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Institute for Local Self-Reliance

Institute for Local Self-Reliance

Institute for Local Self-Reliance

Institute for Local Self-Reliance

Mike Padgett
The Business Journal
June 29, 2005                   [back to top]

A Wal-Mart Supercenter will head the lineup of several new businesses that soon will be among the attractions next to Turf Paradise in northwest Phoenix.

The new development, named Turf Paradise Marketplace, is planned on 70 acres next to the track.

"A Wal-Mart Supercenter will be coming in, and a Sam's Club and Checker Auto, those will be the first three built," said track owner Jeremy Simms.

Simms said a major commercial development has been proposed on the unused property northwest of the track since 2000, when he bought the race track on a total of more than 300 acres southeast of Bell Road and 19th Avenue.

Both Wal-Mart and Sam's Club are expected to open by late summer 2006. Wal-Mart spokesman Jack Bisio said construction is planned to start later this summer. He said an existing Wal-Mart at 330 W. Bell Road will be closed for relocation to the new Supercenter at Turf Paradise Marketplace.

The Supercenter will have about 200,000 square feet and employ from 350 to 500 workers. Sam's Club will have 135,000 square feet and about 200 employees, Bisio said.

Wal-Mart currently has nine Supercenters in the Valley -- two in Phoenix, two in Glendale, two in Mesa, and one each in Scottsdale, Surprise and Apache Junction. The company also has 11 regular Wal-Marts throughout metro Phoenix.

Existing businesses on the south side of Bell Road, including a renovated McDonald's at the southeast corner of 19th Avenue and Bell, will be integrated into the new development.

Simms said the design includes a new four-lane road that will offer access to the track and the new stores. The road will meander eastward from 19th Avenue toward the track and then veer north on the existing street from Bell Road.

The race track will remain open during construction, said Paul Gilbert, Simms' attorney.

The buildings' exteriors will be similar to retail designs seen in North Scottsdale, such as Gainey Ranch Villages at Scottsdale and Doubletree Ranch roads.

The signage for Turf Paradise Marketplace will include a depiction of a miniature racetrack with three metal jockeys.

On the east side of the Bell Road entrance to the track is a smaller parcel where Simms said he has plans for a selection of restaurants and small retailers. He said he has rejected an earlier idea for office buildings as part of his total redevelopment proposal.

© 2005 American City Business Journals Inc.

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Vancouver council turns down Wal-Mart

Canadian Press
Wednesday, June 29, 2005            [back to top]    

Vancouver — The "green" Wal-Mart designed especially for Vancouver was turned down overwhelmingly by Vancouver city council on Tuesday after developers spent four years working on it and opponents spent just as long battling against it.

Only Mayor Larry Campbell and his two political opponents from the Non-Partisan Association supported the big-box store proposal for a former car dealership site on the city's Southeast Marine Drive.

In a rare display of unity on a controversial issue, both factions of the centre-left Coalition of Progressive Electors voted together in opposing the project.

Everyone also voted the same way in voting down a giant Canadian Tire store planned for a site nearby.

The surprise decision made people like Louise Seto, a southeast Vancouver resident who led a campaign against both big-box stores, ecstatic.

"I think they really validated the whole vision of the city. They put the teeth behind the words," she said.

But those who had worked on the Wal-Mart and Canadian Tire applications were dismayed by the decision that many had believed would be much closer than the 8-3 split that emerged Tuesday.

Architect Peter Busby, a renowned sustainability advocate who designed a Wal-Mart concept with windmills on the roof, natural light, and significant energy efficiency, said he was tremendously disappointed.

"Vancouver lost an important opportunity. It became political. It wasn't about the design. It wasn't about the land use."

Wal-Mart's local development consultant, Darren Kwiatkowski of First-Pro Shopping, described himself as "flabbergasted and stunned" that council rejected it after the proposal had been supported by both staff and the city's urban design panel. 

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Wal-Mart acquires Carolina Circle Mall without incentives

The Business Journal of the Greater Triad Area 
June 29, 2005                                                        [back to top]  

Without economic incentives, Wal-Mart Stores Inc. is buying the former Carolina Circle Mall in eastern Greensboro and will convert it into a giant retail store next year.

Greensboro businessman Don Linder, who owns almost all of the property and arranged the deal, confirmed that Wal-Mart is buying the 78-acre site off N.C. 29 for $3.3 million and will have its contractors start construction of a new 206,000-square-foot "supercenter" store in January. That store should take about eight months to be ready and should open in fall 2006, Linder said.

Linder has spent the last three years buying up parcels of the vacant 78-acre site with the hopes of selling it to a larger industrial company. Wal-Mart was willing, but only if the location was ready by November.

In June, Linder asked the Greensboro City Council for $300,000 in economic incentives to help get the site ready and built for Wal-Mart. But amid public opposition by those against tax incentives and eastern Greensboro neighborhood groups that supported the Wal-Mart proposal, Linder withdrew his request two weeks ago.

Wakefield Associates demolition crews have already cleared out the out-parcel stores around the mall and this week have been removing walls inside the 600,000-square-foot mall. At this pace, the demolition will be completed by fall and the site can be graded by December in order to meet Wal-Mart's deadline, Linder said.

"A project like this is very difficult," Linder said. "There are hundreds of issues that we've addressed from many groups, and we're still moving forward."

Wal-Mart (NYSE: WMT) anticipates 60,000 shoppers a week at the new store.

© 2005 American City Business Journals Inc.

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Upscale Tastes Invade Wal-Mart's Hometown Migration of High-Priced Executives Transforms Arkansas County

By Michael Barbaro
Washington Post Staff Writer
Monday, June 27, 2005                      [back to top]

BENTONVILLE, Ark. -- Wal-Mart's folksy, baseball cap-wearing founder, Sam Walton, so despised public displays of wealth that, after his death in 1992, the billionaire's heirs decided to enshrine his prized possession, a battered Ford pickup, behind a simple storefront on the town square here.

But Walton's spirit of restraint is harder to find next door to the museum at Fusion, a new fine-arts gallery that sells $2,500 abstract paintings and $1,200 urns. Or at the nearby Landers Hummer dealership, crowded with $62,000 sport-utility trucks. Or inside Shadow Valley, a gated community where four-bedroom houses fetch $1 million.

The hard-nosed retailing tactics of Wal-Mart Stores Inc. have transformed communities across the country, but none more so than the one in its own back yard. Benton County, once a sedate backwater, is quickly morphing into a swanky oasis in the middle of the Ozarks.

Wal-Mart's unchallenged dominance in American retailing--it now sells about 30 percent of many household consumables--has persuaded scores of suppliers to open satellite offices around its headquarters to ensure their products remain on the chain's coveted shelves.

The result is an unprecedented migration of high-paid executives to the northwest corner of Arkansas -- professionals from amenity-rich cities like New York, San Francisco, Atlanta and Miami, who bring not only their six-figure salaries, but an appetite for Jaguars, sushi, pet day-care centers, Gucci shoes and Chanel sunglasses.

Every week or so a new retailer, restaurant or spa sprouts up amid the cow patches here to satisfy their every need and, seemingly overnight, a county synonymous with a purveyor of cheap socks, dolls and televisions is earning a reputation for something altogether different: luxurious living.

Until recently, being dispatched to a supplier's Wal-Mart office was a dreaded assignment -- two years of eating at a nearby Applebee's and shopping at, well, Wal-Mart. "Nobody wanted to do it," said Ron Johnson, who runs the Wal-Mart office for Walt Disney Co.'s consumer products division. "That's not a problem anymore. So much has changed."

Wal-Mart has produced a fair share of millionaires, but Walton's rigid code of humility -- even top executives stay at a Holiday Inn when traveling on the company dime -- remains deeply ingrained in the company's culture, discouraging conspicuous consumption.

Wal-Mart's suppliers, however, honor no such vow of modesty.

In Rogers, just north of Bentonville, nattily dressed executives from Kellogg Co. and Colgate-Palmolive Co. sip lattes and lunch on cold Thai salmon at the Market, a gourmet grocery store that offers sushi-making lessons. Up the street, at Murphy's Jewelry, the latest Versace fashion show flickers on a flat-panel television and $100,000 necklaces glimmer from behind a glass case.

Jeff Collins, an economist the University of Arkansas's Sam Walton School of Business, said the thousands of suppliers who have moved to the region are "trying to recreate the world they knew back home, wherever that was, and they have the money to do it."

From 1990 to 2000, Benton County's population jumped 57 percent, to 153,406 from 97,499, while the average household income rose to $40,281 from $26,021, according to census data.

Wal-Mart is not the only company cranking out wealth in northwest Arkansas. J.B. Hunt Transport Inc., the trucking company, and Tyson Foods Inc., both major employers, are based here. But neither has the global reach or supplier network of Wal-Mart. "Around here, Wal-Mart is the catalyst," said Bill W. Schwyhart, a partner at Pinnacle Group, which is developing a $200 million upscale shopping center near Wal-Mart's headquarters.

And by Wal-Mart, Schwyhart means its vendors.

In nondescript office parks that have cropped up across the region, the biggest names in consumer goods--Procter & Gamble, Gillette Co., Nestle and PepsiCo Inc.--are packed in cheek-by-jowl with tiny manufacturers such as Dolly Inc., a children's clothing firm, and cigar-maker Swisher International Inc.

No one knows the exact number of suppliers who have opened shop near Wal-Mart, but local officials put the number at 2,000, and predict the figure could eventually double.

The phenomenon began in 1989 after Procter & Gamble, Wal-Mart's largest supplier, opened a 10-person office in Fayetteville, Bentonville's neighbor to the south. Today, P&G's Wal-Mart staff has ballooned to 200.

There are now 20 office parks dedicated to Wal-Mart vendors. Disney, for example, shares a building with Vivendi-Universal, Welch Food Inc. and Sargento Foods Inc. Signs on the office doors read "Wal-Mart-support unit" or "Team Wal-Mart" and, inside, the walls are covered with photos of and quotes from Sam Walton, a tribute designed to catch the attention of visiting Wal-Mart executives more than the supplier's staff.

A long-running debate rages about whether Wal-Mart encourages its suppliers to operate in the area -- Wal-Mart says it takes no position on the issue -- but no one underestimates the importance of being in town. Suppliers who live and work near Wal-Mart's headquarters can schedule last-minute meetings with buyers, hand-deliver samples of their latest products at all hours and, most importantly, cultivate strong personal ties with company executives.

A decade ago, Wal-Mart's suppliers flew into town for a round of meetings with buyers and returned home to Cincinnati, Houston or Boston at the end of the day. Now suppliers and buyers live on the same street, attend the same churches and coach the same little league teams.

"Suppliers know that if they don't have a presence here, their competitors will," said Chuck Sharpe, whose company, C. Sharpe Real Estate Group, owns eight Bentonville office parks occupied by Wal-Mart vendors. "They can't afford that."

Once here, suppliers demand the life they left behind--and, if they cannot find it, they build it. Lou McCleese, a logistics expert for Johnson & Johnson's Wal-Mart office, plowed her savings into Fusion, the art gallery and supply store in downtown Bentonville.

When Phyllis Charette, the wife of a Johnson & Johnson executive, could not find the kind of upscale women's apparel store required to fill out her wardrobe, she started her own, calling it All About Her.

Across the street from Wal-Mart's headquarters, several out-of-town Jewish suppliers have converted a three-room office into a prayer space, available whenever they come through town. A basket of yarmulkes sits on a conference table and copies of the Old Testament line a bookcase.

A new synagogue, Benton County's first, recently opened with 37 families, a large number of them transplants dispatched to Bentonville by a Wal-Mart supplier.

As suppliers move in, their spending power is transforming the lives of those with no connection to Wal-Mart.

Catherine Holmes, 31, bought a hair salon in 1997 that employed 12, most of them earning about $25,000 a year. As more suppliers arrived, she moved closer to an office park filled with executives from Eastman Kodak Co. and Kraft Foods Inc. and began offering exotic facial scrubs, massages and therapeutic baths.

Now she has a staff of 50, several of whom earn $100,000 a year. "Half of my clients are vendors," said Holmes, the daughter of a Wal-Mart employee who drives a $50,000 Cadillac Escalade. "They are a totally different customer than what we were used to."

But not everyone is overjoyed by the influx of high-rollers. Rising housing prices have cost long-time Bentonville residents hundreds of dollars in higher property taxes. "We used to have moderately priced homes here," said John Rickert, who has lived in Bentonville for 41 years. "Now it's all exclusive, planned developments."

At the same time, gentrification is creating some powerful--and, to some local residents, troubling--juxtapositions. In Bentonville, a Golf Headquarters shop that uses high-tech computers to analyze a player's swing opened next to the U.S. Army recruitment center. Nearby, a contemporary furniture store selling pink leather club chairs opened across the street from a pawn shop.

"Everything is higher-end now," said Rickert, who manages a cafe in downtown Bentonville.

Some residents are scrambling to slow the explosion of new housing and retail complexes that are gobbling up farm land and clogging traffic. But most are just watching quietly from the sidelines, with a mix of frustration and wonder, as the little-known rural community that Sam Walton picked to start his company four decades ago grows into a bustling global capital of retail.

"People are tired of sitting in traffic, tired of waiting in line for dinner at their favorite restaurant, tired of change, really," economist Collins said. "But Wal-Mart isn't going anywhere. You cannot put this genie back in the bottle."

Staff researcher Richard Drezen contributed to this report.

© 2005 The Washington Post Company

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Attorney General accuses Wal-Mart of selling illegal fireworks

June 27, 2005, 6:09 PM EDT         [back to top]

HARTFORD, Conn. (AP) _ State Attorney General Richard Blumenthal on Monday accused Wal-Mart of selling illegal fireworks in some of its Connecticut stores.

Blumenthal said he has sent a letter to the retailer and the fireworks' distributor, TNT Fireworks, ordering them to take the firework, "Piccolo Petes," off store shelves.

"Sales of these dangerous devices should stop immediately," Blumenthal said. "Wal-Mart or TNT Fireworks will face legal fireworks in state court, if they defy this order."

The product emits a 5-inch flame when lit, Blumenthal said.

Since 2001, Connecticut has allowed the sale of sparklers. Other fireworks, including Roman candles, remain illegal.

Jerry O'Malley, an attorney for Alabama-based TNT Fireworks, said "Piccolo Petes" is a sparkler under state law, and has been sold here for several years.

"It's non-aerial, non-exploding and contains less than 100 grams of pyrotechnic composition," he said. "It is no or more less hazardous than a sparkler that emits a shower of sparks."

Wal-Mart spokeswoman Karen Burk said the company was not aware that the item violated any law, but it is removing the product from the shelves of its 28 Connecticut stores.

Copyright 2005 Newsday Inc.

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Wal-Mart put to test in Vancouver

Council to decide if retail giant can call city its new home

John Greenwood
Financial Post
June 27, 2005

VANCOUVER - An unprecedented four-year struggle by Wal-Mart Canada Corp. to win approval to build a store in Vancouver is set to come to an end tomorrow when the left-leaning city council holds a final vote on the issue.

Since 2001, when Wal-Mart first unveiled plans for a location in a down-at-the-heels shopping area close to the southern edge of the city, the retail giant has spent tens of millions of dollars on countless traffic studies, opinion polls and economic impact reports in a bid to persuade the city to issue an approval.

When local activists complained the store would lead to increased traffic and air pollution, Wal-Mart asked one of Canada's leading green architects to come up with an environmentally friendly design. The proposal by Peter Busby that was unveiled last year is unlike any other Wal-Mart store in the world, including such features as a windmill to generate electricity, underground wells to heat and cool the building and skylights to replace traditional florescent lamps.

"We spent significantly more than we normally spend," said Andrew Pelletier, Wal-Mart's director of corporate affairs. "We have done everything that could be done [to meet the city's needs]."

Critics still aren't satisfied. Despite the green design and Wal-Mart research suggesting the proposal for the 140,000-square-foot outlet is supported by a majority of local residents, a group of surprisingly vocal opponents has turned it into a lightening rod for discontent over everything from labour issues to the environment.

At a noisy public meeting last week, city council listened to a string of mostly anti-Wal-Mart presenters, including representatives of the Council of Canadians and a group of seniors calling themselves the Raging Grannies.

"This store will wipe out the local economy," said Suzanne Smythe, a resident who said she was there to observe the proceedings. "I'm just terrified of the traffic it will cause."

"It will have a terrible social impact; it will take away the heart of the city," said Emily Sion, who hopes Wal-Mart stays out of Vancouver even if it means she must continue to buy her clothes second-hand at the Salvation Army.

According to the city planning department, which has recommend the project be approved, most of the concerns raised by Ms. Sion and others are overblown.

For instance, many Vancouverites drive out of the city to visit Wal-Mart stores in the suburbs, so the new store would significantly shorten the time they spend in their cars, along with the resulting exhaust fumes. In fact, as much as 35% of the traffic expected to visit the store already drives past it.

Another study cited by the planning department suggests the impact on local retail would also be minimal, with the competition being felt most strongly by other chain stores such as Zellers and Real Canadian Superstore.

"Wal-Mart's presence should not be of concern to existing neighbourhood retailers," said Richard Wozny, a vice-president and manager at Royal LePage Advisors Inc. "It will complement rather than compete with them."

Ironically, a proposal to build a Canadian Tire store that is even larger and would draw more traffic adjacent to the controversial Wal-Mart site has attracted almost no attention. Indeed, in May, the city gave its blessing to a major new Canadian Tire location on Vancouver's Grandview Highway, with barely a whimper from community activists.

"When you're the world's biggest retailer, it just provides a forum for people will all kinds of hobby horses," says local retail consultant Blake Hudema.

Mr. Pelletier declined to comment on the heightened level of scrutiny his company is facing. "We deliberately spent a lot of time on this," he said. "We've done everything that could be done."

© National Post 2005

Walmart eyes expansion in eastern Europe report

06.27.2005, 01:30 AM           [back to top]

HONG KONG (AFX) - Wal-Mart Stores Inc, the world's largest retailer, said it is looking to expand in central and eastern Europe, the Financial Times reported.

In an interview with the newspaper, the company's chief executive, Lee Scott said the firm is looking at Poland and Hungary, both new members of the EU, as well as Russia.

'We have a portfolio we are working on,' Lee said.

'It doesn't matter to us which of these will be first, we want all of them at some point,' he said, adding that Wal-Mart wanted to continue achieving 30 pct of its sales growth outside the US.

In central and eastern Europe, he said acquisitions would make more sense than establishing new operations.

The report said last year that international sales accounted for 21 pct of Wal-Mart's 285 bln usd in sales, and for 31 pct of its annual sales growth of 28 bln usd.

Scott said he was also looking closely at India.

'It has specific rules on foreign direct investment, but at some point [we would like to enter] India. It is such an exciting country with a growing middle class,' he said.

Mr Scott said that Wal-Mart would continue sourcing some goods from suppliers in Central America and Bangladesh, despite the lifting of quota controls on Chinese apparel.

'We are not going to move radically to China, we will continue to source in Central America and Bangladesh,' he said.

'So as long as we can be competitive, we continue to have production from different countries. We are dedicated to that and we get support from non-governmental organisations for that.'

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Wal-Mart's Most Wanted

Attention, affluent shoppers. The retail giant is bent on capturing your dollars

By Marianne Lavelle
US News                          [back to top]

At Fair Lakes shopping center in Northern Virginia, where the median household income of $81,000 is nearly double the national average, Wal-Mart certainly has no problem attracting the customers it sees as its future. But a peek in their shopping carts reveals the retailing titan's plight. Laura Swearingen, who lives 25 miles away in Alexandria, Va., comes to buy cleaning supplies and cat food and perhaps "tank tops and stuff for softball." Penny Peyton of Annandale also has made a long drive from the inner suburbs to look for staples such as paper towels and toothpaste. As for clothing, she'd look to Wal-Mart only for "maybe something cheap to knock around in" and, of course, for underwear. Not for a nice outfit for work or a special occasion. "They don't have the selection or quality," says Peyton.

A low-cost, middle-America image certainly has served Wal-Mart well on its march to worldwide dominance in the retail industry. With annual sales of $285 billion and 5,350 stores (3,700 in the United States), Wal-Mart has pushed aside Main Street small businesses, crushed competing grocery chains, and changed the way America shops. It is still retail's undisputed king, but now Wal-Mart faces new challenges in its drive for future growth. Sales at existing stores--an important industry benchmark--increased just 2.9 percent in the first quarter, considered lackluster compared with the 6.2 percent hike at cheap-but-chic competitor Target. Although Wal-Mart's revenues are still six times as high, its stock price has slid 15 percent since March 2004, while the value of Target shares has soared 23 percent. High gasoline prices and the uptick in interest rates have dealt a bigger blow to Wal-Mart because its average shopper has less disposable income, an annual salary of $35,000, compared with $50,000 for the Target regular.

When Wal-Mart shareholders convened near the Bentonville, Ark., headquarters earlier this month for the company's annual meeting, Chief Executive Officer Lee Scott confessed, "We aren't where we need to be." He wasn't talking primarily about the myriad troubles that have made headlines in the past few years: the largest class action lawsuit ever, a discrimination case on behalf of its 1.6 million female employees; the union-funded campaign against the company's labor practices; or the activism that has blocked the opening of new stores. Scott's main concern now is how to capture a new prey, the upscale customer.

Americans already know they can turn to Wal-Mart for low prices on food, detergent, and underwear. But its executives are convinced that if the behemoth is to maintain the momentum that Wall Street expects, it will have to sell more profitable goods like stylish apparel, home fashion, and electronics. "Historically, they're the low-cost replenishment leader," says Mandy Putnam, analyst at Retail Forward, a market research firm in Columbus, Ohio. "Their challenge has been how to get that shopper across the store to shop for something other than basics."

Nice threads. Wal-Mart's efforts thus far have often fallen flat. Analysts at Credit Suisse First Boston noted recently that the quality of goods has improved, including, for example, high-thread-count cotton bedsheets. But in stores the analysts visited, nothing distinguished the fancy sheets from the cheaper alternatives. "The merchandising of the improved product has not kept up," said the CSFB report.

At the Fair Lakes store, Wal-Mart has a display showcasing its designer line of apparel, George, named after British fashion guru George Davies. Wal-Mart acquired the line as part of its purchase of the United Kingdom's ASDA supermarket chain in 1999. But Wal-Mart has done little to trumpet the brand it clearly hopes will appeal to higher-income consumers. In the center of the George display, for example, stands a well-picked-over rack of clearance items, including sleepwear, maternity blouses, and house-brand casual wear, with quite a few of the items strewn on the floor.

Sticking a "pile-it-high, let-it-fly" rack amid the stylish coordinates is a "Merchandising 101" error that is all too common at Wal-Mart, says Putnam. She contrasts Wal-Mart's approach with that of Target, which heavily advertised its partnership with designer Isaac Mizrahi. In contrast, Wal-Mart did nothing to introduce its designer line. "I'll literally stand in a Wal-Mart and hear people ask, 'Who the heck is George?'" says Putnam. Scott has admitted that crowding stores with cheap items has turned off customers. "The more congested the store, the junkier the store looked," said Scott, and "it became less relevant" to shoppers with more disposable income.

Wal-Mart brass have laid out an aggressive merchandising campaign. The company is hiring fashion experts to help train store managers to, say, feature items that will catch the consumer's eye and draw it toward more expensive goods. Wal-Mart plans to make some of its stores showcases for new tech goodies, including wall-length displays of high-end TV s. Wal-Mart also hopes to widen its appeal by offering more organic and natural foods--at lower cost than groceries or specialty stores, of course. "We don't think you should have to have a lot of money to feed your family organic foods," said Scott at the annual meeting. "Let's face it, affluent customers appreciate saving money, too."

At the same time Wal-Mart is making its pitch to the well heeled, it is forging ahead with its better-known strategy: expanding its so-called Supercenters. Providing groceries along with apparel, sporting goods, tires, and eyeglasses has proved enormously successful. Groceries are a lower-margin business than designer clothing or electronic gadgetry. But the volume Wal-Mart generates at Supercenters is so high--more than $100 million in annual sales at some locations--that the company says the return on investment outstrips that of its traditional discount stores. (Wal-Mart does not disclose sales figures for individual stores.) An example of the impact on the market: Earlier this year, venerable supermarket chain Winn-Dixie, which operates 920 stores in the Southeast, was driven to seek bankruptcy protection, largely, in analysts' view, because it could not beat Wal-Mart prices.

Wal-Mart currently has 1,713 Supercenters, and it plans to open 2,700 more and convert 1,200 current stores to the format. But as the nonunion company has steamrolled traditional grocers, Wal-Mart has made a slew of enemies, many of whom are now uniting to battle the retailer. Both the United Food and Commercial Workers union and the Service Employees International Union have mounted anti-Wal-Mart campaigns, arguing the retailer does not pay a fair wage and burdens state governments by failing to provide adequate healthcare benefits. The UFCW has hired Paul Blank, former political director for Howard Dean, to organize the opposition.

Sometimes joining with grocery chains, the unions have had some triumphs. In Turlock, Calif., the City Council passed an ordinance banning retailers larger than 100,000 square feet. Wal-Mart, which planned to place a 226,000-square-foot store there has sued to overturn the restriction. Meanwhile, Maryland's state legislature recently passed a law that would have forced Wal-Mart to pay more of its workers' health benefits. Republican Gov. Robert Ehrlich vetoed it, but the UFCW is lobbying for the same bill in all 50 states. "We're the focus of one of the most organized, most sophisticated, most expensive corporate campaigns ever launched against a single company," Scott told shareholders.

Bad press. Blank says Wal-Mart shouldn't blame the unions but the press it has gotten over the discrimination lawsuit and the fines it paid for federal child and immigrant labor violations. "It is going to be a problem as Wal-Mart gets into markets where price isn't the only consideration, and people can afford to ask, 'Does this company reflect my values?'" he says, noting that Wal-Mart has opened only four of the 40 Superstores it said in 2002 it hoped to in California. Bob McAdam, Wal-Mart's vice president for community affairs, says that figure is a four-to-six-year goal. "Even in places where we've seen opposition, once the stores open, they are phenomenally successful," he says.

Resistance to new stores could pose a problem, however, since many of those planned locations are in more-affluent areas. "It's a complicated issue, because large numbers of people want to shop at Wal-Mart. They just don't want them across the street," says Edward Weller at ThinkEquity Partners in San Francisco. But based on how Wal-Mart has reigned supreme since the early 1990s, he and many analysts are betting the company will weather its current woes. And if U.S. growth proves difficult, there's the rest of the world, which already accounts for 20 percent of the retailer's business. "I don't think Wal-Mart can ever be underestimated," Weller says. "They are so very good."

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Eminent domain: A big-box bonanza?

Court's ruling OKed land grab for business like Target, Home Depot, CostCo, Bed Bath & Beyond

By Parija Bhatnagar
CNN/Money
June 24, 2005: 3:20 PM EDT               [back to top]

NEW YORK (CNN/Money) - The Supreme Court may have just delivered an early Christmas gift to the nation's biggest retailers by its ruling Thursday allowing governments to take private land for business development.

Retailers such as Target (Research), Home Depot (Research) and Bed, Bath & Beyond (Research) have thus far managed to keep the "eminent domain" issue under the radar -- and sidestep a prickly public relations problem -- even as these companies continue to expand their footprint into more urban residential areas where prime retail space isn't always easily found.

Eminent domain is a legal principle that allows the government to take private property for a "public use," such as a school or roads and bridges, in exchange for just compensation.

Local governments have increasingly expanded the scope of public use to include commercial entities such as shopping malls or independent retail stores. Critics of the process maintain that local governments are too quick to invoke eminent domain on behalf of big retailers because of the potential for tax revenue generation and job creation.

The Supreme Court's decision Thursday clarified that local governments may seize people's homes and businesses -- even against their will -- for private and public economic development.

The ruling would seem to offer new opportunities to retailers. However, some industry watchers caution that with Thursday's decision thrusting the eminent domain issue into the national spotlight, companies using eminent domain risk a very public backlash.

Craig Johnson, president of retail consulting group Customer Growth Partners, said that retailers shouldn't interpret the high court's decision to be a green light to aggressively expand even into those neighborhoods where a big-box presence is unwelcome.

"Even with the Supreme Court's decision potentially in their favor, smart retailers would rather go into communities wearing a white hat rather than a black one," said Johnson.

The appropriate move for companies would be to selectively use eminent domain as a last resort, he said, not as a first course of action. "I think companies have learned a few lessons from Wal-Mart's public relations struggles," he said.

Where's the space crunch? According to industry watchers, retailers face a different type of expansion problem on the East Coast versus the West Coast.

"On the West Coast, land availability takes a back seat to labor union issues and that's why Wal-Mart has consistently run into problems in California," Johnson said. "On the East Coast, because of population density it's very hard to get big open space and the zoning is more restrictive," Johnson said.

Industry consultant George Whalin said that's one reason that Target, the No. 2 retailer behind Wal-Mart, (Research) has resorted to using eminent domain to set up shop in a few East Coast markets.

Target and Wal-Mart could not immediately be reached for comment.

"Wal-Mart and Target have both been criticized for their eminent domain use," said Burt Flickinger, a consultant with the Strategic Resources Group.

Meanwhile, eminent domain opponents called the high court ruling a "big blow for small businesses."

"It's crazy to think about replacing existing successful small businesses with other businesses," said Adrian Moore, vice president of Los Angeles-based Reason Public Policy Institute, a non-profit organization opposed to eminent domain.

"There are many, many instances where we've found that the cities that agreed to eminent domain use not only destroyed local businesses but the tax revenue that the local government had hoped to generate did not come to pass," Moore said.

But at least one retail industry analyst sees things a little differently.

"Expanding for big box store is a challenge, especially in the Northeast. Therefore, retailers will have to devise a strategy for using eminent domain," said Candace Corlett, retail analyst with WSL Strategic nRetail.

"Local communities may oppose Wal-Mart and Target coming to their area but as consumers, they also want to shop at these stores and they complain when they don't have these stores nearby," she said. "The fact is that shoppers ultimately vote with their dollars and retailers are very well aware of that."

Click here to read about whether the government can force you to sell your house in the name of new development.

Where is Wal-Mart looking to expand overseas?

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The United States of Wal-Mart

by John Dicker
BuzzFlash.com                      [back to top]

Okay, they are anti-Union and a huge chunk of their employees get paid so little that they are on Medicaid. Okay, people with minimum wage jobs or no jobs shop at Wal-Mart because their prices are low. Why are the prices so low? Because they pay their employees so little -- and because they buy merchandise from overseas, which eliminates many of the jobs formerly held by their customers.

It's kind of like the Bush Administration economic policies all rolled up in one corporation, or was that Enron?

But we digress.

Wal-Mart is becoming the big fat target that symbolizes the widening income gap in America, globalization, government subsidies of private businesses, and the decline of the middle class, not to mention conservative politics and onerous work demands of its employees.

And there's more coming. "Outfoxed" producer is doing a documentary on Wal-Mart coming out in the fall (and we can assure you it won't be a Valentine), and another book on the company is do out around the same time.

To us, Wal-Mart is most symbolic of the self-cannibalization it represents of the working poor, the non-working, and the lower middle class who buy goods made overseas because they can't afford ones made in the U.S.A. It's kind of like patronizing your own economic slaughterhouse.

The book is chock full of factual and anecdotal information about Wal-Mart and its founder Sam Walton, such as, "It employs one of every 115 American workers. If it were a nation-state, it would be one of the world's top twenty economies." It has yearly sales of some $260 billion.

If Wal-Mart isn't slowed down, America is headed toward third world status, subsidized by the taxpayers, who foot the bill for worker's social needs beyond what their low wages can afford them.

Wal-Mart may put forth a smiley face, but it has one of the highest employee turnover rates in retailing. Obviously, not everyone is happy -- and for good reason.

Book Description | "The United States of Wal-Mart"

An irreverent, hard-hitting examination of the world's largest-and most reviled-corporation, which reveals that while Wal-Mart's dominance may be providing consumers with cheap goods and plentiful jobs, it may also be breeding a culture of discontent.

It employs one of every 115 American workers. If it were a nation-state, it would be one of the world's top twenty economies. With yearly sales of nearly $260 billion and an average wage of $8 an hour, Wal-Mart represents an unprecedented-and perhaps unstoppable-force in capitalism. And there have been few corporations that have evoked the same levels of reverence and ire.

The United States of Wal-Mart is a hard-hitting examination of how Sam Walton's empire has infiltrated not just the geography of America but also its consciousness. Peeling away layers of propaganda and politics, investigative journalist John Dicker reveals an American (and, increasingly, a global) story that has no clear-cut villains or heroes-one that could be the confused, complicated story of America itself.

Pitched battles between economic progress and quality of life, between the preservation of regional identity and national homogeneity, and between low prices and the dignity of the American worker are beginning to coalesce into an all-out war to define our modern era. And, Dicker argues, Wal-Mart is winning. Revealing that the company's business practices have been shaping American culture, including the nation's social, political, and industrial policy, The United States of Wal-Mart provides fresh insight into a controversy that isn't going away.

John Dicker is a journalist whose work has appeared in The Nation, Salon, and the Colorado Springs Independent, among other publications.

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Kennedy, Union Execs Blast Wal-Mart on Health Benefits

By Randy Hall
CNSNews.com
June 23, 2005               [back to top]

(CNSNews.com) - Union representatives, backed by congressional Democrats, Wednesday escalated their attack on the world's largest retailer. They accused Wal-Mart of being "morally bankrupt" and "un-American" for the way it handles employee health care benefits. A Wal-Mart executive at the event disputed those charges.

While introducing the Health Care Accountability Act, Sen. Ted Kennedy (D-Mass.) charged that Wal-Mart "doesn't want to pay their fair share for health insurance for their employees," who then must receive health coverage through taxpayer-funded plans like Medicaid.

Kennedy said that every elected government official -- "every Democrat, every Republican" -- has health insurance "because they understand the importance of providing health care not only for themselves, but also for their families.

"If it's good enough for the Congress, if it's good enough for the Senate, if it's good enough for the president, it's good enough for all Americans," Kennedy said. "Everyone believes that -- except Wal-Mart. See Video

"Medicaid and the Children's Health Insurance Program provide a critical safety net for low-income women and children, the disabled and the elderly," Kennedy said. "They should not also have to underwrite the profits for large companies like Wal-Mart."

To provide greater public scrutiny of employees' health insurance, Kennedy's bill would require every state to generate a report each year naming companies that have 50 or more workers on their payrolls who receive government-funded health care.

"Many states already track this kind of data," Rep. Anthony Weiner (D-N.Y.), the sponsor of similar legislation in the House, said. "And in 14 of the 15 states that do, Wal-Mart is the biggest abuser of taxpayer-subsidized health care, costing taxpayers more than $210 million," he added.

Citing the need for similar information from other states, Weiner added that the proposed bills "will allow us to paint a fuller picture of the Wal-Mart debate than a superficial examination of the price of a pair of jeans."

Also attending the press conference were members of the United Food and Commercial Workers (UFCW), a union that represents 1.3 million employees in the U.S.

"This act will help the American people find out the truth about the 'Wal-Mart Economy,'" said Joe Hansen, UFCW president. "It is not only morally bankrupt, it is un-American for Wal-Mart, a company with over $10 billion in profits, not to be able to give its workers better health insurance than our public safety net," he declared. See Video

"The 'Wal-Martization' of our economy, including Wal-Mart's health-care policy, jeopardizes our workers' ability to join the middle class" because that company "puts profits before people," Hansen added.

However, Mia Masten, director of corporate affairs in Wal-Mart's East Region also attended the event. Afterwards, Masten told Cybercast News Service that she and her company agree that a discussion on the crisis of skyrocketing health care costs is "long past due. We're all for it."

Masten called it "unfortunate," however, that so much of the legislators' attention has been focused on just one company, even one as large as Wal-Mart. "The issue is much, much broader than Wal-Mart," she said. "The issue right now is that we need to have meaningful health-care reform.

"If we're going to move forward with this data collection," Masten noted, "it needs to be accurate, it needs to be comprehensive, it needs to be transparent, and something needs to be done with that information besides just having a press conference."

Masten insisted that Wal-Mart does provide health-care benefits for full and part-time employees. "We have 1.2 million associates in the U.S. We provide health care for more than half of them, not to mention over 400,000 of their family members," she said.

"All in all, Wal-Mart provides health care for more than 900,000 Americans" despite the "misinformation" that was presented at the news conference, she said. See Video

Kennedy and Weiner were joined by Sen. Jon Corzine (D-N.J.) at the news conference, but the congressional members answered only three questions from reporters before cutting off the event.

When asked if she knew whether any of the sponsors of the Health Care Accountability Act had ever been inside a Wal-Mart store, Masten replied: "I don't know. It'd be interesting. I'd love to take them on a tour."

(Cybercast News Service Correspondent Jered Ede contributed to this report.)

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Wal-Mart's healthcare policy rapped

Kennedy wants public aid listed

By Bloomberg News
June 23, 2005                 [back to top]    

WASHINGTON -- Democratic senators Edward M. Kennedy of Massachusetts and Jon Corzine of New Jersey have proposed a law requiring that states report the names of companies that have 50 or more employees who receive government-funded healthcare.

The bill is intended to spotlight large employers such as Wal-Mart Stores Inc., the world's biggest retailer, that rely on state aid for employee medical coverage. More than 600,000 of Wal-Mart's 1.26 million US workers get benefits from government programs or through a spouse's employer, the lawmakers said.

''This is the ultimate in turning your back on responsibility to society," Corzine said. ''The numbers are staggering."

Some states are considering laws that would force the biggest employers to pay more for worker healthcare benefits.

Fifteen states, including Florida and California, already require disclosure of employers with large numbers of workers on state programs, the lawmakers said. Florida reported spending $61 million on healthcare for Wal-Mart employees, Kennedy said.

Government aid programs ''should not also have to underwrite the profits for large companies like Wal-Mart," Kennedy said.

Arkansas-based Wal-Mart, the largest US employer, reported net profit of $10.2 billion in the fiscal year ended Jan. 31. It pays an average full-time hourly wage of $10.

Wal-Mart offers eight health plans, with premiums starting at $40 a month for an individual, and doesn't cap most expenses, the company said.

''We encourage transparency as long as the collection of information includes all employers in the US," Wal-Mart spokesman Dan Fogleman said. ''The issue's much broader than Wal-Mart. Our nation faces a healthcare crisis."

© Copyright 2005 The New York Times Company

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Wal-Mart Is Focal Point Of Democrats' Health Bill

By Amy Joyce
Washington Post Staff Writer
Thursday, June 23, 2005; D02             [back to top]

Several congressional Democrats introduced a bill yesterday that would force states to report the names of companies that have 50 or more employees who receive government-funded health care, an effort to pressure Wal-Mart Stores Inc. in particular to improve employee health coverage.

In introducing the Health Care Accountability Act, Sen. Edward M. Kennedy (D-Mass.), Rep. Anthony D. Weiner (D-N.Y.), and Sen. Jon S. Corzine (D-N.J.) said they are concerned that large employers such as Wal-Mart are transferring responsibility for health care to government-funded programs such as Medicaid.

Of Wal-Mart's 1.3 million full- and part-time employers, the lawmakers estimate that more than 600,000 do not have company insurance. Company critics say Wal-Mart wages are so low and the health premiums charged to employees so high, even some full-time employees qualify for government-funded health care.

"Every member of Congress has health insurance because they understand the importance of providing for themselves and family. If it's good enough for Congress . . . it's good enough for everyone. Except for Wal-Mart," Kennedy said at a news conference. "Every worker in America is paying a part of their taxes to pay for Wal-Mart."

Wal-Mart has been the focus of legislation nationwide that would force it to do more to insure its workers. In April, the Maryland General Assembly passed a bill that would have required Wal-Mart to spend more on employee health benefits. Gov. Robert L. Ehrlich Jr. vetoed the bill, but Democratic legislative leaders have vowed to override the veto. Legislators in Pennsylvania, New Jersey and Delaware are moving in a similar direction, and Wal-Mart's opponents have rallied around the health care issue.

Most recently, the company lobbied against legislation in Minnesota that would show which employers have been a drain on the state's health care system.

"We encourage transparency as long as the collection includes all employers in the U.S. It is important that if we use this data collection as a baseline moving forward that the data be comprehensive and accurate," said Wal-Mart spokesman Nate Hurst.

Wal-Mart said it provides health insurance to more than 568,000 of its employees. About 14 percent of its workers have no coverage. The rest rely on health care coverage from another source, such as a spouse or government program.

Some of the uninsured "may turn to state Medicaid programs which were designed to provide medical coverage at very low cost to relatively low-income residents, at better premiums and related costs than even Wal-Mart can negotiate," Hurst said.

Wal-Mart provides full-time benefits to employees who work 34 hours or more a week. Employees must wait 180 days before they receive health benefits. For families, premiums range from about $155 a month with a $1,000 annual deductible and access to Wal-Mart network doctors, to nearly $300 a month with a deductible of $350 and the right to use any doctor, according to the company Web site.

Hurst said most Wal-Mart jobs are full-time. Part-time workers can receive health care coverage for themselves only after two years of employment.

In 14 states that already track which companies' employees use the most government health care, Wal-Mart workers are the biggest users of such programs, according to the lawmakers. At least 27 states have introduced or plan to introduce health care disclosure legislation. Massachusetts, Colorado, Hawaii and Washington state all passed the Health Care Disclosure Act during 2005. Washington's governor, Christine Gregoire, recently vetoed the bill.

Georgia was the first state to look at such numbers. State Rep. Nan Grogan Orrock said more than 10,000 Wal-Mart employees were on a state health care program. The next-closest employer had 700 on state health care. "I call it the Wal-Mart tax," she said at the news conference. "This is a raging case of corporate welfare."

Joseph T. Hansen, president of the United Food and Commercial Workers Union, said the bill would be the first step to forcing larger companies to cover employee health care.

© 2005 The Washington Post Company

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Styling With Wal-Mart

By Timothy M. Otte
June 23, 2005                        [back to top]

Lord be praised ... Wal-Mart (NYSE: WMT) is starting to figure it out! After three decades of a single-minded pursuit of ever lower prices, the world's largest retailer is finally discovering the law of diminishing returns: The more effort you put into doing exactly the same thing, over and over again, the less benefit you will reap from that effort over time. In other words, too much of a good thing, even lower prices, can be unhealthy.

President Lee Scott recently admitted in a Reuters article that in a bid to boost lagging sales, Wal-Mart stores prominently displayed impulse items priced at less than $1, in hopes that customers would throw an additional item into the cart. The attempt backfired: Scott said that "the further we went that way, the less relevant we got to be to the customer." He also noted the stores began to look "junky," as if the rest of us hadn't already noticed. It was becoming painfully obvious.

Wal-Mart has been struggling in its attempt to grow comparable sales lately. In the current fiscal year's first quarter, the company was able to eke out just a 2.9% gain, well below rivals Target (NYSE: TGT), Costco (NASDAQ: COST), and Best Buy (NYSE: BBY). It's fair to note that the deeper Wal-Mart gets into the grocery business, the more difficult it will be for the company to deliver strong comps. But Costco also relies heavily on food, and Best Buy has to contend with price deflation in many key product categories.

No, something else has been going on here. The company's competitors are simply doing a better job of getting into the customers' heads, as I noted a month ago. For Wal-Mart, the holy grail has always been having the lowest opening price point (OPP). That's its strength, and with a motto of "Always low prices. Always," the customers expect low OPP merchandise. But the practice of driving prices lower, year after year, eventually removes all quality from the offering.

Is the customer only looking for the lowest price? Hardly. Target is having great success with mixing a bit of style into the assortment. Costco offers exceptional prices, but often on truly upscale merchandise. Best Buy is adding labor into its stores to help the customer figure out how to use technology. None of these companies takes the customer for granted. Instead, they seek out what the customer wants, and then price it attractively.

I'm not suggesting that Wal-Mart should abandon low OPPs. But increasingly, the customer is seeking the right mix of price and quality. There's a way for Wal-Mart to strike a better balance and still remain the low price leader: Its legendary IT and logistics systems are miles ahead of the competition and will continue to provide a sustainable competitive advantage. The issue here is mindset, not supply chain.

I can't tell you how encouraged I am that the company has come to this realization -- and not just because I own the stock. I think Wal-Mart is one of the world's great companies, and it pains me to see the house that Sam built going through a soft patch. Other writers are asking whether Wal-Mart should make this kind of change. My answer is that Wal-Mart can do whatever it wants. Sure, the change will take time. You don't change the mindset of a huge merchandising organization overnight. But it appears the company has taken the first step -- recognizing the problem.

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Kennedy, Union Execs Blast Wal-Mart on Health Benefits

CNSNews.com                [back to top]

Union representatives, backed by congressional Democrats, Wednesday escalated their attack on the world's largest retailer. They accused Wal-Mart of being "morally bankrupt" and "un-American" for the way it handles employee health care benefits. A Wal-Mart executive at the event disputed those charges.

While introducing the Health Care Accountability Act, Sen. Ted Kennedy (D-Mass.) charged that Wal-Mart "doesn't want to pay their fair share for health insurance for their employees," who then must receive health coverage through taxpayer-funded plans like Medicaid.

Kennedy said that every elected government official -- "every Democrat, every Republican" -- has health insurance "because they understand the importance of providing health care not only for themselves, but also for their families.

"If it's good enough for the Congress, if it's good enough for the Senate, if it's good enough for the president, it's good enough for all Americans," Kennedy said. "Everyone believes that -- except Wal-Mart.

"Medicaid and the Children's Health Insurance Program provide a critical safety net for low-income women and children, the disabled and the elderly," Kennedy said. "They should not also have to underwrite the profits for large companies like Wal-Mart."

To provide greater public scrutiny of employees' health insurance, Kennedy's bill would require every state to generate a report each year naming companies that have 50 or more workers on their payrolls who receive government-funded health care.

"Many states already track this kind of data," Rep. Anthony Weiner (D-N.Y.), the sponsor of similar legislation in the House, said. "And in 14 of the 15 states that do, Wal-Mart is the biggest abuser of taxpayer-subsidized health care, costing taxpayers more than $210 million," he added.

Citing the need for similar information from other states, Weiner added that the proposed bills "will allow us to paint a fuller picture of the Wal-Mart debate than a superficial examination of the price of a pair of jeans."

Also attending the press conference were members of the United Food and Commercial Workers (UFCW), a union that represents 1.3 million employees in the U.S.

"This act will help the American people find out the truth about the 'Wal-Mart Economy,'" said Joe Hansen, UFCW president. "It is not only morally bankrupt, it is un-American for Wal-Mart, a company with over $10 billion in profits, not to be able to give its workers better health insurance than our public safety net," he declared.

"The 'Wal-Martization' of our economy, including Wal-Mart's health-care policy, jeopardizes our workers' ability to join the middle class" because that company "puts profits before people," Hansen added.

However, Mia Masten, director of corporate affairs in Wal-Mart's East Region also attended the event. Afterwards, Masten told Cybercast News Service that she and her company agree that a discussion on the crisis of skyrocketing health care costs is "long past due. We're all for it."

Masten called it "unfortunate," however, that so much of the legislators' attention has been focused on just one company, even one as large as Wal-Mart. "The issue is much, much broader than Wal-Mart," she said. "The issue right now is that we need to have meaningful health-care reform.

"If we're going to move forward with this data collection," Masten noted, "it needs to be accurate, it needs to be comprehensive, it needs to be transparent, and something needs to be done with that information besides just having a press conference."

Masten insisted that Wal-Mart does provide health-care benefits for full and part-time employees. "We have 1.2 million associates in the U.S. We provide health care for more than half of them, not to mention over 400,000 of their family members," she said.

"All in all, Wal-Mart provides health care for more than 900,000 Americans" despite the "misinformation" that was presented at the news conference, she said.

Kennedy and Weiner were joined by Sen. Jon Corzine (D-N.J.) at the news conference, but the congressional members answered only three questions from reporters before cutting off the event.

When asked if she knew whether any of the sponsors of the Health Care Accountability Act had ever been inside a Wal-Mart store, Masten replied: "I don't know. It'd be interesting. I'd love to take them on a tour."

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Doing Something About Wal-Mart

By Danny Glover
AlterNet
Posted on June 22, 2005            [back to top]

Look into the faces of America's children. There you will find America's future. That's why all of us -- teachers, mentors and parents -- work our hardest to teach, to inspire, to motivate, to instill values that we believe will make their lives better and our nation a better place. It's not easy. But it is the most valuable contribution we can make.

I know. As a kid, I was a hard case to crack, to reach. But my teachers, and my parents, persevered. They taught me a sense of social justice that won't quit. But there's a threat looming that, as parents, teachers, mentors, we can't ignore. We may be living in a time when the generation now in school will, for the first time in our country's history, be worse off than the previous generation.

While there are no doubt many reasons for this threat, there's one that we can do something about. It's the corrosive, drive-to-the-bottom approach some rogue corporations take toward the people they employ. Wal-Mart, the world's -- and this country's -- largest employer uses tactics that are shocking.

Wal-Mart puts kids around the world at risk. It requires its suppliers to import goods from China and other impoverished nations where young people work horrendous hours for little pay. In this country, it was found guilty in April of violating child labor laws. Wal-Mart exposed 85 of its own employees under 18 to dangerous machinery such as chain saws, cardboard balers and forklifts. It got a light fine, a slap on the wrist. Now it faces the largest class action discrimination suit in history--for how it treats its female employees.

My parents were both union members. Because of their unions, we had a decent standard of living. Wal-Mart is one of the most viciously anti-union companies in America. It takes two Wal-Mart jobs just to earn above-poverty wages. 600,000 of its employees can't afford their health care plan. Consequently, the taxpayers in every state wind up paying for those employees' health care, either through Medicaid, or through higher premiums for their own health care plans.

That's just wrong and I think we can change it. The first step toward changing Wal-Mart's anti-social behavior is to use the Internet to recruit teachers, parents, mentors and concerned citizens to send Wal-Mart a simple, loud, clear message: "Because of your behavior, I'm going to do my shopping for back-to-school supplies someplace else this fall."

I urge you to sign this pledge, then become an essential player in this new movement to change America. It's a chance for all of us to use new technology -- Internet and email -- that can bring about social change, to make America's corporations accountable to America's communities and America's kids.

Danny Glover is an actor and longtime human rights activist.

© 2005 Independent Media Institute. All rights reserved.

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Wal-Mart Is Fined for Child Labor Violations

From Bloomberg News
latimes.com
June 22, 2005               [back to top]

Connecticut fined Wal-Mart Stores Inc. $3,300 over child labor violations after a state investigation found that some minors lacked proper paperwork and were operating hazardous equipment at the stores.

Gov. M. Jodi Rell said that the state found 11 violations in three Wal-Mart stores in the state and that 337 minors worked at the company's 32 Connecticut stores from 2003 to 2005. The probe came after the Labor Department in February said the retailer had similar violations nationwide.

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Senators want Wal-Mart healthcare info

Legislation could require companies like Wal-Mart to report number of employees on Medicaid.

By David Ellis
CNN/Money Staff Writer
June 22, 2005: 6:45 PM EDT         [back to top]

NEW YORK (CNN/Money) - Hoping to foster greater responsibility for workers' healthcare costs in such companies as Wal-Mart, a group of Democratic lawmakers introduced a bill Wednesday that would require states to report the number of employees of large companies that rely on publicly-funded healthcare programs.

The Health Care Accountability Act, which was sponsored by Sen. Edward Kennedy of Massachusetts, Sen. John Corzine of New Jersey and New York Rep. Anthony Weiner, would not mandate a change in health insurance policies but require companies to disclose the number of employees that rely on taxpayer-funded healthcare programs such as Medicaid.

Wal-Mart, the number one retailer nationwide, has faced criticism recently for failing to provide healthcare coverage for many of its workers. Many of its critics believe the cuts made in employee benefits only serve to help the company's bottom line.

"Consumers shop at Wal-Mart and other huge retailers because they offer 'rock bottom' prices," New Jersey Senator John Corzine said in a statement. "The reason they can do so is because they often give their employees 'rock bottom' health benefits."

15 states, including Georgia, Florida and Massachusetts currently require large companies to report the number of employees that rely on government healthcare. According to data collected by lawmakers, the reliance of Wal-Mart employees on government healthcare cost taxpayers in excess of $210 million. Among other top abusers was Allied Domecq-owned Dunkin' Donuts.

In a statement, Wal-Mart defended its employment practices and noted that it was unfairly being singled out.

"We encourage transparency as long as the collection is equally applied to all employers in the U.S.," the company said. "Unfairly targeting individual companies is simply not the answer, especially when a company like ours provides over 1.2 million jobs in the U.S. and insures more than 900,000 people (associates and their families)."

While the legislation faces significant hurdles in a Republican-controlled Congress, Laura Capps, a spokesperson with Senator Kennedy's office, said with over 600,000 workers relying on government healthcare, the criticism is not undue.

"The point is they are an easy target because of how egregious their negative impact is on states," said Laura Capps, a spokesperson for Senator Kennedy's office. "We think with all this pressure they can change their policy - this is money that is coming from taxpayers and big employers are getting off without having to pay."

Shares of Wal-Mart (up $0.26 to $48.79, Research) edged higher in regular trade on the New York Stock Exchange to end at $48.79.

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Dems' bill seeks health data from Wal-Mart, others

Reuters
Tue Jun 21, 2005          [back to top]

WASHINGTON, June 21  - In an effort to put pressure on the health-care policies of large profitable companies like Wal-Mart Stores Inc. (WMT.N: Quote, Profile, Research) , several Democrats said on Tuesday they would introduce a bill requiring states to report annually on the number of workers relying on taxpayer-funded health programs. The bill would not require companies to offer affordable insurance to workers, but it would shed light on their practices and establish how many workers rely on publicly-funded programs such as Medicaid, a state-federal program for those who cannot afford medical care.

"Programs like Medicaid provide a critical safety net for low-income women and children, the disabled, and the elderly and shouldn't be a profit center for large companies like Wal-Mart," said Sen. Edward Kennedy on Massachusetts, one of the bill's sponsors.

Wal-Mart denies charges that it steers workers toward public assistance and says it typically picks up two-thirds of the cost of health insurance premiums for its workers.

Spokesman Nate Hurst said Wal-Mart employees can choose from health insurance plans starting at $40 a month for a single person and less than $155 a month for family coverage.

Kennedy, John Corzine of New Jersey and New York Democratic Rep. Anthony Weiner, plan to introduce the bill on Wednesday.

It is unclear if the Health Care Accountability Act will advance in the Republican-controlled Congress.

The measure would not single out Wal-Mart. A Kennedy aide said a similar law in Massachusetts found that Wal-Mart placed third in the number of workers on public-sector health care in the state, after Dunkin' Donuts, soon to be acquired by Pernod Ricard (PERP.PA: Quote, Profile, Research) from Allied Domecq Plc (ALLD.L: Quote, Profile, Research) , and the Stop & Shop grocery chain, a unit of Dutch retailer Ahold (AHLN.AS: Quote, Profile, Research) .

But some state legislators have focused on Wal-Mart because of its size and ranking as the world's biggest retailer.

Maryland lawmakers approved legislation recently that would have effectively forced Wal-Mart to spend more on employee health benefits but Gov. Robert Ehrlich vetoed it.

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For Wal-Mart, green is the colour of money

Peter Ladner
Business in Vancouver
June 21-27, 2005; issue 817            [back to top]

The hidden story behind the proposed "green Wal-Mart" store on southeast Marine Drive in Vancouver is not the company's labour practices, alleged sweatshop suppliers or its impact on competing small businesses.

Yes, those are all worthy issues (although not all pertinent at a rezoning hearing), but if this building is approved, it's the greening of the building design that will be remembered long after the debate about all the other issues moves on.

Sure, the green design is seen as a sop to a council that is predisposed to dislike successful big businesses unless they have green roofs, but there's a lot more to it than that. Whether or not the store is approved in Vancouver, Wal-Mart executives have decided that green buildings are worth the money. I'm guessing the south Vancouver market is not so big that Wal-Mart, the biggest commercial landowner in North America, would willingly invest in a more expensive building than is necessary. Wal-Mart would not veer off its world-leading pursuit of profit for the sake of a few members of Vancouver City Council.

No, they're doing it because, having been motivated by political concerns, they have crunched the numbers and found out that a green building makes financial sense. They're not going green to be cool; they're doing it to make money. The biggest, meanest retailer in the world has signed on to a piece of sustainability. According to architect Peter Busby, they did it only after analysing every green feature to prove its business payoff.

If you haven't been feeling the green building groundswell personally, a green Wal-Mart might seem like an anomaly, but in planning and design circles, so-called green features, validated by Leadership in Energy and Environmental Design (LEED) certification, are rapidly becoming the new norm.

The Pacific Northwest region leads North America in green buildings per capita, but everyone's in the race. After starting with public sector and non-profit buildings, LEED standards have moved into commercial and residential buildings. All new civic buildings in Vancouver City will be built to at least a LEED silver standard. Geothermal is becoming commonplace. Wal-Mart going green sends a huge signal to the commercial marketplace. The first responder locally is Canadian Tire, Wal-Mart's proposed Marine Drive neighbour. Nobody blinked or even raised an eyebrow when it announced it would achieve LEED gold status with its new building in the old Chrysler headquarters.

Being the home of the first green Wal-Mart, a potential prototype for all the chain's future stores, would be another feather in Vancouver's green excellence cap. But before complacency sets in, take note of what's going on elsewhere. A recent issue of Grist Magazine (www.grist.org) reports that "shopping-mall titan Robert Congel, one of the world's biggest commercial real-estate developers, is about to begin building a multibillion-dollar, 800-acre shopping and entertainment complex ... without so much as a barrel of oil or a kilowatt of fossil-fuel-generated power... a 100 per cent clean-energy mega-mall.

"Congel's bulldozers - fully powered by pure biodiesel, along with the rest of his construction equipment - are scheduled to begin levelling the development site in early June (2005) on a massive brownfield in Syracuse, N.Y.... On it he plans to erect the optimistically named DestiNY USA (www.destinyusa.com), a retail complex powered entirely by wind turbines, solar panels, fuel cells, and biofuels."

Like the Canadian Tire and Wal-Mart green buildings, the DestiNY project screams hypocrisy when most visitors arrive in fossil-fuel-powered cars and vans.

But that, too, is about to hit a paradigm shift. As one speaker told Vancouver council last week, what happens when oil goes to $100 a barrel, as it is predicted to do, and gas prices make car travel uneconomical for people in search of $3 underwear? He was arguing against the Canadian Tire project, but my answer would be that those "highway-oriented retail" stores would then have to go the next green step, reaching out more to transit users, cyclists and neighbourhood customers, with more shuttles to the nearby RAV station and more home delivery services.

As I write this, Vancouver City Council has wrapped up hearings on the proposed Canadian Tire Store on southwest Marine Drive, with the Wal-Mart showdown coming June 20 and 21. A final decision on approval of both of these stores will happen at the June 28 council meeting.

Correction: In my last column I referred to John Godfrey by his old title, Parliamentary Secretary. Since July, he has been Minister of State (Infrastructure and Communities).

Peter Ladner is a Vancouver city councillor and vice-president, Business in Vancouver Media Group, pladner@biv.com. His column appears weekly.

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More Child Labor Exploitation Found at Wal-Mart

by Brendan Coyne
NewStandard                [back to top] 

Jun 20 - Investigators with the Connecticut State Attorney's General's office uncovered a series of labor law violations at three Wal-Mart stores in the state and expect more complaints to be confirmed in the coming weeks.

In total, eleven $300 fines have been assessed against the company for breaking child labor laws at three stores in Connecticut. Employees under the age of eighteen were found to regularly work late at night and with machinery, both prohibited by federal and state law.

Connecticut began the investigation shortly after February's deal between the US Department of Labor and Wal-Mart over alleged child labor law violations at stores in Connecticut, Arkansas and New Hampshire. The much criticized agreement calls for the company to pay $135,540.

Many groups denounced that settlement as a "sweetheart deal" for Wal-Mart because of the low dollar amount of the fines and a provision giving the company fifteen days' advance notice before a federal investigation begins. The settled fine is roughly half of what the DoJ could have sought in court.

By law, the maximum fine a company can receive for each instance of breaking child labor laws in Connecticut is $300. State Attorney General Richard Blumenthal pledged to continue investigating Wal-Mart for illegal activities.

© 2005 The NewStandard. See our reprint policy.

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Court to hear Wal-Mart's discrimination case in August

www.sfgate.com 
Monday, June 20, 2005       [back to top]    

A federal appeals court said Monday that it would hear an appeal Aug. 8 by Wal-Mart Stores Inc. of a San Francisco judge's order approving class-action status for a sex-discrimination lawsuit representing as many as 1.6 million current and former women employees.

The 9th U.S. Circuit Court of Appeals did not comment on the merits of the appeal.

The suit claims that the retail giant set up a system that frequently pays its female workers less than their male counterparts for comparable jobs and bypasses them for promotions.

Bentonville, Ark.-based Wal-Mart, the nation's largest private employer, said the company's 3,500 stores do not have a policy discriminating against women, and said the class of plaintiffs is so large that the case is "unmanageable."

If the appeals court does not overturn last year's ruling by U.S. District Judge Martin Jenkins, the case will become the nation's largest civil rights lawsuit targeting one company.

The case is Wal-Mart v. Dukes, 04-16688.

©2005 Associated Press

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Fed Waits to See If Wal-Mart Accepts Pricier Huggies
(Correct) (Corrects number of commodities in index in the ninth paragraph.)

By Shobhana Chandra and Art Pine
Bloomberg
June 20                    [back to top]             

The makers of Huggies diapers want to raise prices; Alan Greenspan will be watching the Wal-Mart checkout counter to see if they succeed.

Kimberly-Clark Corp., along with other consumer-products makers such as Clorox Co. and Procter & Gamble Co., have announced the first widespread price boosts in a decade, in an effort to recoup higher raw-material costs. Discounters such as Wal-Mart Stores Inc. and Target Corp. are pushing back. ``The very last thing they want to do is to increase prices for the consumers,'' says Scott Krugman, spokesman for the National Retail Federation, the industry's Washington trade group.

The conflict highlights an important force in the economy that is helping to keep prices stable: the influence of ``big- box'' retailers such as Bentonville, Arkansas-based Wal-Mart, the world's largest retailer, and Minneapolis-based Target, the No. 2 U.S. discounter. Wal-Mart alone accounts for close to one-third of North American sales for major U.S. household goods companies; the resistance of it and fellow retailers to price increases helps make Federal Reserve Chairman Greenspan and other policy makers more confident that inflation is being contained.

``Over the past few years, the pricing power in the marketplace has shifted away from the manufacturer to the distributor-retailer like Wal-Mart,'' says Barry Bosworth, a senior economist at the Brookings Institution, a research group in Washington. ``These chains are so big, they have the upper hand in setting prices. If products don't sell, they eliminate them from the shelves.''

Pricing Power

Pricing power, the ability of corporations to raise prices easily, is one of the key indicators the Federal Reserve monitors continually in its deliberations over how far to keep raising interest rates, Fed Governor Donald Kohn said June 14.

Greenspan, during congressional testimony June 9, said that ``at the moment, we are finding little evidence of inflationary pressures on the product side.'' While he cited ``some evidence'' that pricing power has been increasing, he said overall inflation remains ``modest.''

That's why the household-goods increases may be closely watched, despite the fact that they affect a small part of the overall economy. On tap for the next two months are announced plans for a 9 percent boost in prices of Clorox liquid bleach; 5 percent increases in diapers from Cincinnati-based P&G's Pampers line and Dallas-based Kimberly-Clark's Huggies; and 6 percent to 7 percent increases in prices of batteries from Boston-based Gillette Co. and St. Louis-based Energizer Holdings Inc.

Raw Materials

Manufacturers say the planned price increases, the first in a decade, are needed to cover the soaring cost of raw materials. ``We have not taken enough pricing to recover margins,'' Gerald Johnston, chief executive of Oakland, California-based Clorox, told investors May 11.

The Reuters/Commodities Research Bureau index of 19 major commodities, from platinum to soybeans, rose 8.5 percent from February through mid-March. It then dropped 6.6 percent through mid-May and rose 5 percent over the past month.

Prices of pulp, used in paper and packaging, surged in 2004 to a four-year high of $590 a metric ton. Raw coffee prices hit a five-year high in March this year. PET resin, used in plastic bottles, rose 22 percent in 2004 and is expected to jump 39 percent this year, according to estimates from Goldman, Sachs & Co.

A Collective Feeling

Bob Goldsborough, an industry analyst at Ariel Capital Management Inc. in Chicago, which owns Clorox shares among the $21 billion in assets that it manages, says that until recently, competition made producers of household products leery about raising prices for fear it would cost them market share. ``There's now, in the case of managements, a collective feeling that they have to take price increases and help make them stick,'' he says.

Retailers, meanwhile, are maintaining a skeptical posture. ``When suppliers bring price increases to us, we don't just accept it,'' says Karen Burk, a Wal-Mart spokeswoman. ``We ask them to show us that raw materials costs have actually gone up and that's the reason for the increase.''

Even then, ``if suppliers' costs are going up it doesn't necessarily mean it'll be reflected in our stores,'' she says. ``If there's any way we can not pass the price increase on, we try not to.''

Richard T. Curtin, director of the University of Michigan's Survey for Consumers, whose monthly report on consumer sentiment is closely watched by financial markets, doubts that most of the price increases planned for household goods will stick.

Hands to the Fire

Companies ``have a slight degree more pricing power than they did'' a year ago, ``but not as much as they think they do,'' Curtin says. ``Consumers have been holding manufacturers' hands to the discount fire, and I don't think they're going to give up.''

Curtin predicts that many consumers will shift ``from the name-brand product to the store-brand'' -- particularly in supermarkets. That's likely to be the strategy of Carla McDonald, a 47-year-old Madison, Wisconsin, mother of two. ``What do they want to do, drive us all to the store brands?'' she says. ``Good luck, Colgate!''

New York-based Colgate-Palmolive Co. plans price increases on its dishwasher detergent. Other price boosts announced since January involve Clorox's Glad trash bags and containers, Irvington, New York-based Prestige Brands Holdings Inc.'s Comet cleanser and P&G's stomach remedy Pepto-Bismol.

One-Time Events

While Amy Chasen, an analyst at Goldman Sachs in New York, sees ``an improving pricing environment,'' Robert Brusca, a former Federal Reserve economist who is now president of Fact & Opinion Economics in New York, says that ``I don't see any evidence'' that pricing power is up sharply. He thinks many of the increases that have stuck are likely to be one-time events that don't indicate a broader trend.

For the companies confronted by pushback from the big retailers and consumers, ``it's the perfect storm,'' says Jason Gere, a New York-based analyst at A.G. Edwards & Sons Inc. who covers household goods companies such as P&G. ``Manufacturers are being hit by higher commodity costs and have to increase prices somehow or their margins will get squeezed. But they can't afford to raise prices too much if they want to remain competitive on the shelf.''

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Wal-Mart confirms Vallejo Supercenter plans

By DAN JUDGE
Times-Herald      [back to top]

Arkansas-based retail giant Wal-Mart will soon file an application to build one of its massive Supercenters in Vallejo, company representatives confirmed Monday. Sometime this week, Wal-Mart will submit its plans for a store of roughly 160,000 square feet at the site of a former Kmart on Sonoma Boulevard, company spokesman Kevin Loscotoff said. "This is a great site for us," Loscotoff told the Times-Herald. "There is a whole corridor there ripe for revitalization, and we're excited about it." If the application is successful, the move could give Wal-Mart two Supercenters - which operate 24 hours a day and include grocery stores - within four miles of one another. The company has already started construction on an American Canyon Supercenter, which faces a legal challenge from two opposition groups. Loscotoff said he does not believe two of the huge stores so close together will over-saturate the market. He also described the Vallejo and American Canyon communities as two distinctly different markets, but did not offer details on how the customer base or stores may differ in the adjoining cities. "We see it as meeting our customers' demand," he said. Company officials estimate the new Vallejo store would employ more than 400 and generate about $600,000 in sales tax revenue for the city annually. They also claim that new architectural and design processes will create a "softer" look for the store while increasing energy efficiency by 30 percent. The company plans to close its 14-year-old Wal-Mart in Vallejo's Meadows Plaza when its American Canyon location eventually opens, Loscotoff said. The current Vallejo store is now in escrow, sources familiar with the deal say, and a Sonoma firm plans to buy the building and lease it to Home Depot for that company's second store in the city. It could take up to two years or more before the Supercenter could be completed, Loscotoff said. Wal-Mart representatives have had discussions with a number of City Council members and city staffers about proposed plans for the store, said William Fleishhacker, an attorney representing Wal-Mart. "We have gotten mixed reaction from staff and the council on whether it is appropriate for the site," Fleishhacker said, adding that council members are so far "neutral" on the issue. Vallejo Mayor Tony Intintoli Jr. said he's reserving judgment on whether he'll support a new Wal-Mart Supercenter in Vallejo until he sees the results of the required studies the application will trigger. "I don't have a position one way or the other," Intintoli said. "As far as I'm concerned, it's a store like any other. They'll put in an application, and it will follow a process that almost certainly will require an economic impact study and public hearings." The mayor said he doesn't know what Wal-Mart officials mean when they say that Vallejo and American Canyon are "two separate markets," able to support two Supercenters within four miles of each other. He's sure, though, that they've done their homework and are betting they can. "I worked in the real estate department of Lucky Stores 25 years ago, and I know that before a store goes into a market, they do a thorough analysis," Intintoli said. "They don't usually want to go where they won't be successful. I haven't seen it, but I'm sure they've done some sort of analysis of the market." The company's first California Supercenter opened in Stockton last year, with one scheduled to open in Gilroy this summer and two in Roseville and Marysville in the fall. Suisun City and Fairfield also have been identified as future sites for such stores. Wal-Mart's plans to bring Supercenters to California has met with legal challenges by a variety of groups, often arguing that the stores' impact on the environment has not been properly considered by money-hungry jurisdictions. In American Canyon, two groups have challenged the store that has been designed to anchor the new Napa Junction Mixed-Use Project. The two - American Canyon United for Responsible Growth and Citizens Against Poor Planning - filed suits asking the courts to set aside 2004 land use approvals. The groups claim the city violated its own zoning ordinances and the California Environmental Quality Act by ignoring economic impacts the supercenter might have on other businesses. Representatives of Wal-Mart, the city and Napa Junction developer Lakestreet Ventures have argued that all the proper procedures have been followed and much of the opposition is actually generated by Wal-Mart's competitors and labor unions. Kathleen Shamet, a spokesperson for American Canyon United, said having both stores so near each other will only magnify the supercenters' negative impact. In fact, she hopes neither store is built. "Vallejo has a lot more potential that to put in a Supercenter," Shamet said. "I am confident the Supercenter will never break ground in American Canyon." The two American Canyon lawsuits are scheduled to be heard in Napa Superior Court on Monday. - Times-Herald reporter Rachel Raskin-Zrihen contributed to this report.

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Springboro, developers to settle Wal-Mart lawsuit

John Wilfong
Dayton Business Journal
June 20, 2005                               [back to top]

Springboro officials and local developers have reached a tentative agreement after more than two years of legal wrangling over plans for a Wal-Mart Supercenter.

The agreement, hammered out during 18 months of negotiations, calls for a much different development than the initially planned 225,000-square-foot Wal-Mart Supercenter and Kohl's department store.

The agreement instead maps out a development that includes a limited amount of retail and service businesses -- such as a grocery store or gas station -- a hotel and conference center, and light industrial and office space. Buildings in the development can be no larger than 30,000 square feet, except for an anchor tenant that can be 90,000 square feet, said Springboro City Manager Chris Thompson.

RG Properties Inc., a Centerville-based developer of regional Wal-Marts that proposed the original plan, still will develop the 54-acre area at the intersection of state Route 741 and Austin Road.

"The picture (for that area) has really changed as the Austin Road interchange is becoming a reality," Thompson said. "I think it's an excellent, creative settlement for the city and the developer and the future development of the Austin Road interchange."

Bruce Ingram, an attorney from Columbus-based Vorys, Sater, Seymour and Pease LLP who is representing the developers, said he anticipates the plaintiffs will sign the agreement, which then will be passed on to Montgomery County Court of Common Pleas for final acceptance. As of June 15, no final decision had been reached.

Officials with RG Properties could not be reached for comment.

The Austin Road interchange is a joint project among Springboro, Miamisburg, Miami Township, Washington Township and Centerville to build an exit along Austin Road on Interstate 75. The communities plan to add 28,000 jobs through business and industrial park development there.

The Wal-Mart would have been permitted under the land's initial zoning, but when plans for the new interchange moved forward, the communities plotted a new course for the area focused more on business and industrial than commercial development. Springboro officials denied the plan for the Wal-Mart Supercenter soon afterward in late 2002, saying it did not fit into the plans they had for the area.

GCG Austin Ltd., Wooster Associates and Victory 4 LLC -- three companies related to RG Properties -- filed a lawsuit Feb. 14, 2003 in the Montgomery County Court of Common Pleas against the city and its planning commission after the Springboro Planning Commission and Springboro City Council denied the plans.

Thompson said the city and the developers began negotiations in January 2004.

Wal-Mart currently has a traditional store on state Route 741 in Miami Township and has plans to build a new supercenter on Kingsridge Drive near the Dayton Mall.

E-mail jwilfong@bizjournals.com. Call 222-6900, ext. 120.

© 2005 American City Business Journals Inc.

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Wal-Mart Nation

The world's largest retailer isn't just buying--and selling--stuff in China. It has become a major force for change

By DORINDA ELLIOTT
BILL POWELL/SHENZHEN
Sunday, Jun. 19, 2005                     [back to top] 

Joe Hatfield is the quintessential Wal-Mart guy--a chain-smoking good ole boy from Baltimore who started as an assistant store manager and toy buyer in the American heartland nearly 30 years ago under the tutelage of Sam Walton. Today he is the missionary from Bentonville, Ark., bringing the Wal-Mart way to China. "I was blessed to work for Sam Walton," he says, "and I am doubly blessed to work in China." Walking through a brightly lighted store in Shenzhen, the boom town across the border from Hong Kong, Hatfield, who heads Wal-Mart's retail operations in China, can't disguise his delight over the--what else?--"everyday low prices!" He zips over to an electronic keyboard selling for $20. "It was three times more a few years ago!" he exclaims. He pauses at a bathroom scale that used to sell for $6 and now is just $2.50. "We found a new vendor," he says. "It's amazing. We're bringing people a great shopping experience!" Chinese customers, piling goods into their shopping carts, seem to agree. In a corner of the food department, Wal-Mart salespeople lead a group of giggling women shoppers in a rousing relay race, transporting small sausages down the aisle with chopsticks.

From Wal-Mart's modest offices across town--a sea of small cubicles plastered with Sam Walton's inspirational messages (DON'T ALLOW YOURSELF TO FALL INTO DIFFICULT SITUATIONS YOU CAN'T CHANGE!) in Chinese--Hatfield is staging his own little revolution. He runs 46 stores today but has much bigger plans. In two years, Wal-Mart will double that number and, in the next year alone, he will train some 25,000 new employees in the art of delivering those everyday low prices to China's growing middle class. It's a grueling, nonstop job. Hatfield has visited 70 Chinese cities in the past six months, convincing Communist Party secretaries and provincial governors alike that opening more Wal-Marts is a "win-win-win-win-type situation." The core of his message to Wal-Mart's associates (as all company employees are called) is simple: respect for the individual--customers in particular--"is what we're all about." Unlike in most Chinese companies, the system is transparent--guanxi, or personal connections, don't matter in the firm's Chinese stores. "The culture of Wal-Mart is stronger in China than anywhere else in the world," he says.

That shouldn't be surprising. The giant retailer is the biggest player in the huge and growing U.S.-China business relationship. Hatfield's stores are simply a sign that the alluring but elusive China market is opening up to all comers. But as grueling as Hatfield's job is--when asked what he does for fun in Shenzhen, he responds, "Nothing''--he has the less controversial half of his firm's business.

It's the buy side, not the sell side that gets the headlines back home. Wal-Mart sources everything from T shirts to toys to lighting fixtures in China--which puts the company right in the firing line of those who think the U.S. manufacturing sector is being killed by too-cheap-to-beat Chinese imports. By itself, Wal-Mart is China's sixth largest export market-- just behind Germany--buying some $18 billion worth of goods last year.

That makes someone you have never heard of, Chiqui (pronounced Chick-ee) Cui, one of the most powerful men in the global economy. The U.S. ran a $162 billion trade deficit with China last year and, as Wal-Mart's top buyer in the country, he is a big part of the transmission belt linking China and the U.S. A gentle-spoken Filipino, Cui, 54, is managing director for Greater China and North Asia in Wal-Mart's global-procurement department. So, for factory owners across China, he is, simply put, the man to see. Every day on the fourth floor at company headquarters in Shenzhen, scores of Chinese factory salesmen come to vendor rooms with dreams of landing a contract. They--and the products they make--are a big part of the reason Wal-Mart's prices in its 3,702 U.S. stores are so low. "If you stop stuff from [abroad] coming into the U.S.," Hatfield says, "it would mean $180 blue jeans. Is that what Americans want?''

If Hatfield sounds defensive, it's understandable. Wal-Mart's passion for buying in China makes it an easy target back in the U.S. "Wal-Mart is both a beneficiary and a driver of the race to the bottom in the global economy," says Alejandra Domenzain, an associate director of Sweatshop Watch, a U.S. advocacy group. "It has enormous leverage, and how it uses that leverage in the pursuit of ever cheaper labor has enormous consequences for communities in the United States." But that may be less true now than it was 20 years ago. The production of most of the goods Wal-Mart sells in the U.S. left American shores long ago, mainly for other countries in East Asia--Taiwan, Hong Kong and South Korea. Only about 10% of the firm's purchases from 2,500 suppliers in China today come from companies owned on the Chinese mainland. Andrew Tsuei, managing director in charge of Wal-Mart's global-procurement operations, says the rest come from longtime suppliers in other parts of the world that have moved their manufacturing to China in search of lower costs. That means Wal-Mart's China trade may indeed be eliminating factory jobs--but in South Korea, not South Carolina.

It is not easy being a supplier to the barons of Bentonville. "In fact, it's very tough," concedes Tsuei. Wal-Mart says it's trying to export its American-style standards and ethics to China's manufacturing sector too. In China, where sweatshops are alive and well, the company insists those measures make a difference. Suppliers, including those who sell to Wal-Mart indirectly through other companies, must limit the work week to 40 hours plus no more than three hours of overtime a day, meet safety requirements and provide decent accommodations for workers. Even those critical of Wal-Mart concede that the standards can make conditions at a Wal-Mart supplier's factory more bearable than they are at a lot of other low-wage factories in China. "When the standards are enforced," says Domenzain, "I think they are a step in the right direction. The question is, How rigorously are they enforced?"

These days, Wal-Mart is concerned that suppliers are getting extremely sophisticated at faking records to show compliance, even coaching workers before inspectors show up. "Most Chinese manufacturers don't understand why we focus on ethical standards," says Tsuei. "They ask questions like, Well, if I do this, then I'll have to increase costs. We say these are things we have to have."

To enforce the standards, Andy Tang, Wal-Mart's Far East manager for ethical standards, travels across China, making unexpected visits to all of the company's suppliers. In 2004, more than 6,500 representatives of suppliers and factories underwent the standards training. When Tang visits a factory, he sticks a cardboard placard on the table announcing the company's policy: no gifts, no kickbacks. He won't even sit for the traditional Chinese banquet. Some "officials are pretty moved when they see that because they're used to a different way," says Hatfield.

Forcing suppliers to stick to ethical standards isn't the only way Wal-Mart can be tough. The bottom line, after all, is what really counts. "We drive prices down," says Tsuei, but not, he insists, "to the point where factories are making losses. We're helping them become more efficient." Manufacturers have to meet rock-bottom costs plus quality and design standards in order to keep selling to Wal-Mart.

At Shenzhen's Catalina lighting-fixtures factory, whose biggest customer is Wal-Mart, the managers are constantly struggling to meet the company's pricing demands and still turn a profit. Girls in pink jackets assemble and inspect parts for a little more than $100 a month. "Wal-Mart's requirements are very tight--on quality, ethical standards, production lead times. They've pushed us to achieve better in all ways," says Sng Lai Kee, who heads the factory. Catalina, he says, tries to stay ahead of Chiqui Cui's relentless price demands by coming up with more sophisticated designs for which it could charge slightly more. Meanwhile, Wal-Mart allows only a month between its orders and delivery time, so Sng has to badger suppliers to deliver promptly. It's tough, but Catalina knows that in today's China, it's not too smart to push back hard against the retail giant's demands. "This is the real world," Sng says. "If we don't do this business, someone else will."

That real world is what brings low prices to Wal-Mart's U.S. customers and, increasingly, to its customers in China too. Joe Hatfield's new stores are thriving, in part because Wal-Mart is spreading a management style that many of its young Chinese employees find liberating. In most Chinese companies, managers typically share little information with employees, and promotions usually depend on whom you know. At the Sam's Club outside Beijing, it's different. Alan Li, 31, the store's deputy manager, encourages workers to contribute ideas about efficiency, and managers tell employees what's going on. "It doesn't matter who you know here," says Li, a high school graduate from a peasant family in rural China. "All that matters is your work." In a country of 1.3 billion people, the Wal-Mart way may not yet amount to a great leap forward. But it is progress.

Copyright © 2005 Time Inc. All rights reserved.

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Wal-Mart's reach/Who pays for fringe benefits?

startribune.com
Published June 19, 2005             [back to top]

In the waning days of the 2005 Legislature, Wal-Mart Stores Inc. has declared war on Sen. Becky Lourey over a bill that would require public disclosure of big companies whose employees rely on state subsidized health insurance. We hope legislators find time in the special session to pass Lourey's bill, for Wal-Mart has taken the wrong position based on faulty premises.

Around the Capitol, Lourey's bill has been dubbed the "anti-Wal-Mart bill." But that's a misnomer. The DFLer from Kerrick, Minn., would require the state to compile a list of all large companies along with the number of their employees who use MinnesotaCare, the subsidized health plan for the working poor. When Massachusetts passed a similar law, Wal-Mart wound up on the list, but so did Dunkin' Donuts, McDonald's, several hospitals and the city of Boston.

No one wants to stigmatize companies that create jobs for low-skill, low-wage workers. But Lourey has a different, and perfectly legitimate, goal in mind. Gov. Tim Pawlenty has proposed severe cuts to MinnesotaCare this year, and lawmakers ought to know how those cuts would affect the economy and Minnesota's biggest employers. More specifically, Lourey wants to sit down with business lobbyists who press for lower taxes while simultaneously using tax-funded services.

But there's a larger public interest as well. The United States has the least regulated labor market in the industrialized world. (Germany and Japan, by contrast, have achieved universal health care by essentially mandating that employers and employees pay for coverage.) The American theory is that the economy works best when private markets set wages, benefits and working conditions -- and then the public sector plugs the gaps where necessary. But that public supplement has become a huge burden on taxpayers; health-care is now the No. 2 item in Minnesota's state budget. When some employers externalize one of the costs of doing business -- and their competitors do not -- voters and taxpayers have a right to know how their money is being spent. Lourey is herself a small business owner who provides health insurance for her employees, and she calls her plan the "we're all in this together bill."

It's no surprise that Wal-Mart is feeling besieged these days, what with community activists and class-action litigators storming its ramparts. But mollifying the nation's biggest employer should come second to transparency for Minnesota taxpayers.

© Copyright 2005 Star Tribune. All rights reserved.

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AmCan Wal-Mart lawsuit heads to judge

Superior Court will decide whether city ignored own laws

By DAN JUDGE
Times-Herald staff writer           [back to top]

AMERICAN CANYON - The battle over a Wal-Mart Supercenter in American Canyon is headed for a showdown Monday in a Napa courtroom. A Napa Superior Court judge will be asked to determine if the city ignored its own laws and the California Environmental Quality Act by failing to consider how the new store might affect existing businesses.

"At the end of the day, when our case has been presented, we think it will clearly demonstrate the city did not follow the law when it approved the project," said Brett Jolley, the Stockton-based attorney representing one project opponent.

That statement was disputed by Vincent "Buzz" Butler of Lake Street Ventures, developer of the Napa Junction Mixed-Use Project that the 170,000-square-foot Wal-Mart Supercenter would anchor.

"If you read the legal briefs, it is so clear that we are in the right - fact by fact," he said.

Wal-Mart representatives could not be reached for comment on Friday.

The debate over the new store ignited last summer when it was learned the main tenant of the Napa Junction project would be the supercenter, which includes a grocery store that would operate around the clock.

A group calling itself American Canyon Community United for Responsible Growth - founded by small newspaper publisher Cindy Coffey before being elected to the City Council in November - sued the city, Wal-Mart and Lake Street Ventures.

The lawsuit charged that the city violated its own zoning ordinances in approving the project and failed to comply with state law that requires more detailed information about the store's impact on other businesses.

Another group calling itself Citizens Against Poor Planning sued as well, making similar claims. The two suits were consolidated for Monday's court date.

Last month a Napa Superior Court judge granted a request by American Canyon United that all construction on the Wal-Mart store be stopped until the court decision had been rendered. A condition of the ruling was that the group post a $180,000 bond.

Representatives of the city, Lake Street and Wal-Mart insisted that all the proper procedures had been followed over the course of numerous hearings.

They also noted that opposition only arose after it was learned that Wal-Mart would be the tenant.

They argued that labor unions and other supermarket chains were using the community groups as a means to kill competition. Butler noted that the legal firm representing Citizens Against Poor Planning also represents Nugget Markets, which owns the nearby Food 4 Less in Vallejo.

"The California Environmental Quality Act clearly states you can't discriminate against one retailer over another," Butler said. "It just becomes an abuse of the CEQA process, which is what I think this group is doing."

American Canyon United spokeswoman Kathleen Shamet said she has no doubt the lawsuits will prevail and called for community members to attend Monday's hearing.

"I think people need to see how the process works, to see how developers like Lake Street Ventures, cities and their councils cannot fool the people," she said. "We are 100 percent confident the court is going to rule in our favor."

In court:

The case is scheduled to be heard at 9:30 a.m. Monday in the Napa Superior

Courthouse at 825 Brown St., Napa.

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Will Labor Take the Wal-Mart Challenge?

By Liza Featherstone
The Nation
Posted on June 17, 2005        [back to top]

Staying union free is a full-time commitment. Unless union prevention is a goal equal to other objectives within an organization, the goal will usually not be attained. The commitment to stay union free must exist at all levels of management -- from the Chairperson of the "Board" down to the front-line manager. Therefore, no one in management is immune to carrying his or her "own weight" in the union prevention effort. The entire management staff should fully comprehend and appreciate exactly what is expected of their individual efforts to meet the union free objective.... Unless each member of management is willing to spend the necessary time, effort, energy, and money, it will not be accomplished. The time involved is...365 days per year....

This admonition comes from a handbook Wal-Mart distributes to managers, and gives an idea of the passion and vision behind Wal-Mart's unionbusting project. The $259 billion retail behemoth that has become a defining feature of the American landscape has also profoundly altered labor politics, deploying ever more creative and ruthless tactics to suppress the right to organize, while driving down wages and benefits in the retail industry and beyond.

The company is providing a business model widely imitated by other corporations, especially its competitors. To take one recent example, after striking for months, grocery workers in Southern California were forced to accept a vastly reduced health plan early this year, as supermarkets, anticipating competition from new Wal-Mart Supercenters throughout the state, refused to compromise with the union -- probably the first time in history that a potential competitor who had not even entered the market yet was such a key player in a labor dispute. But the California grocers are not alone. Supermarkets all over the country have been lowering wages and decimating workers' health plans. Management claims these cutbacks are necessary to compete with Wal-Mart, but another explanation makes at least as much sense: "Greed," says Linda Gruen, a former Wal-Mart worker now organizing supermarket chains for the United Food and Commercial Workers (UFCW). "Management sees what Wal-Mart gets away with," she says, and realizes that the way to increase profits is to do the same.

Wal-Mart, which topped the Fortune 500 this year, for the third year in a row, is not just an industry leader: It is an economy leader, the nation's largest private employer by far, with over 1.2 million employees. That number is growing all the time, as Wal-Mart opens new stores just about every week. The average wage is around $8 an hour -- and the health plan so expensive and so stingy in its coverage that many workers go without, or depend on the government to pay their medical bills. Says Susan Phillips, vice president of the UFCW and head of its working women's department, for any private-sector union in the United States today, "anytime you go into negotiations...it's like there's this invisible 800-pound gorilla sitting in the room at the bargaining table." This is reflected particularly by employers' ebbing generosity on healthcare, but also on wages, pensions and other benefits. Journalist Bob Ortega observed in his 2000 book, "In Sam We Trust," that Wal-Mart's "way of thinking," its relentless focus on giving the customer the lowest price, "has become the norm," not just in retail but in all businesses. This can't be done without crushing labor.

That's why a consensus among labor leaders is emerging that organizing Wal-Mart workers is an urgent priority -- perhaps the most urgent facing a labor movement that is losing density and influence. Asked what it will take to organize Wal-Mart, Al Zack, outgoing assistant director of strategic programs for the UFCW, points to Wal-Mart's stated commitment to remaining "union free." Says Zack, "When the labor movement...matches that commitment, then it will be successful."

It would be difficult to exaggerate the magnitude of this challenge. Wal-Mart's rhetoric is supported by diligent practice. The company screens out potential union supporters through its hiring process: In addition to excluding those with union histories, the company also administers personality tests to weed out those likely to be sympathetic to unions, and offers managers tips on how to spot such people.

The same handbook, which was given to management in a Wal-Mart distribution center in Greencastle, Indiana, urged managers to be wary of certain union-friendly types, including "the Cause-Oriented Associate," who in high school "led demonstrations against everything from 'red dye' to 'ban the bomb.' He once took a trip to India to visit his personal 'guru.'" Managers are also encouraged to avoid the "Overly-Qualified Associate...a Ph.D operating a grinding machine or a former accountant sweeping the floor.... This type of associate includes the associate who has formerly made substantially more money with other employers."

During the hiring process, many workers say they have had to sign forms agreeing that they would not support any effort to unionize the store, a clear violation of federal law. Lorraine Hill, who worked for Wal-Mart in Rock Springs, Wyoming, and in Oxford, Maine, says all her co-workers did this. "If you don't sign that paper you are not employed," she says. "It's not legal. It's not ethical. But if you are low income and you need the job, you abide by the rules."

Of course, these preventive measures do sometimes fail, and workers begin to organize. Wal-Mart is prepared for that, too. At any sign of union activity in a store, managers call the company's Bentonville, Arkansas, headquarters, which sends a "labor relations team" by private plane (Air Walton) to the offending store to crush the organizing effort, often the very day the call comes in.

In the United States, only one group of Wal-Mart employees has successfully organized. In February 2000 ten meatcutters in Jacksonville, Texas, voted 7 to 3 to unionize their tiny bargaining unit. Two weeks later, Wal-Mart abruptly eliminated their jobs by switching to prepackaged meat and assigning the butchers to other departments, effectively abolishing the only union shop on its North American premises. After more than three years, in June 2003, a federal labor judge ruled this move illegal and ordered Wal-Mart to restore the department and recognize the butchers' bargaining unit. Wal-Mart has appealed that decision.

Because the consequences are so minimal, Wal-Mart does not hesitate to break the law in order to stay union-free. Indeed, as the Greencastle handbook to managers notes frankly, during a union drive, "You ... are expected to support the company's position.... This may mean walking a tightrope between legitimate campaigning and improper conduct." Wal-Mart has been found guilty of many violations of workers' right to organize, even firing union sympathizers. But paying fines -- or in some cases, merely hanging a sign in the break room that states that the company violated workers' rights -- is for Wal-Mart simply part of the cost of doing business, a small price to pay for keeping unions out. Until labor laws are reformed to make violating workers' rights a criminal offense -- punishable by sending managers and CEOs to prison -- running Wal-Mart campaigns based on National Labor Relations Board (NLRB) challenges may be fruitless.

Recently Wal-Mart decided that remaining union-free is a political issue, becoming 2003's number one corporate contributor to candidates, 85 percent of them Republicans. Most corporations, realizing that both Democrats and Republicans respond to business interests, give almost equally to the two parties. But Wal-Mart operates on the premise that while Democrats owe something to labor, Republicans don't -- and therefore, if its donations can purchase GOP dominance, they are well spent. Wal-Mart, especially as it moves into urban areas and into union-friendly regions like California, is strategically trying to buy as many politicians and NLRB appointments as it can.

Yet despite Wal-Mart's clear focus on fighting unions, the labor movement has been slow to respond. In the late 1980s the UFCW began to realize that Wal-Mart's rapid growth and competitiveness -- and rapid incursion into the grocery industry, which had been mostly unionized -- posed an urgent threat to members' jobs. The first Supercenter -- a twenty-four-hour Wal-Mart selling groceries in addition to the company's traditional range of goods, from ladies' underwear to lawn mowers -- opened in 1988; by the end of 2003, Wal-Mart had opened 1,430 of them. Wal-Mart had historically been concentrated in "right-to-work" states in the South, but as it grew, the company encroached upon more unionized Western and Northeastern regions. Still, the union effort was halfhearted until the late 1990s, when supermarkets began losing market share to Wal-Mart and it became painfully obvious that the company threatened the UFCW's very survival -- and its members' hard-won comfortable lives.

As the UFCW's humbling defeat in the California grocery strike showed, the union, after years of friendly relations with so many regional grocery stores, does not know how to conduct an antagonistic national campaign, or how to make use of nationwide publicity and public sympathy for workers. Many labor organizers, pointing to such failings, blame the UFCW for its failure to organize Wal-Mart.

But the mistakes of this particular union may almost be beside the point. While it is true -- and sobering -- that the UFCW devotes only 2 percent of its national budget to the Wal-Mart campaign, it is also true, as many in the labor movement are beginning to recognize, that there is no way any single union could tackle an opponent of this size and genius. As Mike Leonard, just-retired director of strategic programs for the UFCW, observes, if his union spent all its resources on organizing Wal-Mart workers, it would have to neglect the pressing needs of current members. As big as the UFCW is -- at 1.4 million members, it is the nation's largest private-sector union -- Wal-Mart will soon have more US employees than the UFCW has members. "It's not a fair fight," says Wade Rathke, founder and chief organizer of ACORN and Service Employees International Union (SEIU) Local 100, in New Orleans. No union has ever organized an entity the size of Wal-Mart, let alone one as creative and coordinated in its anti-unionism. "You have to admire this company," says Rathke. "They are very disciplined, and they've got a program." Labor doesn't, at least not yet.

Increasingly, labor leaders recognize this, and are taking the first step: admitting they have a problem. "This problem [Wal-Mart] is on the short list of any serious labor leader in the country," says Rathke. Andy Stern, president of the SEIU, has opened a dialogue on the subject on his weblog, soliciting ideas about strategy. (The SEIU is not attempting to organize Wal-Mart, nor is any union other than the UFCW, at this point.) Stern, who began the blog conversation with a picture of himself standing in front of one of Wal-Mart's thirty-nine Chinese stores, said in an interview that he sees the blog as an opportunity "to do what Howard Dean did," to stimulate interest, and then as a campaign evolves, mobilize people into action.

As the growing engagement of other unions in this discussion suggests, the UFCW cannot "stop" or change Wal-Mart alone. The task will demand the close cooperation and resources of other labor organizations. Asked what it will take to organize Wal-Mart, Ginny Coughlin of the textile union UNITE, which has recently begun organizing retail workers -- but has no immediate plans to take on Wal-Mart -- says, "I was just talking about this with a colleague the other day. We figured 3,000 organizers at a minimum. And all the resources, political will and leadership of probably four or five major unions." It is not inconceivable that this could happen: Labor leaders' recent rhetoric about greater cooperation between unions is more than talk. Several large unions are launching joint campaigns to organize low-wage workers. UNITE and HERE (the hotel and restaurant workers' union), for example, which are now in the process of merging, are working with the SEIU to organize employees at Sodexho, the nation's largest dining-services provider -- which will involve more serious cooperation between labor organizations than we've seen in years. On May 12 prominent labor leaders held a meeting at SEIU headquarters to discuss the Wal-Mart problem, but partly because most people in the labor movement are preoccupied with defeating Bush, such dialogue is proceeding slowly.

Leonard, who ran the UFCW's Wal-Mart campaign for the past four years, thinks the "entire labor movement" should devote resources to helping Wal-Mart workers build a new, AFL-CIO-affiliated union "from the ground up." If other unions simply run a joint campaign against Wal-Mart, he argues, they are just going to drop out "as soon as they have their next big problem" affecting their own members' immediate interests.

International cooperation could be key to any Wal-Mart organizing strategy. As Andy Stern, just back from China, points out, "Wal-Mart is second only to our current President in unpopularity around the world" [see Carl Goldstein, "Wal-Mart in China," December 8, 2003]. Since Wal-Mart is an increasingly global company, fighting it invites potential for cross-border solidarity, especially in Germany, where many Wal-Mart workers are unionized and the company abides by a sectorwide agreement with a large retail union, and has been the target of pickets and warning strikes. In Britain some ASDA (British Wal-Mart) stores have shop stewards, but none of the workers are recognized as union members, or are covered by a collective-bargaining agreement. In Brazil Wal-Mart has had to reach agreement with unions on some workers' rights issues, while in Japan all of the company's workers are unionized, and Wal-Mart abides by an agreement reached with the stores' previous owner.

Many in the US labor movement believe that Wal-Mart requires a new organizing strategy. "There is no existing organizing model that unions have effectively employed to date that would organize this company," says Wade Rathke, who believes workers need a way to build their own institutions that is "not based on the permission of the employer."

Joel Rogers, a longtime social-justice activist and University of Wisconsin political scientist, agrees that the traditional model of organizing -- by industry, with a focus on getting a majority vote in each shop, which under the law makes all the workers in that shop part of the union -- cannot work for Wal-Mart. Rogers advocates an approach he calls "open-source unionism," in which workers could join unions even if the majority of their co-workers had not yet chosen to do so [see Richard B. Freeman and Joel Rogers, "A Proposal to American Labor," June 24, 2002]. Membership would focus on the individual, not the firm or job; a member could still belong to the union if and when she changed jobs. "It would be a kind of 'Wal-Mart Workers Association,'" says Rathke. This feature makes particular sense at a company like Wal-Mart, where turnover is so high. Under this model, employers could not insure that by defeating unions in elections, their workplaces would remain union-free. While these unions would lack collective-bargaining rights, members would receive advice from the union on how to protect their rights during disputes, and help in improving pay and working conditions through collective action. They would also benefit from alliances with community groups and other unions in putting pressure on their employer. Open-source unionism certainly needs re-branding, since only technologically knowledgeable geeks -- most of whom are middle class -- would understand that phrase, which derives from a term referring to the free exchange of software on the Internet. But it could provide a structure enabling workers' political activism, making it much easier for workers at companies like Wal-Mart to agitate to improve their situation, in cooperation with other workers.

This model isn't just a wonky abstraction. Though they may use different language to describe it, women and immigrants -- including sweatshop workers in the United States and Latin America, and New York City taxi drivers -- have been at the forefront of similar new organizational strategies. In her 2001 book Sweatshop Warriors: Immigrant Women Workers Take On the Global Factory, Miriam Ching Yoon Louie describes how garment workers have developed worker centers both to agitate for rights on the job and to develop political consciousness and become part of a larger social movement. These are, of course, much smaller-scale than a Wal-Mart Workers Association would be, but the principles -- organizing without permission from employer or government, and affiliating with workers who are not in the same shop -- are the same.

"It is essential that Wal-Mart workers have something like that," says Jane Collins, a professor of rural sociology and women's studies at the University of Wisconsin who has studied women's labor organizations in Latin American free-trade zones. Most Wal-Mart workers are women, and women -- whether in Latin America or in immigrant communities in the United States -- have been at the forefront of these new forms of organizing because, says Collins, they have been excluded, or poorly served, by the traditional unions. Similarly, Wal-Mart women find themselves in their current dismal position both as a result of mainstream labor's failure to recognize, early on, the importance of organizing low-wage retail workers and because of working-class women's historic -- and ongoing -- exclusion from unionized skilled trades.

"This might not work either," admits Rathke, of the Wal-Mart Workers Association idea. But it should be tried, he argues, because "we need a new strategy."

Most people agree that any serious approach to forcing Wal-Mart to the bargaining table must eventually threaten the company's profits. Labor organizers used to think they could do this by asking the public not to shop at Wal-Mart, but now most concede that's impossible, given the retailer's low prices. Their own members shop at Wal-Mart, making at least 30 percent of union credit-card purchases at the retail giant. Even activists thinking seriously about how to oppose the retailer keep finding themselves in its parking lots. "I love that damn store," says Rathke, who recalls being a loyal customer when he lived in Arkansas and needed the discounts. "They had me. I wasn't making 2 cents to put together." Now he lives in New Orleans, and admits, "Damned if I don't go down to Sam's for a new tire! They do have something that works. You can't just convince people they're evil." Indeed, many rural and working-class women view Wal-Mart as an ally, an oasis of low prices in an unfriendly world. In her chart-topping paean to country pride, "Redneck Woman," Gretchen Wilson sums it up irresistibly: "Victoria's Secret, well their stuff's real nice/But I can buy the same damn thing on a Wal-Mart shelf half price/And still look sexy, just as sexy as those models on TV/No, I don't need no designer tag to make my man want me." The question of how to threaten profits, given such intense consumer loyalty, is one of many that the labor movement's current dialogue must engage.

While simply telling people not to shop at Wal-Mart may be a losing battle, fighting Wal-Mart and companies like it will require convincing the public that discounts are no substitute for economic justice. Says Beth Shulman, author of The Betrayal of Work: How Low-Wage Jobs Fail 30 Million Americans and Their Families, "We need to talk about cost in a larger way. It is not just about saving $25, but the cost to the lives of workers and their families, and to society." That conversation has already begun in Georgia, Washington State and elsewhere, where studies have shown that Wal-Mart employees depend on public assistance far more than do workers employed by other large companies. April Hotchkiss, who makes $8.33 an hour as a clerk in a Pueblo, Colorado, Supercenter, has had her healthcare costs paid for by the state's program for the indigent. She dreams of the day she will no longer have to shop or work at Wal-Mart. "Whenever I'm able to quit this place, and find something better, I'm never going to set foot in another [Wal-Mart] again," she says. "I don't care how low the prices are -- of course the prices are low, because they don't pay anybody worth crap!"

Ultimately, for this campaign to succeed, the entire progressive movement -- not just labor -- will have to make the unionization of Wal-Mart a priority. Pointing to the recent victory in Inglewood (a Los Angeles suburb where voters rejected a move by Wal-Mart to exempt itself from local zoning rules and erect a massive Supercenter) and the momentum of similar battles in Chicago and elsewhere, Rathke says that when it comes to fighting Wal-Mart, "there is more traction in the community than on the labor side." Andy Stern agrees, envisioning his blog conversation as the beginning of a movement-wide campaign by progressives to bring pressure on Wal-Mart. "The campaign needs to begin not as a labor campaign," says Stern, pointing out that community organizations "are more used to sustaining people around issues for long periods." Similarly, while Stern thinks there is "clearly an opportunity to create a Wal-Mart Workers Association," given that so many employees are unhappy with their working conditions, he thinks it might be a job for ACORN and other community organizations, since "it is not a traditional union model."

But Stern believes the labor movement should put resources behind a central organization that could serve as a resource for -- and help coordinate -- the many constituencies (workers, environmentalists, feminists, anti-sprawl advocates, churches, small-business owners) opposing Wal-Mart. At present, these groups work largely in isolation. Says Rathke, "There's no place to call and ask, 'How do you bring the ghostbusters in?'"

Labor activists talk a lot about involving the "community," which all agree is an important component in the struggle to unionize Wal-Mart. Yet one advantage Wal-Mart has in this regard is that with 70 percent of its stores located outside of metropolitan areas, and "Main Street" dying everywhere, it's doing business in many places where there isn't much of a community. In urban areas like Inglewood, and in some small towns, black churches, small-business associations and other institutions have been able to facilitate a discussion about whether Wal-Mart serves or thwarts the common good. But in many of the rural and exurban counties and townships where the retailer has traditionally operated, there has been no basis for such a debate: only isolated families struggling to get by, grateful to be able to load up their cars with cheap groceries from Wal-Mart. As is often the case, rhetoric about "community" can blind us to the crucial problem of its absence. On the other hand, wherever there is a thriving civic culture, that culture is an essential ally in the fight against Wal-Mart. In Vermont, for example, controversy over proposed superstores recently inspired the National Trust for Historic Preservation to declare the entire state "endangered" by the retailer.

It's encouraging that labor leaders are talking about this problem and entertaining so many new approaches. Yet as Mike Leonard cautions, in the labor movement, "it's a pretty rare day when we go beyond talking about a new idea, and that's part of the problem." And many workers are not optimistic now. Linda Gruen, who tried for several years to organize her Wal-Mart co-workers, is "not sure we will ever unionize Wal-Mart." April Hotchkiss, who still works at Wal-Mart and is trying to organize her co-workers, shares Gruen's view at times. "It is like parting the Red Sea," she says. "Sometimes I think it ain't going to happen. It is one of the hardest things I've ever tried to accomplish. I'd probably be better off trying to run the New York City Marathon."

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.

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Wal-Mart takes aim at hitting Target

By Emily Kaiser
Reuters
Fri Jun 17, 2005 09:41 AM ET          [back to top]

CHICAGO - Wal-Mart Stores, which has gained a reputation for leaving opponents limping into bankruptcy court, is taking on Target Corp in a fight that it just might lose.

Wal-Mart, the No. 1 retailer, is widening its array of stylish-but-cheap goods in hopes of winning over middle-income customers, putting it head-to-head with a rival that has proved it can compete and thrive against a company six times its size.

"Can Wal-Mart make merchandise improvements that will drive incremental sales? Absolutely," said Darrell Rigby, head of the global retail practice at consultants Bain & Co. "Can Wal-Mart beat Target at Target's game? I doubt it."

Target's secret is to match Wal-Mart's prices on commodity items such as food and cleaning supplies, and then use sales of trendy-but-affordable designer merchandise to boost profits.

The strategy seems to be working. For the first quarter ended on April 30, Target turned in a strong 6.2 percent sales gain at stores open at least a year. That was more than double the same-store sales increase for Wal-Mart in the United States.

Wall Street has noticed the discrepancy, rewarding Target's shares with a higher valuation than Wal-Mart's. Target trades at nearly 21 times earnings forecasts for the next fiscal year, compared with a multiple of about 18 for Wal-Mart, according to Reuters Estimates.

The sales gap isn't lost on Wal-Mart executives. Mike Duke, head of the company's U.S. discount stores, said visits to Target stores are the No. 3 use of his time, behind meeting with Wal-Mart employees and customers.

"I'll be straight up -- they are a great competitor," Duke said in a presentation to analysts this month.

WAL-MART CHEAP CHIC?

Now Wal-Mart wants to bring in its own "cheap chic" goods, using the British design team behind its George apparel line to come up with more fashionable offerings.

A Target spokeswoman said the retailer is confident of its strategy and declined to comment on Wal-Mart's plans.

Some analysts worry that Wal-Mart will stray too far from its low-price roots and alienate its core low-income shoppers.

Emme Kozloff, retail analyst with Sanford Bernstein, said fashion is fickle, and Wal-Mart could be stuck slashing prices if its "contemporary" clothing fails to win new customers.

"It's a hit-and-miss business, with no company ever able to always get it right," she said, noting Wal-Mart's scant fashion experience.

The retailer has been relying on staples like groceries to drive sales as rising energy prices cut into discretionary spending, particularly among low-income shoppers.

But food is a notoriously low-margin business, and Wal-Mart's profits have suffered. First-quarter earnings missed the company's -- and Wall Street's -- expectations.

Wal-Mart was unusually frank in taking the blame for its disappointing results.

Instead of pointing a finger at high energy prices or bad weather, the company said it put too much emphasis on its lowest-priced items, which it calls "opening price points," and lost some customers who were willing to pay more for style.

"When it comes to buying domestics or apparel, that customer isn't shopping with us," Chief Executive Lee Scott said. "They are going somewhere else where they believe the offering is more suited to their taste."

'JUNKY' STORES

Scott said Wal-Mart prominently displayed impulse items priced at less than $1 in hopes that cash-strapped customers might be tempted to pick up one or two. The idea was that with more than 100 million shoppers visiting stores each week, sales would grow one dollar at a time.

"But what happened is that the further we went that way, the less relevant we got to be to the customer who was not really being impacted by these negative economic issues," Scott said, adding that stores began to look "junky" because of all the displays of low-priced goods.

This isn't the first time Wal-Mart has taken on a strong rival. Two years ago, its Sam's Club warehouse division was losing ground to Costco Wholesale Corp., and executives set out an aggressive plan to undercut the competitor's prices and go after coveted small-business customers.

While Costco eventually recovered and remained the No. 1 player in the U.S. warehouse club sector, Sam's Club sales grew too, suggesting that when the two giants wrestled, consumers welcomed the lower prices and both sides gained ground.

Wal-Mart is hoping that will happen again.

Scott says consumers fall into three categories -- loyal Wal-Mart customers, those who shop there for food but not general merchandise, and those who don't shop there at all.

"Quite honestly, I believe that Wal-Mart has the opportunity to have all three of those customers," he said.

Winning over fashion-conscious shoppers will be hard. Target has a 10-year head start and has built strong relationships with well-known designers, including Michael Graves and Isaac Mizrahi.

Still, Bain's Rigby said Target knows better than to bet against Wal-Mart.

"I'm sure everyone at Target is taking this new threat very seriously," he said.

© Copyright Reuters 2005. All rights reserved. 

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STOP Wal-Mart from Coming to Your Community!

Author Solidarity Sister
Created 16 Jun 2005        [back to top]      

So far, Santa Cruz County has managed to keep out ultra-evil Wal-Mart from its communities. Wal-Mart is now trying to come into Santa Cruz County... by locating themselves just outside of county lines in the small, unicorporated area of Pajaro. Please help fight the corporate monster! Sometimes a moment comes when what we do, individually and together, MAKES A BIG DIFFERENCE in what happens, for better or for worse, in our communities here on the Central Coast. If we respond, we win. If we fail to respond, we lose. A moment like that has arrived NOW.

At 9:30 AM on Monday morning June 20 the Monterey County Board of Supervisors will hear public comment on whether the county should regulate the development of big box superstores-- combining huge discount grocery sales with cheap consumer goods-- like the WalMart superstore proposed for the unincorporated rural area of Pajaro.

NOT ONLY THAT: at the same time, in the same hearing, the Board will take testimony on whether to show preference for good jobs, whether to discourage bad jobs (with low ages, no benefits and systematic violation of workers rights) and whether to adopt a policy promoting a LIVING WAGE for all working people in the Monterey County. THESE ARE URGENT ISSUE IN A LOCAL ECONOMY ADDICTED TO LOW-WAGE LABOR WITH NO HEALTH CARE AND NO RIGHTS AT WORK.

We all know what WalMart represents. We all know that a WalMart superstore would cause an explosion of traffic, steal needed sales tax from towns like Salinas and Watsonville, erode public services, damage the environment, destroy decent unionized grocery jobs, and suck the life out of local communities up and down the central coast. If we stand up NOW, we can stop this catastrophe.

What can we do?

1. SPREAD THE WORD: send this message to your friends with a note asking THEM to take action. Send it too to larger email lists-- in your union, your church, your community.

2. COME TO THE MEETING at 240 Church St in downtown Salinas at 9:30 AM Monday-- SHARP!--if you can't come, send your husband or brother or friend. Call up your union rep and say "go and speak for us!!!"

3. RIGHT NOW click on this link: http://www.californianonline.com/apps/pbcs.dll/section?Category=NEWS01... to register your views through the Salinas Californian's online poll asking "Should Monterey County supervisors use the general plan to prevent construction of big-box stores outside of cities?"

4. Join the Alliance for Good Jobs and Healthy Communities-- the new coalition born in resistance to this latest WalMart assault our communties-- by replying to this email with your name and contact info. We'll keep you informed and give you more opportunities to fight for good jobs and defend our communities.

Si se puede!

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Court Rules Against Parts of Wal-Mart Code

German Labor Court Rules Against Parts of Wal-Mart Ethics Code, Spokesman Says

The Associated Press
Jun. 16, 2005                    [back to top]

A labor court has ruled that parts of Wal-Mart's ethics code, including a ban on relationships between employees, violate German law, a court spokesman said Thursday.

Wal-Mart's German arm, based in the western city of Wuppertal, declined to comment on the ruling, saying it had not yet received written confirmation.

A spokesman for the labor court in Wuppertal, who asked that his name not be used, said the tribunal ruled against the ban on relationships and against a proposed hot line for employees to report on colleagues' violations of the code.

Labor representatives from Wal-Mart Stores Inc.'s 91 German stores sued the U.S. retail giant over the code after it was introduced without their prior approval in March.

Under German law, employee-management councils must sign off on a wide range of workplace conditions, from hiring and firing to the position of desks in an office.

Wal-Mart has said its guidelines are intended to maintain a safe environment in the workplace.

The court said the company would be able to challenge its ruling, which does not prevent Wal-Mart from applying the rest of its code.

Copyright 2005 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

Copyright © 2005 ABC News Internet Ventures

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German Labor Court Rules Against Wal-Mart Ethics

NewsMax.com Wires
Thursday, June 16, 2005             [back to top] 

FRANKFURT, Germany - A labor court has ruled that parts of Wal-Mart's ethics code, including a ban on relationships between employees, violate German law, a court spokesman said Thursday.

Wal-Mart's German arm, based in the western city of Wuppertal, declined to comment on the ruling, saying it had not yet received written confirmation. A spokesman for the labor court in Wuppertal, who asked that his name not be used, said the tribunal ruled against the ban on relationships and against a proposed hot line for employees to report on colleagues' violations of the code. Labor representatives from Wal-Mart Stores Inc.'s 91 German stores sued the U.S. retail giant over the code after it was introduced without their prior approval in March.

Under German law, employee-management councils must sign off on a wide range of workplace conditions, from hiring and firing to the position of desks in an office.

Wal-Mart has said its guidelines are intended to maintain a safe environment in the workplace.

The court said the company would be able to challenge its ruling, which does not prevent Wal-Mart from applying the rest of its code.

Shares of Wal-Mart fell 7 cents to $49.78 in morning trading on the New York Stock Exchange, where they have traded in a 52-week range of $46.20 to $57.89.

© 2005 Associated Press. All Rights Reserved.

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Wal-Mart names new head of online site

By Elinor Mills
CNET News.com
Published on ZDNet News
June 16, 2005, 1:09 PM PT                  [back to top]

Forward in EMAIL Format for PRINT E-commerce Executive recruiting Ebay Inc Carter Cast, who formerly held positions as vice president of Walmart.com and chief marketing officer at eBay, will be the new president of Walmart.com, Wal-Mart Stores confirmed on Thursday.

As previously reported by CNET News.com, Cast, 41, succeeds John Fleming, who was promoted to chief marketing officer for parent company Wal-Mart in April.

Effective July 5, Cast will be responsible for the day-to-day operations at the retailer's Web site and will report directly to Fleming, the company said.

Cast joined Walmart.com in 2000 as vice president of marketing and later left to join eBay. He worked at the online auction company for four months before resigning earlier this week.

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Wal-Mart prods Bush for the CBC

By Elana Schor                 [back to top]

Continuing its courtship of the Congressional Black Caucus (CBC), Wal-Mart is urging President Bush to extend the Voting Rights Act of 1965.

In recent months, Wal-Mart has moved toward a lasting alliance with the CBC, deepening the ties by stressing its legislative influence as the nation’s largest private employer of African-Americans. Wal-Mart CEO H. Lee Scott’s letter, delivered to the White House on Tuesday, is his first follow-up on a productive winter meeting with the CBC.

“I hope that you will stand with me, members of the Congressional Black Caucus, other political and civil rights leaders and countless Americans in supporting an extension of the expiring provisions of the Voting Rights Act,” Scott wrote to Bush, whose reelection campaign received the maximum contribution from Wal-Mart’s political action committee.

The act is universally beloved by the civil-rights community and a point of pride for black lawmakers. It ensures that no disenfranchisement method can be used to prohibit blacks from exercising their right to vote, and its renewal before the 2007 expiration is a crucial priority for the CBC.

The CBC met with Bush to discuss its legislative agenda two weeks before its Feb. 10 meeting with Wal-Mart. While at the White House, Rep. Jesse Jackson Jr. (D-Ill.) asked Bush whether he would support extending the act and Bush expressed unfamiliarity with the law, according to an op-ed Jackson’s father, the Rev. Jesse Jackson, wrote on the meeting.

“[The CBC] formally presented Lee [Scott] with their legislative agenda and asked Wal-Mart to consider endorsing all or part of the agenda,” said Kimberly Woodard, a Wal-Mart lobbyist. “This was one of the things we noted right away that we would publicly support.”

Wal-Mart has not been a historic financial supporter of Democrats, but the retail behemoth is working to change its ways. While only 22 percent of its PAC giving in the 2004 election cycle went to Democratic candidates, that number has jumped to 47 percent for the 2006 cycle, according to the Center for Responsive Politics.

Of Wal-Mart PAC’s $40,000 given to Democratic candidates for 2006, $12,000 has gone to CBC members.

“We applaud Wal-Mart for supporting the part of the Congressional Black Caucus’s legislative agenda that calls for the reauthorization of the expiring parts of the Voting Rights Act,” CBC Chairman Rep. Mel Watt (D-N.C.) said in a statement. “Hopefully, Wal-Mart and others will endorse the entire agenda.”

Last month’s rebuke of the CBC by an official at the Service Employees International Union (SEIU) who criticized the caucus for its recent meetings with Wal-Mart remains a sore point between the union and the CBC. But lobbyists and lawmakers alike said the relationship would remain healthy.

“We really hope that both Wal-Mart’s friends and foes, particularly organized labor, join with Wal-Mart to support Voting Rights Act extension,” Woodard said.

SEIU kept its rhetoric courteous, declining to comment on the record about what some have complained is “Wal-Mart pandering to the African-American community,” as one lobbyist present at the Feb. 10 meeting put it.

“We’re certainly pleased that they’re working in support of reauthorization” of the Voting Rights Act, said SEIU spokesman Avril Smith. “We are in the process of collecting 500,000 signatures in favor of reauthorization through Rainbow/PUSH,” the Rev. Jackson’s organization, by the end of the summer.

Jonathan E. Kaplan contributed to this report

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Wal-Mart store tells workers to be ready to work any shift

The Charleston Gazette
Posted 6/15/2005 11:27 AM               [back to top]

Workers at a West Virginia Wal-Mart (WMT) store have been ordered to be available to work any shift at any time or face dismissal. The new "open-availability" policy at the Wal-Mart store in Nitro is needed to ensure there is adequate staff during peak hours, said John Knuckles, a manager at the store.

"We have many people with set schedules who aren't here when we need them for our customers," Knuckles said.

"It is to take care of the customers, that's the only reason."

Workers who cannot commit to being available for any shift between 7 a.m. and 11 p.m., seven days a week, will be fired by the end of this week. The store employs more than 400 workers.

"It shouldn't cause any problem, if they are concerned about their customers," Knuckles said.

Wal-Mart corporate spokesman Dan Fogelman said other stores have such rules.

"This is something that is done throughout Wal-Mart stores," Fogelman said. "The reality of retail is that our busiest times are evenings and weekends, so it only makes sense that we have higher staffing levels at those times."

Workers who are fired because they cannot meet the new requirement likely will qualify for unemployment benefits, said David McMahon with Legal Aid of West Virginia.

"If these people lose their jobs through no fault of their own, as a general rule they will be eligible for unemployment benefits," McMahon said Wednesday.

A union spokesman criticized the policy at the non-union retailer's store.

"This is a chilling new direction for Wal-Mart," said Chris Kofinis, communications adviser for Wake Up Wal-Mart, a promotional campaign financed by the United Food and Commercial Workers union. "It shows that when you work at Wal-Mart, you can neither afford a decent standard of life or even have a life."

Copyright 2005 The Associated Press. All rights reserved.

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Scrutinizing Wal-Mart ... Always.

By Kate Ackley
Roll Call
June 15, 2005                      [back to top]

As Wal-Mart Stores Inc. staffs up its Washington, D.C., outpost, the worldwide retail giant continues to fend off missives at the state and local level. The D.C.-based group Wal-Mart Watch is sending out three-page letters this week to local politicians and officials, yet again denouncing the retailer for low wages and substandard benefits, according to a copy of the correspondence.

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Former Wal-Mart exec joins Safeway

East Bay Business Times
June 14, 2005                         [back to top]

John Lewis is the new senior vice president, internal audit at Safeway Inc., the company said Tuesday.

Lewis joins the Pleasanton grocery chain (NYSE: SWY) from Arkansas-based discount retailer Wal-Mart Stores Inc. (NYSE: WMT) where he was senior vice president and chief financial officer of Wal-Mart International since 2003. He had served as vice president and chief audit executive at Wal-Mart since 1996.

In his new position he will have overall responsibility for the company's internal audit function.

© 2005 American City Business Journals Inc.

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Wal-Mart Open To More International Acquisitions

06.14.05, 9:43 AM ET               [back to top]

Credit Suisse First Boston reiterated an "outperform" rating and $55 target price on Wal-Mart Stores (nyse: WMT - news - people ) after a presentation by Chief Executive John Menzer. CSFB noted that the company was still focused on international growth, despite an unsavory European environment: "China has surprised management with comparable-store sales growth after a difficult 2004, Japan has lapped last year's value-added tax inclusion in retail pricing resulting in easier comparisons, Brazil comps are growing double digit, Argentina is recovering, and Wal-Mart is laying the groundwork for an aggressive move into India, should the government change its policies on direct foreign ownership." While the U.K. and Germany continue to struggle, CSFB said that trends were more optimistic in the U.S. "Comparable-store sales have improved concurrent with better weather but traffic has not. While weekly comp sales remain in the 2% to 4% range, we believe trends have improved relative to the 2.5% May result." Wal-Mart also stressed that it was open to further acquisitions--as poor performance hinders competitors in the UK, acquisition opportunities could surface. "Forty percent of international growth has come through acquisitions and management remains open to further acquisitions," CSFB said.

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California Controller Requests Wal-Mart Audit

June 14, 2005

California State Controller Steve Westly requested an audit of the Wal-Mart on Monday, asking the retail giant to address charges that accuse it of exploiting workers, violating child labor laws and ignoring charges of sexual harassment. The request comes on the heels of an $188,000 fine issued by the California Fair Employment and Housing Commission for "willfully and consciously disregarding its obligations as a California employer."

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Readers Write: Turning Up the Heat on Wal-Mart

By Laura Barcella
AlterNet
Posted on June 13, 2005           [back to top]

We received scores of reader responses to Don Hazen’s article of June 1, Turning Up the Heat on Wal-Mart, about filmmaker Robert Greenwald's upcoming expose of the maligned mega-chain.

Greenwald's documentary, Wal-Mart: the High Cost of Low Price, is scheduled for release in November, and national associations of many stripes -- from the United Church of Christ to the Petroleum Marketers Association of America -- are organizing to promote the film's agenda.

What is the film's agenda? To expose the injustices behind Wal-Mart's famously low prices. "This is the largest corporation in the world, and it is running roughshod over family business and workers throughout the country," Greenwald explains in the article.

Wal-Mart relies on cost-cutting to keep customers coming back, but in so doing, local businesses across the country have been run into the ground, unable to compete with Wal-Mart's predatory pricing.

How else is Wal-Mart wicked? Our readers enumerate the ways -- the ridiculously rich institution doesn't share its wealth, instead depending on low-wage workers (its 1.2 million American workers make an average of $9.99/hour); it outsources virtually all of its product manufacturing; gets big-box tax breaks to introduce more and more stores -- and more and more sprawl -- to American communities... And the list goes on.

After receiving so many comments in reponse to Hazen's story, we've decided to showcase some below.

Reader Paul-D expressed regret that his rural relatives were forced to shop at Wal-Mart for lack of alternatives. "My beloved in-laws live in a painfully rural community in Eastern Kentucky," he wrote. "Virtually the ONLY store they can shop at is the local Wal-Mart. I'd like to try to convince them to drive a little further and shop elsewhere, but they won't do it.

“I'm going to make sure they see this movie. Hopefully we can engage in a dialog about this afterward, and maybe I can pursuade them to get involved in their community and make sure Wal-Mart doesn't gain any more ground than it already has."

Reader Phatkat, also rurally located, acknowledged a personal mistrust for the chain but reminded us (again), "when you are rural, and retired on a fixed income, it is hard NOT to shop there. I buy as little as possible, but there are some things that are either unavailable elsewhere, or are twice the price elsewhere. A sorry impasse."

Kirk, a pastor, agreed: "Wal-Mart has moved into rural communities in a way that makes one either drive so far [that] everything costs more, due to time and gas; or go without."

But he addressed some small ways shoppers can help thwart the big W: "I do find that many local retailers will order items especially for me, and sometimes put in price breaks, since I do other shopping there too. It doesn't hurt that I'm a pastor, but maybe you can obtain similar services for at least some of your shopping. No one should be expected to make unreasonable sacrifices; if we all do what we can, local businesses will be stable, and Wal-Mart will shrink."

Pjbretz, from a "small town of around 25,000" residents, recalled commiserating with a Wal-Mart employee during a recent visit. "I was in line for 30 minutes at one of the express lanes...talking to...an employee of the store. She said that a couple of weeks ago, the manager had to come in on a Saturday to help check people out, because some of the checkers had not come in. And for $6.25 an hour, I don't think I would show up either."

Phatcat also weighed in on Wal-Mart's skimpy hourly wages. "When Wal-Mart's wages are posted as being around $10/hr, it is deceptive. The people who work in the stores get much less, but their fleet truck drivers make wages similar to Costco's workers, or $16/hr. The drivers' wages skew the average upward! It's WORSE than it looks!"

Though all of our readers/commenters agreed on the monolithic bully's evils, opinions were mixed about Greenwald's upcoming documentary. Most were excited, but some doubted that the film could achieve its intended impact on mass culture.

"It makes me feel pretty good to know that someone has taken the time to expose the policies and deceptions of Wal-Mart on the big screen," wrote Ratmonster Spook. "I don't expect any changes to take place as a result, though.

"No, I'm not one of the depressed liberals who decided to give up hope after the election. I just know how the greed cycle works. People want stuff. Wal-Mart has cheap stuff, and lots of it. It's made in China, and I can pretty much guarantee you that the people who shop there don't care. They don't care even if it's pointed out to them that Wal-Mart is causing the destruction of many small businesses. Even if they're shown how much money Wal-Mart sends outside of the U.S...people still won't care."

Another reader, Helenwheels, expressed a similarly critical sentiment about the movie's ability -- or lack thereof -- to change Wal-Mart's monopoly on the market. "Wal-Mart isn't going to disappear because of this movie any more than Bush [was going to lose] power after Michael Moore's movie, Fahrenheit 9-11," she noted.

"We always get so hopeful when the truth comes out on the big screen, and these exposes do affect change to a degree, but shockingly enough, they don't seem to change things as much as one would surmise."

But Helenwheels closed on a hopeful note, acknowledging the value of films like Greenwald's. "I am thankful for Greenwald's work, and I truly hope it doesn't merely piss off a bunch of higher-ups for awhile and then disappear, like Farenheit 9-11. My hope upon hope is that if it doesn't manage to set off a chain of events that topples Wal-Mart, it may at least inspire new activists against big business and greedy corporations."

Laura Barcella is an associate editor at AlterNet.

© 2005 Independent Media Institute. All rights reserved. 

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Anthony Weiner's Wal-Mart problem

by Dominic Basulto
Corante New York
June 13, 2005                             [back to top]

There's egg on the face of mayoral hopeful Anthony Weiner, who has been front and center in the fight to keep Wal-Mart out of the city. (The New York Post has dubbed him "Mr. Anti-Wal-Mart") It turns out that Weiner has pocketed more than $30,000 from two families with close ties to the big box retailer. That's not good news, considering that he's one of the sponsors of "Wal-Mart bashing" legislation that will be voted on in the House of Representatives this week.

Is the timing of the Wal-Mart revelations a coincidence? Probably. As the summer heats up, look for the candidates vying for Bloomberg's mayoral post to ratchet up their campaign vitriol. Try to stay clear of any drive-by mudslingings.

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Vancouver Wal-Mart plan is opened up to public scrutiny

John Colebourn
The Province
June 12, 2005                 [back to top]

Vancouver residents will get a chance this week to tell the city's politicians what they think of a proposal for a new Wal-Mart near Main Street and Marine Drive.

Plans for the 16,000-square-metre "big box" store have alrealdy raised concerns from merchants and residents of the South Vancouver area worried about the increased traffic and threat to their businesses.

Coun. Anne Roberts, who led a pre-election campaign against Wal-Mart's plan, has said the location is the problem, arguing that it would eat up valuable industrial land and damage neighbourhood shopping areas.

On Friday, Roberts said "once it's been referred over to a public hearing process, we can't comment on it."

Deming Smith, speaking for a group called Building Better Neighourhoods, told The Province the store would attact an extra 18,000 vehicles along Marine Drive daily, and that the traffic would "make it a pedestrian nightmare."

The land that Wal-Mart has optioned is currently industrial land. A company spokesman said that Wal-Mart will have to pay retail-level rates of about $30 a square foot if rezoning is allowed.

A public hearing on the plan will be held Tuesday at 7:30 p.m. at Vancouver City Hall, 453 West 12th Ave.

jbermingham@png.canwest.com

© The Vancouver Province 2005

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Wal-Mart advances as rivals regroup

Lawsuits may slow new store on Rte. 138

By David Connolly
Globe Correspondent
June 12, 2005                          [back to top]

This town of fewer than 12,000 residents soon may be home to not one but two Wal-Mart supercenters.

The world's biggest retailer is planning its second 200,000-plus-square-foot combination general merchandise and grocery store, on Route 138 in the north side of town. As Raynham's fifth supermarket, it would be joining the existing Wal-Mart supercenter on Route 44, and Shaw's, Stop & Shop, and Market Basket stores.

The competition for grocery shoppers is heating up in neighboring communities as well. Maine-based Hannaford Brothers is opening stores in Easton and Taunton in January, even though Shaw's has stores in each of those communities. Taunton also has two Trucchi's stores, and Easton is home to a Roche Brothers store that is less than 2 years old.

''Supermarkets love suburbia, and especially areas with growth like Southeastern Massachusetts," said Jeffrey W. Metzger, publisher of Food World, a Maryland-based industry publication. ''And Wal-Mart is building their stores closer together than ever before."

Indeed, no one doubts Wal-Mart spokesman Philip Serghini when he says, ''We're aggressively looking in the Northeast."

The growth in supermarkets not only means that consumers will have more choices about where to spend their grocery dollars, they can also expect to see prices drop, according to Mike Berger, editor of the Griffin Report of Food Marketing, a Pembroke-based publication.

''The ultimate benefit will go to the consumer," he said.

But the path for Wal-Mart's expansion is not without obstacles, which may well delay the projected fall 2006 opening of its newest Raynham store.

The town's Planning Board approved the site plan April 20, and the Zoning Board of Appeals approved a special permit a week later, but within a month or so two lawsuits were filed to challenge the boards' actions.

Two weeks ago, neighboring Taunton filed a lawsuit in Superior Court contending that the new Wal-Mart would place an undue burden on the city.

''According to their own study, traffic on Taunton's side of Route 138 will increase by 24 percent with this store," said City Solicitor Steve Torres. Wal-Mart has pledged $200,000 to Taunton for Route 138 traffic improvements, but that won't cover the costs, he said.

''Raynham is getting all the benefits and we're getting all the traffic," Torres said, referring not only to the tax revenue but the $100,000 for a new fire truck and $400,000 for a drinking water well that the host town is slated to get from Wal-Mart in mitigation for its project.

Taunton's lawsuit, filed on May 23, also says that Wal-Mart's proposal, as approved by the Raynham boards, does not adequately protect an underground aquifer that the city is counting on for a future well, and raises concerns about capacity for additional flow to its wastewater treatment plant.

Officials from Taunton and Wal-Mart are expected to work toward a settlement outside of court. Wal-Mart's Serghini declined to comment on Taunton's lawsuit.

The second lawsuit, filed in Superior Court last month by DeMoulas Super Markets, owner of the Market Basket store about 300 yards from the proposed Wal-Mart, is seeking to have Raynham's approvals overturned.

Like Taunton, the DeMoulas company points to traffic concerns. ''The effect of traffic delay is gridlock in front of the Market Basket site, particularly during the evening peak hours," that will keep customers from its store, DeMoulas asserts in its suit.

Raynham Town Planner Richard McCarthy said he is confident the town's April approvals will stand up against the appeals, in part because Market Basket owners did not raise traffic concerns during the public hearings held from February to April.

The lawsuits, he said, ''may stall the project a bit, but not too much."

Wal-Mart must still file its final environmental impact report with the state's Executive Office of Environmental Affairs, and gain approvals from the state Highway Department for curb cuts and plans for Route 138, and the Department of Environmental Protection for a sewer extension permit, McCarthy said. But nothing in that process is expected to stop the project, he said.

Wal-Mart first opened a 125,000-square-foot general merchandise store on Route 44 in 1992. After winning a protracted legal battle over traffic issues, the store added 85,000 square feet of grocery retail space and opened its supercenter in 2003.

Similarly, the Arkansas-based company hopes to open its second general merchandise store in Raynham in fall 2006, and then add its grocery store, using the adjacent 26-acre site of the former Par Three Golf Course.

If that happens -- and once the two new Hannaford stores open -- the area's existing supermarkets will lose customers, predicts Phil Lempert, founder of SupermarketGuru.com, food trend editor on NBC's ''Today Show," and editor of Progressive Grocer magazine.

The stores are already bracing for the increase in competition.

''It seems to me our demographics could be a little over-saturated. That's almost common sense," said James Trucchi, president of his family's Taunton-based chain of five grocery stores.

Officials from Roche Brothers, Stop & Shop, Shaw's and Hannaford said their stores would pay attention to Wal-Mart, but not change any operational procedures.

''The supermarket business," said Paul McGillivray, Roche Brothers vice president of sales, ''is very competitive."

© Copyright 2005 The New York Times Company

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Wal-Mart loses back-pay case

BAROMETER
Posted on Sat, Jun. 11, 2005                 [back to top]

Wal-Mart must pay $188,000 after refusing to reinstate a manager at its Antioch store who returned from maternity leave. The Fair Employment and Housing Commission, in a ruling released Thursday, said the retail giant "willfully and consciously disregarded its obligations as a California employer."

The company's claim that a supervising manager simply misunderstood the state law was not credible, the commission said, because Wal-Mart had been found liable for violating the same law in a 1998 case.

The commission fined the company $25,000, payable to the state. The rest of the damages will go to Krista Jane Carver for lost wages and emotional distress. She's also entitled to be reinstated to her former job.

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Wal-Mart going to Cobblewood

Retailer will tear down two-thirds of Forest Park site for supercenter

Lisa Biank Fasig
Courier
June 10, 2005           [back to top]

Wal-Mart Inc. is preparing to tear down two-thirds of Cobblewood Plaza in Forest Park as part of a plan to build a 200,000-square-foot supercenter within a mile of Kroger, Bigg's and Meijer stores.

The supercenter is expected to open at Cobblewood in midsummer 2006, said Chris Anderson, community development director for Forest Park.

"They've already got the demolition permit and should begin demolition anytime soon," he said. "We've been actually reviewing this for over a year now."

The new store is part of a long-standing plan by Cobblewood's owner, Dallas-based Cobblewood Investors LP, to update the facade of the Winton Road center. In 2001, Cobblewood helped pay for road improvements and traffic signals in anticipation of the redevelopment.

Wal-Mart has acquired the store site and the remaining 135,000 square feet belonging to Cobblewood Investors, said Charles Cooper, a representative for the owner. When the renovation is complete, around the same time Wal-Mart opens, the center will be renamed Parkwood Plaza.

"When it's complete we'll have the same footage as we did before," he said.

The supercenter, which will employ about 400, is among roughly a dozen the retailer has confirmed or built in Greater Cincinnati. On average, each Wal-Mart supercenter generates annual sales of $88 million.

Until last year, Wal-Mart operated two local supercenters.

Forest Park has approved a 10-year tax increment financing plan for the project, which earmarks taxes generated from the improvements at the center to pay for the cost of its redevelopment. Forest Park has yet to determine whether it will need to issue bonds to pay for the redevelopment, city officials said.

Money raised through the TIF also would pay for the city police and fire departments.

The area of Cobblewood Plaza being demolished is largely vacant; tenants will remain open through the redevelopment. Other retailers at the center include Old Time Pottery and Jo-Ann Fabrics.

© 2005 American City Business Journals Inc.

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Walmart Ordered To Pay!

Bob Egelko
sfchronicle.com.
Friday, June 10, 2005      [back to top]

A state civil rights agency says Wal-Mart must pay at least $188,000 for refusing to reinstate a manager at its Antioch store after pregnancy leave.

In a ruling made public Thursday, the Fair Employment and Housing Commission said the retail giant "willfully and consciously disregarded its obligations as a California employer.'' The company's claim that a supervising manager simply misunderstood the state law was not credible, the commission said, because Wal-Mart had been found liable for violating the same law in a 1998 case.

Based on its finding of a knowing violation of the law, the commission fined the company $25,000, payable to the state. The rest of the damages will go to Krista Jane Carver for lost wages and emotional distress. She is also entitled to be reinstated to her former job.

A lawyer for Wal-Mart declined to comment and referred inquiries to company headquarters in Arkansas, which were closed for the day by then. The company could appeal the ruling in Contra Costa County Superior Court.

Carver started working for Wal-Mart in August 1996, had a good record, and was promoted in April 2002 to manager of the tire and lube department in Antioch, making about $41,000 a year, the commission said. She took leave before and after the birth of her first child in April 2001, and became pregnant again in early 2002.

She applied for a month's disability leave in May 2002 after coming down with pregnancy-related diabetes. But when she tried to return the next month, she was told by George Allen, a regional manager, that she had used up all her leave time, had no right to reinstatement and had already been replaced.

Allen would have been right if Carver were protected only by federal law, which entitles an employee to 12 weeks of family medical leave per year. But California law is more protective and allows four months of leave for any disability related to a pregnancy, the commission said.

Later that month, Wal-Mart offered Carver a nonmanagement job in Turlock (Stanislaus County), with lower pay, a shorter workweek and staggered hours. She turned it down, saying she could not make child-care arrangements, and then began an unsuccessful search for a management job with another company, the commission said.

The commission also said Allen, testifying at Carver's hearing last year, falsely denied that Carver's pregnancy played any role in the loss of her job.

Carver's award includes nearly $88,000 for lost wages between June 2002 and August 2004, and $75,000 for emotional distress, plus interest. She is also entitled to additional damages, yet to be determined, for wages she lost since the hearing in her case in August.

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Wal-Mart Ends Former Officer's Benefits on Misconduct

June 10
Bloomberg        [back to top]

Wal-Mart Stores Inc. stripped former Vice Chairman Thomas Coughlin of his retirement benefits after concluding he engaged in misconduct for using company funds for his own benefit.

Coughlin, who retired in January and resigned from the board in March, won't receive 186,407 shares of restricted stock and 302,503 stock options, according to an earlier filing. Wal-Mart, the world's biggest retailer, took this action after suspending the benefits in April while conducting its investigation.

``For a period of several years and continuing until at least December 2004, Mr. Coughlin had been involved in a scheme to misappropriate corporate funds and property for his own personal benefit,'' Bentonville, Arkansas-based Wal-Mart said in a filing today.

Wal-Mart's stock has fallen 16 percent in the past year as the company faces a major sex-discrimination class action lawsuit, growing protests from community and labor groups against its expansion and greater competition from rivals including Target Corp. The retailer earlier reported the results of its Coughlin probe to the U.S. Attorney for the Western District of Arkansas and said a government investigation is underway.

Telephone messages to the home of a Thomas Coughlin in Bentonville weren't immediately returned.

The former executive told Wal-Mart investigators that he was using the money for ``union activity,'' the filing said. The United Food and Commercial Workers union has unsuccessfully tried to organize stores in the past. Wal-Mart said its investigation found no evidence of such activity on Coughlin's part.

Coughlin's resignation came after an internal probe into his alleged unauthorized use of corporate gift cards and personal reimbursements that appeared to have been obtained through reporting false information on third-party invoices.

Shares Wal-Mart rose 16 cents to $47.98 at 4:18 p.m. in New York Stock Exchange composite trading.

To contact the reporter on this story: Lauren Coleman-Lochner at llochner@bloomberg.net.

Last Updated: June 10, 2005 18:08 EDT

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Wal-Mart official leaves after Nazi book-burning ad

By MICHAEL BARBARO
Washington Post
June 9, 2005, 7:01AM                   [back to top]

WASHINGTON - The Wal-Mart community affairs director for Arizona and Southern California, whose office approved an advertisement that appeared to equate a local zoning proposal with Nazi book-burning, has resigned, the giant retailer said.

Peter Kanelos, who oversees the chain's public relations effort in both states, will leave the company Friday, said Daphne Moore, who runs the community affairs program for Bentonville, Ark.-based Wal-Mart Stores.

Wal-Mart has not publicly announced Kanelos' resignation, but Moore acknowledged it in an interview Wednesday. Asked if Wal-Mart requested that Kanelos leave the company, Moore said, "I can tell you he resigned."

Kanelos, in an e-mail, said he is leaving the company "on mutually agreeable terms" but would not elaborate.

The firm Wal-Mart hired to design the ad said it had severed its six-year relationship with the company as well.

Wal-Mart has said it reviewed and cleared for publication a full-page advertisement in the May 8 edition of the Arizona Daily Sun featuring a 1933 photo of Germans throwing books on a pyre at Berlin's Opernplatz. The ad was part of a campaign, funded by Wal-Mart, to defeat a Flagstaff, Ariz., ballot initiative that would have restricted the chain's growth. Voters later narrowly rejected the measure.

The ad drew criticism from the Anti-Defamation League, members of Congress and Wake-Up Wal-Mart, a union-funded organization. Wal-Mart, the nation's largest retailer, responded by apologizing in a second newspaper ad and by setting up a hot line for local residents to call.

The controversy became high-profile enough for S. Robson Walton, Wal-Mart's chairman, to address it last week during the retailer's annual shareholder meeting.

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Wal-Mart scouts for Indian retail business CEO

Pummy Kaul                    [back to top]

New Delhi, June 8 Wal-Mart Stores Inc, the world’s largest retailer, is not waiting for government clearance to start preparing for its retail foray in the country. The global major is believed to have initiated the recruitment process for its proposed retail operations in India. This follows the recent recruitment exercise it undertook for its sourcing operations, managed by the Bangalore based Indian affiliate of its subsidiary WMGS Singapore Pte.

According to sources, Wal-Mart is in the process of appointing an HR consultant for India with a clear mandate to identify a CEO to spearhead its retail operations in India. Discussions, are, however, at a preliminary stage, sources said.

Worldwide, its recruitment is done by the leading senior exective search firm Heidrick & Struggles, which works closely with the global giant in most markets including Europe and the US. However, H&S, which has operations in India as well, may or may not necessarily bag the Wal-Mart retail account in India. The final decision is expected to be taken soon by Wal-Mart as it is believed to have called for a pitch from global HR firms including Heidrick & Struggles.

Industry sources maintain that it is more likely that Wal-Mart will bring an expat to head its proposed retail operations as only ‘an expat can bring the required value-add’. “There’s very limited talent in the retail industry here.”

Wal-Mart spokesperson when contacted maintained that the issue was a bit premature and the company would be in a better position to prepare and make plans once the policy is clear. “In fact, our situtation has not changed since we were in India. First, the policy must change and that is in the hands of the Indian government officials. Then once we know the policy we will be in a better position to prepare and make plans,” Wal-Mart International director, international corporate affairs, Beth Keck said.

Things can, however, change as the global retailer is believed to be currently negotiating with Indian business houses for a joint venture partnership for its proposed retail foray in the country.

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Wal-Mart CEO says 5-year plan simple: Grow more

Becky Yerak
June 7, 2005            [back to top]

Even in front of an audience of 800 people, Lee Scott isn't afraid to think big.

During a recent speech in Chicago, the chief executive officer of Wal-Mart Stores Inc. painted a mind-boggling picture of the long-term growth potential of his $285 billion company.

Wal-Mart, Scott noted, has U.S. market share of only about 10 percent; in contrast, European retailer Tesco, he said, has 30 percent of the United Kingdom's food market alone.

"We're a $200 billion U.S. company. If we were a $600 billion U.S. company, we'd only be as good as Tesco," Scott said at an Executives' Club of Chicago luncheon last month. "So there's an extraordinary amount of growth ahead of us because there aren't many people who can say, `I see a clear path to adding $400 billion to my sales.' But we can."

In an interview afterwards, Scott said he wasn't necessarily claiming that Wal-Mart would become a $600 billion business, although some retail analysts have predicted that Wal-Mart could reach the $500 billion mark by 2010. Rather, Scott said he was trying to convey the importance of daring to dream when you're already the world's biggest retailer.

"When you get as large as we are, you have to paint a picture in people's minds that you can still grow. Otherwise they think of $285 billion and think `That's the end of that.' Well it isn't," Scott said.

"It's not even the start of it. We have a five-year plan, and have a pretty good idea in five years where we'll be."

He declined to elaborate except to say getting there would involve opening new stores in the U.S. and overseas, expanding existing stores and making acquisitions.

While rival Target Corp. lately has done a better job of increasing sales in its existing stores than Wal-Mart, the latter does have a recent edge on square footage growth.

Wal-Mart's U.S. store group, excluding its Sam's Club unit, boosted its retail square footage by 8.6 percent in the fiscal year ended Jan. 31, 2005, according to its annual report.

Target, which has annual revenues of $46.84 billion, expanded square-footage growth by 8.2 percent, according to its annual report for the year ended Jan. 29, 2005.

This year, Wal-Mart plans to open as many as 530 new stores, the company said in its annual report. That includes 165 international locations. Already, Wal-Mart's foreign sales are on par with those generated by Sears Holdings Corp., the retailer formed by Kmart Holding Corp.'s March acquisition of Sears, Roebuck and Co.

Meanwhile, Target expects to add more than 600 stores over the next five years, the company told shareholders at its recent annual meeting.

During a May 12 conference call about its first-quarter earnings, one analyst asked Target about rumors that it might link up with Tesco to grow overseas. But Target said there is still growth to exploit stateside.

"We know we can double the number of stores in the continental United States," and factoring in existing stores' sales growth will "lead us to be able to triple in size in this country," Target CEO Bob Ulrich said.

"It's sexy to be overseas, but there's a strong return for our strategy here, so I think overseas is still a ways off."

byerak@tribune.com

Copyright © 2005, Chicago Tribune

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WalMart Tries to be the Photograph Copyright Police - Ignoring Customers Rights

Posted by James Fee                        [back to top]

"Amateur photographer Zee Helmick encountered that problem when she went to pick up photos she had ordered at a Wal-Mart near her home in Henderson, Nev. She had taken the photos of her son that morning to use as head shots for an audition for a TV commercial. She had used her photo-editing software to add his name, information about him and even her own copyright to make the image look more polished, Helmick said. She uploaded the 8-by-10-inch photos to Walmart.com, which prints photos sent to the site at a nearby store for customers to pick up. At the store, Helmick said a clerk told her, "We can't release the pictures to you." "What's wrong?" Helmick asked. "We can't release the pictures to you without a copyright release form signed by the photographer," the clerk replied, according to Helmick. The clerk said the photos looked like a professional had taken them, Helmick said. And no matter how much Helmick protested that she, an amateur, had snapped the shots of her son, she said the clerk wouldn't budge."

Has this ever happened to you? It has with me at Walgreen's with some pictures of my wife and I on our honeymoon. There was nothing I could do to convince them that I took them as I didn't have the negatives, just the jpegs from my digital camera. What I have to wonder is why WalMart would be doing this. If they just print the photos they can say it is not their duty to enforce the copyright, but now that they are being "vigilant", they'll be liable for the times when they don't catch a "professional" photo.

What is the best way to handle something like this when you have no clear proof?

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Wal-Mart closer to entering India

Big News Network
Monday 6th June, 2005
(UPI)                                      [back to top]

Wal-Mart, the world's largest retailer, seems closer to entering India after the prime minister announced a possible end to prohibitory restrictions.

Prime Minister Manmohan Singh announced India might lift its restrictions on foreign direct investment in the retail sector after a meeting last week with John Menzer, president of Wal-Mart's international division, who was on a fact-finding trip to India, the Press Trust of India reported Sunday.

Wal-Mart has been lobbying for years to get into India, a potential market estimated at $280 billion. The disposable income of India's emerging middle class -- estimated at 300 million people -- grew by 20 percent between 1999 and 2003.

We think India's great. It's a fantastic market, said Beth Keck, Wal-Mart's director of international corporate affairs, who also was visiting New Delhi.

Wal-Mart, French supermarket chain Carrefour and British retailer Tesco, all of which are already active in China, are attracted to India and its population of 1 billion.

But the Communists, the Hindu Nationalist Party BJP and small business owners are opposed to Wal-Mart's opening stores in India and say they will attempt to block any such move.

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Wal-Mart testing company gas stations

By Emily Kaiser
Reuters
Mon Jun 6, 2005 12:37 PM ET     [back to top]

CHICAGO (Reuters) - Wal-Mart Stores Inc. <WMT.N> is quietly testing company-owned gas stations at a handful of its U.S. stores, a move that could stall its partner Murphy Oil Corp.'s <MUR.N> fast-growing gas station business.

Wal-Mart currently has more than 800 Murphy gas stations in the parking lots of its stores, and the oil company expects to open 100 more this year. The stations account for more than one-third of Murphy's revenue, but analysts said they generate very little of the company's profit.

The world's biggest retailer opened its fifth company-owned gas station last month at a new supercenter in northwest Arkansas, just minutes from its Bentonville headquarters.

Wal-Mart opened one in Missouri earlier this year, about 15 minutes from Bentonville. The retailer has three others that it opened in Virginia about two years ago, but spokeswoman Sharon Weber said Wal-Mart wanted more locations closer to home "so that we can really keep a close eye and test them well."

"It's something that Sam's Club has been doing quite successfully for some time," Weber said, referring to Wal-Mart's warehouse club division, which has company-owned gas stations at many of its locations. "We're looking at it and we'll move forward as we can."

Weber declined to comment on expansion plans, and said the retailer continues to have a "good partnership" with Murphy. She said Murphy was aware of the Wal-Mart-owned stations.

A Murphy spokesman did not immediately return a call seeking comment.

Murphy signed on to build gas stations at Wal-Mart stores in 1996. The oil company has agreements with Wal-Mart ranging from 10 to 15 years, with options for two five-year extensions, according to its annual report.

The Wal-Mart gas stations accounted for 38.6 percent of Murphy's 2004 total revenue, according to the company's most recent annual report filed with the U.S. Securities and Exchange Commission. Murphy said it expected revenues to rise as it opens more Wal-Mart gas stations.

In 2002, the Wal-Mart stations accounted for 30.3 percent of Murphy's annual revenue.

Analysts said despite the hefty revenue contribution, Murphy makes the bulk of its profit from exploration and refining, not retailing, which is a low-margin business.

Murphy reported first-quarter profit of $124.9 million from continuing exploration and production operations. Its refining and marketing division -- which includes the gas stations -- recorded a quarterly loss of $5.5 million.

"When you go to bed with Wal-Mart, they wake up with the profits," said Fadel Gheit, who follows Murphy for Oppenheimer & Co. The retail gas stations are "a very, very small part of their refining and marketing business, which in turn is a very small of the company," he said.

Gheit said if Wal-Mart were to significantly expand its company-owned gas stations at the expense of Murphy, it would be a near-term "hiccup" for the oil company, but would not change Murphy's prospects. He rates Murphy's stock a "buy."

Wal-Mart has a long history of testing out new ventures and usually takes its time evaluating whether the projects will generate sufficient profit. But analysts said if Wal-Mart finds that it can run gas stations cheaper than Murphy can, the retailer will not hesitate to go it alone.

Wal-Mart's gas stations are concentrated in the U.S South and Southeast.

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The 'Wal-Mart cheer' fails to quell those troubles in store

By David Litterick in New York
(Filed: 04/06/2005)                   [back to top]

Jessica Simpson sang the national anthem, Jon Bon Jovi performed live on stage, thousands of people gathered in the auditorium cheered and screamed their approval, but this was no rock concert.

Instead, the high profile names drawn to a university basketball arena in Fayetteville, Arkansas, were part of a highly orchestrated attempt to pump up Wal-Mart shareholders drawn to this Deep South city for the retailer's annual meeting. "Gimme a W, gimme an A, gimme an L..." shouted executive after executive in numerous different languages as the shareholders, most of whom were company employees, responded to the "Wal-Mart cheer" with power salutes. The company pays for one worker from each of its 5,350 stores around the globe to attend the pep rally.

As a distraction tactic, it didn't really work - the loudest cheer came when chairman Rob Walton asked the crow "We all want to see the share price higher, right?" The stock has lost around 20pc over the past 12 months. Investors also appreciated Mr Walton's moment of humility when he acknowledged that executives were "human", adding "sometimes we make mistakes."

This touchy-feely sentiment is part of the Wal-Mart's strategy to regain its reputation, which has been dragged through the mud in recent months as allegations of financial impropriety and regulatory breaches have dogged the company.

In previous years the world's largest retailer would have shrugged off such attacks but this year it has embarked on a massive marketing scheme to defend itself against its critics, which include a number of UK asset managers. Several shareholder proposals called on the retailer to do more to support human rights, protect the environment and promote and reward women and minorities.

Others berated Wal-Mart for paying executives millions of dollars in salary and stock options while it faces a litany of accusations about discrimination against women, poor treatment of factory workers, and environmental damage from its stores.

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Lowe's, Wal-Mart come to Concord

David Goll        [back to top]

Contra Costa County's largest city finally has attracted the attention of the world's largest retailer.

Wal-Mart Stores Inc. plans to be one of two major anchors in the proposed Jones Ranch shopping center in North Concord, joining Lowe's at the 28-acre retail center northwest of the Highway 4 interchange with Highway 242.

If the development is approved by city officials, the locations would be the first in Concord for both retail giants.

At the same time, the world's largest home improvement retailer, The Home Depot Inc., plans to close its 93,703-square-foot EXPO Design Center at 1461 Concord Ave. When it opened in the fall of 2000, it was the first EXPO store in the Bay Area.

John Montagh, business development manager for the city of Concord, said the store will be converted into a Home Depot store, although he isn't sure of the specific format for the outlet. There is already a Home Depot store a short distance away at 2090 Meridian Park Blvd.

Jean Osta, a spokeswoman for Atlanta-based EXPO, said in an e-mail message that the Concord store was being closed because "it wasn't meeting our strategic objectives. At this point, there is no exact closing date. At this time we are working to close any open projects."

Osta could not be reached for further comment to elaborate on what "open projects" would be affected, including perhaps EXPO stores in Oakland and Dublin.

The Home Depot operates more than 50 of the upscale EXPO home design stores nationwide, along with 1,900 of its hugely successful home improvement warehouse stores throughout North America.

Concord also is attracting the East Bay's first outlet of Panera Bread, a nationwide chain of 773 bakery/cafes specializing in artisan and other specialty breads. It's part of an expansion by the Richmond Heights, Mo.-based Panera Bread Co. into the Bay Area, where it has announced the opening of 14 other cafes in San Mateo, Santa Clara and Santa Cruz counties over the next five years.

Julie Somers, a Panera Bread spokeswoman, said the Concord cafe will open by late fall in the Willows Shopping Center at 1975 Diamond Blvd. She did not comment on plans for other East Bay locations.

On a far grander scale will be the city's Wal-Mart, although Concord officials may be relieved to hear the Bentonville, Ark.-based retail behemoth plans only to build a conventional general merchandise store of about 151,000 square feet in size - not one of its supercenters. Those combination grocery/general merchandise stores are usually at least 200,000 square feet in size and have sparked controversy in communities throughout California and other states because of their mammoth scale, traffic congestion, non-union labor policies and impact on neighboring businesses.

Wal-Mart's proposed Jones Ranch neighbor, the Lowe's home improvement store, is planned for about 134,000 square feet. Parent Lowe's Cos. Inc. of Mooresville, N.C., is nipping at The Home Depot's heels, having grown to encompass 1,100 stores in 48 states.

Craig Lazzareschi, a principal with Greater Bay Real Estate Group LLC of Walnut Creek, is assisting the family-owned development company that plans to develop and then manage and retain ownership of the Jones Ranch property. He said the project will also include three outer "pads" that will most likely house restaurants.

"This will not be your average looking big-box center, as it will be heavily designed, making use of many arches and stone," he said. "Since this is the first retail development in the North Concord area, the city is insisting on a high-quality appearance."

He said the family, Winton and Nathlie Jones and their children, Olin and Janell, are "big Wal-Mart supporters and are really thrilled to have these two anchor tenants" for their development. At present, Lazzareschi said, many Concord residents have to travel to Martinez, Pittsburg, Antioch or Vallejo to find outlets of those stores. For the past 50 years, family members have lived on the property that will be developed, Lazzareschi said.

Montagh said the proposed retail center must first go before the city's design review board, then pass muster with the Concord Planning Commission and City Council. He said the city would welcome the additional sales tax revenue generated by Lowe's and Wal-Mart, adding to the $28 million generated during fiscal 2004.

Amid the state's chronic budget problems, cities have encouraged retail development as a way to increase their tax revenue to help pay for public services. They also decry "leakage" of sales tax dollars to nearby cities when their residents travel out of town to shop.

dgoll@bizjournals.com | 925-598-1436

© 2005 American City Business Journals Inc.

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Wal-Mart's New Realm: Reality TV

By STUART ELLIOTT                 [back to top]
June 3, 2005

Wal-Mart, seeking additional ways to burnish its tarnished image, is turning to a new realm: reality TV.

For the first time, Wal-Mart Stores is becoming a major sponsor of a reality television show, by signing a branded-entertainment agreement with ABC for "The Scholar," a summer series that begins a six-week run on Monday night. Wal-Mart will be woven into the plots of episodes of the show, which is centered on a competition among 10 high school seniors from across the country for a grand prize of a full college scholarship, valued at $250,000, covering tuition and expenses.

The students will compete in a variety of academic, creative and social tasks, including team challenges, oral exams and defending themselves before a scholarship committee. In one challenge, the five members of the winning team each receive a $2,000 Wal-Mart gift card to outfit their dormitory rooms. And Wal-Mart is underwriting the cost of the scholarships for the nine runners-up, totaling $300,000. (The Broad Foundation in Los Angeles is donating the grand prize.)

There will also be commercials during the show promoting the Wal-Mart and Sam's Club Foundation's long-running program offering scholarships to students in towns where it operates stores and distribution centers. The foundation said yesterday that it would provide more than $6.9 million in scholarships this year to more than 6,700 students through the Sam M. Walton Community Scholarship Program, named after the company's founder.

"We don't usually do sponsorships of any show, no matter what the format is," said Betsy Reithemeyer, executive director of the foundation and vice president for corporate affairs at Wal-Mart in Bentonville, Ark.

But "The Scholar" was "different from anything brought to us before," she added, because it is "a unique way to get out the message on national television that we're supporting education."

Wal-Mart has been under intensifying attack on a variety of issues, ranging from how much it pays its workers to how much merchandise it buys abroad to how much its big stores affect small businesses. The company has been increasing its efforts to counter those critics by taking steps like running issue-oriented advertising campaigns, providing more access to reporters who cover the retail industry and assigning a spokeswoman to be responsible for what is called reputation management.

"In the battleground Wal-Mart is now part of, they're recognizing it's time they speak up for themselves," said Wendy Liebmann, president of WSL Strategic Retail, a consulting company in New York. "They have to tell their own story, or otherwise people will tell it for them."

Ms. Liebmann praised Wal-Mart's strategy of getting out the word about its scholarship program through "The Scholar" sponsorship rather than "the more typical 'Aren't we good citizens?' speech."

"That way, you're not hitting people over the head," she said. "You let the program speak for you and you get the good rub off. I call it 'the company we keep' approach."

Wal-Mart and ABC declined to discuss the financial details of the deal, but Wal-Mart said it was paying "well above six figures" for its participation in "The Scholar." Payments by marketers for branded-entertainment deals in reality TV series can range from less than $100,000 to as much as $4 million.

The deal between Wal-Mart and ABC, part of the Walt Disney Company, is indicative of the growing appetite among blue-chip marketers to become intrinsically involved in the content of entertainment programming. Their goal is to counter the growing appetite among television viewers to zip, zap and otherwise avoid traditional commercials that interrupt the shows they want to watch.

"The Scholar" is also an example of a trend among the producers of reality TV shows to play down their previous emphasis on hard-edge competition shows, in arenas like athletics, romance and relationships, in favor of so-called feel-good topics that viewers deem more inspiring - or, at least, less time-wasting.

For example, a kinder, gentler version of a relationship reality series, "Beauty and the Geek," which WB introduced Wednesday, received positive advance reviews and garnered the best ratings in its time period for the network since February among a core audience, women ages 18 to 34.

The feel-good trend was spurred in large part by the success of another ABC reality series, "Extreme Makeover: Home Edition," which has had a branded-entertainment deal with a primary Wal-Mart competitor, Sears, owned by the Sears Holdings Corporation, since it began as a special in December 2003.

"What we like about 'The Scholar' is how it showcases individuals and their efforts to lift themselves up," Ms. Reithemeyer said. "There are 10 kids who overcame difficulties and reached the academic level where they're able to go to college."

She acknowledged that Sears's sponsorship role on "Extreme Makeover: Home Edition" had "given them enormous visibility in that particular show," adding, "I can see where you would see that" the accolades Sears has enjoyed from its sponsorship led Wal-Mart to pursue a branded-entertainment deal of its own.

But, Ms. Reithemeyer said, "this outreach is because of this unique show being brought to us."

Wal-Mart learned about ABC's efforts to find a sponsor for "The Scholar" from one of its two primary agencies, Bernstein-Rein Advertising in Kansas City, Mo., which shares general-marketing assignments for the retailer with GSD&M in Austin, Tex., part of the Omnicom Group. Bernstein-Rein's duties include national broadcast media buying and creating ads promoting Wal-Mart's prices and convenience, its electronics merchandise and the foundation.

"Over the last six months, we evaluated a lot of proposals," said Joe Myers, vice president and group account director at Bernstein-Rein, "but we didn't want to miss out on this one."

"We felt this one really seemed to do the best job," he added, because "it resonated perfectly with what the foundation wanted to tell the public" and "the 10 students are from every walk of life."

As for Wal-Mart delving more deeply into branded entertainment, "We're going to see how this goes," Mr. Myers said, "and see where we go from here."

The ABC executives responsible for "The Scholar" have high hopes for the series.

"We're not going down the mean-spirited path of reality," said Meredith Momoda, vice president for integrated marketing and promotion at the ABC Television Network unit of ABC in Burbank, Calif., "which is why advertisers are so drawn" to such series.

ABC retained creative control of "The Scholar" as it does with all its reality series, she added, and advertisers are generally kept abreast during production. Ms. Momoda said that the popularity of "Extreme Makeover: Home Edition" "woke up a lot of people to the possibilities of what integrated marketing can do for you," and "not just for products but to showcase corporate image."

"Sears gets letters from viewers saying, 'We're going to shop at Sears because you do so much good for people,' " Ms. Momoda said.

Imagine how happy Wal-Mart would be to get even a postcard to that effect.

Copyright 2005 The New York Times Company

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A Force Too Strong, Even for Wal-Mart

By DANIEL AKST
May 29, 2005                [back to top]

WHEN Wal-Mart announced recently that it was giving up on the mail-order movie rental business and directing its subscribers to Netflix, the implication seemed clear: Wal-Mart had stumbled.

But the company's apparent capitulation came at roughly the same time as another interesting piece of movie-related news: a copy of the new "Star Wars" movie surfaced on the Internet more or less simultaneously with its theatrical release. Dan Glickman, president of the Motion Picture Association of America, put that development in this perspective: "The unfortunate fact is this type of theft happens on a regular basis on peer-to-peer networks all over the world."

Hollywood movies, in other words, are being passed around the Internet regularly. But the salient point here is not piracy; it's the means of distribution. As Mr. Glickman also said, several companies are already giving customers legal access to some movies via the Internet. This is how most films are likely to be distributed in the reasonably near future.

That's why Wal-Mart's move was no stumble. Rather than a misstep, the retailer's decision to stop mailing DVD's all over creation was smart. It's also a clear signal to the rest of us - just like that quick online appearance of "Star Wars: Episode III - Revenge of the Sith."

The Internet has a funny way of colonizing other forms of communication. Already, VoIP, or voice over Internet protocol, may be on its way to destroying the traditional long-distance phone business by routing calls from regular telephones over the Internet. Similarly, letters and faxes are being replaced by e-mail. Bills increasingly arrive electronically and are paid the same way. Net-friendly digital photographs are pushing aside film. Music downloading, legal and otherwise, is already big and will only spread.

Now look at Netflix, which says on its Web site that it "ships about 11,000 tons of DVD's each year."

"If placed side by side," it says, "the discs would form a line about 20,500 miles long, which is the circumference of the world at 34.1 degrees north - the latitude of Hollywood." The company adds that if you start piling up the DVD's it ships daily, the stack would be "taller than Mount Everest within 10 days." Does this mountain of discs look like the business of the future?

Netflix seems to know that it doesn't. In its most recent 10-Q quarterly filing, it says that "we continue to invest resources to develop solutions for downloading movies to consumers." Its apparent strategy is to develop the DVD subscription business, accumulate millions of customers and, if and when the market changes, port them over to electronic delivery.

But the mail-order DVD rental business is competitive. Wal-Mart's departure looks sensible when you consider not only the future of movie delivery but also the market-share battle between Netflix and Blockbuster, which still has actual stores. Then bear in mind that Amazon.com offers a DVD rental service in Britain, and some people think that it may do the same in this country, where DVD rentals could help Amazon leverage its infrastructure and bring in more customers for its merchandise. And when downloading movies becomes an everyday activity, will it be of much use to have a large mail-order DVD rental business like that of Netflix? I am skeptical, and apparently, so are the people who run Wal-Mart.

The big retailer's decision to abandon the field to Netflix says something about many other businesses that depend on the delivery of information in some physical format. Newspapers, books and magazines, for instance, are still delivered on paper, but eventually many publishers are likely to dispense entirely with paper and ink to deliver materials electronically, to readers who are freed from their desks by wireless networks and portable magazine-sized tablets with vivid screens. There have been several false starts, but the long-term trend is nonetheless clear.

THAT doesn't mean that paper and discs have no future, but it's not a very bright one when it comes to transmitting news, information or entertainment. The day may come when not only DVD's by mail but traditional mail itself becomes obsolete. If some of us can make do with mobile phones, dispensing with land lines altogether, is it so far-fetched that some day people won't even bother to have mailboxes? Paper junk mail, ghettoized to a postal system that carries little else, may go the way of telegrams, leaving delivery services to focus on packages that require physical delivery. You can't download a shirt, after all.

That day hasn't yet arrived, but maybe the folks at Wal-Mart know something that the rest of us only pretend to know: if it's data, it will move over the Internet. And maybe, just maybe, it's time to stop pretending otherwise.

Daniel Akst is a journalist and novelist who writes often about business.

Copyright 2005 The New York Times Company

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Wal-Mart Wiggles Around Worker Health

By Liza Featherstone,
The Nation
Posted on May 26, 2005        [back to top]

Wal-Mart is famous for trying to circumvent local zoning regulations, but in Dunkirk, Maryland, the retailer got particularly creative. The small hamlet had a rule against stores larger than 75,000 feet--so the company proposed to build two Wal-Mart stores side by side. Fortunately, this bit of Amelia Bedelia literalism was emphatically rejected by a community outcry, and Wal-Mart backed down last week.

Meanwhile, also in Maryland, small-time whore Governor Ehrlich has, as expected, vetoed a bill to force Wal-Mart to provide decent health insurance to workers. Wake Up Wal-Mart has a letter you can send him, politely letting him know you think he is a putz (sorry, tell him you're disappointed). More importantly, since Democrats are threatening to override the veto, if you live in Maryland: call, write or visit your state representatives and make sure they do the right thing!

More and more states are considering similar legislation, thanks to a growing and coordinated national movement. A pending Pennsylvania bill would require firms with 50 or more workers to provide data on how many workers depend on public assistance for health care. Other states and localities debating Wal-Mart-inspired measures similar to Maryland's--requiring large companies to insure workers or contribute to Medicaid-- include New Jersey, Georgia, New York City, California, Montana and Connecticut. (To keep abreast of these developments and take action, sign up for updates at americansforhealthcare.org.)

If Wal-Mart find these bills irksome, and still doesn't want to provide decent health insurance for its workers, the company should lobby for national health insurance. That's unlikely, of course, but let's hope the political battle over Wal-Mart's benefits at least convinces Americans that our health is too important to be left to the whim of greedy employers.

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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Wal-Mart Avarice

by Katrina vanden Heuvel
The Nation
Published on Tuesday, May 24, 2005          [back to top] 

Kudos to veteran 60 Minutes correspondent Morley Safer for lambasting the New York Times for its "paean" to Wal-Mart heir Alice Walton, and taking aim at Wal-Mart's "systematic obliteration of thousands of family businesses and of course the creation of hundreds of thousands of sweatshop jobs." Safer's letter (posted below) succintly captures the grand irony of Walton's recent $35 million purchase of a famous landscape painting. ("All that Wal-Mart money was gleaned from the systematic destruction of the very American landscape Ms. Walton so expensively celebrates.")

Here's hoping that Safer's hardhitting letter is the basis of a forthcoming 60 Minutes segment.

New York, May 14, 2005

To the Editor:

Your paean to Alice L. Walton, the Wal-Mart heir who recently purchased Asher B. Durand's landscape painting "Kindred Spirits" for $35 million ("A Determined Heiress Plots an Art Collection," Arts pages, May 14), ignored a grand inherent irony.

All that Wal-Mart money was gleaned from the systematic destruction of the very American landscape Ms. Walton so expensively celebrates. Not to mention the equally systematic obliteration of thousands of family businesses and of course the creation of hundreds of thousands of sweatshop jobs.

The robber barons of yore, through contrition or vanity, also established enduring cultural institutions, but surely in this age of alleged transparency, it behooves the newspaper of record to make at least passing reference to the human and environmental price we all pay to satisfy Ms. Walton's ambition.

Morley Safe

© 2005 The Nation

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Former Wal-Mart exec files complaint Whistleblower was fired after reporting colleague's fraudulent scheme, newspaper report says.

CNN/Money
May 24, 2005: 8:59 AM EDT        [back to top]

NEW YORK - One of Wal-Mart's former executives filed a complaint with the Labor Department, accusing the retail giant of violating federal whistleblower rules when it fired him, according to a newspaper report.

Jared Bowen, a former vice president for Wal-Mart Stores Inc. (up $0.67 to $47.85, Research), provided information about a scheme allegedly hatched by one of the company's executives, the Wall Street Journal reported Tuesday. Wal-Mart asked Chairman Thomas Coughlin to step down after investigating him for defrauding the company of as much as $500,000 through expense-account abuses and false invoices, said the Journal.

Coughlin resigned before his board term was set to expire in June.

Bowen, 31, was terminated about a week after Coughlin resigned in March, said the Journal, and a copy of his exit interview said he was fired for a "loss of confidence" in him as a company officer. Wal-Mart has previously said Bowen was terminated because he took part in Coughlin's scheme, but the company recently declined to comment, according to the Journal.

Bowen's complaint claims that Wal-Mart, based in Bentonville, Ark., violated a provision of the federal Sarbanes-Oxley Act, which protects whistleblowers, the Journal reports.

Bowen has asked for his $250,000-a-year job back, as well as back pay with interest and damages. Wal-Mart referred the case to the U.S. Attorney for the Western District of Arkansas.

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Wal-Mart Tops Planet Retail's Global Grocers List

MAY 24, 2005          [back to top]

LONDON -- Wal-Mart has once again nabbed the top position in the annual list of the top 30 grocers worldwide, published by Planet Retail (www.planetretail.net) here.

According to the international research group, Wal-Mart has expanded its global reach to nearly 6,000 stores across 13 countries, and achieved $309 billion in sales last year. The retailer beefed up its supermarket portfolio by acquiring Bompreco hypermarkets in Brazil, which were formerly operated by Ahold.

France-based retailer Carrefour retained its No. 2 position on the list, with a marginal 3 percent sales increase to $113 billion. Ahold and Metro followed at No. 3 and No. 4, respectively.

The biggest shakeup in the list was at No. 5, where London-based Tesco toppled Kroger Co. Tesco's sales grew 10 percent vs. 2003, to $68 billion. "Tesco's success can be attributed to a wide range of factors, including a dynamic and flexible range of formats ranging from hypermarkets to convenience stores in developed and developing markets, sharp pricing, a strong own-label offer, and an extensive nonfoods range," noted Planet Retail in its report. Additionally, Tesco has shown it can ably compete with Wal-Mart, both in the food and nonfoods sectors.

Planet Retail's "2005 Watch List" of retailers to keep an eye on in includes Japan's AEON, Albertsons and CVS from the United States, Coles Meyer and Woolworths from Australia, and Canada's Loblaw.

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Religious investors ask Wal-Mart to review social, economic policies

By Tracy Early
Catholic News Service
May-23-2005                      [back to top]

NEW YORK (CNS) -- A group of religious orders and other investors is asking the retail giant Wal-Mart to assess the company's policies and practices in light of their "social, environmental and economic sustainability."

A resolution filed for shareholder action said Wal-Mart, which will hold its annual stockholder meeting June 3 in Fayetteville, Ark., is facing widespread "negative public perceptions" about its operations.

"Wal-Mart's business success is dependent on its domestic and global workers receiving a sustainable living wage to meet their basic needs, and the environmental viability of the communities in which the company operates," the resolution added.

The Shareholder Association for Research and Education, an agency based in Vancouver, British Columbia, said in a report earlier this month that Wal-Mart activity had drawn concern in Canada as well as the United States. The agency helps pension funds build sound investment practices that protect beneficiaries but also contribute to a "just and healthy society."

In reaction to union organizing efforts, Wal-Mart closed a store in Quebec after "a short round of negotiations" with "the chain's first North American unionized bargaining unit," the report said.

"The danger for shareholders is that some cost controls could undermine key relationships with employees, customers, suppliers and communities," according to the agency's director, Peter Chapman.

For the Wal-Mart resolution, the lead filer is the United Methodist Board of Pension & Health Benefits, and co-filers include the Dominican Sisters of Adrian, Mich., the School Sisters of Notre Dame, Sisters of Charity, Benedictine Sisters, Congregation of the Holy Cross, Presbyterian Church, Unitarian Universalist Service Committee and a Vancouver agency, Ethical Funds.

According to the Shareholder agency, Wal-Mart has asked shareholders to vote against the resolution. The company said it plans to prepare a report like the one requested but wants to do it "only in the form and at the time that is in the best interests of the company and its associates and the communities and customers we serve."

Religious investors also filed resolutions with Wal-Mart this year on equal employment and on the sale of violent video games to children.

Wal-Mart is not alone in drawing the attention of the church-related investors, but is only one of dozens of companies that are being challenged in stockholder resolutions.

For example, as ExxonMobil moved toward its annual meeting in Dallas May 25, it was facing resolutions filed by church-related groups on global warming and on the qualifications of its directors.

Most of this activity is coordinated by the Interfaith Center on Corporate Responsibility, a New York agency headed by Mercy Sister Patricia Wolf.

In a press release May 19, the center reported that it "has had a very successful shareholder meeting season so far."

The center says it represents groups with investments of more than $100 billion of pension, endowment and reserve funds.

Although substantial, their members' stock holdings do not enable them to win votes at stockholder meetings. But they believe their efforts in forcing attention to issues and entering into dialogue with management have a positive effect over time.

As an example of success this year, the center reported that the Ford Motor Company had agreed to "analyze climate change and report on its economic impact."

Christian Brothers Investment Services, a New York agency that provides investment advice to a number of religious orders and other Catholic investors, reported May 19 that successful negotiations with Best Buy Company had led it to withdraw a resolution it had filed on the sale of violent video games to children.

"The company has agreed to publicly outline what may be the toughest policy introduced by a major American retailer to restrict the sale of mature-rated video games to children and teens," the report said.

Co-filers of the Christian Brothers' resolution included the Sisters of St. Joseph of Carondelet, the Adrian Dominican Sisters and Trinity Health, an agency formed by a merger of health care facilities of Holy Cross and Mercy nuns and based in Novi, Mich.

Christian Brothers also announced May 20 that the New York League of Conservation Voters had honored it the previous evening for its efforts to encourage companies to follow environmentally responsible policies.

"As a leading proponent of the 'green dollar,' Christian Brothers Investment Services is positively achieving environmental change through socially responsible investing," said the league's director, Marcia Bystryn.

Copyright (c) 2005 Catholic News Service/USCCB. 

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Limbaugh branded Maryland's proposed Wal-Mart bill as "a vestige of fascism"

http://mediamatters.org/
Monday May 23, 2005 at 1:05 PM EST        [back to top]

Nationally syndicated radio host Rush Limbaugh declared that proposed legislation in Maryland, which would have required discount retailer Wal-Mart to choose between increasing health benefits for employees or paying more into the state's Medicaid program, is "a vestige of fascism." The bill, which passed the Maryland Senate and House of Delegates but was vetoed by Republican Gov. Robert Ehrlich on May 19, was designed to address the concerns reinforced by a number of studies and analyses showing that Wal-Mart's low wages and meager health care benefits cost taxpayers millions of dollars through increased enrollment in taxpayer-funded social programs.

From the May 20 edition of The Rush Limbaugh Show:

LIMBAUGH: They [the Maryland General Assembly] are legislating socialism. This is the government -- in this case the state government -- telling a private business how it must run its affairs. Now, some might even call that a vestige of fascism. Some might say you're getting very close to fascism here when the government starts telling everybody in business -- at an increasing rate -- how they have to run their business, allocate funds, and so forth. And it's almost extortion to boot, because if Wal-Mart doesn't do what the legislature says -- then the legislature must -- then Wal-Mart must pay the legislature. So it's -- they're legislating socialism at the Maryland legislature.

Copyright © 2004-2005 Media Matters for America.

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Wal-Mart's Chinese suppliers shift base to India

Monday, May 23, 2005                [back to top]

NEW DELHI: When the going gets tough, the Chinese simply cross the Wall. Faced with a higher tax on exports following pressure from the U.S. and the European Union, large Chinese textile suppliers to Wal-Mart are relocating their manufacturing base to India.

And the world?s largest company seems to love it. The company says it ?welcomes? the shift and plans to double sourcing from India, business daily the Economic Times reported.

Incidentally, Wal-Mart buys goods from India worth $1bn ? close to Coke?s total investments here in the past 13 years.

The Chinese are not the only ones packing their bags. Wal-Mart suppliers in Singapore and the Middle East have also shown interest to shift production to India. The removal of quotas seems to be helping India?s case.

China is already under pressure from the U.S. to revalue its currency, which has been artificially kept low against the dollar. It also faces demands from the EU and the U.S. to curb its surging textile exports. Beijing has reacted to it by hiking the tax on exports. If the Yuan is revalued, the combined effect of the changes will make Chinese goods costlier, the paper said.

Vice-president and managing director of Global Procurement, Wal-Mart Stores, Andrew Tsuei said that the removal of textile quotas has made India more competitive in apparel and textile production.

Commenting on the expected shift by suppliers in favor of India, he said cheaper raw material and availability of trims allow Indian companies to reduce production lead-time, which is important to the retail industry.

Suppliers and buyers also evaluate infrastructure development, port security, political stability, labor and technology ? areas where India is strong compared to other exporting nations. Retailers also like to source from a number of different countries to reduce risk.

?As India is becoming more competitive, our suppliers are relocating to India and other countries in the Indian sub-continent. Wal-Mart welcomes this shift as we hope to see our Indian suppliers improve their efficiency as they increase the scale of their operations. We hope to see gains in improved delivery times and cost, which in turn, improves the in-stock levels in our stores and the prices we can offer our customers,? said Andrew.

On the debate over revaluation of Yuan, he said, ?This is a hard question to answer as the impact, if there is any at all, will depend on the level of appreciation of the Yuan, how fast it takes place, and how the Chinese government manages any change. We don?t have a clear answer because of all the various factors involved with exchange rates,? he said.

?What we do know is that higher prices will tend to make Chinese goods less competitive in the global marketplace, and this could encourage manufacturers to move production to other markets. In the past 30 years, we have seen this happen as manufacturing costs increased in countries like Japan, Korea, Taiwan and Hong Kong. Global trade is a highly-competitive and mobile business, and India is in a good position to compete,? said the Wal-Mart official. Wal-Mart buys goods worth $12 billion (Rs 54,000 crore) from China and any impact on the Chinese currency will have significant implications for the retail giant, the paper added.

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Forum highlights the misdeeds of Wal-Mart, treatment of employees

BY MICHAEL LYCKLAMA
May 20, 2005                         [back to top]

The crusade against Wal-Mart made its way to Western's campus Wednesday.

Craig Cole, president and CEO of Brown & Cole Stores, which owns the local Food Pavilion and Cost Cutter stores, informed students and community members about the misdeeds of Wal-Mart.

He spoke at the Fairhaven Auditorium for the "Is Wal-Mart Good for America" weekly World Issues Forum that Fairhaven College sponsors.

"The species most endangered by Wal-Mart is the American worker," Cole said in the lecture.

Cole said Brown & Cole Stores, the oldest retail grocery firm in Washington, will close eight stores because of competition from Wal-Mart. Food Pavilion stores in Yakima, Pasco, Kennewick, Arlington and Smokey Point will close, as well as a Food Depot store in Okanogan and Thrifty Foods stores in Burlington and Stanwood.

"Their plan is not to compete, but to oversaturate and dominate," Cole said.

Wal-Mart puts as many stores as possible in an area to drive out competition. It then reduces the number of its stores in that market after defeating the competition. Last year Wal-Mart closed 350 of its stores nationwide, Cole said.

Wal-Mart plans to open a store at Smokey Point, seven miles north of its Marysville store, Cole said.

Brown & Cole Stores provides health care to 95 percent of its workers while Wal-Mart only insures one-third of its workers, Cole said.

"Wal-Mart is the richest corporation in the world, yet two-thirds of its employees don't have health care," said Shirley Osterhaus, Fairhaven College lecturer and World Issues Forum coordinator. "You, as a taxpayer, are paying health care for those workers."

Wal-Mart encourages workers who do not receive health benefits to apply for state benefits, Cole said.

"If we are going to have an employer-based health care system, which is the majority in this country, we can't have the largest employer in the world not play the game," Cole said.

Brown & Cole Stores pays 50 percent more per hour than Wal-Mart's average of $10 per hour, Cole said.

"What I really hate about Wal-Mart is that they don't pay for their social costs," Bellingham resident Ingeborg Paulus said.

Cole said Wal-Mart plans to build a store every 20 to 30 miles along the Interstate-5 corridor, including five more in Whatcom and Skagit counties.

"I think it's terrible that they are going to put five Wal-Marts in a row," Western freshman Hailey Habenicht said. "It's just going to drive more people to Bellingham."

Cole points to Costco as an example of an international corporation that competes fairly.

"Costco made a choice to pay its employees well and serve its community," Cole said. "Wal-Mart made another choice."

Citizens can stop Wal-Mart from harming their community with a concerted effort, Cole said.

"One place where Wal-Mart is not dominant is in your mind," Cole said. "Olympia, Gig Harbor and Tumwater have all said no. Citizens have to be thinking about the kind of community they want before Wal-Mart comes."

© 2005 The Western Front

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Scott's Wal-Mart Opens Store Targeting Amish

Greg Levine,
05.20.05, 2:03 PM ET                [back to top]  

Raising the roof. The Wal-Mart Stores (nyse: WMT - news - people ) deal this week to shift its online DVD business to Netflix (nasdaq: NFLX - news - people ) drew a lot of attention from industry observers and customers alike. But in Middlefield, Ohio, the deal is not likely to cause much of a stir. The Mahoning Valley town is the site of one of the newest Wal-Mart locations, and probably the most unique so far: It's a unit geared to the region's large Amish community. With stores ranging all the way to China, the firm, led by Chief Executive H. Lee Scott Jr., is used to adapting to local colors and ways. But the Middlefield store goes a step further by taking a step back, all the way to the 18th century customs of its clientele. According to the online edition of the Tribune Chronicle, the retailer's parking lot will feature 84 spots to hitch horse-and-buggy transportation. The store's usual dizzying abundance of merchandise will naturally also be geared to the self-styled "plain people": Store manager Paul Franz says the unit will feature such low-tech goods as 25-pound blocks of ice for ice boxes, canning supplies, denim and other sturdy solid-colored textiles that the Amish use to make their clothes. So after the "English"--as the ancient sect calls non-Amish Americans--are done stuffing their SUVs with purchases like South Beach Diet meals from Kraft Foods (nyse: KFT - news - people ) and Microsoft (nasdaq: MSFT - news - people ) Xbox 360s, it is hoped they'll brake at the exit...and yield to slow-moving carts.

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Maryland Governor Vetoes Wal-Mart Bill

By GRETCHEN PARKER
The Associated Press
Friday, May 20, 2005; 11:16 AM          [back to top]

PRINCESS ANNE, Md. -- Gov. Robert Ehrlich vetoed a bill aimed at making Wal-Mart pay higher health care benefits or contribute more to Medicaid and said the measure threatened the economic health of the community.

The retail giant plans a distribution center in this lower Eastern Shore town. Ehrlich was joined at the veto ceremony by a Wal-Mart executive and 200 people, including a handful of protesters. A high school band played "God Bless America."

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The Fair Share Health Care Act, passed by lawmakers in April, would require a company with more than 10,000 employees to spend at least 8 percent of its payroll on health care benefits or pay more into the state Medicaid fund. Currently, only Wal-Mart fits that criterion.

Eduardo Castro-Wright, chief operating officer of Wal-Mart stores USA division, said the company already spends 7 percent to 8 percent of its payroll on health benefits.

He said the Bentonville, Ark.-based retailer still opposed such a bill, saying it could be dangerous if broadly applied.

"Next time around ... it might not be 10,000 employees, it might be 200. Then you are talking about a very different scenario that involves everyone in the business community, not just Wal-Mart," Castro-Wright said.

The planned distribution center, which could start construction in 2007, would employ 350 workers initially and up to a thousand eventually.

Wal-Mart could reconsider the plan if the General Assembly overrides the veto when it reconvenes in January, said Castro-Wright. The Senate passed the bill with enough votes to override a veto, while the House margin was just short of the number needed for an override.

Unions criticized the veto.

"Gov. Ehrlich should be ashamed for literally standing with big corporate interests rather than Maryland's working families," John Sweeney, president of the AFL-CIO, said in a statement.

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Ehrlich Vetoes Health Care Bill Aimed at Wal-Mart

By John Wagner and Michael Barbaro           [back to top]

PRINCESS ANNE, Md., May 19 -- Gov. Robert L. Ehrlich Jr. vetoed legislation Thursday that would have effectively forced Wal-Mart Stores Inc. to spend more on employee health benefits in Maryland, a measure that has unnerved the retailing giant and prompted other states to consider similar approaches.

Ehrlich's action came during a tightly choreographed ceremony in which he was joined by a top executive from the Arkansas-based company, which has been on the defensive on several fronts nationwide.

"We are here to enthusiastically veto a bad piece of public policy," Ehrlich (R) said, arguing that the measure would have a chilling effect on businesses considering locating or expanding in Maryland. He was greeted by a high school band playing on a blocked-off downtown street lined with American flags. About two dozen protesters turned out, but were forbidden from displaying signs.

The bill would have required for-profit companies with more than 10,000 employees to spend 8 percent of their payroll on health care benefits or to the state's health program for the poor.

As written, Wal-Mart is the only known company operating in Maryland that would be affected. Officially called the Fair Share Health Care Bill, the legislation was commonly referred to in Annapolis as the "Wal-Mart bill" and drew national attention.

Ehrlich's position, which he made clear weeks ago, drew heavy criticism Thursday from leading Democrats, union representatives and health care advocates.

"Governor Ehrlich should be ashamed for literally standing with big corporate interests rather than Maryland's working families," said AFL-CIO President John J. Sweeney.

Ehrlich chose Somerset County to announce his veto because it has one of the state's highest unemployment rates, and the fate of a planned Wal-Mart distribution center here has become entangled in the controversy over the bill.

The company is moving ahead with the facility, which could employ more than 800 people. But Eduardo Castro-Wright, the second-ranking executive at Wal-Mart's U.S. division, said before the ceremony that Wal-Mart might reconsider its plans if lawmakers overturn Ehrlich's veto when they convene again in January.

"It singles a company out in a way that is discriminatory," he said of the legislation, which passed with wide margins in the heavily Democratic legislature.

The presence of Castro-Wright underscored how seriously the chain is taking the bill and the precedent it might set. Lawmakers in Pennsylvania and New Jersey are moving in a similar direction, and Wal-Mart's opponents have rallied around the health care issue as they try to slow the chain's growth.

Wal-Mart's business model, which produced a $10 billion profit last year, is designed to hold down labor costs. The company offers a wide range of health care plans, but the cost to employees is far higher than in plans provided by unionized grocery chains such as Giant Food LLC.

Wal-Mart has questioned the motivation behind the legislation, which is supported by Giant, a Wal-Mart competitor, and United Food and Commercial Workers Local 400, the grocery workers union trying to slow Wal-Mart's growth in the Washington region.

"It's clear Wal-Mart is worried," said Chris Kofinis, a senior adviser at the UFCW who attended yesterday's ceremony. "They realize public opinion is against them."

Terry Lierman, chairman of the Maryland Democratic Party, said the legislature's passage of the bill had been "the right thing to do," given that some Wal-Mart employees now must rely on Medicaid, the state-run insurance program for the poor, for health care.

P. Franklin White, president of the Princess Anne Town Commission, said he hopes the General Assembly does not revive the bill in January.

"It's a bad bill for business, and it's a bad bill for Somerset County," White said. He praised Ehrlich for taking "a very courageous step."

The legislation is certain to factor into next year's governor's race. Wal-Mart hosted a fundraiser for Ehrlich last year, and the two leading Democrats seeking to replace him both issued statements condemning his veto.

Barbaro reported from Washington.

© 2004 The Washington Post Company

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Clothing Company Bans Wal-Mart Kansas City 

Posted on: Thursday, May 19, 2005 03:05 AM         [back to top]

SHAWNEE -- Ace Kicker Tees has announced that it will not allow Wal-Mart Stores, Inc. to carry Ace Kicker's line of poker t-shirts in any of Wal-Mart's more than 5,000 retail outlets.

Wal-Mart's past history of music and book censorship contributed heavily to Ace Kicker Tees' decision. "It really worries me when big business starts dictating ethics to artists and other creative voices," says Ace Kicker Tees sole proprietor John Carlton. "One of our poker shirts has an obscenity on it. And we're simply not willing to sacrifice our first amendment rights, regardless of what sum of money we stand to make in return."

In addition, Carlton believes that the business values of Ace Kicker Tees and Wal-Mart are not in line with each other. "I have a great respect for Wal- Mart's tremendous success and economic influence. But I believe that to get our products' pricing in line with the low-price leader would require us to decrease quality and significantly devalue the creative contributions of all the people involved in making Ace Kicker Tees. Even though that means our prices will never compete with Wal-Mart, we believe our customers are willing to pay more for a premium quality product."

The popularity of poker -- especially No Limit Texas Hold 'Em -- has skyrocketed in recent months. Retailers have experienced increased sales in poker chip sets, electronic poker games, tabletops and other poker supplies. But despite the added demand, Carlton says Ace Kicker Tees must remain true to the company's core values. "We might not ever sell at the highest volume, but we will always sell with the highest integrity."

Ace Kicker Tees offers poker t-shirt designs online at http://www.acekickertees.com/ . For more information, contact owner John Carlton at 913-441-6770 or john@acekickertees.com .

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Wal-Mart to Add 150 Jobs at German Center

Associated Press
05.18.2005, 07:13 AM           [back to top]

The German arm of Wal-Mart Stores Inc. announced Wednesday it will create 150 jobs at a new fresh-foods packing center to cement the company's position in the local market.

The new center will be build in the western city of Bingen and cost about euro25 million (US$31.5 million), Wal-Mart's head in Germany, Kay Hafner said.

"With this investment, Wal-Mart is setting an example that the company plans to be in Germany over the long term and aims to grow through better quality products and lower prices," Hafner said.

The Bingen center will allow the company to buy the bulk of its fresh produce, meat and dairy products directly from German and other European farmers for delivery to stores in western and southern Germany. It is to begin production by summer 2006.

Wal-Mart has 91 stores in Germany and roughly 13,000 employees.

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Wal-Mart to open 15 stores in China and export 18 bln usd of goods

AFX News Limited
05.17.2005, 01:27 AM         [back to top]

BEIJING (AFX) - US retailer Wal-Mart Stores Inc said it will grow both its retail and export business in China this year, opening up to 15 stores and exporting 18 bln usd of goods from the country in 2005.

Wal-Mart chief executive John Menzer said in Beijing that: 'right now China, percentage-wise, is our fastest growing market.'

The US retail giant buys toys, footwear and seasonal goods from China, making it 'our largest export country,' he said.

Menzer forecast that its importance would continue to grow, with direct and indirect China exports rising to 18 bln usd this year, without giving a figure for Wal-Mart's exports last year.

'That's growing at a 20 pct clip right now,' he said.

The chief executive, who is to meet with Chinese Premier Wen Jiabao, declined to comment on the impact of rising protectionism in the US on Wal-Mart's manufacturing in China.

He also said the much-anticipated revaluation of China's currency, the yuan, is only a 'small factor' in the company's considerations.

'We think things will move very slowly... we only see slight changes,' he said.

Wal-Mart will open its 46th China store in Beijing tomorrow.

Now with permission to expand westward, Wal-Mart expects to open 12 to 15 stores across China this year, with Chongqing its next target, he said.

'We started in Shenzhen and we've been working our way as far north as Harbin, Beijing and out west to Kunming.'

He noted, however, that, 'China wasn't really developed for chain stores and for brands.

'Going across provincial lines takes time to get provincial approvals, central government approvals, it creates a lot of backroom paperwork, but it's moving along at a quick pace.'

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Wal-Mart Stores, Inc.

Walmart: A Victim of its Own Success?

By swapusa
Fool.com
May 16, 2005             [back to top]

Posts selected for this feature rarely stand alone. They are usually a part of an ongoing thread, and are out of context when presented here. The material should be read in that light.

Walmart's slogan, "Always Low Prices, Always," is finally catching up with them. With their stock trading only a few points above their 5-year lows, it makes one wonder about what is happening at Walmart. Their executives and the analyst community would like and do blame things like slow economic growth and rising oil for Walmart's woes. But, IMHO, that is just an excuse. Walmart's problems are deeper than that. It is not that obvious but Walmart is falling victim to its own success and its own low cost suppliers, namely the Chinese factories, are now helping undo the great power that is, or was, Walmart. Here is the way I see it:

For years Walmart has been able to put pressure on its suppliers and cut prices on a regular basis and pass along the cost savings to consumers. That is fine, but as long as price drop on an item means you can sell considerably more of that item to make more absolute dollars. As manufacturing costs in China have dropped translating into lower Walmart retail prices, items have become too cheap and there is only so much people can buy. How much room does one's closet or house have for stuff? If the price of a notebook drops in half, are you going to buy twice as much for your kids? The problem is that prices of Chinese made products have dropped so much that Walmart can no longer increase its existing store revenues as fast is it used to. Their stores are selling considerably more volume of products than before, but the increased volume is not enough to offset the falling prices due to the Chinese invasion of retail store shelves. Just look at the fast growing Dollar Store industry and you see what I mean.

But that's not the main problem, although it is a big factor. Years ago, when Walmart was growing fast and squeezing other small and large retailers out, doing business abroad and finding low cost suppliers in remote corners of the world was a tall order. It took gigantic investments in infrastructure and personnel and required face to face meetings with suppliers overseas. You actually had to travel all over the world to find the low cost factories and buy from them. Importing container and shipload of products was not something an everyday small businessman could do. It was reserved for the big boys with money and the know-how. But that's not the case today.

The incredible economic growth of China and the growth of the Internet in the same time has disrupted the balance of power that companies like Walmart once enjoyed. Chinese products that Walmart imported into the USA used to be made by only a handful of factories that only catered to large retailers and master importers. A few years ago, a small entrepreneur could not even dream of approaching the factories in China, Taiwan, Korea, and others to purchase products in small quantities. But the Chinese incredible growth has created thousands of small and large factories that make the same products. If an item has a market in the USA, hundreds of factories are set up to make it overnight. And all these factories are looking for buyers to sell their wares. They no longer have to just sell to large retailers and master importers. They can sell to smaller retailers and small time rookie importers at almost the same prices that they sell to the likes of Wal-Mart. Their only problem was to find these smaller importers. Internet to the rescue!!!

Small importers and savvy small distributors and even single store retailers can now use the power of the internet to find factories and suppliers in China who are willing to sell direct to them even if the order amount is under $1,000. Order a palette load and they sell it to you. I have even seen factories in China who are willing to sell a case of product, if you can afford the shipping costs. Numerous Asian supplier specific web sites have been set up in the past few years that allow thousands upon thousands of Chinese, Indian, and other Asian factories and suppliers to advertise their products to the world. Alibaba.com and GlobalSources.com are just 2 such sources of products and there are countless others. Finding factories in China has become as easy as looking something up on eBay or Google.

One might think that, due to their size, Walmart and other large retailers can still get products much cheaper than the small time importers. That was true a few years ago but it is no longer the case. So many factories copy and make the same products in China, that they end up selling them in small quantities at almost the same prices they sell to the likes of Wal-Mart. Large retailers still get better deals, but their own internal costs are so huge compared to the nimble small importers and retailers that the cost differentials are going away. For years Wal-Mart kept squeezing its suppliers and factories for every penny of profit and made them efficient. But there is only so much that you can squeeze out of them and now the same efficient suppliers and thousands of others who have learned from them are catering to everyone and anyone who is willing to give them a buck.

But the problem for large retailers is getting worse. As if the Internet and ease of travel to China was not enough for their factories to find buyers, they are now showing up in international trade shows and setting up booths in U.S. gift fairs and other trade exhibitions. I have been attending trade shows in the U.S. both as buyer and seller for well over 12 years. In the past year, I have noticed a sudden large surge in the number of booths set up by Chinese factories and trading companies. The last Toy Fair in New York was in February and the Chinese and Honk Kong based companies and factories had 3 isles dedicated to them. We exhibited at the BCA (Billiards show) in Las Vegas a month ago and the second largest exhibition space was a Chinese factory with a large white banner reading "We proudly say: We Made These in China." The poor American pool table factories were trying to sell their pool tables for upwards of $3000 to $4000 at wholesale, while the Chinese factory was asking $600 for similar items with no minimum order. And here is where it gets even more interesting: The Chinese factory has set up a huge warehouse in Los Angeles and the $600 price was FOB L.A.

And that's the next phase of problem for large retailers like Wal-Mart. Large numbers of Chinese factories are setting up warehouses inside U.S., ship their products to the mainland USA, and sell direct to small retailers at low profit margins. Believe me when I say this: When it comes to entrepreneurship, the Chinese entrepreneurs are second to none. With thousands upon thousands of factories in China making products for export, some smarter ones have figured out that it is to their advantage to set up warehouses in the USA so that they can sell in ever-smaller quantities to their U.S. customers. Believe it or not, the Chinese factories are now selling their products directly on eBay from within U.S. borders. We are an importer of products from China and I now see Chinese suppliers in the U.S. who are selling the same products I am importing, at or slightly above my direct container quantity cost with no minimums. How can the likes of Wal-Mart compete with that?

The way I see it, the Chinese invasion and the efficient marketplace that they are creating will continue and it will make it harder and harder for large retailers to make money. The trade barriers have fallen and direct importing is no longer the big boys exclusive game. Their profit margins are under attack by smaller more nimble entrepreneurs who can move quickly and get in and out of hot products in a flash. The only large retailers who will survive are the ones who protect their turf by offering branded products and continue getting a premium for the brand names. But Wal-Mart is definitely now known for brand name products. It sells cheap Chinese products that are now available to other retailers at similar costs.

Honestly, I can't say that I am unhappy with the way things are going. Behemoths like Walmart are not good for this country and it is time the small entrepreneur has its day in the sun once again!!!

Cheers,

Mehran,
SwapUSA

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As American as apple pie, but now Wal-Mart is eating humble pie

The retail giant with homely values but a huge appetite for growth is having to take stock as sales stagnate, its employment practices are savaged and local communities resist its advance.

Katherine Griffiths                  [back to top]
writes from New York
15 May 2005

At Wal-Mart, America's un-disputed king of low-cost retailing, some surprising things are turning up on the shelves. There are cotton sheets with a 400-thread count, and extra-thick towels in fashionable hot orange. In its fridges, "key lime pie", a speciality of Florida, is stocked alongside nine-layer lasagne. These luxury goods are the result of months of testing behind closed doors by Wal-Mart's cooks and designers, who have been trying to come up with products to tempt a new group of middle-class customers.

Critics say the changes are overdue: the world's largest retailer has hit a block with the large slice of Americans on very limited budgets who have traditionally poured through its doors.

Wal-Mart said on Thursday that it was "disappointed" with performance in the first quarter of the year, when sales at its US stores that have been open for more than a year grew by just under 3 per cent. The results went down badly with investors, who dumped shares, pushing down the entire Dow Jones index.

Wal-Mart, which is several times as large as its next-biggest competitors put together, posting $285bn (£153bn) in sales last year, has recently made other changes to improve its image.

The retailer has been trying to show it is listening to the army of environmentalists, community groups, unions and politicians in the US, who claim it is bad news for towns when Wal-Mart moves in. The company recently announced a partnership with the National Fish and Wildlife Foundation to conserve one acre of natural habitat for every acre it develops. The agreement to save important areas of land and water is the largest-ever by a company, and will cost it $35m over 10 years.

Lee Scott, Wal-Mart's chief executive, said: "We've changed as a company. We're trying to get past the idea that everyone who criticises you has an ulterior motive and wants you to fail."

If Wal-Mart feels sensitive, it is perhaps understandable. The company faces a multitude of lawsuits over its employment practices, while some states are campaigning to keep it out on the grounds that it kills off local businesses.

Last month, it also became the subject of a federal grand jury investigation in Arkansas into whether its former vice-chairman was orchestrating a covert, illegal campaign against union organisers within Wal-Mart's workforce.

On Wall Street, as a result, the company is out of fashion. Its shares have been trading at a five-year low, with investors fearful that a groundswell of opposition to the retailing juggernaut may stop it in its tracks.

Perhaps in a less contrite mood than when he professed he was listening to the criticism, Mr Scott said on a separate occasion recently that it mattered "diddly squat" if Wal-Mart had come under attack - as long as customers kept coming through the doors.

With its distinctive corporate culture and lack of sympathy with those who do not share the values of the American heartland, Wal-Mart has had a bunker attitude in the past. Until this year, few journalists have been allowed inside its HQ in Bentonville, Arkansas, and financial analysts have had to make do with few of the briefings normally given by executives at big companies.

Having gone from not existing 50 years ago to revolutionising retailing around the world, Wal-Mart has historically chosen to concentrate on churning out goods at rock-bottom prices and expanding its empire of cavernous supercentres.

The cash tills are certainly still ringing - it reported more than $10bn in profits last year - and Wal-Mart is the number one seller in America of products ranging from dog food to diamonds. It owns 3,719 stores in the US and another 1,596 around the world, including Asda in the UK.

Yet even though pockets of the Wal-Mart empire are still growing, especially in Latin America and China, there are clear signs that the growth engine overall is slowing down.

Asda, in particular, has become a drag on the business, with Wal-Mart also revealing on Thursday that the once-rising star had endured a "challenging" first quarter. The UK chain failed to meet its operational income target, while underlying sales rose only in the low single digits - something Wal-Mart blamed on increasingly stiff competition in the UK.

Compared to its modest 3 per cent rise in US same-store sales in the first quarter, one of its largest rivals, Target, managed to squeeze out a 6 per cent increase during the same period.

In recent times, one of Wal-Mart's big problems has been that its low-income customers have been hit particularly hard by the rising price of oil, which has translated into historic highs at the gas station.

But there also concerns that the company has been tardy in picking up new trends, such as offering more fashionable lines at low prices, and targeting those on higher incomes who want value for money but also more quality and choice than has traditionally been found at Wal-Mart.

The big fear among investors is that Wal-Mart, once a pioneer followed by other retailers religiously, has lost its focus. One analyst who follows the company said: "Its attempts to improve its public image and the changes to its range recently will go some way to eliminating some of its problems, but they do not significantly offset the headline risk."

Paradoxically, one of the biggest issues unsettling Wall Street is Wal-Mart's stridently negative view on unions. Despite employing almost 1.7 million people globally, it has managed to keep its workforce almost entirely union-free. The exceptions are in China, where workers are allowed to join an official union not known for encouraging members to agitate, and in Canada. A store in Jonquiere, a small town in northern Quebec, last year became the first unionised Wal-Mart in all of North America.

That store was closed by Wal-Mart two weeks ago, after a bitter fight between the company and workers, and amid allegations by union organisers of intimidation and threats of violence.

Speaking to The Independent on Sunday, Johanne Desbiens, a cashier at the Jonquiere store where she has just lost her job, said: "There was always a bunch who were against the union and who were intimidating. There have been third parties saying we were going to be beaten up."

Wal-Mart emphasises that it has a zero-tolerance attitude to threats against workers, whether or not they are in a union. "We would never, ever support the intimidation of anybody. It would be grounds for dismissal," said a Wal-Mart spokesperson in Canada.

Yet that is exactly what Thomas Coughlin, Wal-Mart's former chairman and a hunting buddy of its founder, Sam Walton, is being investigated for in Arkansas. Mr Coughlin was sacked in March, but if he is found guilty then there could be serious implications for the company, which could face government penalties and yet another raft of lawsuits.

Wal-Mart says it is co-operating fully with the investigation and insists it has found no evidence of anti-union skulduggery among its senior people.

But it is not just the union issue with which Wal-Mart must contend. Politicians, consumer groups and communities who want to keep the company out of their area are becoming increasingly hard for Mr Scott to ignore.

Five members of Congress lent their support to a campaign urging consumers to boycott Wal-Mart for America's Mother's Day on 8 May - in support of 1.6 million current and former female employees who are suing the company for allegedly routinely under-paying women and refusing to promote them to management positions

It has also had to pay $11m to bring a government investigation to an end into charges it used illegal immigrants to clean its stores. Recently, it handed over a symbolic $135,540 to settle allegations that it allowed workers aged under 18 to use dangerous equipment including chainsaws.

In February, the company was ordered to pay $7.5m to Patrick Brady, a former employee with cerebral palsy who was hired to work in one of its pharmacies but was rapidly reassigned to collecting rubbish and rounding up shopping trolleys in the parking lot.

Douglas Wigdor, a lawyer in New York who is representing Mr Brady, said: "Wal-Mart has a brazen attitude and believes it is above the law. Rather than accepting the jury's verdict and saying they are going to make changes and make sure people with disabilities are treated fairly, they are still saying that they have done nothing wrong."

It is no secret that Wal-Mart is not like other companies. Founded by Mr Walton in 1962, it has mushroomed by driving down prices for consumers across the US.

Opening his first Wal-Mart in Rogers, a town in the heart of America's Bible belt, Mr Walton called his employees "associates" and built a rural dime store with old-fashioned values into a shopping behemoth.

Yet the sheer size of the company has caused mounting opposition. It was identified in Thomas Friedman's recent book, The World is Flat, as a key driver of the negative aspects of globalisation.

According to the New York-based research house Sanford Bernstein, Wal-Mart's prospects for further growth are now "under siege in several regions of the country from growing opposition by local communities".

This is particularly the case in New York and parts of California, two of the most lucrative areas for retailers in the US, where some communities have waged successful campaigns to stop Wal-Mart in its tracks.

A spokesperson for the borough of Queens in New York, where a property company abandoned a deal with the retailer earlier this year, said local legislators "had concerns about Wal-Mart's history with labour and with its national record".

It doesn't help that the company, whose pharmacists are not allowed to sell the morning-after pill, and where magazines such as Cosmopolitan are covered up on the shelves for being too risqué, may be out of tune with liberals. It also doesn't help that it is one of the largest donors to the Republican party.

Yet Texas, the home state of President George Bush, has put up one of the biggest fights to keep Wal-Mart out. And its trailing sales figures show it has its work cut out to win back loyal customers even in the states where the retailer was once a national hero.

Also in Analysis & Features Business Analysis: Sir Ken may have met nemesis with acquisition of Safeway The Investment Column: Wait and see how Levin deals with challenges facing UBM Market Report: Man Group suffers as hedge fund gloom grows The Week Ahead: Retailers to paint mixed picture of high street Small Talk: Easier rebels take action in battle to remove the board

© 2004 Independent Digital (UK) Ltd

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Wal-Mart of Worry

By Mike Marino                         [back to top]            
TheStreet.com
5/14/2005 12:00 PM EDT

Investors will be checking out the consumer again this week as retailers -- big and small, upscale and downscale -- take their turn in the earnings parade.

Along with the busy earnings slate, expect some important economic data. Topping the list will be April's housing starts number, due Tuesday morning, and the consumer and producer price index reports later in the week. Those figures should help Wall Street get a better read on the strength of the economy and the Fed's rate-hike plans.

But for now, in the wake of last week's latest disappointment at Wal-Mart (WMT:NYSE) , the health of the U.S. consumer is front and center.

"All eyes will be watching the retail sector very closely next week," said Paul Mendelsohn, chief investment strategist at Windham Financial Services. "The March sales data were good, but the stocks have not been performing well, especially after Wal-Mart reported disappointing earnings."

Indeed, the Bentonville, Ark.-based titan took some starch out of May's brief retail rally Thursday by posting soft quarterly numbers and guiding toward more of the same. Solid results at rival Target (TGT:NYSE) suggested the problem could lie more with Wal-Mart than with the retail sector at large, but this week's earnings should firm up the evidence one way or another.

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Unlike in China Walmart finds India a much harder nut to crack – promises billions of dollars but stubborn India plans to restrict venture!

Sonal Joshi
May 14, 2005                 [back to top]

Walmart Corporation slowly understands that India is much different country than China. Unlike China Indian businesses are matured and is really free to operate like a free enterprise.

The world's largest retailer, yesterday said it would commit "serious money" to India if the government allowed foreign companies to invest directly in the country's $180bn retailing sector.

It was an interesting approach since the whole world knows Indians in India are ready to anything for earning dollars. But “anything” may not include everything.

In recent weeks Mr Kamal Nath, the commerce and industry minister, has been talking up reform, possibly allowing foreign investment of 24 per cent to 49 per cent in Indian retail ventures.

But Walmart is looking for a close to 100% ownership like in China. Experts say they will not get it and may be offered at best a 48% ownership. Walmart according to sources may back out from India. They are showing signs of threatening outsourcing from India to some extent.

John Menzer, president and chief executive of the retailer's international arm, said after talks with Prime Minister Manmohan Singh that India was a market "to which we will just keep coming back because of its unbelievable potential. There's talk [that FDI in retail] could be limited to brands or even certain regions. We think that is unproductive - we can''t utilise our global leverage if that happens ".

Mr Kishore Biyani, whose Mumbai-based group Pantaloon, India biggest retailer, is expanding rapidly ahead of possible entry by global rivals such as Wal-Mart and Carrefour of France, said "foreign retailers'' large investment is a bait to the government" for reform. This Government would do anything for foreign exchange.

According to media reports, Wal-Mart's proposed stores in India would be aimed at "middle class appetite for life-style and convenience shopping", as well as serve as a base to build exports, notably of fresh and packaged foods.

Wal-Mart believes its food exports could quickly exceed the value of its textiles procurement from India, which account for 65 per cent of the $1.2bn worth of goods sourced from the country last year.

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Wal-Mart Apologizes for Book-Burning Ad

Associated Press
05.13.2005, 08:20 PM       [back to top]

Wal-Mart Stores Inc. is apologizing for a newspaper ad featuring a photo of a book-burning in Nazi-era Germany. The ad was published in a northern Arizona newspaper by a political action committee the company helped fund.

The company was writing an apology letter Friday to the Anti-Defamation League in Arizona and will run an apology ad this weekend in Flagstaff's Arizona Daily Sun, which carried the original ad, said Daphne Moore, director of community affairs for Wal-Mart.

"It was a terrible mistake and one that we sincerely regret," Moore said.

The ad ran as part of a campaign opposing an ordinance that would effectively prevent Wal-Mart from opening a supercenter in Flagstaff. The ordinance was passed by the Flagstaff City Council but voters are being asked to ratify it.

The ad showed a historic photo of people throwing books into a large fire. A swastika is clearly visible near the center of the photo.

The text below it reads: "Should we let government tell us what we can read?"

It says it was paid for by Protect Flagstaff's Future, the political action committee, with "major funding" by Wal-Mart.

Moore said the ad was prepared by an outside agency but reviewed and approved by Wal-Mart. "Whoever the individual who approved it was, was not aware of the historical context of the picture," she said.

The company apologized after receiving complaints from members of the public and the ADL.

HighGround Inc., the Phoenix company that prepared the ad, and the political action committee are also apologizing for the use of the photo, said HighGround President Charles Coughlin.

Bill Straus, Arizona regional director for the Anti-Defamation League, said the use of the image was clearly a mistake.

"I think all parties involved understand that a mistake was made," Straus said. "They understand the impact of it and they understand the importance of doing everything they can to follow up, and that includes an apology for any offense, although unintended, that was taken."

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Lawmakers ask Wal-Mart for worker data

Part of effort to see if retailer pays female employees less than men; company denies charges.

May 13, 2005: 4:09 PM EDT                 [back to top]

WASHINGTON (CNN) - Congressional Democrats are asking Wal-Mart for employee data in order to determine if claims of wage discrimination against female workers are true.

In a letter drafted by Rep. Rosa DeLauro, D-Conn., and signed by 50 of her colleagues, the company was asked to provide its wage statistics, along with any related information that Wal-Mart has already given to the Equal Opportunity Employment Commission.

"It is of great concern to us that Wal-Mart (Research), America's largest employer, does not pay its women the same wage as men for the same work," said the letter, addressed to Wal-Mart CEO Lee Scott.

It cited research done by Richard Drogin, a professor emeritus at California State University at Hayward, saying it shows Wal-Mart paid its female hourly workers 40 cents less per hour than their male counterparts, and paid its female managers nearly $5,000 per year less than male managers.

The letter also claimed that while women make up 72 percent of Wal-Mart's workforce -- almost 700,000 employees overall -- they account for only 15 percent of its store managers.

Wal-Mart said Friday the data cited in the letter is "false and incorrect."

Ray Bracy, a Wal-Mart vice president of public affairs, told CNN that Drogin's report, first published in 2003, is not reflective of current data concerning pay statistics at Wal-Mart.

Drogin is currently being retained by the legal team representing a class-action lawsuit against Wal-Mart, Duke vs. Wal-Mart Stores, filed in April 2003. He would not comment on how much he is being paid for his work on the case, but did say that he has updated his research, which is available on the Web site www.walmartclass.com.

Bracy would not cite current pay statistics at Wal-Mart.

He said 60 percent of Wal-Mart employees and 40 percent of its managers are female.

"We have a very active program to promote women at Wal-Mart and we do not tolerate discrimination of any kind at the company," he said.

The request for data, which does not have the force of law, is the latest in a series of public actions and campaigns painting Wal-Mart as not treating its employees fairly. Recently, the company has been fighting charges that it does not offer adequate health insurance.

-- from CNN Business News Senior Producer Scott Spoerry

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Sowell defends Wal-Mart, ignores workers' dependence on Medicaid, food stamps

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In his May 12 syndicated column, Thomas Sowell criticized those urging higher wages for employees of the discount retailer Wal-Mart. Sowell referenced a May 4 New York Times article that contained a quote from a Wal-Mart employee who said he was not earning a living wage. Sowell asked: "How is he living, if he is not making a living wage?" Several studies show that he might in fact be getting help through government assistance programs.

Sowell argued that Wal-Mart stockholders should not have to subsidize higher wages for Wal-Mart workers "through lower earnings," but he apparently failed to recognize that taxpayers are subsidizing Wal-Mart stockholders and executives through the high levels of public assistance that are used by its employees compared with other retail workers. A number of studies and analyses have shown that taxpayer-funded government programs are picking up the tab resulting from Wal-Mart's low wages and insufficient health insurance coverage.

An August 2004 University of California, Berkeley Labor Center study found that many Wal-Mart workers in California rely on government safety net programs such as food stamps, Medi-Cal (California's version of Medicaid) and subsidized housing at an estimated cost to taxpayers of $86 million annually-- $32 million for health-related expenses and $54 million for other assistance. Further, families of Wal-Mart employees utilize these services considerably more than the average for families with employees of all large retail companies. In fact, if other large retailers in California were to provide wages and benefits at Wal-Mart's level it would cost California taxpayers an additional $410 million in increased public assistance costs. According to the study:

The families of Wal-Mart employees in California utilize an estimated 40 percent more in taxpayer-funded health care than the average for families of all large retail employees. The families of Wal-Mart employees use an estimated 38 percent more in other (non-health care) public assistance programs (such as food stamps, Earned Income Tax Credit, subsidized school lunches, and subsidized housing) than the average for families of all large retail employees. A 2002 internal memo from the Georgia Department of Community Health that focused on the state's Children's Health Insurance program PeachCare showed that the children of Wal-Mart employees accounted for 10,261 of the 166,000 children enrolled, about 14 times that of the second-highest employer, the supermarket chain Publix, which had 734. Wal-Mart, with 42,000 workers in the state in 2002, had about one child in the health care program for every four employees; the ratio for Publix was one child in PeachCare for every 22 employees [The Atlanta Journal Constitution, 2/27/04 (registration required)].

The state of Connecticut discovered in January 2005 that it pays an estimated $43 million annually to cover health costs for workers at the state's 25 largest employers; Wal-Mart was at the top of the list with 824 employees or employees' adult dependents on state public assistance programs. Beyond Connecticut, Wal-Mart had the most employees on Medicaid in a total of 11 states: Alabama, Arkansas, Connecticut, Florida, Georgia, Iowa, Tennessee, Texas, Washington, West Virginia and Wisconsin, according to examinations in those states [Employee Benefit News, 5/01/05].

A 2004 study conducted by the Democratic staff of the House Committee on Education and the Workforce looked at Wal-Mart employees' eligibility for a wide range of public assistance programs and estimated that one 200-employee Wal-Mart store may cost federal taxpayers $420,750 annually, or about $2,103 per employee. This includes $36,000 for free and reduced-price school lunches, $42,000 for Section 8 housing assistance, $125,000 for federal tax credits and deductions for low-income families, and $108,000 for federal costs relating to health care assistance.

Copyright © 2004-2005 Media Matters for America. All rights reserved.

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Wal-Mart seeks entry into India's retail business

IANS                            [back to top]
New Delhi
May 12, 2005 7:40:04 PM IST

New Delhi, May 12 : Wal-Mart Stores, the $288 billion global retail chain, has urged India to open up its retail trade sector to foreign direct investment and said it is keen on setting up a chain of such stores in the country.

The wish list of the Arkansas-based retail chain giant was conveyed at a meeting here Thursday between the group's international president John B. Menzer and Prime Minister Manmohan Singh.

"We had a very good meeting," Menzer, who carries a leather wallet sourced from India, told reporters after his 20-minute meeting with the prime minister.

"Hope there will be a change in the foreign investment policy and we are allowed in."

The Wal-Mart international president also sought to allay fears that the entry of global retail chains such as Wal-Mart would push out of business the small "mom and pop" shops that dominate the retail trade business in India.

"There is room for everyone in here," he said, adding that India was not only among the fastest growing economies in the world but also for Wal-Mart's international operations.

Only two percent of India's retail trade is in the organised sector. Moreover, almost half of all retail stores are "mom and pop" shops that engage in subsistence trading.

The Wal-Mart official said the company sources merchandise worth $1.5 billion from the Indian market and expects such outsourcing to grow at a rate of 30 percent a year.

"We also want to invest significantly in retail stores."

Menzer's remarks on seeking foreign investment in retail trade business comes in the backdrop of a proposal from Commerce Minister Kamal Nath to the cabinet to allow limited entry for overseas retail companies.

The government, according to official sources, is examining what could be the possible cap on foreign investment, if and when it will open the sector - 26 percent, 49 percent or 51 percent.

"Foreign direct investment in retail, first mooted by the commerce ministry, is still being discussed," Finance Minister P. Chidambaram had told reporters here Wednesday on the sidelines of an event on an e-commerce initiative.

The finance minister's comments were sought in the wake of strong opposition by the Left parties, which support the United Progressive Alliance (UPA) government from outside.

Menzer, who arrived here after a daylong visit to Bangalore, did not wish to dwell on the company's position should the government impose a low foreign investment cap on retail trade.

"We have to look at the market and what the government offers," said Menzer, 54, who earlier held discussions with the company's Indian employees in Bangalore.

©2002 - 2003 Netindia123.com. All rights reserved.

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Wal-Mart profit misses target

Retailers' sales also lower than Wall Street forecasts

The Associated Press                [back to top]
May 12, 2005

LITTLE ROCK, Ark. - Wal-Mart Stores Inc. reported a 14 percent increase in first-quarter earnings Thursday, but the results missed Wall Street estimates. The world’s largest retailer also warned that second-quarter results could be much lower than analysts expected as unseasonably cool weather and higher gasoline prices continue to hurt business.

Wal-Mart also said that while it could still meet its profit goal for the year, as business should start to improve in the second half, it will be difficult to achieve. The news sent shares down $1.30, or 2.7 percent to $47.40 in morning trading on the New York Stock Exchange.

Wal-Mart said quarterly net income grew to $2.5 billion, or 58 cents per share, in the three months ended April 30 from $2.2 billion, or 50 cents per share, a year earlier. The company said first-quarter earnings were boosted by $145 million, or 3 cents per share, from tax and legal resolutions. Excluding the items, earnings per share totaled 55 cents per share, a penny below Wall Street expectations.

Sales rose 10 percent to $70.9 billion from $64.76 billion a year ago, while total revenue including sales and other income grew to $71.7 billion from $65.4 billion a year ago.

Analysts surveyed by Thomson Financial expected the company to earn 56 cents per share on sales of $72 billion.

“We achieved record results in the quarter,” said Lee Scott, president and CEO in a statement. “Yet with higher gasoline prices and a cooler and wetter spring than normal we missed our plan. We are making the necessary adjustments and I anticipate better results in the second half of the year.”

Sales at stores open at least a year, known as same-store sales, were up 2.9 percent.

At Wal-Mart’s namesake discount stores, total sales rose 9.3 percent to $47.64 billion, while Sam’s Club division had a 5.9 percent increase, reaching $9.16 billion in sales. The international business enjoyed a 12.4 percent gain, reaching $14.11 billion in sales.

In a pre-recorded call, Tom Schoewe, Wal-Mart’s executive vice president and chief financial officer, said the company is continuing to feel the effect of gasoline prices and other pressures, including payroll, insurance and maintenance.

Schoewe said the company expects “below plan sales” for the second quarter, and projected per-share earnings for the period of between 63 cents and 67 cents.

Analysts polled by Thomson Financial expect 70 cents in the second quarter.

Schoewe said the company could still meet its target of annual profit of between $2.70 and $2.74 cents per share but doing so will be difficult considering the way the first half of the year is shaping up.

The quarter had its bright spots; Sam’s Club warehouse stores proved the exception with its operating income growing faster than sales. Also, food sales at Supercenters were up 17 percent. But the company also saw its Supercenter gross margins pressured by fuel prices and freight surcharges. And rising interest rates will hurt Wal-Mart’s bottom line. Schoewe said about half of the company’s debt is tied to floating rates.

Schoewe said Wal-Mart is making changes to its stores to increase efficiency and production and is looking at ways it can adjust its staffing.

Wal-Mart, as of April 30, had 3,719 U.S. stores and 1,596 international units, not counting Seiyu Ltd. in Japan, in which Wal-Mart has a stake.

Copyright 2005 The Associated Press. All rights reserved.

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Union bargaining, Wal-Mart style

12.05.05
By Katherine Griffiths
New Zealand Herald           [back to top]

Wal-Mart has reinforced its anti-union reputation by closing down a store in Canada after it became the first in North America to become unionised.

The confrontation became a cause celebre in Canada amid accusations by union organisers that they were threatened with violence.

Sylvie Lavoie started recruiting staff to the union in Jonquiere, northern Quebec, because "there was injustice at the company and it did not respect its workforce".

The US retailing giant acted quickly, calling a meeting of its 190 employees and publicly naming union organisers.

Activists claim they were later subjected to intimidation, although Wal-Mart strongly denies involvement.

Despite the threats, the union continued to organise and demanded a minimum 37-hour week for full-time employees.

Then the directors announced the Jonquiere store would be closing, because, they said, it was not making money

A Wal-Mart spokesman, Andrew Pelletier, said: "The store was struggling. When you factored in the union demands, which were completely unreasonable ... the store would not be viable."

But the United Food and Trade Workers’ Union believes the closure of the only store that dared to unionise "is a Wal-Mart message addressed to the United States and elsewhere to say, ‘If you want to unionise, we’ll close you down’."

Wal-Mart has a long history of antagonism towards unions. A federal grand jury in Arkansas is still investigating whether Thomas Coughlin, Wal-Mart’s former vice-chairman, has been orchestrating an illegal campaign against union organisers.

Copyright © 2005, APN Holdings NZ Ltd Privacy Policy

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Wal-Mart scene of protest

May 11 2005 04:36 PM           [back to top]<