Congress for letting airline executives bid for bailouts without protecting jobs, health insurance pensions or wages of the workers. Speaking about the government, she said, "We are not just going to stand by and let you destroy our industry."

Her union said last month it would hold strike-authorization votes at four major airlines, United, US Airways, ATA and Hawaiian. Union officials said they would await the outcome of the airlines' bankruptcy proceedings before deciding whether to strike.

"Our airlines are Wal-Mart with wings," AFL-CIO President John Sweeney told the demonstrators. "Thousands of workers and tens of thousands of passengers are sharing substandard and potentially unsafe working and traveling conditions."

US Airways said in a statement Tuesday that it continues to negotiate with its flight attendants' union to reach agreements that both parties can accept.

It said a strike would not be legal under current circumstances. "It would ground this airline and send approximately 5,400 flight attendants to the unemployment line," the statement said. "That option would not be in anyone's best interest."

Donna Hansen, 48, for 18 years a flight attendant with United, said she is flying 15 more hours a month now than when she started and being paid less after inflation: $40.97 per flight hour now compared with $37 in 1986.

"They're using bankruptcy to get leverage with unions and enforce concessions on the employees," she said. "We work more hours to get less pay."

Shortly after the Sept. 11, 2001, attacks, Congress established a $15 billion airline bailout to compensate the carriers for losses caused by the emergency. The legislation also set up the September 11th Victim Compensation Fund, which compensated survivors or families of victims of the attacks on condition that they forgo lawsuits against airlines.

Copyright 2004 The Associated Press. All rights reserved. 

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Walmart Under Fire

WJACTV.com                 [back to top]
POSTED: 4:55 p.m. EST December 15, 2004

Johnstown -- The AFL-CIO claims Walmart employees make $9 an hour on average. That adds up to $20,000 dollars a year, which is less than half the national average. The labor unions also complain Walmart not only kills higher-paid supermarket jobs but lowers the standard of living where the company locates. The unions say the cause is the lower priced items.

Jennifer Selfridge of Ebensburg tells Channel 6 News, "As a shopper there, they are low priced on things and there's the variety."

Paula Kline of Somerset County says, "Any store that comes to this area that is making money somebodys gonna have something bad to say about them."

Walmart defends its low prices. The retail giant says it does not cut costs through wages and benefits, but by driving down costs.

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Wal-Mart electronics prices not the lowest

Big News Network.com              [back to top]
Wednesday 15th December, 2004

Wal-Mart may advertise always low prices, but a survey finds prices for electronics at the big U.S. discounter are not the lowest available.

A Prudential Equity Group pricing survey found Wal-Mart has higher electronics prices than Best Buy, and not significantly lower prices than Circuit City, Target or Sears, the Chicago Tribune reported Tuesday.

Prices at Sears on a basket of 33 non-electronics products were lower than Wal-Mart's by 1.3 percent on Oct. 25, but higher by 0.9 percent on Dec. 6.

In a related finding, America's Research Group asked 800 U.S. shoppers Sunday at which of three stores -- Target, Sears or Wal-Mart - did they do most of their shopping during the past weekend. The survey determined 52.1 percent said Wal-Mart, down from last year's 53.4 percent.

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Wal-Mart sued over f-word

Written by CBC News Online staff      [back to top]
Last Updated Tue, 14 Dec 2004 15:53:44 EST HAGERSTOWN, MD. -

Retail giant Wal-Mart is being sued for selling an album by Evanescence that includes the f-word.

The suit, filed in a Maryland court, alleges that Wal-Mart sold the CD – which did not have a parental-advisory sticker – knowing the profanity is used in one of the songs.

Holiday shoppers gather outside a Wal-Mart in Hamburg, N.Y. Wal-Mart has cultivated an image, derided by some as being overly intrusive, of being a family friendly retailer by not selling albums with the warnings.

According to the suit, filed by Maryland resident Trevin Skeens, Wal-Mart censored the song in question, Thoughtless, when it offered a free sample of the tune on its website.

Skeens and his wife allowed their 13-year-old daughter to purchase the album, called Anywhere but Home, for her 13th birthday and were shocked when they listened to it on the drive home from the store.

"I don't want any other families to get this, expecting it to be clean. It needs to be removed from the shelves to prevent other children from hearing it," the Associated Press reported Skeens saying.

The suit seeks $74,500 U.S. in damages for each person who bought the album without knowing about the profanity.

Skeens is also suing Wind-up Records, the company that recorded the music and did not apply a warning label, as well as distributor Sony BMG.

"While Wal-Mart sets high standards, it would not be possible to eliminate every image, word or topic that an individual might find objectionable," Guy Whitcomb, a Wal-Mart spokesman, said in response to the suit.

Whitcomb said the company is investigating the matter.

He also said the online sample of Thoughtless was censored by Wal-Mart's web arm, which is a separate division.

In October, Wal-Mart banned the Jon Stewart faux textbook America (The Book) because it included a fake picture of the members of the U.S. Supreme Court in the nude.

Copyright ©2004 Canadian Broadcasting Corporation - All Rights Reserved

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Commerce requests reversal on Wal-Mart 

Big News Network.com               [back to top]
Tuesday 14th December, 2004

The U.S. Chamber of Commerce Monday asked the 9th U.S. Circuit Court of Appeals to reverse a sex-discrimination case ruling against Wal-Mart.

The lawsuit alleges women received lower pay and fewer promotions than male workers at Bentonville, Ark.-based, Wal-Mart stores.

In June, a judge allowed other women who had worked at U.S. Wal-Mart stores to join the six women who originally filed the suit. That decision potentially adds as many as 1.6 million plaintiffs to the legal action, making it the largest class-action suit against a retailer in history.

Chamber lawyers said the lower court's order encourages companies to adopt quota-like policies that are contrary to the purposes and spirit of Title VII of the Civil Rights Act.

The U.S. Chamber of Commerce represents more than three million businesses and business organizations.

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Wal-Mart, Target, Office Depot to pay Illinois $2.4M in back taxes

St. Louis Business Journal          [back to top]
December 10, 2004
http://stlouis.bizjournals.com/stlouis/stories/2004/12/06/daily72.html

Wal-Mart, Target and Office Depot will pay to the state of Illinois more than $2.4 million in back taxes that they failed to collect on sales made over the Internet, said Attorney General Lisa Madigan Friday.

Wal-Mart.com Inc.; Target Corp., and its affiliate Target.Direct; and Office Depot Inc. and its affiliate Viking Office Products, agreed to the amount to settle complaints filed by Madigan. She said the companies claimed they did not collect sales tax because the dot-coms were separate companies not located in Illinois. However, she said, the dot-coms set up a presence in the state when the stores accepted returns of merchandise bought online by Illinois residents.

"These settlements level the playing field between Illinois stores without dot-come subsidiaries and Internet retailers," Madigan said, in a statement.

© 2004 American City Business Journals Inc.

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Analyst: Is Wal-Mart Killing Its Own Category?

By Nat Worden                                   [back to top]
TheStreet.com Staff Reporter
12/8/2004 10:58 AM EST
URL: http://www.thestreet.com/markets/natworden/10198076.html

Shares of Wal-Mart (WMT:NYSE) dipped Wednesday after an analyst downgraded the stock and warned that the company's strategy to crowd out its competitors may be weakening its sales.

Goldman Sachs analyst George Strachan lowered the world's largest retailer's rating to in line from outperform, saying in a research note that the company's sales growth may be suffering from "self-cannibalization," opening new stores too close together. The stock was recently down 24 cents, or 0.5%, to $52.26.

"If we are correct about self-cannibalization, it would help explain why general merchandise sales are especially weak at Wal-Mart," Strachan said. "Customers are already willing to travel for non-food items. Adding another supercenter several miles from an existing one helps Wal-Mart gain food market share... however, it probably drives less and less non-food share."

At Wal-Mart's analyst meeting in October, management said it was pursuing a market concentration strategy, opening new supercenters as close together as possible to maximize market share without damaging return on investment. While the company warned that this could act as a temporary drag on the top line, it said that saturating the market could ultimately win it 15% U.S. market share, up from the current 7% to 8%.

While Strachan said the strategy appears to be working for Wal-Mart's food segment, which has consistently posted 7% to 9% comparable-sales gains, he said it may have gone too far, slowing the company's overall sales growth.

Since last spring, Wal-Mart has seen a significant slowdown in same-store sales growth from its historical average. Meanwhile, it has failed to benefit from weakness at other competitors like Toys R Us (TOY:NYSE) and Kmart (KMRT:Nasdaq) , and other discounters like Target (TGT:NYSE) and Costco (COST:Nasdaq) have outperformed. Year to date, Wal-Mart has logged a 4.3% gain in comps, well below its historic average that is closer to 6% to 8%.

Conventional wisdom on Wall Street assumes that soaring oil prices have constrained the retailer by eating into the spending budgets of its low-income customers, who are particularly sensitive to higher gas and heating prices. For months, the stock has been seesawing with the movement in the price of crude futures trading on the Nymex.

But while management has consistently stuck to this script in explaining the situation, Strachan believes its market saturation strategy may be playing a larger role than the company is letting on.

"We have been surprised during several visits to Sunbelt growth markets this year by how much self-cannibalization Wal-Mart was willing to inflict on itself," he said. "The company plans to deliberately cannibalize its stores when they reach sales volumes of $100 million or more a year. This is a positive for sales growth, especially in the long-term, but it can result in comp-store sale declines at [these stores] , which, after one or more bouts of self-cannibalization, may run at a rate of $80 million or less in sales per annum."

Still, Strachan recommends that investors keep some market-weighted exposure to Wal-Mart. Its shares have dropped over 9% since it topped out on a drop in oil prices in mid-November, making it one of the less expensive growth stocks in the market.

"Wal-Mart remains the greatest company in global retailing, with tremendous financial and operating flexibility to drive earnings growth," Strachan said. (Strachan doesn't have a position in Wal-Mart shares, but his firm does have an investment banking relationship with the company.) "Should any event trigger a flight to quality or liquidity, Wal-Mart would be an obvious beneficiary."

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Wal-Mart Plans First New York City Store In Queens

Dow Jones Newswires        [back to top]
December 7, 2004

NEW YORK (AP)--Wal-Mart Stores Inc. (WMT), the world's largest retailer, plans to open its first store in New York City.

The company announced on Monday that it would open a new store in the Rego Park neighborhood of Queens. The store would be built on the already shopping traffic-heavy Queens Boulevard.

Wal-Mart officials said ground will likely be broken for the 135,000-square-foot store in 2007 or 2008, Newsday reported in its Tuesday editions. The Bentonville, Ark.-based company plans to open up the new location as early as mid-2008.

The store joins a strip of large retailers that includes Sears (S), Target (TGT), TJX Cos.' (TJX) Marshall's, Best Buy (BBY) and other stores at the Queens Center mall.

Kathleen Histon, district manager of Queens' Community Board 6, said she expects "more traffic because it's already a heavily congested area."

Vornado Realty Trust, a Manhattan-based development company, owns the site where the store is planned and wants to put up a mixed-used structure that will combine retail and housing.

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Wal-Mart suffering at its own hands

Has long been accused of forcing manufacturing jobs overseas with its low pricing.

http://www.timesonline.co.uk/newspaper/0,,170-1389980,00.html

[back to top]

Discount retailers have suffered from the absence of a recovery in the manufacturing industry. Retailers laid off 16,000 workers last month, at a time when they should have been hiring more staff for the Christmas period.

Wal-Mart, the retailer that has long been accused of forcing manufacturing jobs overseas with its low pricing, is now suffering at its own hands. In the Midwest, where the company does most of its business, customers are out of jobs and out of pocket.

Competitors like Target and Best Buy and Costco have learnt from Wal-Mart, and are giving the retail giant a run for its money.

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Outside U.S., the Wal-Mart way gets mixed reception from locals

By Constance L. Hays                    [back to top]           
The New York Times
Tuesday, December 7, 2004

More than a decade ago, Wal-Mart Stores set its sights on conquering the globe with a mix of cheaply produced goods, discount prices and aggressive store growth. . Using that formula, the company has become the dominant retailing force in the United States; but its experience overseas, which began in earnest in 1991, has been checkered.

Wal-Mart has stores in Argentina, Brazil, Britain, Canada, China, Germany, Mexico and South Korea, as well as a nearly 40 percent stake in Seiyu, a Japanese retailer. It also owns stores in Puerto Rico. 

The company likes to celebrate its international flavor at its annual shareholder meeting by having foreign workers get up and lead the Wal-Mart cheer, "Give me a W!" in Korean, Spanish or Portuguese. But analysts say there is not always something to cheer about.

In some places, Wal-Mart can be called a success story, at least for the time being. In others, the "Wal-Mart way" has barely gotten off the ground. Cultural obstacles on both sides of the relationship are often the reason; products that sell out quickly in American stores may simply clog the shelves abroad, and there can be built-in resistance to the encroachment of an American company on local business. Also, deep-pocketed companies like the French retailer Carrefour can be powerful competitors.

Then there are political and labor issues. Although it is known for being antiunion, Wal-Mart gave way to Chinese pressure and law last month and said it would allow its workers in China to unionize.

"It's a mixed bag out there for Wal-Mart," said Steve Spiwak, an economist with Retail Forward, a research and consulting firm in Columbus, Ohio, that counts Wal-Mart among its clients. "Their problems have been trying to transplant their stores without molding them to local customs." . Not surprisingly, the company disagrees with that assessment. "I'd say we have a good story to tell" about international operations, said Bill Wirtz, a spokesman for Wal-Mart.

Pointing to economic difficulties in countries like Argentina and Germany, he added, "It's a measure of our success that we've survived."

In fact, he said, the international unit has grown more in its 13-year history than the Wal-Mart chain, which began in 1962, grew in its first 13 years.  "It's a growing part of the business," he said of the foreign operations.

Spiwak said that an early miss was Indonesia, where Wal-Mart began trying to build a business in 1996. Indonesians turned up their noses at the brightly lighted, highly organized stores, he said, and, because no haggling was permitted, considered them overpriced. A year later, Wal-Mart packed up and left.

In Argentina and Brazil, an apparent ignorance of local preferences regarding cuts of beef alienated many potential customers, Spiwak said. And in Germany, shoppers gave a cold shoulder to the greeters that Wal-Mart uses to lend a friendly atmosphere to its sprawling American stores. "It was viewed as too friendly and disruptive, invading their space," he said.

International sales made up 18.5 percent of the $256.3 billion Wal-Mart took in last year, and their international operating profit of $2.37 billion was 15.8 percent of the company's total. In general, the discounter has had better luck by purchasing foreign chains and turning them into Wal-Marts than by building a business from scratch.

Growth abroad is increasingly important to Wal-Mart, said Burt Flickinger 3rd, a retail consultant who has followed the company for years. "As efforts to block Wal-Mart stores in the continental United States continue, Wal-Mart desperately needs to be successful in South America and in southern Asia," he said.

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Wal-Mart to hit New York in 2008 

BY LAUREN WEBER Staff Writer        [back to top]
December 6, 2004, 11:31 PM EST

There's almost nothing New York City shoppers can't find in their own city, be it custom-fitted leather pants, $10,000 baby carriages or spices from any country in the world.

Just about the only thing they can't find here is a Wal-Mart.

That may change in a few years. Wal-Mart, the world's biggest retailer, yesterday said it plans to build its first New York City store in Rego Park, opening as soon as 2008.

The store would be located at the southeast corner where Queens Boulevard intersects with the Long Island Expressway. That puts it on a strip of the boulevard that already includes other national retailers including Sears, Marshall's, Best Buy, Target and the shops at the newly expanded Queens Center mall.

Whether the neighborhood will welcome Wal-Mart -- whose stores have run into opposition in towns from Maine to Mexico -- remains to be seen. Big discount stores have been met by stiff resistance in other parts of the city, but this one may be different.

"If they were coming somewhere in Manhattan, you probably would have very active community boards resistant to it," said Robin Abrams, a retail real estate broker with Manhattan-based Lansco, who was not involved with the Wal-Mart deal.

But "in Rego Park, there's already been a lot of growth, a lot of big box stores. So I don't know what kind of resistance you'll get there."

Vornado Realty Trust, the Manhattan-based developer that owns some of the city's most valuable midtown real estate, also owns the Rego Park site and plans to put up a mixed-use building combining retail and housing.

Vornado executives declined to comment. But Bert Dargie, a real estate manager with Wal-Mart, based in Bentonville, Ark., said the builders will probably break ground in late 2007 or early 2008, with the 135,000-square-foot store open as soon as mid-2008.

Kathleen Histon, district manager of Community Board 6,. said Vornado has not yet submitted a plan, so she could not comment on specifics. The developer as yet to begin the regulatory process. "But you know there'll be more traffic because it's already a heavily congested area," she said.

Wal-Mart has drawn opponents in other urban areas based on congestion and on its reputation for paying low wages, blocking unions and driving independent retailers out of business. Earlier this year, a bitterly divided Chicago city council voted to approve one Wal-Mart store but not a second location.

Histon said Community Board 6 will be as impartial as possible. "We don't have any opinion on Wal-Mart or any other company," she said.

The store will be a single level, Dargie said, but it departs from the usual model because it will be enclosed in a multi-level building. Wal-Mart's typical store, a one-level gray box, dots the landscape of suburban and rural areas.

In cities, though, Wal-Mart and other big-box retailers have been forced to become more flexible. Home Depot, for example, designed a multi-level store when it chose to rent space in the old Hasbro building on 23rd Street in Manhattan. Target has tried to stay visible to trendy Manhattanites through marketing stunts such as temporary stores.

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For Wal-Mart, unions are made in China, too Why aren't U.S. workers worthy of same organizing?

Wal-Mart has finally found a union it can live with.

By HAROLD MEYERSON         [back to top]
Houston Chronicle
Dec. 4, 2004, 10:11PM

Up to now America's largest employer has opposed every effort of its employees to form a union. Wal-Mart doesn't recognize unions; it doesn't even recognize "employees." The proper Wal-Mart name for its workers is "associates," a term that connotes higher status and collegiality and that actually means lower pay and workplace autocracy. For the privilege of associating themselves with Wal-Mart, its employees are paid so little that many can't afford the health insurance the company generously allows them to buy. One study of health care in Las Vegas revealed that a plurality of that city's employed Medicaid recipients worked at Wal-Mart.

But that was the old Wal-Mart. Last month Wal-Mart announced that if its associates wanted a union to represent them, that would be hunky-dory — as long as the union was affiliated with the All-China Federation of Trade Unions, a body dominated by the Chinese Communist Party. The official statement was simple and seemingly unambiguous: "Should associates request formation of a union, Wal-Mart China would respect their wishes."

Wal-Mart America has made no such declaration, of course. Why it deems its 20,000 Chinese associates who work in its 40 Chinese stores worthy of representation while its 1 million U.S. employees can't be trusted with the right to represent themselves is a good question.

The answer must lie in Wal-Mart's preference for old-line communist-dominated unions in authoritarian communist states over any other kinds of unions anywhere else. America's unions, which Wal-Mart despises, have a long history of anticommunism, and today's AFL-CIO is the staunchest defender on the American political scene of democratic rights in communist nations such as China. For that matter, unions affiliated with reformed or post-communist parties outside of the few remaining communist states have gotten nowhere with Wal-Mart either. Only in China, with its inimitable blend of Dickensian capitalism and authoritarian communism, has Wal-Mart found a union to its liking.

And small wonder. Unions affiliated with the All-China Federation seldom push for wage increases or safer machinery. Indeed, the locals are often headed by someone from company management. Not that there isn't worker discontent in China: Every week brings accounts of spontaneous strikes, and now and then an occasional riot over such lifestyle impediments as unpaid wages. But the role of the state-sanctioned unions isn't to channel the discontent into achievable gains; it's to contain it to the employer's benefit.

The leaders of genuine workers' movements in China don't end up running the All-China Federation. They're to be found in prison, in exile or in hiding. Besides, truly democratic unions in China would run counter to the truly undemocratic, one-party state. Allowing a democratic union movement to form would threaten both Dickensian capitalism and authoritarian communism, and diminish some of China's competitive advantage over other low-wage but not authoritarian nations in Southeast Asia, Central America and elsewhere. Such a development would be anathema to both the Politburo and Wal-Mart's board of directors. It would introduce the concept of free choice and the prospects of higher living standards not just to Wal-Mart's 20,000 Chinese employees but to the far larger number of Chinese workers laboring in poverty-wage servitude to stitch clothing for the contractors, subcontractors and sub-subcontractors whose products fill Wal-Mart's shelves.

When a company such as Wal-Mart is so plainly comfortable with authoritarianism abroad, it tells you something about that company's values at home. Bentonville regards the prospect of employee free association and organization within its stores with the same fear and loathing that Beijing feels at the prospect of free elections in China. Anti-union American employers can't imprison pro-union workers, but exile is a real possibility. Troublemakers are free to go. According to Cornell labor relations professor Kate Bronfenbrenner, at least 5 percent of workers involved in unionization campaigns are fired, which is both quite illegal and quite routine: Companies would rather pay the nominal fines than pay their workers higher wages and lose the absolute control they hold over the work lives of their employees.

The noblest of the Bush administration's goals, surely, is that of spreading democracy. If it's serious about that task, though, there are places closer to home than the Middle East that could use a little democracy-spreading, and the American workplace is high on that list. Strengthening labor law would make it harder for employers such as Wal-Mart to thwart their workers' desire for an organized voice on the job. When America's largest employer feels more affinity for the political legacy of Mao Tze-tung than for that of Franklin D. Roosevelt, it's time to start democratizing our own back yard.

Meyerson is editor-at-large of the American Prospect.

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Wal-Mart's mistake may set off a price war

CNBC Market Dispatches           [back to top]
11/30/2004 5:10:43 PM ET

The retail giant admits it under-promoted last weekend and will fight back. Analysts say that means discounting, and retail stocks slide. Stocks end slightly lower but had a thankful November.

Can you say price war?

It may be what we see as the holiday shopping season progresses, and retail stocks were hammered as a result.

Let’s start with the colossus of Bentonville, aka Wal-Mart Stores (WMT, news, msgs). The retail giant was down more than 2% today (and is off nearly 5.9% this week) as the company conceded it deliberately pulled back on promotions for the opening weekend of Christmas shopping. And Wal-Mart paid for the strategy. It expects to show only modest growth for November while other retailers expect more robust sales.

So, what will Wal-Mart do next? Investors were betting the company will start discounting to compete against retailers who promoted heavily over the weekend. Target (TGT, news, msgs), Kohl's (KSS, news, msgs), Toys R Us (TOY, news, msgs), Circuit City (CC, news, msgs) and Best Buy (BBY, news, msgs). Just about all of these stocks moved lower.Banks and insurers check your credit. So should you.

The retailers’ woes -- the Standard & Poor’s Retail Index ($RLX.X) was down 1.97% -- spread to the major averages. The Dow Jones industrials were down nearly 48 points. The Nasdaq Composite was off more than 10 points, and the Standard & Poor’s 500 Index was down 4.75 points.

But Wal-Mart’s shadow extended all across retail. Hot Topic (HOTT, news, msgs), a big teen retailer, fell 13.1% today as it said November sales were lower and cut earnings estimates. In response, Urban Outfitters (URBN, news, msgs), Pacific Sunwear (PSUN, news, msgs), Wet Seal (WTSLA, news, msgs) and Candie’s (CAND, news, msgs) all tumbled.

A less than stellar holiday season? Wal-Mart raised a bigger question: How strong will this year’s holiday season be for the retail industry? Yesterday, there was a sense it might be pretty good. Today, the International Council of Shopping Centers cut its sales growth estimate for the season to 2.5% to 3%. The ICSC had earlier projected a gain of 3% to 4%. In addition, the ICSC said retail chain store sales slipped 1.5% in the week ending Nov. 27 from a week earlier, even though the latest week included Thanksgiving weekend.

What happened? The answer seems to be while Friday sales were quite strong, sales on Saturday fizzled. A clearer picture will come Thursday when retailers release their November sales reports.

Is Wal-Mart a buy yet? The short answer: Probably not.

But Wal-Mart accounts for 8% of all retail sales in the country, right? It’s expanding in Mexico, China and a lot of other places, right?

The problem is valuation. The stock was at $52.06 today, and it was selling at nearly 22 times projected fiscal 2005 earnings of $2.40. That’s probably a bit rich. Besides, as trader Terry Bedford suggested, the stock may have to test its 2004 low of $51.08. If it falls through that level, the next test comes at its 2003 low of $46.50.

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Wal-Mart Makes Effort to Unionize Workers at Colorado

Wal-Mart Take Initial Move to Unionize at World's Largest Retailer

The Associated Press     [back to top]
Nov. 30, 2004

In a move that has been unsuccessful elsewhere in the United States, 17 workers at a Wal-Mart Tire & Lube Express have taken the first step to unionize at the world's largest retailer.

The National Labor Relations Board planned a hearing Thursday to consider the workers' request to be represented by the United Food and Commercial Workers Local 7.

"Wal-Mart workers don't have to be second-class citizens," said Ernest Duran Jr., president of the union, which also represents more than 17,000 grocery workers at King Soopers, Safeway and Albertsons stores.

Union officials argue the workers in the automotive service department are separate from the store and eligible for independent union representation. Wal-Mart officials disagree.

"With approximately 400 associates in that particular facility, we feel that more than 17 associates should have a say on such an important matter," said Christi Gallagher, a spokeswoman for Bentonville, Ark-based Wal-Mart.

Wal-Mart said it treats its workers fairly and has an open door policy that lets each negotiate directly with management.

"Our associates see they don't have to pay hard earned money to do what they can do every day," she said.

The union is in negotiations with the Colorado grocery stores, which have cited competition from nonunion discount chains such as Wal-Mart in offering wage and benefit increases that have been rejected by workers.

Efforts to unionize Wal-Mart stores in the United States have failed, while in Canada, a government agency this year certified workers at a Quebec store as a union and told the two sides to negotiate. Wal-Mart has said it may have to close that store.

In the United States, the closest a U.S. union ever came to representing Wal-Mart workers happened in 2000. Eleven members of the store's meatpacking department at Jacksonville, Texas, store voted to be represented by the UFCW.

In a move it said was unrelated to the union vote, Wal-Mart eliminated the job of meatcutter company-wide, and announced it would only sell pre-cut, pre-wrapped meat.

The workers were offered other jobs at the store.

Copyright 2004 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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Wal-Mart's China inventory to hit US$18b this year

By Jiang Jingjing (China Business Weekly)        [back to top]
Updated: 2004-11-29 15:21

The world's largest retailer, Wal-Mart Stores Inc, says its inventory of stock produced in China is expected to hit US$18 billion this year, keeping the annual growth rate of over 20 per cent consistent over two years.

The trend is expected to continue, company officials revealed.

"We expect our procurement stock from China to continue to grow at a similar rate in line with Wal-Mart's growth worldwide, if not faster," said Lee Scott, the president and CEO (chief executive officer) of Wal-Mart.

An unnamed company official also stated the firm will extend its procurement base from South China's Pearl River Delta to the North and East China in the coming few years.

A market rumour says the retailer has its eyes on a 340,000-square metre warehouse at a logistics garden of the Shanghai Waigaoqiao Bonded Area.

Scott covertly visited the site earlier this month, and hopes to own the whole warehouse to accommodate the firm's further expansion in China.

At present, Wal-Mart has quite limited warehouse resources in East China.

Xu Jun, Wal-Mart China's director of external affairs, ruled out the rumour, saying the CEO has never visited that or any other site for a warehouse.

Nevertheless, he said China is Wal-Mart's most important supplier in the world. The overseas procurement home office in Shenzhen, a city of South China's Guangdong Province, has played a key role in the firm's global purchasing business.

Wal-Mart shifted its overseas procurement centre from Hong Kong to Shenzhen in February 2002 to better serve the purchasing and exporting business.

"If Wal-Mart were an individual economy, it would rank as China's eighth-biggest trading partner, ahead of Russia, Australia and Canada," Xu said.

By the end of September, 2004, the top seven trading partners to the Chinese mainland are the European Union, the United States, Japan, Hong Kong, ASEAN (Association of Southeast Asian Nations), South Korea and China's Taiwan Province, state statistics from the Ministry of Commerce.

Last year, the firm bought US$15 billion products from China, half from direct purchasing, the other from the firm's suppliers in China.

More than 5,000 Chinese enterprises have established steady supply alliances with Wal-Mart.

Good quality and low price are the major attractions of the retailing giant.

Insiders point out Wal-Mart's imports from China have largely influenced the US trade deficit in China, which is expected to reach US$150 billion this year.

Xu declined to comment if the anti-dumpling measures of the US Department of Commerce have impacted the firm's procurement of textile commodities and household appliances in China, saying again that China is an important sourcing base for the firm.

So far, more than 70 per cent of the commodities sold in Wal-Mart are made in China.

Experts say Wal-Mart's plan of increasing its procurement from China has granted the firm a positive corporate reputation in the country.

"Buying more products in China means more job opportunities, which helps the firm win not only the government's hearts, but also the customers' appreciations," said Wang Yao, director of information department under the China General Chamber of Commerce.

In the United States, poor people find it possible to afford cheap "Made In China" products for their daily necessities, Wang said.

Wal-Mart, headquartered in Bentonville, Arkansas, entered China in 1996. It has opened 39 stores, including supercenters, "Sam's Clubs" and neighborhood markets in 15 cities around China, including Beijing, Harbin and Dalian.

It has recently announced the opening of its first store in Shanghai, slated for the middle of next year.

The firm has a total of 4,900 stores in 10 countries worldwide.

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Wal-Mart weighs down retail sector

By Jennifer Waters,                  [back to top]
CBS.MarketWatch.com
Last Update: 5:21 PM ET Nov. 29, 2004

CHICAGO (CBS.MW) - Investors dumped shares of Wal-Mart Stores Monday and most other retail stocks along with them after the world's largest retailer reported lackluster holiday sales.

The S&P Retail Index ($RLX: news, chart, profile), the sector's main measure, slumped 4.4 points, or nearly 1 percent, with Wal-Mart (WMT: news, chart, profile) off 3.9 percent, or $2.17, to $53.15.

The nation's largest retailer said Black Friday sales were much slower than expected and that the month's same-store sales -- a key industry metric -- would be well below the 2 percent to 4 percent gain originally forecast.

Though other retailers didn't experience the same sluggishness at stores during the Thanksgiving weekend, investors punished them, too. Shares of most discount and department stores turned sharply lower in early dealings.

Kmart Holding Corp. (KMRT: news, chart, profile) was hit hardest, down 5.6 percent, or $6.05, to $101.25 while Target Corp. (TGT: news, chart, profile) slipped by 31 cents to $51.90.

May Department Stores (MAY: news, chart, profile) fell 3.1 percent, or 68 cents, to $29.01, while Federated Department Stores (FD: news, chart, profile) dropped to $56.63, down 70 cents, or 1.2 percent.

Sears Roebuck & Co. (S: news, chart, profile) lost 3.4 percent, or $1.88, to $52.42; J.C. Penney (JCP: news, chart, profile) dropped 1.6 percent, or 65 cents, to $39.91.

Shares of Hot Topic Inc. (HOTT: news, chart, profile) dived 10 percent in post-market trading after the teen-wear retailer said same-store sales in November dropped 8 percent. That prompted the City of Industry, Calif.-based company to trim its fourth-quarter outlook. Hot Topic is now looking at a profit in the range of 37 cents to 43 cents a share, down from an earlier forecast of 49 cents to 52 cents a share.

Hot Topic shares were offered at $16.90, down from $18.84 at the close.

Shares of Tiffany & Co. (TIF: news, chart, profile) declined 81 cents, or 2.5 percent, to $31.41 at the close. Earlier, the jewelry and fine gifts retailer said it has replaced the president of Tiffany & Co. Japan Inc., which has struggled with sluggish sales as new upscale competitors have joined the fray.

Michael C. Christ will succeed Katsuhiko Nitta, who is going back to New York to head up the international division.

Jennifer Waters is the Chicago bureau chief for CBS.MarketWatch.com.

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Blue Chips Fall on Wal-Mart

Mon Nov 29, 2004 11:20 AM ET             [back to top]
By Mark McSherry
NEW YORK (Reuters)

Blue-chip stocks fell on Monday as Wal-Mart Stores Inc. (WMT.N: Quote, Profile, Research) recorded disappointing Thanksgiving sales, while Apple Computer Inc. (AAPL.O: Quote, Profile, Research) rose after brokerages raised their price targets on the maker of the iPod musical device, limiting tech stock losses.

Wal-Mart, the world's largest retailer, fell about 3 percent to $53.56 after it slashed its forecast for November sales on Saturday, saying customer traffic slowed toward the end of the week.

Analysts said Wal-Mart's lower forecast could fuel concerns that high oil prices and lackluster job and wage growth could curb spending over the holidays, particularly among lower-income earners.

The Dow Jones industrial average was down 66.58 points, or 0.63 percent, at 10,455.65. The Standard & Poor's 500 Index was down 5.77 points, or 0.49 percent, at 1,176.88. The technology-laced Nasdaq Composite Index was down 3.37 points, or 0.16 percent, at 2,098.60.

Apple jumped about 6.5 percent to $68.45 after Merrill Lynch raised its price target to $78 from $61 on expectations of increased sales of iPod, Apple's digital music player. UBS also upped its price target to $77 from $66.

Despite Wal-Mart's problems, retail industry data showed other stores had a solid start to the holiday shopping season, especially high-end retailers.

The National Retail Federation said 133 million Americans from a population of 291 million hit the stores over Thanksgiving weekend, spending $22.8 billion.

"My expectation is the market will be held in check to some extent because there are so many important economic numbers this week," said Hugh Johnson, chief investment officer at First Albany Corp. in Albany, New York.

"The numbers are important because the Federal Reserve has told us their decision on interest rates on Dec. 14 will be very much determined by the economic numbers."

On Thursday, a round of economic data will include monthly retail sales figures, weekly jobless claims, factory orders, and durable goods orders. The November U.S. nonfarm payrolls report is due on Friday.

Amazon.com Inc. (AMZN.O: Quote, Profile, Research) was down about 2 percent at $38.25 following a weekend article in Barron's, a weekly financial newspaper, which argued the company is more of a retailer than a technology company.

U.S. crude oil futures rose Monday morning as Iran said OPEC should cut its oil production back to official quotas. NYMEX crude for January delivery was up 26 cents at $49.70 a barrel.

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Wal-Mart bows to unionization in China, sort of

By David Barboza                     [back to top]  
The New York Times
Friday, November 26, 2004

SHANGHAI It may be a big step for Wal-Mart, but a tiny step for China. . After years of opposing unions in the United States and around the world, Wal-Mart Stores said this week that it would allow a union at its operations in China.

The decision may have been an about-face for Wal-Mart, which just months ago suggested that it would oppose a union here. But the move may have been a bow to Chinese law. 

Perhaps just as important, unions have a different role in China: They work in close concert with management - that is, when they are not the management itself - and traditionally with the Communist Party. 

Analysts were perplexed by the announcement, which read: "Should associates request formation of a union, Wal-Mart China would respect their wishes." But they said it could signal a significant change in the way Wal-Mart deals with worker issues. The company has long been criticized for its labor practices. 

The company, the world's largest retailer with about 5,000 stores worldwide, has not acknowledged a single union within its operations in the United States, and has vigorously opposed the formation of unions within Wal-Mart.

"This is a watershed event," said Eugene Fram, a professor of marketing at the Rochester Institute of Technology and a longtime observer of Wal-Mart's operations. "This is the first time they've given acceptance without saying, 'Let's go to a union vote."'

Many analysts and union officials said it was unclear whether Wal-Mart, which has 40 stores and about 20,000 employees in China, intended to allow a real union to take shape or whether a strong union could even be created, given the status of unions in China.

Unions in China operate differently from independent unions in the United States or elsewhere. Rarely, for instance, do unions in China oppose management or press for higher wages or better working conditions, specialists say.

"Setting up a union won't make much difference on workers' wages because in most cases the union in China acts as a subsidiary to the employer and rarely represents the workers and fights for higher wages," said Fei Li, a retailing specialist at Tsinghua University in Beijing.

But there have been small signs of independent union activity in China, which could be a challenge to the government-run unions. Workers in Guangzhou recently went to court to fight their company's decision to appoint a high-level manager as the head of the union. Other labor groups have been pressing multinational companies to improve their working conditions.

The Wal-Mart announcement came after months of pressure from the All-China Federation of Trade Unions, a government-run umbrella organization. The federation had recently threatened to sue Wal-Mart and other multinational companies, like Dell and Samsung, if they did not allow the formation of unions here.

Wal-Mart acknowledged the federation in its news release and said it planned to comply with Chinese law, which allows the formation of unions in companies with 25 employees or more.

Wal-Mart executives often say its managers like to deal directly with employees rather than through third parties or unions.

Union set to help Wal-Mart .

The All-China Federation of Trade Unions, China's Communist Party-controlled union, is ready to help Wal-Mart set up union branches at its Chinese stores "as soon as possible," The Associated Press reported from Shanghai, citing the official Xinhua press agency. 

The 123 million-member federation plans to push ahead with its demand that foreign enterprises set up trade unions, Xinhua said, citing a union official.

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Wal-Mart loses in Sask.

Saskatchewan ruling says labour board was within rights to demand documents

By VIRGINIA GALT            [back to top]
LABOUR REPORTER

The lid on Wal-Mart Canada Corp.'s ''Toolbox to Remaining Union Free'' might be pried open after all.The Saskatchewan Labour Board was within its rights to demand that the company produce certain documents during a certification hearing, including a document entitled ''Wal-Mart: a Manager's Toolbox to Remaining Union Free,'' the Court of Appeal for Saskatchewan ruled yesterday in overturning a lower court decision.

However, company spokesman Andrew Pelletier said Wal-Mart is now considering whether to appeal to the Supreme Court of Canada. "It's a definite possibility."

Yesterday's ruling was welcomed by the United Food and Commercial Workers union, which is also attempting to represent employees at a dozen other Wal-Mart operations in Canada -- and locking horns with the company every step of the way.

"The company is notoriously anti-union," Michael Fraser, the UFCW's Canadian director, said in an interview yesterday.

Currently, a store in Jonquière, Que., is the only unionized Wal-Mart location in North America. The company and the union recently opened negotiations for a first contract, after the company warned that the store was unprofitable and could close if the parties did not reach a "reasonable" settlement.

With all eyes on what sort of deal the union can negotiate at Jonquière, the stakes are high for Wal-Mart, which operates 240 Wal-Mart and Sam's Club stores and employs more than 65,000 in Canada.

Mr. Pelletier would not speculate on what grounds might form the basis of appeal of yesterday's decision, apart to say that it was in "stark contrast" to a earlier finding by a Court of Queen's Bench judge that the Saskatchewan Labour Board had an anti-business bias and was engaging on a fishing expedition when it ordered the company to produce documents.

The Saskatchewan Court of Appeal decision involves an application for union representation by employees at a Wal-Mart store in Weyburn, Sask. Certification hearings were suspended last summer when the company challenged the labour board's order for the production of certain documents -- a challenge that was supported by a Court of Queen's Bench.

Yesterday, however, the Court of Appeal said the labour board does, in fact, have the right to examine company documents and determine whether they are relevant to union claims that the company engaged in unfair labour practices during the organizing drive. The labour board has expertise in these matters "and the courts should extend deference to decisions of the board in such areas," the appeal court ruled.

"Wal-Mart workers have the right to join a union. Let the board decide if that's what Weyburn workers want and whether Wal-Mart broke the law during this campaign," Mr. Fraser said in a news release yesterday. The union based its bid for certification on a claim that it had signed up a majority of eligible employees in Weyburn. The company contests that claim.

Wal-Mart and the union have engaged in legal combat before various labour boards and courts across the country.

Mr. Pelletier said yesterday that Canada has become the prime battleground in the UFCW's attempt to unionize Wal-Mart because the labour laws, particularly in Saskatchewan and Quebec, present fewer barriers to unionization

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Worried about Wal-Mart -- and shopping anyway

Two recent stories about retailing giant Wal-Mart unleashed a flood of e-mails to MSN Money, and their message is an angry one.

By MSN Money staff             [back to top]

About 1,400 readers fired off replies after reading Forbes.com's "Wal-Mart's next victims" and CNBC's "With a small-town culture, Wal-Mart dominates," two stories detailing the Arkansas discounter's relentless growth.

Wal-Mart has its defenders, but they were greatly outnumbered by worried or outraged shoppers, employees and small businessmen. For many in rural areas, Wal-Mart is the only option left. Others simply can't resist the prices, even as they profess to detest the company.

Read a sampling of their comments below.

Wal-Mart's next victims The world's largest retailing machine is always looking for new worlds to conquer. Here are 5 that look particularly vulnerable, including banking and electronics.

I have already been affected by the stranglehold Wal-Mart is putting on the grocery stores. I have two family members who work (husband now retired) in the grocery business that were involved in the five-month strike that recently took place. Contracts negotiated adopted the Wal-Mart two-tier system, paying new employees basically minimum wage as a starting salary. This came about because of the "super stores" that Wal-Mart is trying to build all over California, and the country at large.

If Wal-Mart is successful in their 'mowing down' of this country, then we will, in effect, become a ghost town business-wise, with virtually no ability to choose where we want to shop and what we want to buy.

Some cities are resisting Wal-Mart's efforts and have been successful (Inglewood being one here in California), but many others are not. The unions have been trying to make the American public aware of this for a long time -- because of the grocery strike, I think it is now coming to light. We must not let Wal-Mart be successful in their greedy endeavors.

Yes, Wal-Mart is big. Yes, Wal-Mart is successful. Yes, Wal-Mart has plans for this and plans for that, but nobody wants to admit they shop there. I work with high school and grammar school kids. They hate Wal-Mart. They call kids who wear cheap clothes "Wal-Mart kids.” They would never ask their friends to meet them at Wal-Mart. At some point, the negative must catch up with the price-a-tive.

Although my example is a small one in terms of population, if kids all over the USA think like these kids do, then the future of retailing isn't Wal-Mart.

What will happen in the future as these kids have kids? Eventually, Wal-Mart will be seen as the place where the dumb, uneducated, no-money, no-good-jobs, stupid people shop. At some point, this is going to catch up to Wal-Mart.

Wal-Mart is working because that's what people want, plain and simple. With small children, I don't have to run to a bunch of different stores to get the items that I want. They have competitive prices and good service. Their pharmacy does their job in an expedient manner and isn't a huge hassle. If all of that's a problem for other retailers, then maybe they need to get their acts together.

Just like many Wal-Mart towns in America, we're considered a "small" town. The nearest Toys-R-Us is about one hour and 15 minutes away. The nearest electronics retailer of any decent size is 45 minutes away. Why on earth would I want Wal-Mart to go away? I have to admit that I used to think of Wal-Mart as a cheap store that sold inferior products. That was before I started shopping there more regularly and found out that it's a decent store and is convenient. It seems to me that the other stores are just whiners. It's called competition -- play the game guys and change your style if it's not working.

Oh, by the way, the grocery store complains about the Wal-Marts and Costcos selling food items -- why on earth is it then that I can buy patio furniture at the grocery store!

Why don't you comment on the fact that Wal-Mart is one of the largest importers of foreign goods? Can't blame either Republicans or Democrats if jobs move overseas. The only ones we can blame are ourselves for shopping at major import retailers like Wal-Mart. George Bush and John Kerry probably do little shopping at Wal-Marts and the like. When are consumers going to quit passing the buck on the responsibility of why jobs are going overseas?

In a very short period of time, consumers have made Wal-Mart the largest corporation in the world, per Fortune 500. Politicians didn't do that as much as consumers did. Some of the most profitable Wal-Marts are in the industrial states where unions also have a strong representation. So much for the argument that union people buy American made products. The figures just don't support that claim.

Your Forbes article portraying Wal-Mart as some kind of demon conglomerate set on the destruction of retail as we know it is a joke. What's wrong with a success story like Wal-Mart? If they were so bad, why are they so successful? Why do millions shop there? I shop there because I am sick and tired of the stupid gimmicks of the other chains like Fry's and Safeway and their silly "cards" that they make you sign up for to receive their so-called "discounts.”

No, Wal-Mart is no-nonsense and that is what consumers like. Cheap prices, decent-quality products with no "discount" cards to carry around in your wallet before you can receive the discount. I long to see Fry's and Safeway be blasted into oblivion by the Alexander the Great of all shopping behemoths -- Wal-Mart the Supreme.

I despise what Wal-Mart has done to small-town America. Wal-Mart and its counterparts such as Super X, Revco and CVS have closed down almost all the mom-and-pop stores that once populated our small town of Harlan, Ky.

Their parking lots are always filled, and they laugh all the way to the banks they use in other cities -- certainly not the banks in small-town America. I try my best to stay out of those voraciously hungry consumers of everything that smacks of a gentler time in America.

If only Wal-Mart would get into the following industries: airlines, real estate, automobiles and health care. Then we could all afford live in America.

I don't know if Sam Walton is spinning in his grave, or dancing on it. I used to like shopping at Wal-Mart because of its "American-made" policy and the reasonable prices. I used to drive out of my way to shop there. Now, I drive out of my way to avoid shopping there.

They use shady tactics and unscrupulous methods to override the desires of communities who do not want them locating in their towns. I lived, and voted, in a town that voted down Wal-Mart three times and they blackmailed their way in anyhow. They sneer at the mom-and-pop stores and accuse "the little guys" of being paranoid of the competition. It isn't paranoia when you know that even when you have a loyal customer base, you can't compete with a company that undercuts your every move. They even put a stranglehold on military exchanges, citing, of all things, unfair competition.

Their employment practices are also an issue for me. I know that they do not always schedule enough employees for each department and they do not always promote the most qualified person. Shopping at a Wal-Mart store for my family is a last resort. We do not mind paying a few pennies more to get what we want, if it means not going to a Wal-Mart. They have taken a good thing (Sam Walton's dream) and corrupted it beyond all recognition.

I just want to say that I work for Wal-Mart and am proud of it. I have been with the company for 12 years. I have excellent benefits (85% covered by the company), I have dental, stock, 401(k). Yes, I work hard and could probably make a bit more somewhere else (state-certified horticulturist), but the company makes up for that with all the benefits. They treat the associates well and we are a "family.” Every day someone asks me how I am doing, on a personal level. You don't get that from any other company.

With a small-town culture, Wal-Mart dominates

The company had to learn to do many things on its own because it started in little Bentonville, Ark., but that helped it become a retailing power. Has it gone too far?

Wal-Mart does a great job of spreading rhetorical comments and communicating through a very strong PR strategy that they are efficient, etc., while still earning huge profits, making their managers rich. The hypocrisy is so pervasive and part of the organization that most of the buying public just doesn't get it. It is a shame that Wal-Mart accomplishes all this through the mantra of being down-home folk, when they are in practicality absolutely antithetical to such an ideal.

I must admit that until last week, I was a hypocrite: hating Wal-Mart's huge corporate invasion strategy, but shopping there anyway (I think a lot of customers feel that way). The one-stop shopping seemed appealing to me. But this week I stopped. Anymore the store simply seems so much like an eerie corporate charlatan ready to slice the throat of any in its way, hypnotizing its host with claims of good deeds while draining it of its very essence."

You really don’t want to know my opinion on Wal-Mart, but I will tell you this. I am a little independent grocery owner in the small town of Fulton, Miss. Our population in the city is around 3,400 and the county is around 10,000.

We had a regular Wal-Mart since 1979 (I think), but five years ago they opened a Super Center. It really hurt our business and nearly put us out! But we did a lot of praying and switching around our grocery programs. Now Wal-Mart will not match our ads and that has helped a whole lot. I hope now we can see a light at the end of the tunnel.

My husband and I both work at our store and we have 21 employees to worry about. We also have three children to support and put through college. I get so sick of hearing how great Wal-Mart is! I hope one day they get too big for their britches and go under for what they have done to all the independents like us.

It scares me that only half of the country sees how dangerous Wal-Mart really is. For the first few decades, they concentrated on destroying small businesses. Now, as your article indicates, they're out to topple all retail businesses.

Many, if not most, retailers in our nation are unionized. How is it possible that not even a single Wal-Mart store has had a "vote" on whether to unionize? I'm not pro- or anti-union, but acknowledge that the unions have helped to raise the standard of living for millions of Americans.

What about all of the big class-action lawsuits against Wal-Mart? Why have they not come to trial? How can they be so powerful unless there is underlying corruption and payoffs?

They're not playing on a level field with other retailers, because they cheat, not because they are better.

You would have to have grown up and lived in one of the small communities being serviced by Wal-Mart to really appreciate its positive impact on the economy. Those people living in rural areas of America were at the mercy of small mom-and-pop stores that overcharged customers for products with little selection. Yes, maybe the mom-and-pop's were overcharged by the manufacturers, but it didn't keep most of them from being the ones living in the newest homes in town . . . the ones with the in-ground swimming pools . . . the ones whose children could afford college. Wal-Mart is the answer to rural America's underprivileged, both in terms of employment and in terms of living affordably. You could call it the "revenge of the poor." This issue also arises for those in the impoverished neighborhoods of our metropolitan areas.

The large corporations that have failed in the new economy find it easy to lay the blame at Wal-Mart's feet, but I don't buy that. I blame bloated incompetent executives for these company’s' failures. I believe the media moguls can gross all they want to and can continue to throw dispersions, but the public will continue to support and rally behind those providing goods and services in a convenient way at a fair price.

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Union, labour board win their appeal in battle to unionize Sask. Wal-Mart 

November 23, 2004, EST.               [back to top]

REGINA (CP) - The Court of Appeal has sided with the United Food and Commercial Workers and the provincial labour relations board in the fight to unionize a Wal-Mart store in southern Saskatchewan.

The case deals with the unionizing of the Wal-Mart in Weyburn, Sask. - a community southeast of Regina. In a 28-page ruling released Tuesday, the three judges ordered the retail giant to turn over reams of internal documents that the board had requested at the behest of the union.

The UFCW had been seeking the documents as part of the union certification process, alleging that Wal-Mart managers were being given instructions on how to derail union drives.

Wal-Mart had argued that the material was irrelevant and requesting it amounted to nothing more than a fishing expedition on the part of the union.

Earlier this year, Queen's Bench Justice George Baynton agreed and quashed the labour board's subpoena.

But the three judges on the appeals court set aside that ruling, saying it is impossible to determine relevance if the documents have not been produced.

"The proper procedure when there is a requirement to produce documents ... is to have the documents produced, so that the tribunal charged with determining their relevance will have them available for examination," the judges wrote. "This is the procedure the board intended to follow."

The Saskatchewan Labour Relations Board became involved in the Weyburn case when the UFCW announced a majority of employees had signed membership cards at the store, making union certification automatic under Saskatchewan law.

But Wal-Mart contended the proposed bargaining unit excluded 29 employees - 23 per cent of the workforce - meaning a true majority has not signed up.

U.S.-based Wal-Mart is the world's largest employer, with 65,000 employees in Canada alone

Earlier this year, a store in Quebec became the chain's only unionized store in North America.

Union drives are currently underway at two other Quebec stores, another store in Saskatchewan and among automotive workers at seven stores in British Columbia.

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Wal-Mart Gives in to China's Union Federation

The world's largest retailer, Wal-Mart has always been resistant to unionization in its stores around the world. As its business in China expands, the chain store is pressured by China's official All China Federation of Trade Unions to establish union branches in its many stores. In a recent statement, Wal-Mart stated that the company would be in full compliance with Chinese law, and that it would allow voluntary action of its associates to unionize under the Federation. Will the company's agreement in China have implications for its operations elsewhere in the world? – YaleGlobal

Richard McGregor The Financial Times,        [back to top]
23 November 2004

Wal-Mart, the world's largest retailer, said on Tuesday it would agree to establish officially-sanctioned unions in its 40-odd Chinese stores, but only if its workers requested that it form one.

Wal-Mart, which has long battled to keep unions out of its stores in the US and around the world, has been under pressure from the All China Federation of Trade Unions, an official organisation, to allow it to establish branches in its stores.

Wal-Mart said in a statement that the company was in full compliance with Chinese law "which states that establishing a union is a voluntary action of associates." Wal-Mart refers to its workers as "associates."

"Currently there are no unions in Wal-Mart China because associates have not requested that one be formed," the statement said. "Should associates request the formation of a union, Wal-Mart China would respect their wishes and honour its obligation under China’s Trade Union Law."

The Chinese union federation claims to have 123m members, a result of the monopoly the government has allowed in the representation of workers' interests.

Independent unions are banned in China, and the federation unions have traditionally been an instrument for the communist party to control workers, not a vehicle for agitation and strikes, which are almost never allowed.

The federation says all companies, foreign and local, are required to establish a union, using funds from a 2 per cent levy on wages.

In an interview given during the launch of their campaign against Wal-Mart last year, a federation official said they had often tried to talk to the US company but had been met with excuses, "like the boss is not in, and so on."

A federation official, when informed of Wal-Mart statement on Tuesday, said he hoped that other foreign companies would follow suit.

In practice, however, Wal-Mart will not have to form a union if it can say that none of its workers have asked for one.

In the statement, Wal-Mart said it encouraged its workers to have "direct communications with the company."

"Issues of concern are taken seriously by the company and followed up with prompt action," the company said.

Wal-Mart has ambitious expansion plans for its stores in China, where it lags its global rival, France's Carrefour.

Wal-Mart also uses China as a major sourcing center for its US stores, buying about US$15bn worth of goods last year from the mainland.

At one stage, about two years ago, Wal-Mart purchases from China were worth 10 per cent of the country's total exports to the US, according to a State Department briefing paper.

Rights: © Copyright The Financial Times Ltd 2004.

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Wal-Mart Says It's Willing to Let China Employees Set Up Unions

Nov. 23                              [back to top]
(Bloomberg)

Wal-Mart Stores Inc., the world's largest retailer, said it's willing to let its employees in China set up trade unions, responding to media reports of criticism by the country's national union federation.

``Should associates request formation of a union, Wal-Mart China would respect their wishes and honor its obligation under China's Trade Union Law,'' the Bentonville, Arkansas-based company said in a faxed statement. Local associates, or employees, manage all the company's stores in China, Wal-Mart said.

The All-China Federation of Trade Unions blamed foreign companies including Wal-Mart, Eastman Kodak Co. and Dell Inc. for not allowing unions in their Chinese operations, the China Business Weekly, a newspaper published by the official China Daily, reported on Nov. 16.

``Wal-Mart is currently in full compliance with China's Trade Union Law, which states that establishing a union is a voluntary action of the associates,'' Wal-Mart said. ``Currently, there are no unions in Wal-Mart China because associates have not requested that one be formed.''

Wal-Mart, which bought $15 billion of goods from China last year, plans to open as many as 15 new stores in the country next year, taking its total to 58, Joe Hatfield, chief executive for Asia, said in an interview on Nov. 2.

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TV shows discover new setting: Wal-Mart

ANN ZIMMERMAN and JOE FLINT     [back to top]
Monday, November 22, 2004
The Wall Street Journal

Companies pay big bucks to get mentioned on TV shows. Then there is Wal-Mart Stores Inc., which could live without much of the free publicity it is getting these days.

In recent weeks, a Wal-Mart look-alike played a prominent role in "Without a Trace," the CBS hit crime-drama about Federal Bureau of Investigation agents who track down missing people. The show's store -- "Every Mart" -- was the employer of a single mother who didn't qualify for health benefits and whose wages were so meager she had to deal drugs to pay for her son's hearing aid. The writers may have called the store by a fictitious name, but by dressing workers in Wal-Mart's trademark blue smocks, the resemblance to the world's No. 1 retailer was unmistakable.

This month, Comedy Central's ever-irreverent cartoon "South Park" built an entire episode around a "Wall-Mart" coming to town. Originally met with wild enthusiasm, the new arrival turns the town folk into consumer zombies lured by cheap prices to buy massive quantities of products they don't need. It also turns Main Street into a bombed-out ghost town.

Wal-Mart also has served as a familiar model for a store in Fox's "King of the Hill." Renamed Megalo Mart, it is the merciless competitor of the small, neighborhood store where Hank Hill sells propane and propane accessories.

At the same time, Wal-Mart's market muscle and increasing influence on American society make it a favorite topic for news shows. The Bentonville, Ark., retailer was the focus of two recent television documentaries, one on CNBC and one PBS's "Frontline."

"From PBS to 'South Park' -- it just shows you how much a part of the culture we are," says Mona Williams, vice president of communications for Wal-Mart.

Some see a cultural chasm at play in how television depicts the gargantuan retailer. "The fact is, people shop at Wal-Mart because they have low prices and great selections and poor people need it, and portraying (the company) as evil is sort of an elitist viewpoint," says John Altschuler, one of the executive producers on "King of the Hill."

"King of the Hill" doesn't ascribe to the "Wal-Mart-killing-America" viewpoint, Mr. Altschuler says. It instead focuses on the frustrations of dealing with the giant stores -- pushing carts for vast distances in search of items, with scant assistance from often-clueless sales clerks. However, the show's other executive producer, David Krinsky, notes the upside: "Hank (the main character) likes the appeal of buying his hammer and pants in the same store to see how they go together."

"Without a Trace" set out to write another kind of social commentary. Hank Steinberg, the show's executive producer, says he wanted the plot to address "a larger issue with corporate America in general being about their bottom line and not about protecting their workers."

In the episode in question, the protagonist can't get health care because the fictional Every Mart chain doesn't let its employees work 40 hours a week. As it happens, Wal-Mart employees who work 34 hours or more a week are considered full-time and are offered health care. What is more, hearing aids aren't typically covered under any health insurance policies. Finally, Wal-Mart takes issue with the notion that it exploits the working poor.

"Hourly jobs like those offered by Wal-Mart and other retail and service providers are generally not designed to support a family," says Ms. Williams, the Wal-Mart official. "Three-quarters of our workers are seniors supplementing their income, students working their way through school or second-income providers."

Flipping to another channel, a recent episode of Comedy Central's fake news program "The Daily Show" noted that Wal-Mart was opening a store near some ancient ruins in Mexico -- "which marks the first time the chain moved into a community that was already in ruins."

Bob Thompson, director of Syracuse University's Center for the Study of Popular Television, says Wal-Mart is ripe for satire because it is something everybody can understand. The best response for the company, he adds, "is to never address it directly and pummel the culture with a completely alternative vision of themselves."

This is precisely what Wal-Mart is attempting to do with its recent barrage of image commercials touting itself as a good place to work and a beneficent community citizen. But the commercials don't seem to be making a dent on the company's reputation. According to the sixth annual Reputation Quotient study conducted by Harris Interactive Inc., a market-research firm, and the Reputation Institute, a research organization, Wal-Mart fell five notches to 28th place in this year's ranking. Several respondents said they didn't buy the image Wal-Mart projected in its ads. In an ongoing CNBC poll asking respondents to characterize Wal-Mart as either "Evil Empire" or "Great American Success Story," 59 percent of respondents so far called the company as a success story, while 41 percent of respondents saw it as evil.

Wal-Mart is one of the biggest spenders on television, plunking down more than $500 million on network TV? last year and almost $340 million so far this year, according to Nielsen Monitor-Plus. On Viacom Inc.'s CBS alone, the chain spent $40.4 million on commercials in the first seven months of this year. It spends much less on News Corp.'s Fox -- only $17 million through August of this year.

Wal-Mart does no advertising on Comedy Central, but the chain's Ms. Williams thinks the channel's "South Park" was "right on target" in its episode featuring "Wall-Mart." Desperate to stop their town from total collapse, the main "South Park" characters -- Stan, Kyle, Kenny and Cartman -- go to the store's headquarters to learn where the heart of Wall-Mart is so they can kill it. The heart, it turns out, is a mirror. And the local store the town decides to support instead grows from a mom-and-pop to a Wal-Mart-like behemoth.

"South Park confirmed that the power behind Wal-Mart is the consumer," Ms. Williams says. "Even if I don't agree with the way they do things, there is frequently a lot of truth in their satire."

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Wal-Mart Knucklehead Facing Jail

By George Anderson       [back to top]
November 19, 2004

As those who saw the recent CNBC documentary, The Age of Wal-Mart, know, the company's chief executive, Lee Scott, calls associates who stray from the retailer's rules of conduct: knuckleheads.

In the context of his CNBC interview, Mr. Scott was referring to store personnel who simply didn't get what Wal-Mart was all about or who lacked the moral conscience to do what was right for the customer and co-workers.

But, as it turns out, Mr. Scott doesn't have to go out to his stores to find knuckleheads. In at least one case, the knucklehead had workspace right in the company's headquarters in Bentonville, Ark.

Clifford H. Pruitt Jr., a former regional vice president for Wal-Mart, admitted in federal court to taking kickbacks from a supplier, reports The Associated Press.

"Earlier this year, we discovered that Cliff Pruitt was taking kickbacks from a supplier, totaling about $80,000," said Wal-Mart spokesperson Mona Williams. "We investigated it, terminated Pruitt, and referred the matter to the U.S. attorney's office for a criminal investigation."

Moderator's Comment: Is the practice of asking for and taking kickbacks and gifts from suppliers a problem in the retail business?

We don't know Clifford Pruitt but, at this juncture, we're sure he'd disagree with the sentiments of the Gordon Gecko (Michael Douglas) character in the movie, Wall Street, that "greed is good."

Mr. Pruitt faces up to 20 years in prison and a fine of $250,000. - George Anderson - Moderator

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Lawsuits and Change at Wal-Mart

By STEVEN GREENHOUSE            [back to top]
November 19, 2004 

Wal-Mart is not only the world's largest retailer, but also a magnet for employee complaints about off-the-clock work. It faces lawsuits in more than 30 states.

Wal-Mart says its deep pockets have made it an attractive target. Plaintiffs' lawyers counter that off-the-clock work is endemic at Wal-Mart because of the company's emphasis on keeping its costs low.

Wal-Mart settled one case involving 69,000 workers in Colorado for $50 million four years ago. In Oregon, a federal jury found in 2002 that the company had required off-the-clock work, but the court awarded back pay to only 83 workers.

Wal-Mart has changed some practices. The computer system in its stores no longer allows a cashier who clocks out to continue ringing up customers.

In orientation, employees are told not to work off the clock, and company memos direct managers not to allow such work.

"We continually reiterate our position that associates are to be paid for every minute they work,'' said Gus Whitcomb, a Wal-Mart spokesman.

But some employees say their managers still demand off-the-clock work. Aaron Payne, who earned $6.25 an hour working in the sporting goods department of a Wal-Mart in Camden, S.C., said the assistant manager made him work many hours last summer without pay.

"I'd be clocking out, and he'd point out all this stuff, saying, 'This isn't done, and if you leave before this is done, you won't have a job Monday morning,' '' said Mr. Payne, an Army veteran who served in Iraq. "It happened almost every night. I'd usually have to stay one and a half or two extra hours."

Copyright 2004 The New York Times Company 

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Trying to Get Big Enough to Battle Wal-Mart

By FLOYD NORRIS                [back to top]
Nov 18, 2004

n the world of retailing, there is no such thing as "too big to fail," as investors have often learned to their sorrow.

It may be a measure of just how far Sears, Roebuck & Company has fallen from its perch as the nation's largest retailer that it has agreed to be acquired by Kmart, which itself was once No. 2 to Sears. But that was before Kmart went broke, slashed its operations and then emerged from bankruptcy last year.

The combined company will be No. 3 in American retailing, the companies said in announcing the transaction. With $55 billion in revenue, it will trail Wal-Mart and Home Depot.

Sears gained its dominance with the slogan "Satisfaction Guaranteed or Your Money Back" in the years after World War II as it followed its customers to the suburbs while the old leader, Montgomery Ward, hunkered down and conserved its cash, awaiting a postwar economic slump that never arrived. That chain limped along for decades and has now vanished.

But Sears eventually lost the No. 1 position to Wal-Mart, which started in smaller towns and then expanded to the suburbs. Wal-Mart managed to reduce costs to bring inexpensive goods to Americans who might once have relied on Sears or the famous Sears catalog, which was eventually discontinued to save money. Two years ago, Sears bought Lands' End, a catalog retailer, to bring customers back to its clothing department and to re-enter the catalog business.

In recent years, Sears has strived to revive its fortunes, with some success, but it has not shown an ability to grow. Its revenues last year were little changed from those of 2000, although profits were much higher. In the first three quarters of the year, its revenues were down 14 percent, largely because it sold its credit card operations.

In 2003, Wal-Mart sales were $256 billion, six times those of Sears. They would have been more than four times those of a combined Sears and Kmart.

As Sears has struggled, the stock has attracted players known for real estate plays rather than an interest in selling clothing to customers. In talking to investors on Wednesday, Edward S. Lampert, a hedge fund manager who controls Kmart and had a 15 percent stake in Sears, said he was determined to make the combined company worth more than its real estate.

Less than two weeks ago, Sears stock leaped on the news that Vornado Realty Trust had acquired a 4.3 percent stake in the company, partly through buying stock and partly through an options transaction that would bring it shares in 2006. In the past, Vornado had acquired Alexander's, once a proud name in New York retailing but now gone, and it has been trying to buy Toys "R" Us, another once-dominant retailer that has had difficulty competing with Wal-Mart.

"It is pretty obvious that scale is important to compete effectively," Mr. Lampert, a former Goldman Sachs trader, told investors at a meeting in New York. He pointed to the experience of the financial services industry, which he said had cut costs in the 1990's through aggressive consolidation. He vowed to have "a very low cost structure to compete effectively" but said he would maintain "the reputation and quality of service that Sears has always provided."

The plan, the companies said yesterday, is to rename some Kmart stores as Sears stores, combine operations to save money and allow brands sold at one chain to be sold at the other. But the fact that neither chain managed to do well against Wal-Mart for a sustained time may leave some people wondering just how well they will compete as parts of the same company.

Still, Kmart has done surprisingly well under Mr. Lampert. Its shares, which were issued to creditors of the old Kmart, sold for $15 when they began trading in May 2003, and soon fell to a low of $12. But they have since soared. Shares of Kmart rose $7.78 yesterday, to $109.

Kmart has amassed a large cash hoard - in part from selling 50 stores to Sears for $576 million, although not all that money has yet been paid - and the transaction calls for it to buy 45 percent of the Sears shares for cash at $50 a share. The remaining 55 percent of shares are to be exchanged for half a Kmart share each.

Mr. Lampert said he would seek to convert all his shares to Kmart shares, although he might be forced to accept some cash if other holders also demand the cash.

Shares of Sears rose $7.79, to $52.99. They are now up 51 percent since the end of October - thanks in part to speculation after Vornado announced its investment - and about 200 percent from the low of $18.13 reached in March of last year, when Sears' prospects seemed least promising and some doubted Mr. Lampert's wisdom in acquiring a large position in the company.

A low point for Sears came five years ago, when it was booted out of the Dow Jones industrial average - it had been a member since the index was expanded to 30 stocks in 1928 - and replaced by Home Depot. Investors who held on had the last laugh. Since then, Sears is up 96 percent, while Home Depot is down 10 percent and the Dow is up just 2 percent.

Shares of Sears are still well below their record high of $65.25, reached in 1997. But that performance is much better than that of the old Kmart. Its shares, which sold for as high as $28.13 in 1992, became worthless as a result of the bankruptcy.

The ability of Kmart to do the deal is a testament to just how much Wall Street has become enamored of Mr. Lampert.

At the end of last year, a Kmart share sold for almost exactly half the price of a Sears share. Now the ratio is reversed, and it is that ratio that provides the terms of the merger.

If one measures retailers by revenue, Kmart shareholders are also getting a much better deal. Their company provided 35 percent of the combined sales of the two companies over the most recently reported 12 months, but they will get 46 percent of the stock.

It is clear that Mr. Lampert has persuaded investors that shares in his company are worth a large premium over what he paid for them. If only the combined company can persuade consumers that its merchandise is similarly valuable.

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Wal-Mart downgraded; concerns cited

By Brendan January,                         [back to top]
CBS.MarketWatch.com
Last Update: 4:05 PM ET Nov. 17, 2004

NEW YORK (CBS.MW) -- Prudential Equity Group downgraded Wal-Mart Stores Wednesday, citing a number of near-term and long-term concerns that the company is said to be hard-pressed to overcome.

Analyst Wayne Hood cut his rating on the retailer's stock (WMT: news, chart, profile) to "underweight" from "neutral weight" and lowered his price target to $57 from $60.

The move, Hood wrote in a note to clients, reflects "concerns about expense growth, the need for 5 percent comp-store sales to leverage expenses, disappointing trends in general merchandise sales, a difficult first-quarter 2005 comparison and the stock's valuation."

Shares of Wal-Mart fell 65 cents, or 1.1 percent, to $56.24 in midday trading Wednesday. The Bentonville, Ark.-based retail giant reported third-quarter earnings Tuesday that were generally in line with expectations.

Hood was concerned that the results showed a 0.2 percent margin decline in the company's earnings before interest and taxes. This margin, he said, has fallen in four of the past six quarters.

Wal-Mart also faces growing costs for wages, energy and accidents, added Hood, expenses that are not easily absorbed when comp-store sales rise just 1.3 percent, as they did in the third quarter of 2004.

"While the company does have room for gross-margin rate improvement from reduced merchandise markdowns and the benefits from global/direct sourcing," the analyst wrote, "the growth in expense dollars will have to be brought under better control."

Moreover, Hood cited the stock's $7 gain from its 52-week low of $50.50. He attributed this climb to "higher interest in retail stocks and not on improved fundamentals."

Even if fundamentals do improve, said Hood, he does not expect investors to see a windfall. "The stock could retreat to its 52-week low if the fundamentals don't improve, and if they do improve, the shares likely have little upside from present levels."

However, he's not optimistic that the fundamentals will improve. In his view, the fundamental trends will cause Wal-Mart's stock to underperform compared with other retail stocks covered by Prudential.

In 2004, Wal-Mart's stock has risen 7.2 percent, compared with a 20.2 percent gain for the RLX Index, according to Hood.

Looking ahead, the analyst sees several threats to Wal-Mart's valuation. A slowdown in consumer spending would make it difficult for Wal-Mart to exceed upcoming tough sales comparisons.

Another threat comes from local resistance in urban markets to Wal-Mart store openings, which could hinder the company's growth strategy.

Finally, the retailer expects 30 percent of its earnings growth to come from overseas operations. A slowdown in international growth could lower sales and earnings results.

Brendan January is a reporter for CBS MarketWatch.com in New York.

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Kmart Buying Sears in $11 Billion Deal

Nov 17, 10:09 AM (ET)         [back to top]
By MEGAN REICHGOTT

CHICAGO (AP) - The discounter Kmart Holding Corp. (KMRT) is acquiring one of the most venerable names in U.S. retailing, the department store operator Sears, Roebuck & Co. (S), in a surprise $11 billion deal that will create the nation's third largest general merchandise retailer.

The combined company under Wednesday's deal would be known as Sears Holdings Corp., but it was clearly orchestrated by Kmart chairman and Sears shareholder Edward Lampert who will lead a new board that will be dominated by Kmart directors.

Shares of both companies surged on news of the deal. Kmart shares climbed $15.80, or 16 percent, to $117.02 on the Nasdaq Stock Market while Sears shares soared $9.70, or 21 percent, to $54.90 on the New York Stock Exchange.

The deal marks a remarkable comeback for Kmart, a company once known for its "Blue Light Specials," that scaled back its operations after seeking bankruptcy protection in 2002. Sears' roots date to the late 1800s when it offered merchandise by mail order to farmers, opened its first retail store in 1925 and eventually became the nation's biggest department store operator.

The new company is expected to have $55 billion in annual revenues and 3,500 outlets. That will mean it will trail only Wal-Mart Stores Inc. (WMT) and Target Corp. (TGT) among the biggest U.S. general merchandise retailers.

The new company plans to operate the Kmart and Sears businesses under their current brand names.

It will be headquartered in the northwestern Chicago suburb of Hoffman Estates, where Sears has its headquarters, but will maintain a "significant presence" in Troy, Mich., where Kmart is based.

Under the agreement, which was unanimously approved by both companies' boards of directors, Kmart shareholders will receive one share of new Sears Holdings stock for each Kmart share. Sears, Roebuck shareholders can choose $50 in cash or half a share of Sears Holdings stock. That portion of the deal values Sears shares at $11 billion, a 10.6 percent premium over its value at Tuesday's close.

Kmart chairman Lampert will be the chairman of Sears Holdings, while Sears CEO Alan Lacy will be vice chairman and CEO of the new company. The new 10-member Sears Holdings board will have seven members from Kmart and three from Sears.

"The merger will enable us to manage the businesses of Sears and Kmart to produce a higher return than either company could achieve on its own," Lampert said in a press release.

Lampert, Kmart's majority shareholder, is also Sears' largest shareholder, holding a 15 percent stake in Sears through his ESL Investments Inc.

The merger, expected to close by the end of March 2005, is subject to approval by Kmart and Sears shareholders, regulatory approvals and customary closing conditions.

Kmart filed for Chapter 11 bankruptcy protection in early 2002, leading to the closing of about 600 stores, termination of 57,000 Kmart employees and cancellation of company stock. The retailer emerged from bankruptcy in May 2003 and in March posted its first profitable quarter in three years.

Mired in a retail slump, Sears had long fallen out of favor on Wall Street after losing ground to competitors and enduring sluggish sales for years. The company last fall introduced its Sears Grand stores, which offer grocery and convenience items besides traditional Sears fare such as clothing, home appliances and tools. The concept had delivered promising results for the struggling retailer at its first three stores in metropolitan Salt Lake City, Las Vegas and Chicago, in the suburb of Gurnee.

Kmart, in recent years, has been shedding many of its underperforming stores, a strategy that has helped the once-struggling discount retailer bounce back after it emerged from bankruptcy. Kmart recently agreed to sell 50 stores to Sears for $575 million as part of that strategy.

Kmart's earnings have been improving. On Wednesday, Kmart posted net income in the third quarter ended Oct. 27 of $553 million, or $5.45 per share, compared with a loss of $23 million, or 26 cents per share, for the same period a year ago.

Its stock price has risen nearly seven-fold to $101.22 on Tuesday from $15 a share when it emerged from bankruptcy.

In recent weeks, it appeared that Sears could be shifting toward a similar real estate strategy after the disclosure that Vornado Realty Trust (VNO), a real estate investment trust, had purchased a 4.3 percent interest in the department-store chain. That move left the impression that the value of Sears' real estate holdings may be not be fully reflected in its stock price. Since that Nov. 5 announcement, Sears' stock has jumped 25 percent. It closed at $45.20 in trading Tuesday on the New York Stock Exchange.

Company officials said the merger would help make their properties more profitable through a broader retail presence and improved operational efficiency in areas such as procurement, marketing, information technology and supply chain management.

"The combination will greatly strengthen both the Sears and Kmart franchises by accelerating the Sears off-mall growth strategy and enhancing the brand portfolio of both companies," Lacy said. "This will clearly be a win for both companies' customers while significantly enhancing value for all shareholders."

The merger will not affect agreements to carry home and fashion lines including Martha Stewart Everyday, Lands' End and Sesame Street, the companies said.

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What Wal-Mart Knows

Posted by Britton                 [back to top]
November 17, 2004

While Wal-Mart's traditional strength is in the smart and severe management of its supply chain in order to maintain "everyday low prices," one should not underestimate its growing knowledge of the demand side -- who its customers are and how they behave.

"With 3,600 stores in the United States and roughly 100 million customers walking through the doors each week, Wal-Mart has access to information about a broad slice of America - from individual Social Security and driver's license numbers to geographic proclivities for Mallomars, or lipsticks, or jugs of antifreeze," according to a New York Times article last week. "The data are gathered item by item at the checkout aisle, then recorded, mapped and updated by store, by state, by region. By its own count, Wal-Mart has 460 terabytes of data stored on Teradata mainframes, made by NCR, at its Bentonville headquarters. To put that in perspective, the Internet has less than half as much data, according to experts."

With exception of its Sam's Club brand (which builds individual customer profiles), WalMart does not tend to watch each customer as an individual. It is more important for the company to understand the "basket" of goods that were purchased together. "Me knowing what you specifically buy is not necessarily going to help me get the right merchandise into the store," says Linda M. Dillman, Wal-Mart's chief information officer. "Knowing collectively what goes into one shopping cart together tells us a lot more."

Of course, the company's supply chain expertise has not finished evolving either. The company is moving toward a near future where its suppliers will own the products on WalMart shelves and will not be able to collect until they are sold. "Wal-Mart will never take those products onto its books," said Bruce Hudson, a retail analyst at the Meta Group, an information technology consulting firm in Stamford, Conn. "If you think of the impact of shedding $50 billion of inventory, that is huge."

Although customers won't complain, Hudson contends that this will squeeze suppliers even further. "You can see the pattern of Wal-Mart's mandates, and as Wal-Mart grows in power, it is getting more dictatorial," he said. "The suppliers shake their heads and say, 'I don't want to go this way, but they are so big.' Wal-Mart lives in a world of supply and command, instead of a world of supply and demand."

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Wal-Mart foes file lawsuit

DAN JUDGE, Times-Herald staff writer           [back to top]
Tuesday, November 16, 2004 

AMERICAN CANYON - A group opposing the construction of a Wal-Mart Supercenter in American Canyon has filed a lawsuit in Napa Superior Court in an effort to derail the project.

American Canyon Community United for Responsible Growth is asking the court to revoke the city's recent approval of the store, alleging that state and local laws were ignored during the approval process.

"The only option left for American Canyon United and the citizens was to ask that the court make the city comply with the city and state laws that have been violated," the group's attorney Brett Jolley said Monday.

The suit against the city, Wal-Mart and developer Lake Street Ventures requests that the court set aside the project's approval until it meets city zoning codes and an environmental impact report is prepared that complies with the California Environmental Quality Act.

The litigation seeks no monetary awards except compensation for legal fees.

American Canyon officials disputed the charges, saying the project conforms to the required laws and zoning codes.

City Attorney William Ross said the lawsuit simply repeats arguments that were made - and rejected - during the course of public hearings before the American Canyon Planning Commission and City Council.

"It raises the same issues that were raised during the hearings and they were responded to at that time," he said.

The same day the legal action was filed, City Councilmember-elect Cindy Coffey - the organizer of American Canyon Community United -formally renounced her membership.

"I am proud of this group and even more proud to have played a part in motivating so many residents to speak up and play a part in our community," she said in a statement. "However, as a newly elected member of the City Council, it is important that I be free from conflict and able to serve the city, which elected me."

Ironically, Coffey - the leading critic of the Wal-Mart project before her election on Nov. 2 - may have little influence on the matter after she takes office.

Her past association as a principal spokesperson for the group suing the city could mean she would be barred from even discussing the Wal-Mart case in closed session with the rest of the council, the city attorney said.

"Based on what I know now, I don't see how she could participate," Ross said.

American Canyon Community United member Kathleen Shamet quickly took up the role of spokesperson for the group.

"We are not happy to be suing our own city," she said in a statement. "Unfortunately, they have not disclosed nor fully examined the effects of a Supercenter on our growing community. We have rules and regulations for a reason. We only ask that they follow them."

Last month, the council voted unanimously to uphold the Planning Commission's approval of the Wal-Mart Supercenter's design and sign program.

The massive store, which wil be larger than 190,000 square feet, would be the anchor tenant for the Napa Junction mixed-use project. The center is slated to include retail stores, restaurants, an apartment complex, a hotel and a public park.

The lawsuit makes a number of allegations, including that the project needed special permits for retail food sales and an oversize 120-foot sign:

It also charges that special approval was required for major changes to the project and that it did not provide an environmental impact report that meets the minimum requirements of the California Environmental Quality Act.

Lake Street Ventures developer Vincent "Buzz" Butler challenged the accusations. He noted that there have been at least 10 public hearings on the project and it has passed close examination.

"It was a fairly elaborate approval process," he said. "It is a well-planned project and we are very proud of it."

Butler said any success American Canyon Community United has in delaying the Wal-Mart Supercenter will only hurt the community's chances of bringing in other quality retailers. Many of them have based their own tenancy plans on having Wal-Mart as an anchor, he said.

"This is a community that has been craving retail opportunities and services," Butler said. "It will just delay the community's ability to have them."

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Is Wal-Mart Good For America?

PBS Frontline asks what is the real cost of Wal-Mart's famous 'everyday low prices'.

Nov 16, 2004, 09:00 am PST               [back to top]
Contributed by Chris Steins

On Tuesday evening, November 16, PBS Frontline is scheduled to run a special report exploring the relationship between U.S. job losses and the American consumer's insatiable desire for bargains in "Is Wal-Mart Good for America?"

Through interviews with retail executives, product manufacturers, economists, and trade experts, correspondent Hedrick Smith examines the growing controversy over the Wal-Mart way of doing business and asks whether a single retail giant has changed the American economy.

To understand the secret of Wal-Mart's success, Smith travels from the company's headquarters in Bentonville, Arkansas, to their global procurement center in Shenzhen, China, where several hundred employees work to keep the company's import pipeline running smoothly. Of Wal-Mart's 6,000 global suppliers, experts estimate that as many as eighty percent are based in China.

From the promo: "Frontline offers two starkly contrasting images: one in Circleville, Ohio, where the local TV manufacturing plant has closed down; the other--a sea of high rises in the South China boomtown of Shenzhen. The connection between American job losses and soaring Chinese exports? Wal-Mart. For Wal-Mart, China has become the cheapest, most reliable production platform in the world, the source of up to $25 billion in annual imports that help the company deliver everyday low prices to 100 million customers a week."

Full story: Is Wal-Mart Good for America?
Source: PBS, Nov 16, 2004.

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Wal-Mart, meet Big Brother

A huge mine of consumer and inventory data is one of the keys to the retail giant's domination of the industry

NY TIMES NEWS SERVICE , NEW YORK                    [back to top]
Sunday, Nov 14, 2004, Page 12

Checking out at the Saddle Brook, New Jersey, Wal-Mart earlier this month. Plenty of retailers collect data about their stores and their shoppers, and many use it to try to improve sales. But Wal-Mart amasses more data about the products it sells and its shoppers' buying habits than anyone else, so much so that some privacy advocates worry about the potential for abuse.

Hurricane Frances was on its way, barreling across the Caribbean, threatening a direct hit on Florida's Atlantic coast. Residents made for higher ground, but far away, in Bentonville, Arkansas, executives at Wal-Mart Stores decided that the situation offered a great opportunity for one of their newest data-driven weapons, something that the company calls predictive technology.

A week ahead of the storm's landfall, Linda Dillman, Wal-Mart's chief information officer, pressed her staff to come up with forecasts based on what had happened when Hurricane Charley struck several weeks earlier. Backed by the trillions of bytes' worth of shopper history that is stored in Wal-Mart's computer network, she felt that the company could "start predicting what's going to happen, instead of waiting for it to happen," as she put it.

The experts mined the data and found that the stores would indeed need certain products -- and not just the usual flashlights.

"We didn't know in the past that strawberry Pop-Tarts increase in sales, like seven times their normal sales rate, ahead of a hurricane," Dillman said in a recent interview. "And the pre-hurricane top-selling item was beer."

"People don't know that Wal-Mart is ... capable of capturing a huge amount of outside information about them that has nothing to do with their grocery purchases."

Katherine Albright, founder and director of Caspian, a consumer advocacy group

Thanks to those insights, trucks filled with toaster pastries and six-packs were soon speeding down Interstate 95 toward Wal-Marts in the path of Frances. Most of the products that were stocked for the storm sold quickly, the company said.

Such knowledge, Wal-Mart has learned, is not only power. It is profit, too.

Plenty of retailers collect data about their stores and their shoppers, and many use the information to try to improve sales. Target Stores, for example, introduced a branded Visa card in 2001 and has used it, along with an arsenal of gadgetry, to gather data ever since. But Wal-Mart amasses more data about the products it sells and its shoppers' buying habits than anyone else, so much so that some privacy advocates worry about potential for abuse.

With 3,600 stores in the US and roughly 100 million customers walking through the doors each week, Wal-Mart has access to information about a broad slice of America -- from individual Social Security and driver's license numbers to geographic proclivities for Mallomars, or lipsticks or jugs of antifreeze. The data are gathered item by item at the checkout aisle, then recorded, mapped and updated by store, by state, by region.

By its own count, Wal-Mart has 460 terabytes of data stored on Teradata mainframes, made by NCR, at its Bentonville headquarters. To put that in perspective, the Internet has less than half as much data, according to experts.

Information about products, and often about customers is most often obtained at checkout scanners. Wireless hand-held units, operated by clerks and managers, gather more inventory data. In most cases, such detail is stored for indefinite lengths of time. Sometimes it is divided into categories or mapped across computer models, and it is increasingly being used to answer discount retailing's rabbinical questions, like how many cashiers are needed during certain hours at a particular store.

All of the data are precious to Wal-Mart. The information forms the basis of the sales meetings the company holds every Saturday, and it is shot across desktops throughout its headquarters and into the places where it does business around the world. Wal-Mart shares some information with its suppliers -- a company like Kraft, for example, can tap into a private extranet, called Retail Link, to see how well its products are selling. But for the most part, Wal-Mart hoards its information obsessively.

It also takes pains to keep the information secret. Some of the systems it uses are custom-built and designed by its own employees, the better to keep competitors off the trail. Companies that sell equipment and software to Wal-Mart are bound by nondisclosure agreements. Three years ago, Wal-Mart summarily announced that it would no longer share its sales data with outside companies, like Information Resources Inc. and ACNielsen, which had paid Wal-Mart for the information and then sold it to other retailers.

With so much data at Wal-Mart's corporate fingertips, what are the risks to consumers? Most have no clue that their habits are monitored to such an extent. There are no signs -- like the ones for Wal-Mart's anti-shoplifting cameras -- advising customers that information is being collected and stored. And there is no giveback: Wal-Mart doesn't use loyalty cards and rarely offers promotions based on past purchases.

It is aware, however, that shoppers are concerned about privacy. On its Web site, Wal-Mart posts a privacy policy that states: "We take reasonable steps to protect your personal information. We maintain reasonable physical, technical and procedural measures to limit access to personal information to authorized individuals with appropriate purposes."

Not everyone agrees. "People don't know that Wal-Mart is capturing information about who they are and what they bought, but they are also capable of capturing a huge amount of outside information about them that has nothing to do with their grocery purchases," said Katherine Albright, the founder and director of Caspian, a consumer advocacy group concerned with privacy issues.

"They can find out your mortgage amounts, your court dates, your driving record, your creditworthiness."

One source of information can be a credit card or a debit card, Albright said. Wal-Mart shoppers increasingly use the cards to pay for purchases, particularly in the better-heeled neighborhoods where the company has been building stores recently.

Wal-Mart uses its mountain of data to push for greater efficiency at all levels of its operations, from the front of the store, where products are stocked based on expected demand, to the back, where details about a manufacturer's punctuality, for example, are recorded for future use. The purpose is to protect Wal-Mart from a retailer's twin nightmares: too much inventory, or not enough.

Still, achieving sleeker operations is not the whole story. In many ways, data are used to forecast and drive Wal-Mart's business.

"We use it in real estate decisions, understanding what the draw is like and what the customers will be like," Dillman said.

Eventually, some experts say, Wal-Mart will use its technology to institute what is called scan-based trading, in which manufacturers own each product until it is sold.

"Wal-Mart will never take those products onto its books," said Bruce Hudson, a retail analyst at the Meta Group, an information technology consulting firm in Stamford, Connecticut.

"If you think of the impact of shedding US$50 billion of inventory, that is huge."

The impact will probably be felt by suppliers, he added, but none are likely to complain.

"You can see the pattern of Wal-Mart's mandates, and as Wal-Mart grows in power, it is getting more dictatorial," he said. "The suppliers shake their heads and say, `I don't want to go this way, but they are so big.' Wal-Mart lives in a world of supply and command, instead of a world of supply and demand."

Copyright © 1999-2004 The Taipei Times. All rights reserved.

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Wal-Mart's Data Obsession

Posted by timothy on                                     [back to top]
Sunday November 14, @03:58PM
from the what-do-you-want-today dept. g8oz writes

"The New York Times covers Wal-Mart's obsession with collecting sales data. Fun fact: 'Wal-Mart has 460 terabytes of data stored on Teradata mainframes, at its Bentonville headquarters. To put that in perspective, the Internet has less than half as much data, according to experts.' That much information results in some interesting data-mining. Did you know hurricanes increase strawberry Pop Tarts sales 7-fold?"

Wal-Mart's Next Victims

Penelope Patsuris,                   [back to top]
11.10.04, 6:00 AM ET

When Toys "R" Us said in August that stiff competition from mass merchant Wal-Mart Stores was making it consider exiting the toy business, the news struck fear in the hearts of retailers everywhere.

After all, Toys "R" Us (nyse: TOY - news - people ) pioneered the "category killer" concept that's now employed by big box specialty stores like Best Buy (nyse: BBY - news - people ), Home Depot (nyse: HD - news - people ) and Bed, Bath & Beyond (nasdaq: BBBY - news - people ). The notion of creating giant specialty stores that cater to a particular product segment has become a staple of the U.S. economy. But Wal-Mart (nyse: WMT - news - people ), the antithesis of a category killer with aisles stocked with a vast spectrum of products, is posing a dire threat to this way of business.

Wal-Mart had sales of $259 billion for fiscal 2004, ended Jan. 31, ranking it as the world's largest retailer. That sheer size has vaulted it to the number one spot in categories as disparate as food, apparel, jewelry and home furnishings. For fiscal 2005, Wal-Mart plans to add 310 new stores and 30 new Sam's Clubs, to its stable of 3,625 locations. Oppenheimer retail analyst Bernard Sosnick expects that by 2010, Wal-Mart will have 3,000 supercenters, up from 1,600 this year, and total company sales of half a trillion dollars.

That kind of growth will make Wal-Mart number one in plenty of other product categories soon enough, and it will put an even tighter squeeze on existing players in arenas that Wal-Mart already dominates, like apparel and food. With a lion like Wal-Mart on the loose, no store is ever safe, but here we've identified five categories that that look particularly vulnerable to its looming threat.

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Wal-Mart Discriminates with Liza Featherstone & Judy Gorman Sin

by Ken Nash & Mimi Rosenberg          [back to top]
Building Bridges Radio
09 Nov 2004  

Selling Women Short: The Landmark Battle for Workers Rights at Wal-Mart by Liza Featherstone Women workers at Wal-Mart stores across the country filed a class-action suit against the company for sex discrimination in promotions, pay and job assignments. Dukes v. Wal-Mart Stores is potentially the largest class-action suit in history, representing 1.6 million past and present women employees. Featherstone's interviews with the plaintiffs reveal an entrenched good ol' boy network at the company, where highly qualified women are routinely passed over for promotions that are given to men with less experience . Judy Gorman sings songs from her new CD - The Rising of Us All 18 songs peace & justice, work & women, struggle and celebration.

To download this 27:56 minute program: go to radio4all download page: http://www.radio4all.net/proginfo.php?id=10376

Building Bridges is regularly broadcast over WBAI, 99.5 FM in the N.Y.C Metropolitan area on Mondays from 7-8pm EST and streamed at http://www.2600.com/offthehook/hot2.ram

for more information email knash (at) igc.org See also: http://la.indymedia.org/uploads/walmart_-_walmart.mp3

Dispute over Wal-Mart-owned store near Mexican pyramids sparks scuffle

Monday, November 8, 2004             [back to top]
(AP)

Souvenir vendors scuffled with opponents of a Wal-Mart-owned discount near the ancient pyramids of Teotihuacan after the protesters blocked entrances to the ruins, a move vendors said cost them a day's sales, local media reported Monday.

The Wal-Mart-owned Bodega Aurrera store opened its doors Thursday less than a mile from the ruins without any violence, despite months of protests claiming the boxy outlet was an insult to Mexican culture.

Protesters, outnumbered by townspeople who support the store, did not attend the Thursday opening, but did block tourist entrances to the ruin site for several hours Sunday, the newspaper Reforma reported.

The scuffle occurred when about 120 vendors approached about 80 protesters, mainly university students, and demanded they allow tourists to enter. The protesters refused, and shoving and punching ensued. No serious injuries were reported.

Residents of Teotihuacan, a colonial-era town of about 60,000 built near the 2,000-year-old ruins, largely support the store because it offers jobs, as well as lower prices and more variety than local stores.

The bulk of the opponents are not from the town, a fact which further angered local residents, many of whom support themselves by selling clay and stone reproductions of ancient artifacts.

Protesters have said they do not object to having a discount chain in the area, but want it built farther from the spectacular ruins, located in a valley just north of Mexico City. Built by a little-known culture whose very name has been lost, the pyramids were abandoned hundreds of years before the Spaniards arrived.

Wal-Mart is now Mexico's biggest retailer after buying up numerous Mexican chains in recent years, including companies like Bodega Aurrera.

Despite protests starting in August, the store was rushed to completion after local authorities and the Paris-based International Council On Monuments and Sites, Icomos, said the building would do no harm.

Only minor vestiges of the ruins -- some pottery shards and a small stone platform -- were found under the site's parking lot. They were preserved.

While the store is barely visible from atop one of the two pyramids crowning the site, so are many other modern businesses and homes.

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China, not city for Wal-Mart

BY DANIEL DUNAIEF DAILY NEWS BUSINESS WRITER       [back to top]
Monday, November 8th, 2004

It's going to be even easier to find a Wal-Mart in China next year than it is in New York. That's because the world's biggest retailer already has 40 stores in China and plans to open another 15 there, while it will continue to be a no-show here in the city.

The planned expansion comes as the Chinese government has lifted restrictions on foreign-owned stores in the country, Bloomberg News reported.

New York City, meanwhile, isn't on the map yet for the Bentonville, Ark.-based Wal-Mart, which has stores in Beijing and Shenzhen.

"Before we come into the city, we need to look at [many] options," Mia Masten, a company spokeswoman said. "There are operational issues in terms of truck deliveries and multi-level stores, which are different than our normal format."

Indeed, Wal-Mart has discussed the possibility of opening urban stores that are 99,000 square feet, which is much smaller than the average for its franchise.

Still, that's about 50% more space than the typical Food Emporium or D'Agostino's uses, analysts said.

The world's largest retailer so far has stores in four cities, including Atlanta, Philadelphia, Tampa and Dallas. Within the next few months, Wal-Mart plans to add shopping centers in Hartford and Chicago.

This is a tiny fraction of the company's 3,200-store franchise.

Even in its early efforts, Wal-Mart had its share of challenges expanding into the cities.

Just a few months ago, Wal-Mart scrapped a plan to build a store on the South Side of Chicago, amid proposed changes in what retailers can sell and after outspoken opposition from Jesse Jackson about wages.

"The lead time on opening stores in urban locations will be longer," said Jeff Stinson, an analyst at FTN Midwest Research, because of delays in "dealing with city and town councils that more heavily scrutinize the sites."

Meanwhile, Wal-Mart has grown at a considerably faster rate in other countries, including Mexico, where it's the country's largest retailer.

Wal-Mart, though, could apply some of its global expertise to any urban expansion.

"From many places around the world, it's applying the best practices and in tight-fitting New York locations, if such should become available, there might be prototypes of what Wal-Mart could do," said Bernard Sosnick, an analyst at Oppenheimer & Co.

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Wal-Mart exploits workers, taxpayers

By Dave Zweifel, Madison.com           [back to top]
November 8, 2004

Folks who think they are saving oodles of money by shopping at Wal-Mart might do well to look a little further than the bottom line of their cash register receipt.

They also might look a little further than believing those fancy TV ads that the world's largest corporation is running these days, portraying itself as a warm and fuzzy employer whose workers get good health insurance.

The New York Times reported earlier this week that because of the giant corporation's miserly treatment of its workers, taxpayers - the very people who shop at its stores - are picking up more and more of the tab for those workers.

That's especially true of health insurance.

According to the Times' story, a survey by officials in the state of Georgia found that more than 10,000 children of Wal-Mart employees were in the state's health program for children, at an annual cost of $10 million to taxpayers. A North Carolina hospital reported that 31 percent of 1,900 patients who described themselves as Wal-Mart employees were on Medicaid, while an additional 16 percent had no insurance at all.

California officials claim that Wal-Mart employees without company insurance are costing taxpayers there an estimated $32 million a year.

And in the state of Washington, the insurance commissioner is pushing the legislature to enact a law that would require big companies to either furnish workers health insurance or at least pay into a state pool to help defray the costs of its uninsured employees.

Wal-Mart, of course, denies it, but the Times talked to employees who claim they were told to go to the government to get their children covered for health care.

According to the article, employees who are covered by a Wal-Mart insurance plan - and that's about half of its 1.2 million-person work force - must pay roughly a third of the monthly cost. That can be nearly $250 a month for a worker earning between $8 and $10 an hour, unaffordable to many of them.

By comparison, most large companies in Wisconsin pay at least 80 percent of the premium's cost, some as much as 90 percent or more.

Cutting corners on workers' pay and benefits is a major reason Wal-Mart is able to regularly undercut competitors, a secret to its huge success.

"Socially, we're engaged in a race to the bottom," the Times' quoted a chief executive of a small grocery chain that tries to compete with Wal-Mart's Supercenters, but pays for insurance coverage for about 95 percent of his employees. "Do we want to allow competition based on exploitation of the work force?"

Not to mention exploitation of the taxpayers.

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China trade union federation threatens action against Wal-Mart

Friday, November 5, 2004 at 03:30         [back to top]
JST - (Kyodo News)

BEIJING — A state-run federation of Chinese trade unions is threatening action against Wal-Mart Stores Inc, the world's biggest retailer, if it does not let thousands of workers here form labor unions, but the U.S.-based company says its China employees have never asked to unionize.

The All-China Federation of Trade Unions said via the official Xinhua News Agency on Oct 27 that it would "blacklist" and possibly sue Wal-Mart as well as other foreign companies that refuse employees' unionization efforts. Xinhua said all employees in China have the right to unionize despite an employer's opposition.

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Wal-Mart Sees Earnings Lifted by Tax Rate

Reuters                                      [back to top]
Thu Nov 4, 8:11 AM ET

NEW YORK  - Wal-Mart Stores Inc. (NYSE:WMT - news) on Thursday said third-quarter sales were weaker than it had planned but earnings will be at the high end of its estimated range because of improved margins and a better tax rate.

The world's biggest retailer said sales at its U.S. stores open at least a year rose 2.8 percent in October, toward the low end of its forecast of 2 percent to 4 percent.

The result was in line with a 2.8 percent estimate the Bentonville, Arkansas, company gave at its weekly sales update last Saturday when it reported good sales of bedding, children's and men's clothing and pet supplies.

But analysts welcomed Wal-Mart's announcement that it now expected earnings for the fiscal quarter ending Oct. 31 to come in at the high end of its forecast range of between 52 cents and 54 cents a share.

The company attributed this to gross margins in the quarter exceeding its forecasts and a change in its effective tax rate, which had resulted primarily from the retroactive renewal of work opportunity tax credit.

"This demonstrates their ability to show strong earnings growth despite modest sales increases," said Bill Dreher, an analyst with Deutsche bank Securities Inc..

"From that perspective it is encouraging for the fourth quarter and next year."

Analysts were on average expecting Wal-Mart to earn 52 cents per share in the third quarter, according to Reuters Estimates before the company's statement on Thursday. The retailer is due to post its quarterly results on Nov. 16.

Wal-Mart, which operates over 5,000 stores worldwide, has forecast full year 2004 earnings in a range of $2.36 to $2.40 per share with analysts on average expecting earnings of $2.38.

During October, Wal-Mart said net sales rose 10.4 percent over a year ago to $21.04 billion.

Same store sales rose 2.4 percent in the Wal-Mart stores division and increased 5.0 percent at Sam's Club warehouse stores, the company said.

International sales for the period were $4.31 billion, up 16.2 percent over the same period a year ago.

Wal-Mart said it expected same-store sales to rise between 2 percent and 4 percent in November. It has forecast sales for full year 2004 rising between 2 percent and 4 percent.

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Wal-Mart spurs debate

SEATTLE POST-INTELLIGENCER EDITORIAL BOARD         [back to top]
Tuesday, November 2, 2004

Wal-Mart's parsimony ultimately might spur a vigorous and long-overdue national conversation on how best to provide Americans with health care coverage.

The employer has become the default source for health care coverage. Ill-served are the unemployed, the self-employed and the underemployed.

Wal-Mart's legendary propensity to slip the bonds of employer-provided health care puts other companies at a competitive disadvantage and swells the rolls of state-subsidized health care. It has now sparked moves to force employers who don't provide employees coverage -- or pay them so poorly that they can't afford it -- to contribute to state costs, a scenario called "play or pay."

Such a measure is on the ballot in California today and similar legislation has been suggested here.

The New York Times reports that Wal-Mart has passed the health care cost buck to California taxpayers to the tune of $32 million a year.

Wal-Mart covers only 58 percent of eligible employees. Compare that with Issaquah-based competitor Costco, which covers 96 percent of its eligible employees.

The employer-provision model may well be an outmoded one, but pushing millions of employees onto the rolls of the state-subsidized, or the uninsured, is neither good policy nor ethical management.

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Wal-Mart Eyes New China Stores

Tue Nov 2, 2:25 AM ET          [back to top]
By John Ruwitch

BEIJING (Reuters) - The world's biggest retailer, Wal-Mart Stores Inc., said it planned at least 10 new stores in China next year, joining other foreign retail giants in taking advantage of new rules letting them move into smaller cities.

China's $240 billion retail market, dominated by local firms such as Beijing Wangfujing Group and Wumart Stores, is turning into a major battlefield as foreign firms ratchet up their investment.

Arkansas-based Wal-Mart will have 43 Chinese outlets by the end of this year, just a fraction of its more than 5,000 outlets worldwide, and it runs a distant second to France's Carrefour SA in terms of foreign retailers in China.

Next month, Beijing will drop geographic and joint venture requirements for foreign retailers, as well as minimum turnover and asset criteria, giving them greater access to China's retail arena.

Metro AG, the world's fourth-most valuable retailer, said on Monday it would break even in China for the first time next year as it, too, opens 10 more stores.

The German giant, which set up shop in China in 1996, the same year as Wal-Mart, expects to have 23 outlets across China by the end of the year.

Britain's Tesco Plc. joined the China fray in July after agreeing to buy half a local hypermart chain, while France's Casino has said it was eyeing the vast market.

Carrefour, which already operates 53 of its flagship hypermarts in China, said last week it was launching its Champion discount chain, hoping to run 10-15 outlets by 2005.

China's retail sales topped 2 trillion yuan ($242 billion) last year, though that is still well short of about $1.2 trillion in Japan, Asia's top retail market.

GOOD PROGRESS

"We really are very happy with the progress we have made in China over the last year," Wal-Mart China President Cassian Cheung said on Tuesday.

The firm, which opened its 40th store in China on Monday, plans to add about new 10 stores by the end of next year, about the same number as this year. "We don't think we will be less than that," Cheung said, adding it may be more.

Wal-Mart is looking at opportunities outside China's larger cities, but was unlikely to change its structure of partnering Chinese firms, executives said.

"Wal-Mart evolved by starting in smaller cities and moving into the larger cities. China's been a little bit of the reverse of that," Joe Hatfield, President and CEO of Wal-Mart Asia, told a news conference in Beijing.

"We visited many provincial cities over the last three to four months in preparation for approval from Beijing."

Lee Scott, Wal-Mart's chief executive, said he did not think the new rules freeing foreign firms from the joint venture structure would affect his company's business model.

"We do not see ourselves, and have no immediate plans, to move away from a partnership structure," he said.

But he shied away from directly addressing China's threat last week to blacklist foreign firms, such as Wal-Mart, if they did not set up trade unions at their China units.

"I can assure you that Wal-Mart, as we do with taxation, sanitation and a number of areas ... will always abide by the law in the countries that we are in," Scott said.

"It really isn't a position that is anti-union. It's just a position that has been focused on the associate and on the customer and it has worked out well for us."

Wal-Mart says it had invested 1.6 billion yuan ($193 million) in China.

Last year, it sourced $15 billion worth of goods in low-cost China, from bicycles to fish. Scott said Chinese products made up about 80 percent of imports sold by Wal-Mart at its more than 3,200 U.S. outlets.

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States and rivals attack Wal-Mart health policy

By Reed Abelson The New York Times          [back to top]
Tuesday, November 2, 2004

In the debate over what to do about the growing number of working people in the United States with little or no health insurance, no company may be taking more heat than the country's largest employer, Wal-Mart Stores. .

The company, despite its popularity with consumers, has grown accustomed to being accused of crushing Main Street merchants with its sprawling stores and low prices, and of driving down wages for workers across the retail industry. And more than a million former and current female Wal-Mart employees are part of a sex discrimination lawsuit that the company is fighting. .

Now, Wal-Mart finds itself under attack for what critics see as its miserly approach to employee health care, which they say is forcing too many of its workers and their families into state insurance programs or making them rely on charity care by hospitals. .

Wal-Mart vigorously defends its health care policies, saying it offers affordable coverage for all employees. The company says it has no way of knowing how many of its employees or their families are insured under state programs. .

The larger issue of whether companies can and should absorb the soaring cost of health care is a national issue, said Susan Chambers, the executive vice president who oversees benefits at Wal-Mart. "You can't solve it for the 1.2 million associates if you can't solve it for the country," she said. .

A survey by Georgia officials found that more than 10,000 children of Wal-Mart employees were on the state's health program for children at an annual cost of nearly $10 million to taxpayers. A North Carolina hospital found that 31 percent of 1,900 patients who described themselves as Wal-Mart employees were on Medicaid, while an additional 16 percent had no insurance at all. .

In California on Tuesday, voters will decide on a measure that would force big employers like Wal-Mart to either provide affordable health insurance to their workers or pay into a state insurance pool. Backers of this measure say Wal-Mart employees without company insurance cost state health care programs an estimated $32 million a year. .

In Washington State where the insurance commissioner is pushing the Legislature to adopt a law similar to the one on the California ballot, companies that struggle to compete with Wal-Mart while insuring most of their own workers have become openly critical. .

"Socially, we're engaged in a race to the bottom," said Craig Cole, chief executive of Brown & Cole Stores, a supermarket chain that employs about 2,000 workers in Washington and adjoining states and pays for insurance coverage for about 95 percent of its employees. "Do we want to allow competition based on exploitation of the work force?" .

Wal-Mart, which disputes the California figures and says it cannot verify the Georgia and North Carolina data, defends its health care policies. It cites internal surveys indicating that 90 percent of its employees have insurance, many through means other than Wal-Mart's coverage because they are senior citizens on Medicare, students covered by their parents' policies or employees with second jobs or working spouses. .

"'We are doing everything we can to take care of our associates and not shift costs," said Chambers, the executive vice president. .

The company has gone on its own offensive, saying last week that it was spending $500,000 to defeat the California measure, Proposition 72. The measure is opposed by many other businesses, particularly restaurants and retailers, and by Governor Arnold Schwarzenegger, who argues that it would impede the state's economic recovery and lead to a loss of jobs. .

Wal-Mart has also been running a television ad nationally that features a Wal-Mart worker whose company health insurance covered his toddler son's treatments for life-threatening liver disease. "Without Wal-Mart," the father says, "I don't know that he would have made it." .

But critics say that too many Wal-Mart workers and their families have no insurance, either because they are unable to meet the company's eligibility requirements or because they cannot afford monthly premiums as high as $264 a month for family coverage on an $8-an-hour cashier's wage. Wal-Mart says its employees make $10 an hour on average. .

Countering Wal-Mart's television ad, a California group supporting Proposition 72 has begun publicizing the case of a former Wal-Mart employee, Marco Guillen, who says he twice missed the company's annual enrollment deadline for health insurance. The first time, he said, was because he was confused about his eligibility. The second time, he said, was because he was in a coma after being in a car accident. His medical bills were about $1 million, he said, and were paid by Medi-Cal, the state version of Medicaid. .

Wal-Mart declined to discuss the specifics of the case, saying that doing so would violate Guillen's rights under the federal laws governing patient privacy. . The company says it spent about $1.3 billion of its $256 billion in revenue last year on employee health care to insure about 537,000 people, or about 45 percent of its work force. Wal-Mart says that about 23 percent of its employees are not eligible for coverage, but that it covers 58 percent of those who are. . That compares with an insured rate of 96 percent of eligible full-time or part-time employees of Costco Wholesale, the discount retailer that is Wal-Mart's closest competitor nationwide. .

Costco employees, most of whom are not represented by a union, become eligible for health insurance after three months working full time, or six months part time. At Wal-Mart, which has no union employees, many who work full time must wait six months to become eligible. Part-time workers are not eligible for at least two years. Because of turnover, some employees never work long enough to become eligible. .

If there is any place where Wal-Mart's labor costs find support, it is Wall Street, where Costco has taken a drubbing from analysts who say its labor costs are too high. Costco's pretax profit margin is only 2.7 percent of revenue, compared with 5.5 percent for Wal-Mart. .

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Wal-Mart, a discreet player in US presidential campaign

Mon Nov 1, 1:24 AM ET           [back to top]

WASHINGTON (AFP) - Favored by shoppers but criticised by organized labor, Wal-Mart -- the world's number-one retailer -- has been a discreet participant in the US presidential election campaign.

The company, which reported sales of 256 billion dollars last year, would be the 20th largest economy in the world if it were a country -- larger than Austria or Turkey.

It is the largest private US employer, with more than 1.2 million workers, many in the so-called "battleground" states seen as crucial to the success of President George W. Bush (news - web sites) or Democratic challenger John Kerry (news - web sites) in Tuesday's presidential election.

In 2002, Retail Forward predicted the company would double in size in five years.

More than two-thirds of its stores are in states that voted for Bush in 2000 and the "Wal-Mart" effect clearly leans in favor of the Republicans.

Like some other firms, the company has a political action committee (PAC) to collect donations from employees for campaign contributions.

Wal-Mart's committee was the second most important business PAC in the United States, with nearly 1.5 billion dollars in contributions, about 80 percent of which went to Republicans, according to the independent group Political Money Line.

Wal-Mart has much to gain by supporting candidates who would seek to extend free trade deals with countries like China, a major supplier for the low-cost chain.

Wal-Mart itself has become a political issue for people who blame the company for job and business losses in areas where its discount stores are located.

Vice President Dick Cheney (news - web sites) recently defended the company.

"This is one of our nation's great companies, and one of the most familiar names in all of America," he said.

"The story of Wal-Mart exemplifies some of the very best qualities in our country -- hard work, the spirit of enterprise, fair dealing, and integrity," Cheney told Wal-Mart employees in Bentonville, Arkansas, the company's headquarters.

However Wal-Mart has recently been accused of improper behavior with its workers by those concerned over the company's enormous power.

Over the summer, the company was charged with looking into the legal records of some applicants, and at the beginning of the year was caught locking night workers in certain stores.

At the end of last year, hundreds of illegal immigrants were discovered working at Wal-Mart stores, through subcontractors hired for cleaning duties.

"While charging low prices obviously has some consumer benefits, mounting evidence from across the country indicates that these benefits come at a steep price for American workers, US labor laws, and community living standards," Democratic Representative George Miller (news, bio, voting record) said in a report earlier this year.

"Wal-Mart's current behavior must not be allowed to set the standards for American labor practices."

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Wal-Mart automotive employees seek union certification at seven B.C. stores

Reuters                                 [back to top]
Mon Nov 1, 4:47 PM ET

VANCOUVER (CP) - The drive to unionize Wal-Mart stores in Canada has picked up a group of workers at the auto-service departments of seven British Columbia outlets of the world's largest retailer.

The United Food and Commercial Workers said Monday it has applied to represent the employees at Wal-Mart Tire & Lube Express in Terrace, Dawson Creek, Fort St. John, Quesnel, Kamloops, the Victoria suburb of Langford and Guildford Mall in Surrey.

The union said the application covers between 50 and 75 technicians, with current earnings ranging from minimum wage to about $13 an hour.

"These Wal-Mart employees have expressed real interest in joining our union, and were brave enough to sign union cards despite their employer's well-documented hostility towards unions," said Brooke Sundin, president of UFCW Canada Local 1518.

Sundin, whose union has 26,000 members in B.C. and 230,000 across Canada, expressed optimism that the provincial Labour Relations Board will quickly hold a certification vote.

The labour board last month dismissed a UFCW application to represent workers at the Terrace Wal-Mart, ruling that the union lacked sufficient support to warrant a vote.

Elsewhere in Canada, Wal-Mart is in negotiations with the UFCW at its first unionized store, in Jonquiere, Que., 250 kilometres north of Quebec City.

Workers at Wal-Marts in the Quebec communities of Longueuil and St-Hyacinthe have also filed for certification.

Wal-Mart, which entered Canada in 1994, has 230 Canadian outlets staffed by more than 60,000 "associates," part of a 1.5-million-member workforce at almost 5,000 stores in the United States and eight other countries.

Last year it earned a profit of more than $9 billion US on sales of $256.3 billion US.

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Wal-Mart workers seek union

Canadian Press        [back to top] 

VANCOUVER — The drive to unionize Wal-Mart stores in Canada has picked up a group of workers at the auto-service departments of seven British Columbia outlets of the world's largest retailer.

The United Food and Commercial Workers said Monday it has applied to represent the employees at Wal-Mart Tire & Lube Express in Terrace, Dawson Creek, Fort St. John, Quesnel, Kamloops, the Victoria suburb of Langford and Guildford Mall in Surrey.

“These Wal-Mart employees have expressed real interest in joining our union, and were brave enough to sign union cards despite their employer's well-documented hostility towards unions,” said Brooke Sundin, president of UFCW Canada Local 1518.

Mr. Sundin, whose union has 26,000 members in B.C. and 230,000 across Canada, expressed optimism that the provincial Labour Relations Board will quickly hold a certification vote.

The labour board last month dismissed a UFCW application to represent workers at the Terrace Wal-Mart, ruling that the union lacked sufficient support to warrant a vote.

Elsewhere in Canada, Wal-Mart is in negotiations with the UFCW at its first unionized store, in Jonquiere, Que., 250 kilometres north of Quebec City.

Workers at Wal-Marts in the Quebec communities of Longueuil and St-Hyacinthe have also filed for certification.

Wal-Mart, which entered Canada in 1994, has 230 Canadian outlets staffed by more than 60,000 “associates.”

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Wal-Mart Workers in British Columbia Want to Unionize (Update3)

Nov. 1                                                         [back to top]
by Frederic Tomesco (Bloomberg)

Wal-Mart Stores Inc. workers at seven tire centers in British Columbia applied to join the United Food and Commercial Workers, expanding efforts by Canadian unions to make inroads at the world's largest retailer.

The employees work at Wal-Mart Tire & Lube Express departments at stores in Surrey, Terrace, Dawson Creek, Fort St. John, Quesnel, Kamloops and Langford.

Between 37 and 40 people applied to join the union, said Andrew Pelletier, a spokesman for Wal-Mart's Canadian unit. Union spokesman Tom Cameron-Fawkes said the figure is ``somewhere between'' 50 and 75. A Wal-Mart tire center typically employs five to 10 people, compared with about 200 people for an entire store, Pelletier said.

The union has said it's targeting Bentonville, Arkansas- based Wal-Mart because it's concerned the company's expansion in Canada will put pressure on local rivals to lower wages. The retailer operates 234 Wal-Mart and six Sam's Club stores across the country, including 24 in British Columbia, where Wal-Mart employs more than 5,000.

Stricter Rules

Allowing unions in its stores could hamper Wal-Mart's ability to offer everyday low prices, said investors such as Patricia Edwards at Wentworth, Hauser and Violich Investment Counsel in Seattle.

``It will push costs up if they have to pay higher wages,'' said Edwards, who helps manage $5.3 billion in assets, including 502,000 Wal-Mart shares. ``Plus, they will face stricter workplace rules.''

Wal-Mart plans to ask the British Columbia Labour Relations Board to dismiss the application. Last month, the board rejected an application by the UFCW to unionize Wal-Mart workers at its Terrace store, citing lack of sufficient employee support.

``We think it is wrong for the union to try to carve out a very small group of people and we will be challenging the application,'' Pelletier said. ``It's the latest attempt in a very aggressive campaign.''

Cameron-Fawkes said the union is ``under no illusions. We expect Wal-Mart to do everything they can possibly think of to try to stop their stores from being organized.''

UFCW Local 1518 made the application to the labor board after a majority of the employees at each of the seven Tire & Lube Express departments signed membership cards with the union, the union said.

Unions elsewhere in Canada are also trying to get Wal-Mart workers to organize.

In Quebec, a union local at a store in Jonquiere was granted certification in August and both parties are due to meet for talks later this month to negotiate an initial labor agreement. Workers at a two other Wal-Mart stores in Quebec have filed applications to form a union.

To contact the reporter for this story: Frederic Tomesco in Montreal at tomesco@bloomberg.net.

To contact the editor responsible for this story: Erik Schatzker at eschatzker@bloomberg.net.

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How women pay for Wal-Mart's success

By Naomi Aoki, Globe Staff            [back to top]
October 31, 2004

Like McDonald's in the food industry, Wal-Mart sets the rules of retail.

The big-box chain is the world's largest retailer, the number one grocery store, the number one toy seller, the number one sporting-goods chain. As Wal-Mart expands its reach, it changes the landscape of one industry after another, undercutting rivals and forcing them to lower prices, declare bankruptcy, or shift their business focus to survive.

In her book, ''Selling Women Short: The Landmark Battle for Workers' Rights at Wal-Mart," Liza Featherstone asks what price America pays for Wal-Mart's success. Her answer is nothing less than a condemnation of the company as a titan of corporate greed and bastion for good ol' boys.

''The working poor are even more likely than other Americans to shop at Wal-Mart, not necessarily because they find it a shopper's paradise, though of course some do, but because they need discounts, or live in remote areas with few other options. Through shoppers as well as associates, Wal-Mart is making billions from female poverty," writes Featherstone, a freelance journalist whose work has appeared in publications including The New York Times and Rolling Stone magazine.

Featherstone paints a grim picture through stories of women suing Wal-Mart Stores Inc. for depriving them of pay, promotions, and job assignments because of their sex.

Still being litigated, the class-action Dukes v. Wal-Mart represents more than 1.6 million women. Featherstone builds a compelling case through interviews, legal depositions, and court records. But in the end, it's unsatisfying.

Featherstone repeatedly asserts the suit's potential to change workers' rights not only at Wal-Mart, but throughout retail. Yet she offers little insight into what change would look like. Unlike Wal-Mart, Target Corp. pays women comparable to their male counterparts and promotes women in greater numbers. But ''in many markets," Featherstone writes, ''its wages are as low as Wal-Mart."

So even if the women suing Wal-Mart were to win, it remains unclear that the broader social problems Featherstone spends much of the book exposing would be addressed. But if wages throughout the sector are low, what would Wal-Mart's incentive be to increase its wages across the board and improve healthcare benefits?

As Featherstone herself so poignantly points out, average Wal-Mart shoppers can't afford the luxury of boycotting the store's ''Always Low Prices" regardless of what they think of its employment practices. She writes that class-action suits often fail to change the status quo, and describes the ardor with which Wal-Mart fights unions.

Nonetheless, she proposes that a better future depends on the power of unions to protect workers and on public policy that ''challenges corporate greed, and takes the side of ordinary people."

Perhaps the reason her proposition seems unsatisfying is that in the age of Wal-Mart, it just doesn't seem realistic.

Naomi Aoki can be reached at naoki@globe.com.

© Copyright 2004 The New York Times Company

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Study: Wal-Mart inhibits antipoverty gains

Big News Network.com                     [back to top]
Friday 29th October, 2004

Counties that gained a Wal-Mart store during the 1990s experienced smaller reductions in family poverty rates, U.S. researchers have found.

Penn State University researchers said during the economically strong 1990s, counties not gaining a Wal-Mart store did better at fighting poverty.

The study examined the effect of the retailing chain on county poverty rates. It found that, even during the economic upswing of the 1990s, counties that added a Wal-Mart store during the decade saw their poverty rate decline by a smaller amount than did counties not adding a store. Specifically, the ability of counties that gained a Wal-Mart to decrease their poverty rate during the decade was reduced by about 8 percent relative to those counties that did not gain a new store, the researchers said.

One possible explanation is a county's poverty rates may rise because the retail chain pays its workers relatively low wages. This especially would be the case if these workers had previously earned higher wages in retail or other establishments that were closed in the face of competition from Wal-Mart, the researchers said.

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Calif. lawmakers to probe Wal-Mart, health-care

Thu Oct 28, 2004 09:31 PM ET               [back to top]

SAN FRANCISCO, Oct 28 (Reuters) - California lawmakers said on Thursday they would hold hearings to investigate claims that Wal-Mart Stores Inc. (WMT.N: Quote, Profile, Research) burdens the state with an unfair portion of the retailer's employee health-care costs. Democratic members of the Senate Budget Committee also questioned whether California pension fund Calpers should consider selling off its estimated $1 billion investment in Wal-Mart stock because of the company's policies.

"The Senate Budget Committee will, as part of the budget process next year, investigate the extent that Wal-Mart does not provide coverage, and the extent that California taxpayers then pay for care for Wal-Mart's workers," said Senate Budget Committee chairman Wes Chesbro.

"We need to figure out if Wal-Mart is not paying their fair share into the health care system on which we all rely."

Critics charge Wal-Mart's health plan is inadequate, forcing workers to use state-funded health programs to take up the slack, such as using emergency rooms at public hospitals rather than visiting personal physicians.

The retailing giant, which could not immediately be reached for comment, has come under fire in California where it has faced discrimination cases, charges of anti-union practices and opposition to its plan for expansion in the nation's most populous state.

In response, the Bentonville, Arkansas-based company has undertaken a broad advertising and outreach campaign to counter protests over its growing presence in California.

The decision to hold hearings follows Wal-Mart's aggressive campaign against a measure on the Nov. 2 ballot that would require larger employers in California to pay for health care coverage for workers.

On Tuesday, the world's biggest retailer said it would spend $500,000 to defeat Proposition 72 because supporters of the measure featured the company in a television ad claiming taxpayers paid millions more because Wal-Mart "won't provide affordable health coverage."

Walmart spokeswoman Cynthia Lin in a statement on Thursday said the advertisements claiming the company did not provide affordable health care were "outright lies" and that workers could get quality plans.

Other Democratic lawmakers, who control the state legislature, said any investigation should look into whether the California Public Employees' Retirement System, or Calpers, should sell-off its Wal-Mart stock.

The nation's No. 1 pension fund, which owns an estimated 18.8 million shares of Wal-Mart stock worth more than $1 billion, supports Proposition 72.

© Copyright Reuters 2004. All rights reserved.

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Wal-Mart political spending jumps in Calif.

By Tom Chorneau, Associated Press Writer      [back to top]
October 27, 2004

SACRAMENTO, Calif. --After years of waging its political wars almost exclusively on the local level, Wal-Mart Stores Inc. is spending aggressively this election in support of favored statewide candidates and ballot measures -- including donations to Gov. Arnold Schwarzenegger and the state Republican Party.

The world's largest corporation, which once had a tradition of trying to stay out of politics, has given more than $2.4 million on California races so far this year -- well beyond any previous sum the company has spent here in one year.

And Tuesday, the Bentonville, Ark.-based company announced it would donate an additional $500,000 to the opponents of Proposition 72, a measure that will require employers to provide basic health insurance to workers.

Wal-Mart representatives said the escalation of political activity in California is a direct result of mounting attacks the company faces from labor unions and other critics.

"Many of our opponents are trying to use the political system to stop our growth," said Bob McAdam, Wal-Mart's vice president of corporate affairs. "And we are not going to sit back and take it without responding. We will respond."

Indeed, after spending more than $1 million this year on unsuccessful efforts to gain voter approval for superstore projects in the Los Angeles and San Diego areas, the company has given the California Republican Party $160,000 to use in legislative races and close to another $70,000 to support candidates and measures in Lodi and Antioch where Wal-Mart has proposed centers. They have donated another $10,000 to governor's California Recovery Team, which Schwarzenegger can use to fight or support any ballot measure he chooses, and another $30,000 to a general purpose campaign set up by major employers that is supporting GOP candidates statewide.

The contributions this year far exceeds the $1 million spent in 2003 and more than double the previous high of $1.2 million four years ago.

The big Wal-Mart check to the opponents of Proposition 72 came just one day after supporters of the measure began running TV ads citing a study from a University of California research group with ties to the labor movement that estimates California taxpayers spend $32 million a year providing health care to Wal-Mart workers.

Among those backing Proposition 72 and the critical Wal-Mart health care ads, is the California Medical Association, whose chief executive Dr. Jack Lewin has said that Wal-Mart was singled out because it is the state's most prominent low-wage, low-benefit employer.

Union officials say California has become a battleground for the company.

The latest fight is in the Bay Area town of Antioch where the retailer is backing three council candidates that are sympathetic to the company's plan for a superstore in that community.

Critics contend the company's deep pockets pose a severe threat to the political balance of power.

"They are so large and have so much money that they can overwhelm the traditional democratic process," said Greg Denier, spokesman for the United Food and Commercial Workers International Union. "This company isn't just the largest employer in the U.S., they are the largest employer in the majority of the states. I don't think people have ever confronted something like Wal-Mart before."

© Copyright 2004 The New York Times Company

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A Rarity for Wal-Mart: Talking to a Union

By IAN AUSTEN                   [back to top]
October 26, 2004  

OTTAWA, Oct. 22 - On Tuesday, a group of employees and managers from Wal-Mart's Canadian subsidiary will hold an unusual meeting, at least by the standards of the company. The gathering in Jonquière, Quebec, will be the start of talks that the retail workers' union hopes will produce the first collective agreement in North America covering Wal-Mart workers.

The opening of negotiations will be the latest step in a two-year effort by the union, the United Food and Commercial Workers Canada, to organize Wal-Mart's 241 stores in Canada. The Canadian arm of the international union has found more success with Wal-Mart than its United States counterpart, thanks in part to differences in labor laws. Six applications for union certification at Wal-Mart stores are pending or under appeal in three Canadian provinces.

But the union's success so far in Jonquière - the store's union local was certified by the provincial labor board in August - offers no guarantees about the outcome. Earlier efforts by the Canadian branch of the United Steelworkers of America at a Wal-Mart store just across the border from Detroit, in Windsor, Ontario, brought certification, but the union failed to sign a contract before the local collapsed.

And Wal-Mart Canada, which has an undisguised dislike for unions, is already saying the Jonquière outlet is a money-losing underperformer, raising worker concerns that it will be closed before any contract is signed.

"It's very clear that they don't want a union," said Louis Bolduc, the union's Quebec coordinator. "If we have to start a fight between them and every union in Quebec, we will."

Wal-Mart first came to Canada 10 years ago, when it purchased 122 discount department stores owned by Woolco Canada, which is now defunct. Among the 22 stores it did not buy were 10 with unionized employees. Andrew Pelletier, a spokesman for Wal-Mart Canada, which is based in the Toronto suburb of Mississauga, Ontario, said the store selection was "generally performance based" and not focused on union status.

Despite the steelworkers' unhappy experience in Windsor in the 1990's, Michael J. Fraser, the Canadian national director of the food and commercial workers union, said his organization decided to make a target of Wal-Mart when its Canadian operation began expanding into the grocery business. Most of the union's members work for Canada's large grocery chains.

"It was partly a defensive thing," Mr. Fraser said. "Our concern was that when they started opening large retail food stores that paid lower wages and offered lower benefits, that would have an impact on all our members in Canada."

The union's main pitch to Wal-Mart workers was a promise of improved wages and benefits. Mr. Fraser said that Wal-Mart generally pays 8 to 8.50 Canadian dollars an hour, or $6.50 to $6.90. His union's members earn about 12 to 14 Canadian dollars, or $9.75 to $11.35 and, in some cases, up to 24 Canadian dollars, or $19.50, an hour. When benefits are considered, Mr. Fraser estimated, the gap in earnings between his members and Wal-Mart workers is 10 to 20 Canadian dollars an hour.

In addition, Mr. Fraser contended that the union could give Wal-Mart employees a way to settle disagreements and disputes with the company fairly - something, he said, that they currently lack.

"For people who work at Wal-Mart, you do what you're told, when you're told, or you're out of there," Mr. Fraser said.

Mr. Pelletier, of Wal-Mart, rejected the union's charge that the company was a substandard, low-paying employer. He confirmed that wages start at about $8.40 an hour, but said that they could rise to $15. On top of that, Mr. Pelletier said in an e-mail message, profit sharing "can add hundreds (and even thousands) of dollars in bonus payments" depending on the performance of an employee's store.

When Wal-Mart opens a new store in Canada, Mr. Pelletier noted, it typically receives 10 applications for every job. Wal-Mart was also ranked 14th on a list of Canada's 50 best employers compiled by Hewitt Associates, a human resources consulting firm, and published by The Globe and Mail newspaper in Toronto.

"Are we a perfect employer? No, of course not," Mr. Pelletier said. "Our strategy is to be the best employer possible."

He added: "The debate seems to have become union and nonunion. It should be: Are you a good employer or not a good employer?"

While the union has been attempting to organize Wal-Mart stores throughout Canada, Mr. Fraser said that its efforts had been concentrated on the provinces of Saskatchewan and Quebec. Labor law in Canada is an issue handled by the provinces, except for a few industries like airlines and railways.

"Quebec and Saskatchewan, in my view, have two of the best sets of labor law in Canada," Mr. Fraser said. For his part, Mr. Pelletier called the two provinces' legislation "almost antiemployer."

Despite that, the union's efforts have not always been successful. Its applications at two Saskatchewan stores are being challenged not only by Wal-Mart, but by a lawyer who said he was being paid by employees who said they were coerced into signing union cards. The union has applied to represent workers in a third Saskatchewan city, Moose Jaw, even though it has yet to sign a single member there. Mr. Fraser said it was arguing that it had successor rights because the city formerly had a unionized Woolco store. An effort in Manitoba failed in two votes and Jonquière failed its first vote.

Mr. Fraser contended that those defeats were mainly the result of unfair labor tactics by Wal-Mart, like reducing work hours for union sympathizers, and fear among workers in areas with limited job opportunities. Mr. Pelletier argued that the union defeats were a clear sign that workers like things as they are.

Earlier this month, Wal-Mart sent out a news release that, among other things, suggested that the Jonquière store was in financial distress. Mr. Pelletier said that the store had lost money since it opened three years ago and that its employees had been regularly briefed about its financial position.

"Things have gotten worse in recent months," Mr. Pelletier said of Jonquière's performance, though he declined to offer specific figures for it or the two other Wal-Mart outlets in the Saguenay, a region north of the city of Quebec.

He attributed the poor performance to divisions among the staff created by the union certification. In particular, he blamed the exclusion from the bargaining unit of several workers, mainly supervisors, office workers and security guards, that the labor board found to be in the categories of managers or excluded employees.

"We're going into the process and the talks with the union in good faith," he said. "We're trying to be cautiously optimistic about the situation with respect to Jonquière.''

While Wal-Mart has never closed a store in Canada, Mr. Pelletier said, Jonquière's survival depends on better financial performance.

"We have been struggling with that store for many months now and we hope we can salvage it," Mr. Pelletier said.

To Mr. Bolduc, the union's Quebec director, suggestions that Jonquière is unprofitable and may be closed are just a tactic to frighten employees at other Wal-Mart stores away from the union.

"It's the first time that Wal-Mart has said that one of its stores in Canada is not commercially viable," Mr. Bolduc said. "Yet the parking lot is always full. If it's not profitable, maybe the prices are too low."

But hanging over Jonquière is another instance of a large corporation based in the United States closing an outlet in Quebec after it was unionized. In an earlier episode, the Teamsters organized workers at a downtown Montreal franchise of McDonald's Restaurants of Canada Ltd. Shortly after contract talks began, the fast-food outlet shut.

Gilles Trudeau, a professor of labor law at the Université de Montréal, said that a Supreme Court of Canada ruling since then on an unrelated case has made it clear that Wal-Mart or any other employer can shut a recently unionized factory or store without fear of legal repercussions.

"If Wal-Mart really decides to close in Jonquière, it's going to be really hard for the union and the workers," Professor Trudeau said. "There's no recourse."

Copyright 2004 The New York Times Company 

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Windsor debates Wal-Mart

The Denver Business Journal                   [back to top]
October 25, 2004

The Windsor town board will hold a public hearing at 7 p.m. Monday to get input from citizens about a proposed Wal-Mart store on Main Street.

The board also will vote that night on whether or not to rezone 23 acres to accommodate the discount store. Windsor's planning board already unanimously voted against changing the zoning designation from multifamily residential to commercial.

Bentonville, Ark.-based Wal-Mart Stores Inc. (NYSE: WMT) wants to build a 186,000-square-foot Wal-Mart Supercenter off State Highway 392 between 16th and 17th streets. The site is just west of a King Soopers grocery store, across the street from a Safeway grocery and near Grandview Elementary School.

A grassroots group called Stop Windsor Wal-Mart opposes the new Wal-Mart, saying its site is "the worst possible location for a Wal-Mart in our town" because of its proximity to competing grocery stores and the school.

The Wal-Mart Supercenter would carry groceries. Wal-Mart became this country's biggest grocer in 2002, with $53 billion in grocery sales that year, finally surpassing Kroger Co. of Cincinnati.

The group also contends smaller nearby businesses would be hurt by the Wal-Mart, and that there already are three Supercenters "within 15 minutes" of Windsor.

Another neighborhood group called Windsor Against the Wall also is fighting the store.

The planning commission decided against rezoning the site in August, saying the safety of school children outweighs tax revenue the Wal-Mart would generate. In recent newspaper ads, Wal-Mart said the store would bring $1.5 million in annual sales tax revenue to Windsor.

The city council in nearby Longmont recently OK'd a new Wal-Mart for that community, after the planning commission there recommended against it.

Public debate at the Oct. 25 meeting in Windsor will be cut off at 10 p.m.

© 2004 American City Business Journals Inc.

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Anti-Wal-Mart protesters climb pyramid

October 24, 2004        [back to top]

TEOTIHUACAN, Mexico (AP) - More than 300 demonstrators streamed into the ancient ruins of Teotihuacan on Sunday and climbed part way up the towering Pyramid of the Sun, the latest in a string of protests against the construction of a Wal-Mart-owned store nearby.

Lugging huge banners and waving signs decrying Wal-Mart and other international corporations, protesters who had chosen to stay out of the national park during previous demonstrations surprised tourists and visitors by setting up near the ruins' tallest pyramid.

Many on-hand wore traditional Azteca headdresses and danced to a steady drum beat. Others handed out fliers, sang songs, chanted, or hung banners from trees, brush and smaller ruin structures.

After about 30 minutes of protesting on the ground, a steady stream of demonstrators climbed the Sun Pyramid's stone steps and performed a traditional ceremony.

The 2,000-year-old ruins are 40 kilometres northeast of Mexico City.

Construction of the store - Bodega Aurrera, a Mexican subsidiary of Wal-Mart Stores Inc. - is nearing completion, and those opposed to it have promised to organize larger demonstrations as its opening date approaches.

The store will be 1.5 kilometres from the national park, and earlier this month the Paris-based International Council On Monuments and Sites said the store wouldn't harm the ruins.

Many local residents support the idea of a discount-retailer in the area, saying it will create jobs and bring lower prices.

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Wal-Mart charged over Mexico site Leftist leader seeks criminal counts against retailer for building store near ancient pyramids

October 20, 2004: 6:27 AM EDT             [back to top]

MEXICO CITY (Reuters) - A Mexican leftist leader filed criminal charges against Wal-Mart and local and federal officials over construction of a huge discount store in the shadow of ancient pyramids outside Mexico City.

Gerardo Fernandez, a national director of one of Mexico's biggest opposition parties -- the Party of the Democratic Revolution -- filed charges Tuesday with the federal Attorney General's office to block the Wal-Mart owned store at the Teotihuacan archeological ruins.

Wal-Mart damaged archeological relics during construction, a crime subject to imprisonment, Fernandez said in his complaint, a copy of which was obtained by Reuters. The company had no immediate comment.

Fernandez also charged that federal, state and local officials broke the law in fast-tracking the project, showing "mercantile and irresponsible conduct."

Construction of the Bodega Aurrera, a unit of global retailer Wal-Mart Stores Inc. (Research) is nearly complete. The big-box style discount store is scheduled to open by December about half a mile from a tourist park housing the 2,000-year-old ruins on a United Nations World Heritage Site.

The project has fueled a growing national debate that pits notions of Mexican identity against global interests.

Many residents and local authorities want the store for the low prices and jobs it will bring. And Wal-Mart calls it an investment in the poor community.

Artists battle project But some local opponents, along with leading Mexican artists and writers, say the outpost of U.S. consumer culture will mar the ruins, kill small enterprise and change the local way of life.

"Teotihuacan is for Mexicans our greatest cultural heritage, an expression of our history and our identity as a people and nation," 63 writers, painters and other cultural figures said in a letter to President Vicente Fox last week.

Fernandez called the store "an insult."

Their fight echoes opposition to Wal-Mart in the United States, where activists have fought, sometimes successfully, to block construction by the world's biggest retailer.

In his complaint, Fernandez said national anthropology institute INAH should have stopped construction after a small altar was unearthed at the site, although preliminary excavations showed no evidence of valuable relics there.

INAH has said the altar will be preserved in the store parking lot, and that the store poses no threat to the ruins. The Paris-based International Council on Monuments and Sites and UNESCO have also signed off on the project.

No one is certain who founded the ancient seat of power and then abandoned it around A.D. 600. The Aztecs later came upon it and named it Teotihuacan (The Place Where Men Become Gods).

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Wal-Mart finds a friend in Stockton

Published: Tuesday, October 19th, 2004                    [back to top]
By CHRIS TOGNERI BEE STAFF WRITER

Northern California's first Wal-Mart Supercenter opens Wednesday in Stockton, with company officials expecting 2,000 eager customers at the opening ceremony on East Hammer Lane.

One person who will not be there, however, is Turlock Mayor Curt Andre.

'Well, I'll say this,' Andre said. 'They haven't invited me.'

Turlock city leaders grabbed national headlines in January when the council voted to limit the size of a store to 100,000 square feet when at least 5 percent of its space is devoted to groceries and other nontaxable goods.

Proponents of the ban said this type of store, including a proposed 225,000-square-foot Wal-Mart Supercenter near a smaller, existing Wal-Mart on Fulkerth Road, would cause traffic congestion and could force neighborhood supermarkets to close.

The ordinance did not mention Wal-Mart, but Wal-Mart sued the city in February, seeking to overturn the ban.

With the Stockton store's opening just a day away, Andre said Turlock had no 'quarrel' with Wal-Mart specifically, but that it would not allow any large store to negatively impact traffic.

'Our first concern is that we not deliberately allow traffic congestion worse than Pelandale (Avenue in Modesto) to develop here in Turlock,' he said. 'I don't want to be mayor when people are sitting in two straight miles of traffic wondering who let this happen.'

City leaders and residents in other San Joaquin Valley towns agreed.

Emily Bruce, chairwoman of Stockton's planning commission, said she is 'horrified' that the city allowed the supercenter to be built.

'I refuse to go,' she said of the opening ceremony. 'How come no one said this is not a good thing? Everyone (in city government) sort of lined up and said, 'OK, whatever you want.''

Bruce said she opposes supercenters because they create unfair competition for smaller businesses, especially in the traditional downtown core.

'Historically, there are very few places in California where the downtowns haven't died,' she said. 'Lodi is one, but that's because they've never put up a mall. Stockton built a mall in the '70s, and of course the downtown started to die because people wouldn't go there anymore they'd go to the mall.

'And now almost 40 years later here we are trying to revitalize our downtown economically,' Bruce said. 'And then this happens. All the mom-and-pop stores wither up and die.'

Opposition to Wal-Mart is also mounting in Lodi, where voters will decide whether to approve an anti-supercenter measure on Nov. 2. Measure R would restrict retailers from building stores that exceed 125,000 square feet, unless voters approve a specific store.

Betsy Fiske, chair of the Small City Preservation Campaign Committee in Lodi, is leading the charge to keep supercenters out of her city.

'Disgust,' Fiske said, referring to her feelings on the opening of the Stockton supercenter. 'Do you know how big this sucker's going to be?'

Answer: 207,000 square feet.

Wal-Mart has a smaller store in Lodi, and has proposed a 227,000-square-foot supercenter on Lower Sacramento Road.

Fiske said such a supercenter would diminish the city's 'small-town quality of life.'

'This is a small city, and that's a nice feeling,' she said. 'That's why a lot of people move here.'

Furthermore, a supercenter would 'draw customers away from our downtown businesses,' she said. 'This is not the answer.'

Candidates for city council in Oakdale have debated the merits of enacting a supercenter ban.

But not everyone thinks Wal-Mart should be kept out.

Lodi Mayor Larry Hansen said he supports the proposed Wal-Mart supercenter in his town. Banning them would be bad for business and city finances, he said.

'I'm opposed to (Measure R) because of the loss of tax revenue, and I think it's very bad for business,' he said. 'I don't want to see the sales tax go to Stockton or the county, or even Galt. It (also) sends a very poor message to our future businesses. No one's going to want to get voter approval just to build a store they could build anywhere else.'

Wal-Mart officials also defended their supercenters. The new Stockton store is across the street from a smaller Wal-Mart that opened in 1990, said Cynthia Lin of Wal-Mart. Since plans were announced for the larger store, she said, customers have been 'literally every day asking when the supercenter across the street would be open,' she said.

'In Stockton, Wal-Mart has been a part of the community for over a decade,' Lin said. 'It's now evolved to a supercenter format, and it's something the customers have been looking forward to.'

Indeed, there was little resistance to the supercenter in Stockton, city and Wal-Mart officials agreed.

'I think competition is good in the long run,' said Christopher Kontos, the Stockton planning commission's vice-chairman. 'I can't speak for everybody, but it passed. The plans went through.'

'The mayor loves us, the chamber loves us,' said Stephan Gordon, the store manager of the Stockton supercenter. 'Stockton wants to grow. You just drive around the neighborhood and there's a million houses going up here.'

Gordon said he does not understand the resistance to supercenters in Turlock and Lodi.

'I don't know anything about Lodi I'm from Texas,' he said. 'Maybe they don't want to grow. (But) I don't understand why in the world some town wouldn't want to grow.'

Lin said supercenters are often 'misunderstood' by locals 'fearful of the unknown.'

'But what we've seen is that once we come in, customers really embrace Wal-Mart,' Lin said. 'Opposition is often driven by special interest groups, like union leaders and even our competitors. But they do not speak for the majority of people.'

In Lodi, however, Fiske said she would continue to fight Wal-Mart.

'A supercenter would make sense, maybe, if we were living in Kansas and you had snow and ice on the road and you wanted to get your shopping all done at one place,' she said. 'But we've got lots of choices here already. And they're not even bringing in anything new. We already have a Wal-Mart.'

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This article is protected by copyright and may not be printed or distributed for anything except personal use.

Companies, People, Ideas Playing Hardball With Wal-Mart

George Stalk, Rob Lachenauer,                      [back to top]
10.18.04

Sell to the world's largest retailer? It's a question to test the mettle of suppliers. The borg is a character in the television show Star Trek: The Next Generation, an alien life form that is part human and part machine. A network known as "the collective" links its life forms to one another. The Borg regularly attacks alien cultures and absorbs them into the collective, saying, "Resistance is futile. You will be assimilated." The Borg is unstoppable. The Borg plays hardball.

Wal-Mart is the Borg of business today, the largest retailer on the planet. It is more than three times larger, when measured in sales, than the next-largest retailer, Carrefour. (Carrefour has more stores.) Wal-Mart is the largest, or among the top three largest, sellers of many categories of goods, including groceries, family clothing, toys, personal care products, home electronics, magazines and others. Wal-Mart continues to push into new categories with catastrophic consequences to traditional competitors. Its cost position is so strong that its competitors' attempts to match it on "everyday low prices" end in failure. As one of our Boston Consulting Group colleagues observed, "The world has never known a company with such ambition, capability and momentum." Wal-Mart currently is the world's quintessential hardball player.

Wal-Mart presents a dilemma to its suppliers. It is the most profitable customer for many suppliers on an absolute basis and often on the basis of percentage. It helps everyone strip out costs from the supply chain. Although it keeps a lot of the savings for itself, it also shares some of them with its suppliers. So suppliers dearly want to keep their Wal-Mart business.

However, Wal-Mart has another agenda that is not so beneficial to its suppliers. It wants to stock your brand to build traffic to its stores, but it really wants the consumer to buy Wal-Mart's private-label products once they get there, because they are far more profitable for the retailer. The fastest-growing apparel brand? Wal-Mart's Faded Glory--$10 for a pair of jeans, some of which are sourced from Mexico, the same country that supplies Wrangler jeans that sell for $14.

Another big Wal-Mart threat, as Rubbermaid painfully learned some years ago, is that when it represents such a large percentage of your business, it can hurt you badly if it dumps you. When Rubbermaid could not, or would not, rationalize its delivery system to consolidate shipments from different factories, Wal-Mart took simplification into its own hands. It drastically reduced the number of Rubbermaid items it would stock, a hardball move that significantly affected Rubbermaid's total sales volume. (Today Wal-Mart accounts for some 25% of P&G's domestic business.) So, to avoid being Wal-Marted, make sure you balance your portfolio by selling through other channels and into many markets.

But there are chinks in the monolith's armor.

Customers are forced into a compromise when they shop at Wal-Mart. They usually have to travel a long distance to get to a store. They have to park in a large, crowded lot. They must roam through acres of retail space, through aisles designed to take them ever deeper into the store. Sales help is scarce and not always knowledgeable. The prices are dramatically low, but the experience is mediocre at best and unpleasant at worst. Some customers (although probably fewer than the media would like you to believe) refuse to shop at Wal-Mart because they don't enjoy the experience. Others refuse to shop there because they are opposed to Wal-Mart's effect on communities or dislike their labor practices.

Some suppliers don't like Wal-Mart, either, and won't sell to them. They believe that Wal-Mart stifles innovation. James A. Wier, CEO of Simplicity Manufacturing (a producer of lawn mowers) has said that Wal-Mart's main mission is to drive costs down. Simplicity decided to stop selling to Wal-Mart because they found Wal-Mart's relentless pressure on costs to be at odds with Simplicity's mission to create high-quality products.

Whether to sell to Wal-Mart is your choice to make. The carrot is the large volume of purchases. The stick is the need to submit to the Wal-Mart way, including pricing that is expected to always go down. The promise is that your brand will get huge exposure and increase its customer base. The danger is that your brand will lose its vibrancy in its association with Wal-Mart and that you will not have enough cash to innovate and improve the product.

Your strategy options include:

Don't sell to Wal-Mart at all. Accept the fact that your sales will be lower but your margins will likely be higher, and accept the risk of your competitors selling to Wal-Mart. If they do, they will achieve higher volume than you can, drive down costs and may then attack the profit sanctuaries you have created in alternative channels.

Sell some products or brands to Wal-Mart, but create a separate product line that you sell through other channels. This will be difficult. If the outside brand is successful, Wal-Mart will want that one, too, and can hold your existing sales with them hostage to convince you to give the new brand to them, as well.

Establish a pattern of rapid product innovation. Sell new products outside of Wal-Mart for as long as possible at as high a premium as possible and then sell through Wal-Mart when the products mature. But Wal-Mart is quick. The window of opportunity won't be open very long. They will likely want to bring the new products inside before you'd like them to. If you resist, they may create a knockoff, as they did with Mainstays, which is positioned against Martha Stewart's Everyday brand at Kmart.

It is very difficult to play hardball against a hardball player as accomplished as Wal-Mart. However, in addition to breaking the compromise of the customer experience, there are two other possibilities:

Exploit anomalies. Even with Wal-Mart's enormous inventory, it is focused on utilitarian goods at low prices. It has not been successful in competing against premium brands. Such goods appeal strongly to groups of consumers that are, by nature, anomalous to the undifferentiated "general population" that is Wal-Mart's customer base. Most important, such premium products are sold, and very profitably, on the basis of emotional engagement--at purchase and in use. The Wal-Mart shopping experience, by contrast, does not enhance the product; it often degrades it. It costs money to create an appealing store environment, through better layout and design, lighting and fixtures--money that Wal-Mart is reluctant to spend.

Internetable retailers such as Tesco can be seen as exploiting the same anomaly--the willingness of some customers to pay higher prices for a better experience. (Although Wal-Mart also has an online operation, its product offerings do not always reflect what's available in the stores, and Wal-Mart.com fulfills its sales from large regional warehouses. Tesco, by contrast, offers the same range of products online as is available in its stores and fulfills from the inventory of the store nearest the consumer.) Internet-savvy consumers who value their time and want competitive prices but don't need the very lowest prices find shopping online to be a perfectly acceptable substitute for shopping at Wal-Mart and other big box retailers. A wide range of goods can be delivered within an agreed-upon time and unloaded into the house. No driving. No parking. No crowds. No wandering the endless aisles. No lugging packages. No Wal-Mart.

Raise costs. Wal-Mart is also vulnerable on its image. It is perceived by some people not as a hardball player, but as a bully. Wal-Mart has taken heat for pressuring its employees to work unpaid overtime, offering meager health benefits, damaging small businesses, polluting the environment, and even for being philanthropically stingy. A smart competitor may figure out a way to raise Wal-Mart's costs by exposing Wal-Mart's performance on a specific issue, bettering that performance and forcing Wal-Mart to raise its costs in that area. But be careful, Wal-Mart's costs are so low in comparison to its competitors it will be difficult to force them up enough to make Wal-Mart feel the pain.

Eventually Wal-Mart's business model may no longer provide the growth that the company wants or needs. One potential source of trouble for Wal-Mart is global expansion. The company cannot maintain its domestic growth rate for many more years; they will have to figure out how to grow internationally, where they have struggled for years. If Wal-Mart's growth rate falls, while that of others increases, its economic model may destabilize and become vulnerable to attack. Perhaps a new kind of competitor will emerge to challenge the big box concept. A likely one is some form of online retailing that effectively provides a much larger box than the biggest bricks-and-mortar retailer could ever build, while dramatically improving the shopping experience.

But even if Wal-Mart is eventually marginalized or defeated, it is likely that another Borg will arise and present some new, seemingly insurmountable, challenge to the world's competitors.

Whatever company becomes the next business, Borg will be, without doubt, a hardball player. It will be a company that uses every legitimate resource and strategy available to it to gain advantage over its competitors. It will then use that advantage to build share, improve products, streamline processes, cut costs and achieve virtually unassailable advantage. The men and women who lead the new Borg will play with total commitment to the game. They will focus constantly on the heart-of-the-matter issues and execute fiercely. They will play rough when necessary and not apologize for winning.

In the next ten years companies are going to move more quickly, act smarter and battle more fiercely than ever before. There will be the leading players and lots of niche players, but very few, if any, players in between. Only the hardball players will survive. Only the hardball players should survive.

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International Boycott vs Costco and Walmart

Sunday, October 17             [back to top]

THE TRUE VALUE OF A HUMAN BEING DEPENDS ON HIS SPIRITUAL DEVELOPMENT. WE MUST BE RESPECTFUL OF THE PLANET AND OF THE DIVERSITY OF CULTURES. WE CANNOT ALLOW FOR CORRUPT, IGNORANT COMPANIES, TO DESTROY OUR ENVIRONMENT AND OUR CULTURAL TREASURES. BECAUSE THE ANCIENT RELIGIOUS SITES ARE BEING DESACRATED AND THE PEOPLES OF THE WORLD HAVE BEEN OFFENDED, AN INTERNATIONAL BOYCOTT HAS BEEN CALLED AGAINST FOOLISH TRANSNATIONALS AND THEIR ADMINISTRATORS. HAVING DESTROYED SACRED SITES OF THE AZTEC AND OLMEC NATIONS, ROOTS OF THE PEOPLE OF MESO-AMERICA WE INVITE ALL ORGANIZATIONS FROM ALL COUNTRIES TO TARGET ALL WALMART ASDA AND COSTCO STORES.

MEXICA TIAHUI

TEOTIHUACAN, MEXICO, 2004

Stop Transnational Abuse: www.laneta.apc.org/procasino

Editor: WalMart has received a less than warm welcome in many communities. Last week, WalMart opened a new store in Hawaii on a native burial ground, relocating the graves to an air conditioned trailer.

Los Angeles voted to restrict new WalMart stores, unless they did serious impact studies.

WalMart, with it's huge customer base, has the power to buy products at lower prices, and then the flexability to sell the products to customers at pretty much any price they'd like. Many cities have been economically destroyed, when customers have been taken away from "mom and pop" stores, to the super-meglo-mart, aka Wal-Mart. While this is great for WalMart, it's tragic for many communities. With the opening of a single WalMart, thousands can lose their jobs at smaller stores. WalMart doesn't support those thousands of now unemployed workers, which begins the downfall of small communities.

But hey, there's nothing like seeing the big friendly blue Wal*Mart building on the horizon. There's something that warms my heart about seeing the sunrise over yet another Wal*Mart superstore. Or is that nausea? Sometimes I get those confused.

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Wal-Mart Finds Union at Its Back Door

Associated Press                   [back to top]                     
10.17.2004, 07:23 AM

The signs topping sales racks wear the same yellow smiley face, but promise "Chute de Prix," instead of price rollbacks. The boxes of Tide shelved in housewares come packed with a bonus CD inviting shoppers to experience "la passion du Hockey."

Otherwise, the Wal-Mart store off highway 70 could be almost any one of the retail Goliath's nearly 5,000 discount emporiums in the United States and eight other countries. And that's what worries executives at the Arkansas headquarters of Wal-Mart Stores Inc.

The 165 hourly workers at this store 2 1/2 hours north of Quebec City could soon become the first anywhere to extract what the world's largest private employer insists its 1.5 million "associates" around the world neither want nor need - a union contract. A government agency has certified the workers as a union and told the two sides to negotiate.

"One person against Wal-Mart cannot change anything," said Gaetan Plourde, a 49-year-old sales clerk, explaining frustration over pay, scheduling and other practices. "Wal-Mart wants to be rich, but it won't share."

Wal-Mart responds that it does share its cost savings with consumers through lower prices and that it treats its workers fairly. The company has redefined retailing by squeezing its suppliers and keeping a tight lid on other costs, including labor, allowing it to undercut competing stores. That translated last fiscal year into profits of more than $9 billion on sales of $256.3 billion.

It would be easy to overlook events in northern Quebec as purely local. But they are not.

There has been angry name-calling by workers riven into pro-union and anti-union factions. There have been accusations of intimidation by managers and threats of a lawsuit by the United Food and Commercial Workers Union.

And on Wednesday, Andrew Pelletier, a spokesman at Wal-Mart Canada, said this: "If we are not able to reach a collective agreement that is reasonable and that allows the store to function efficiently and ultimately profitable, it is possible that the store will close."

The struggle over the Jonquiere store is part of a larger chess game, waged by labor organizers in Wal-Mart stores scattered across Canada - including two others in Quebec, where union spokesman Michael Forman said employees have applied for union certification.

The public jockeying is also geared to capture the attention of workers in the United States.

Hourly wages are Wal-Mart's biggest operating cost, about 35 percent to 40 percent of the bill to run its stores. Benefits are second. Those costs have been rising because of higher health care bills and the retailer's entry into more expensive cities.

Wal-Mart says the average hourly wage of its U.S. workers is $9.96 an hour - just below the $10 an hour average pay for U.S. discount department store workers and short of the $10.87 an hour earned by the average supermarket employee. But pay and benefits are substantially better at some unionized food stores.

Wal-Mart defends its pay as competitive and says its chief concern with unions is that they would get in the way of doing business.

Even if a union gains entry, it will make only an incremental difference in Wal-Mart's costs and profits, said Emme Kozloff, an analyst who tracks the retailer for Bernstein Research in New York. It's the perception among employees and shareholders, as much as the bottom line impact, that concerns Wal-Mart, she said.

"I do think the union thing would be a symbolic blow externally and internally, but they're probably gearing up to handle something like this," she said. "For a retailer, the biggest component of your cost structure is labor and so you're going to be darn sure you do everything in your power to make sure you avoid an increase."

Wal-Mart does not disguise its distaste for unions. It has built such a high wall against organized labor that it's not clear what would happen if a single brick was yanked loose.

Maybe, as has been the case often before, Wal-Mart's bankroll, tenaciousness and skill at buying time will win out and the union effort here will fizzle. Or just maybe, something else happens - a prospect the union savors - something with an impact beyond Jonquiere.

"It's a little bit like watching a hurricane form," says Robert Hebdon, a professor of labor relations at McGill University in Montreal. "You don't know whether it's going to be just be a little bit of wind ... or whether it's going to be a storm."

__

The whispered complaints began almost three years ago, months after Wal-Mart opened on the fringes of town. It was only two or three employees at first, grumbling mostly to themselves. Some, like Patrice Bergeron, were irritated about what they perceived as pay inequities - he was making $7.70 an hour (about $6.05 in U.S. dollars) stocking groceries, while a co-worker was earning $8.50. Others say they were angered that managers locked the doors on workers restocking shelves after the store closed, even though they were not being paid for the time. Soon, there was a small cadre of workers, including Pierre Martineau, a 60-year-old maintenance man.

Their clandestine discussions were almost out of character in a region where union membership has long been worn proudly. While union membership in the United States has declined to about 13 percent of the labor force, about a third of all Canadian workers are unionized.

Even so, the talk about a union did not win universal support in the new Wal-Mart, with some workers worried it might cost them their jobs, others rejecting the idea of paying union dues.

Soon word got back to managers. Exactly what happened next depends on who is providing the account.

Martineau said the situation grew tense after managers called his name on the intercom one morning soon before opening. He said he went into the employee's assembly room, only to find himself surrounded by department managers demanding that he explain his organizing activities. The store's manager referred all questions to a Wal-Mart spokesman who denied there has been any intimidation.

Noella Langlois, a worker who opposes unionization, said "the atmosphere in the store has totally changed. Instead of helping each other, it's become 'It's not my responsibility. It's not in the job description.'" She, like her co-workers, spoke in French through an interpreter.

A statement released Wednesday by Wal-Mart questioned the store's viability given what it called a "fractured environment" there. Wal-Mart's Pelletier said the store has never made money and that its finances have gotten worse recently. Asked whether the company was using intimidation tactics in hinting that the store could close, he said: "We think we are being realistic and honest."

Forman, the UFCW spokesman, responded: "It's not about profitability; it's about power."

__

Protocol says that each day, workers at Wal-Mart stores are supposed to join in a cheer: "Whose Wal-Mart is it? My Wal-Mart!" But just how employees should exercise their stake in Wal-Mart has long been a subject of virulent disagreement between the company and unions bent on recruiting its workers.

Christi Gallagher, a spokeswoman at the retailer's headquarters in Bentonville, Ark., notes that Canadian laws and customs are different, but that the company's thoughts on unions transcend borders.

"We just don't feel like the union would add anything to our culture or improve our relationships with our associates."

Union officials are no more generous when it comes to their appraisal of Wal-Mart. But if Wal-Mart's employees are dissatisfied, unions have failed to tap that sentiment.

The closest a U.S. union has ever come to winning a battle with Wal-Mart was in 2000, at a store in Jacksonville, Texas. In that store, 11 workers - all members of the store's meatpacking department - voted to join the UFCW, the retailer's principal adversary in organized labor.

Wal-Mart took a stance that is now being repeated in Canada - arguing before labor officials that any union should represent all employees at the store. That argument was rejected. But Wal-Mart announced a change that it said had long been planned - eliminating meatcutters company-wide.

The case of the Texas meatcutters, who were offered other jobs by the company, remains alive before the National Labor Relations Board, but none of the employees who voted to unionize still work at the store and the union campaign there has stalled.

Unable to get in through Wal-Mart's front door, union leaders have been trying the latches on the rear windows and think they've found an opening in Jonquiere and six other stores in three Canadian provinces.

"It's the contract that's the key," Forman said, because once the retailer's other workers see it, "what they'll see in front of them is hard evidence that there are some Wal-Mart workers out there who are doing better than them."

The faceoff in Canada provides a compelling case study in Wal-Mart's creativity in keeping itself union-free.

Wal-Mart entered Canada in 1994 by buying 122 stores in the discount Woolco chain, and putting its name on them. In doing so, the retailer took a pass on 22 Woolco stores - including the only 10 whose workers were represented by a union. The company portrays it as a coincidence.

Two years later, the Canadian affiliate of the United Auto Workers tried to organize workers at a Wal-Mart in Windsor, Ontario, but that drive eventually fizzled. In Weyburn, Saskatchewan, the union collected enough membership cards to apply for government recognition, the effort now tied up in several court suits. In Thompson, Manitoba, the union has twice sought - and lost - a vote to represent workers.

Then there is Jonquiere, where the two sides have parried for the past year over how to proceed.

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Despite managers' discouragement, talk of a union continued in the store, slowly finding new converts. But pro-union workers say the balance shifted in their favor only after what at first seemed a failure. In April, after the union collected membership cards from more than 35 percent of the workers, the provincial labor board oversaw a vote on representation. The union lost by nine votes.

When the results were announced, about two dozen managers and employees who opposed the union began dancing and shouting the company cheer. Pro-union employees said co-workers who had been on the fence found the celebration boastful and unbecoming.

Enough minds were changed for the union to persaude more than half the workers to sign membership cards, enough for the provincial labor board to certify a union without a vote and instruct the two sides to negotiate a contract.

Wal-Mart objects that no vote was required.

"We believe that the only way to ensure that employees can express their views without coercion or intimidation is by allowing a secret ballot," Pelletier said.

To the union, the events in Jonquiere are precisely the entry point it's been searching for. "For the first time Wal-Mart will have to sit with us at the negotiation table," says Louis Bolduc, who directs the union's activities in Quebec province. "We're not going to let them play with us."

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EDITOR'S NOTE - AP Business Writer Anne D'Innocenzio contributed to this report.

www.walmartcanada.ca

www.ufcw.ca

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Wal-Mart vS. the Pyramids of the Sun and Moon

By LAURA CARLSEN                    [back to top]

The showdown is rife with symbolism. Wal-Mart's expansion plans in Mexico have brought about a modern-day clash of passions and principles on the site of one the earth's first great civilizations.

Several months ago Wal-Mart, the world's largest retail chain, quietly began construction on a new store north of Mexico City. To many, it's just another step in the phenomenal takeover of Mexico's retail sector. But to others, it's stepping on the cultural foundations of the country. Excavation for the new store started just several thousand meters from the Pyramids of the Sun and the Moon, the crowning structures of the ancient city of Teotihuacan.

The Teotihuacan empire is thought to have begun as early as 200 B.C. It grew into a thriving city estimated at over 200,000 inhabitants at its peak. Its streets and sacred buildings are a marvel in urban planning, organized geometrically along the Avenue of the Dead and punctuated by the massive pyramids. The placement of each structure is believed to have a cosmological and social significance that researchers are only beginning to decipher.

The dominion of Teotihuacan stretched deep into the heart of Mayan country in Guatemala and throughout present-day Mexico. Its major symbol and guiding principle of governance was the plumed serpent, Quetzalcoatl. The civilization fell in 700 A.D., under circumstances still shrouded in mystery.

Since then, other tribes and civilizations, including the Aztecs and contemporary Mexican society, have claimed the "City of the Gods" as their heritage. The grand-scale human accomplishment it represents and the power of its architectural, historical, and spiritual legacy is central to Mexico's history and culture. Indigenous leaders, New Age seekers, sightseers, and archaeologists make up a steady flow of pilgrimages to the site.

While little is known for certain about the rise and fall of Teotihuacan, much is known about the rise of the Wal-Mart empire. From a store in Rogers, Arkansas founded by the Walton brothers in 1962, the enterprise ballooned into the world's largest company.

Wal-Mart's driving symbol and governing principle is the dollar sign. The company has revolutionized the labor and business world by working cheap and growing big. Labor costs are held down through anti-union policies, the hiring of undocumented workers, alleged discrimination against women and persons with disabilities, and cutbacks in benefits. Prices paid suppliers are driven down by outsourcing competition.

In Mexico, Wal-Mart's conquest of the supermarket sector began by buying up the nation's extensive chain, Aurrerá, beginning in 1992, and from there building new stores across the country. Today, with 657 stores, Mexico is home to more Wal-Marts and their affiliates than any other country outside the United States. Buoyed by $244.5 billion dollars in annual net sales, the chain can afford to make ever deeper incursions into the country's retail sector.

Proponents of pyramid Wal-Mart argue that it will create jobs and serve consumers cheaply-the hallmark of the store's reputation. The chain has already become Mexico's largest private employer, with over 100,000 employees. But recent studies in the United States, where resistance to the megastores has been growing, show that job creation is often job displacement, as Wal-Marts put local stores out of business, leading to net job losses.

Opposition to the store is led by a diverse group of local merchants, artists, actors, academics, and indigenous organizations that protest damage to Mexico's rich cultural heritage. Through ceremonies, hunger strikes, demonstrations, and press coverage the movement to defend the site has kept the conflict in the public eye and heightened the public-opinion costs to the transnational. Opponents have taken their concerns to the Mexican Congress and UNESCO.

Excavation on the site has revealed archaeological relics from the layers of civilizations that have populated Teotihuacan. Wal-Mart construction workers told the national daily, La Jornada, they had orders to hide any pieces they find. The presence of relics often requires that further excavation be carried out painstakingly or halted altogether. These are processes that the booming Wal-Mart clearly has no time for.

Wal-Mart's economic power as an employer and investor, however, is a force to be reckoned with-especially considering Mexico's high unemployment and the chronic need for foreign currency. Mexico State Governor Arturo Montiel had announced an effort to relocate the planned store, but that initiative inexplicably dissolved only days later. Wal-Mart refuses to relocate, claiming it obtained legal permits and has complied with all formal requirements.

The dispute in Teotihuacan today is not a battle between the past and the future. It is a struggle over a nation's right to define itself. For defenders of the site, gathered behind banners that read "Don't ruin our ruins," the pyramids symbolize the nation's cultural heritage - but they also constitute part of contemporary integrity. Mexico in the modern age is still a country that defines itself by legends, and whose collective identity-unlike its neophyte northern neighbor-reaches back thousands of years.

In this context, Wal-Mart is a symbol of the cultural insensitivity of rampant economic integration. Although its actions may be technically legal, in the end it could pay a high price for them.

And if there's anything Wal-Mart hates, it's high prices.

Laura Carlsen is Director of the Americas Program for Interhemispheric Resource Center. She holds a BA in Social Thought and Institutions (1980) from Stanford University and an MA in Latin American Studies (1986) from Stanford. She received a Fulbright Scholarship to study the impact of the Mexican economic crisis on women in 1986 and has since lived in Mexico City. She can be reached at: laura@irc-online.org

TAKE ACTION!

Write Wal-Mart Chief Executive Officer H. Lee. Scott to request relocation of the store: Wal-Mart Stores, Inc. 702 S.W. 8th Street Bentonville, AR 72716 Phone: 1-800-WALMART (1-800-925-6278) Web: http://www.walmart.com

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Alachua Commissioners Hope to Land Dual Wal-Mart Projects

Gainesville Sun                            [back to top]
10/13/2004

Turned down by Gainesville last year, Wal-Mart is still seeking acceptable sites for two supercenters in that city, while embraced some 13 miles up I-75, where the Alachua City Commission voted 4-1 for a controversial distribution center in August, and now some commissioners seem predisposed toward an 184,000-square-foot supercenter with gas pumps that the company may propose next year.

Both distribution center and supercenter would be ''great,'' said Commissioner James Lewis. ''The city of Alachua and the county of Alachua should be proud of the tax revenue they'll gain from this. And you can't beat those jobs.''

But some residents, reports Gainesville Sun writer Amy Reinik, think the much-debated and eventually improved Wal-Mart distribution center plan still doesn't ensure sufficient protection for ''the sinkhole-rich city's water supply from pollution, area roads from too much traffic or nearby neighborhoods from noise.''

Its sole opponent on the commission, Vice Mayor Dianna Kosman-Rothseiden, voices similar concerns about the prospective supercenter, also worried it may damage the city's small businesses. ''I just think,'' she said, ''about whether we're going to be hurting the people who have built this community, who have been here 80 or 90 years.''

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Class Action Against Wal-Mart Announced by Tousley Brain Stephens Includes Estimated 40,000 Employees in State of Washington Seattle

Daily Business News                                                    [back to top]
Posted on: Monday, October 11, 2004 04:10 AM

SEATTLE - A King County Superior Court Judge ruled that a large class action lawsuit against Wal-Mart stores in the State of Washington may proceed, opening the way for some 40,000 current and former employees to participate in the lawsuit, according to the Seattle law firm Tousley Brain Stephens.

The lawsuit alleges that Wal-Mart has "engaged in a systematic scheme of wage abuse against its hourly paid employees in the State of Washington." The illegal abuses include off-the-clock work for which employees were never paid, missed meal and rest breaks and altered time records.

According to the legal complaint, Wal-Mart has a strict No Overtime policy which it enforces by disciplining employees who work more than 40 hours per week without prior authorization. Understaffing of the stores, however, leaves employees with too much work to complete in 40 hours. As a result, thousands of employees work for free (off the clock) and miss meal and rest breaks rather than risk losing their jobs.

Plaintiff Georgie Hartwig worked for the Colville, Washington, Wal-Mart store for six years, and estimates that she worked from 2 to 5 hours over her "clocked in" time every week, doing work for which she was never compensated. In addition, she claims her work load was so heavy that she was often not able to take her meal and rest breaks. She said she also had time "disappear" when Wal-Mart manipulated her time records. Ms. Hartwig's story has been echoed by many other current and former Wal-Mart employees.

Seattle attorney Beth Terrell (from the firm Tousley Brain Stephens) blames Wal-Mart's "bottom-line culture that encourages managers to treat their workers illegally. Wal-Mart's managers have financial incentives to suppress store expenses -- and they do so on the backs of their hourly workers."

Employees report attending mandatory meetings and performing computer-based training while off the clock. "Hourly managers, too, are often not paid for work they do. They are encouraged not to record their time actually worked, and to forgo rest and lunch breaks in order to keep costs down. Wal-Mart hides behind written policies that purport to forbid these illegal labor practices, while at the same time fostering a culture in which these unlawful labor practices necessarily occur," according to attorney Terrell.

Terrell continues, "Perhaps most disturbing was our analysis of Wal-Mart's time-keeping records, which revealed a number of ways that Wal-Mart manipulated its employees' time, depriving them of wages they had earned."

Unlike other class action lawsuits that require class members to join, the order signed by King County Superior Judge Terry Lukens creates a class that automatically includes all current and former hourly paid employees.

The Court appointed Tousley Brain Stephens PLLC, and Lieff Cabraser Heimann and Bernstein LLP as counsel for the class.

EMPLOYEES WITH QUESTIONS may call 1-800-299-8219, or go to www.tousley.com for further information. Media representatives wishing a copy of the complaint or signed order may contact attorney Beth Terrell at 206-682-5600.

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Wal-Mart Faces 'Save Our Community' Group, Derailing California Land Rush

Oct 11, 2004                                   [back to top]
(financialwire.net via COMTEX)

(FinancialWire) Wal-Mart (WMT), still trying to march through California, has run into another obstacle in its land rush in the form of the Save Our Community group of residents in Rosemead, a suburb of Los Angeles.

Residents, disillusioned with their city grovernment's approval of an environmental impact report that would allow construction of another Wal-Mart store, have sued both Wal-Mart's real estate subsidiary, Wal-Mart Real Estate Business Trust, and the city.

Critics say that Wal-Mart stores hurt main street and locally owned businesses. The company has also been accused of discrimination and anti-union practices.

The Save Our Community group said they are also considering a campaign to recall the city council.

Wal-Mart recently published a letter to California residents in some 15 newspapers to state its case.

For up-to-the-minute news, features and links click on http://www.financialwire.net

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Wal-Mart's expansion doesn't come without a fight

Wal-Mart may create jobs and provide cheap goods, but their low prices come at a cost to communities, opponents say

THE GUARDIAN , CHICAGO         [back to top]
Sunday, Oct 10, 2004

Nikki Weatherly, left, and Tanecia Butts push their carts out of a Wal-Mart store in Cleveland Heights, Ohio, Thursday. PHOTO: AP

From the outside, the local community association on the west side of Chicago doesn't look like much. The only sign on the shabby one-storey building is a piece of paper stuffed inside a clear plastic jacket on the front door. The building was supposed to be a temporary home but somehow years have gone by and the organization is still there.

The South Austin coalition community council, run for 26 years by Bob Vondrasek, is in one of Chicago's grittiest neighborhoods. It has taken on slum landlords, insurance companies, utilities firms, the board of education and the big banks over predatory lending policies. In recent months, though, the coalition and other community leaders in the city have confronted an opponent of an altogether different magnitude; Wal-Mart, the biggest company in the world, which is looking to open its first store within the city limits.

Its plans have provoked an emotionally-charged response from politicians, civic leaders and the church. Supporters argue that local people in the rundown neighborhoods where it plans to open are in desperate need of cheap goods as well as jobs. Those against protest that Wal-Mart represents the very worst in American business and that it destroys small businesses and pushes down labor standards. The low prices, they argue, come at too high a cost.

"People ask why are we targeting Wal-Mart?" says Vondrasek. "The reason is because they are so influential and once you knock out the big bully the others tend to fall in line."

At the last count, Wal-Mart employed 1.3 million workers in the US. This month alone, it is opening 12 stores across the country. It also owns businesses in Europe and Japan, including Asda in Britain.

Last year it had sales of US$256 billion, accounting for 2 percent of US GDP. If it were an independent nation, Wal-Mart would be the eighth biggest trading partner with China.

The ramifications of the company's spread have even made the presidential election campaign. John Kerry recently called its health care benefits "disgraceful." Consumer advocate Ralph Nader, running an independent campaign for the White House, described it as "a cancer on the economy". Vice-president Dick Cheney, however, praised Wal-Mart during a visit to its head office in Bentonville, Arkansas.

The Chicago case is not isolated. Local resistance in Inglewood, California, earlier this year prevented Wal-Mart from opening there.

Local groups are also preparing for battle in Washington DC as the company looks for its first location in the capital.

The argument for Wal-Mart is compellingly simple -- it creates jobs and provides low prices to consumers. Its store in Forest Park, just outside Chicago, is selling Wrangler jeans for US$14.94, a flat screen TV for US$96.94 and a microwave oven for US$29.87. Economists believe Wal-Mart has played a significant role in keeping US inflation down.

On the west side of Chicago low prices and jobs are both welcome. The predominately black and Hispanic neighborhood of Austin was once a vibrant manufacturing community but has fallen into decline as the factories have closed and the service industry moved out. The community wrestles with poverty and is rife with drugs and gangs.

Wal-Mart had planned for two stores in the city; the other, in the equally rundown south, was blocked. It hired local public relations and legal firms, incl