Wal-Mart: The Face Of Twenty-First Century Capitalism
Edited By Nelson Lichtenstein
The New Press www.thenewpress.com
The Great Risk Shift:
The Assault on American Jobs, Families, Health Care and Retirement
By Jacob S. Hacker
Oxford University Press www.oup.com
War On The Middle Class:
How the Government, Big Business, and Special Interest Groups Are Waging War on
the American Dream and How to Fight Back
By Lou Dobbs Viking,
a member of Penguin Group www.penguin.com
Momentum: Igniting Social Change in the Connected Age
By Allison H. Fine Jossey-Bass
The True Cost of Mega-Retailers and the Fight for America's Independent
By Stacy Mitchell, www.beacon.org www.newrules.org Wal-Mart: The Face Of the Twenty-First-Century Capitalism
Edited by Nelson Lichtenstein
by The New Press
The Bully Of Bentonville
How the high cost of Wal-Mart's Everyday Low Prices is Hurting America
By Anthony Bianco
NEW YORK -- Allegations
Wal-Mart Stores Inc.
covered up the findings of an internal probe that proved its Mexican
subsidiary bribed officials in that country could have huge
implications for the world's biggest retailer and its executives.
The alleged bribery scheme was revealed by The
New York Times, which
reported that Wal-Mart failed to notify
law enforcement after the
company's investigators found evidence of millions of dollars in
bribes given to Mexican officials in exchange for getting
building permits faster and
other favors to help it aggressively expand in the region.
Two Democratic U.S. congressmen Elijah Cummings
Henry Waxman said on Monday
that they were launching an investigation into the matter, and they
sent a letter to CEO Mike Duke asking for a meeting. And The
Washington Post reported
late Monday that the
U.S. Department of Justice
has been conducting a criminal probe of the allegations since
December, citing people familiar with the matter.
If Wal-Mart is found to have violated the Foreign
Corrupt Practices Act, which forbids paying bribes to foreign
officials, the company could face fines of hundreds of millions of
dollars. Top Wal-Mart executives could lose their jobs - or worse,
go to jail. And the retailer could suffer a public relations
nightmare if a lengthy investigation ensues.
"Unlike prior bad PR stories in recent years, this
will be a material distraction for Wal-Mart on multiple fronts,"
said Charles Grom, a retail analyst at
The Times reported on Saturday that a former
company executive in 2005 told Wal-Mart top brass about a bribery
campaign that was used to help the retailer expand in Mexico. The
paper said Wal-Mart officials launched an investigation into its
Wal-Mart de Mexico subsidiary, but shut down the probe despite a
report by its lead investigator that Mexican and U.S. laws likely
In December, Wal-Mart said in a filing with the
Securities and Exchange Commission
that it had begun an investigation into an overseas operation
related to its compliance with the foreign corrupt practices law.
Over the weekend, the company revealed that it had met with
officials from the SEC and the
Justice Department to
discuss the company's ongoing investigation. But, according to the
Times, Wal-Mart only did so after being informed that the paper was
looking into the allegations.
"We are committed to getting to the bottom of this
matter," Dave Tovar, a Wal-Mart spokesman, said in a statement.
The Justice Department and the SEC declined to
comment for this story. But legal experts say if there is a
government investigation into the bribery allegations, the results
could vary widely. In recent probes into corporations- and their
executives - the penalties for violating the foreign corruption law
have ranged from big fines for the companies to
jail time for the
In February, for instance, Albert "Jack" Stanley,
a former KBR Inc. CEO got a 2 1/2 year
prison sentence for his
role in a scheme to bribe Nigerian government officials in return
for $6 billion in engineering and construction contracts. KBR, an
engineering and construction firm, was a Halliburton subsidiary at
the time of the bribes.
And in March, medical device maker Biomet Inc.
agreed to pay $22.7 million to settle U.S. criminal and civil
allegations that it bribed government-employed doctors in Argentina,
Brazil and China for more than eight years to win business with
Experts say a government probe into Wal-Mart's
alleged bribery campaign would look at whether the company had
adequate controls in place to prevent bribery, whether there was
adequate training to discourage the practice before the violations
occurred, and how high up any alleged cover-up took place.
If the government finds that Wal-Mart or its
executives were negligent, the company could face fines and top
executives could lose their jobs. But if it's determined that there
was a cover-up that involved actions such as falsifying records,
there could be criminal charges.
Mexico's federal government, however, indicated
late Monday that it would not be investigating the matter. It said
it had no jurisdiction in the case because the report only referred
to the involvement of Mexican state and city officials.
Eduardo Castro-Wright, who was head of Wal-Mart de
Mexico at the time of the alleged bribes and, could face criminal
charges, experts say. According to the
New York Times, he was the
driving force behind the bribery.
Duke, Wal-Mart's CEO who was over the company's
international division at the time of the investigation, could also
face intense scrutiny, experts say. As could H. Lee Scott Jr., who
was CEO at the time of the allegations and remains on Wal-Mart's
According to the Times story, Scott rebuked
internal investigators at one meeting for being overly aggressive.
Shortly after, according to the paper, the company turned over the
investigation to the general counsel for Wal-Mart de Mexico, who
himself was alleged to have authorized bribes. He exonerated his
fellow executives, according to the Times story.
Kevin Abikoff, chairman of the anti-corruption and
internal investigations practice group at law firm Hughes Hubbard &
Reed, said that the government will decide whether to file criminal
charges against the company and its executives based on whether they
tried to cover-up the allegations, including destruction of records
or accounting irregularities.
Abikoff said the government is usually more
lenient when a company discloses wrong-doing rather than when it
tries to cover up the violations.
"The government can't tolerate that behavior," he
said. "It's usually the cover-up that kills."
Either way, the allegations could be a headache
for Wal-Mart. It comes at a time when the Bentonville, Ark.-based
company has been focused on expanding internationally as sales have
slowed in the U.S.
Wal-Mart's international business, which had a
15.2 percent increase last year, has had the fastest growth compared
to its Wal-Mart U.S. business and Sam's Club division. In
particular, Mexico, which it entered in 1991, has been a strong
market: Wal-Mart de Mexico is now Wal-Mart's largest subsidiary, and
one out of every five
Wal-Mart stores is now in
If there is a lengthy government investigation, it
could increase the monitoring of its businesses in other regions
like China and Brazil, which could hamper its international growth.
Additionally, any penalties would be a financial pain for Wal-Mart,
which recently reversed more than two years of sales declines at its
namesake U.S. business.
"This is going to be a major distraction for
Wal-Mart," said Leonard Baynes, professor at business law at
St. John's University.
NEW YORK —
Walmart Mexico paid out millions of dollars in bribes to Mexican
officials to facilitate the company’s rapid expansion there, according
to a New York Times report.
The payments could violate the Foreign Corrupt
Practices Act, the report stated.
Eduardo Castro-Wright, who led Wal-Mart’s Mexico
operations until early 2005 and later ran the company’s U.S. division,
was the “driving force” behind “years of bribery” in which more than $24
million was paid to local officials in Mexico, the article claimed.
Wal-Mart had looked into the allegations, and its lead
investigator concluded that there was “reasonable suspicion to believe
that Mexican and USA laws have been violated,” the New York Times
reported. The article claims that top Wal-Mart officials then basically
swept the matter under the carpet and shut down the investigation, and
did not notify authorities until after they had learned of the Times’
Both Castro-Wright, who is scheduled to retire as
Wal-Mart vice chairman in July, and H. Lee Scott, who was chief
executive of Wal-Mart Stores at the time, declined to comment to the
In a statement provided to SN, David Tovar,
vice president of corporate communications, Wal-Mart, said the company
launched an investigation into FCPA compliance last fall through the
audit committee of its board of directors.
“We take compliance with the U.S. Foreign Corrupt
Practices Act very seriously and are committed to having a strong and
effective global anti-corruption program in every country in which we
operate,” Tovar said. “We will not tolerate noncompliance with FCPA
anywhere or at any level of the company.
“Many of the alleged activities in The New York
Times article are more than six years old. If these allegations are
true, it is not a reflection of who we are or what we stand for. We are
deeply concerned by these allegations and are working aggressively to
determine what happened.”
Vast Mexico Bribery Case Hushed Up by Wal-Mart After
Confronted with evidence of widespread corruption
in Mexico, top Wal-Mart executives focused more on damage control than
on rooting out wrongdoing, an examination by The New York Times found.
MEXICO CITY — In September 2005, a senior
Wal-Mart lawyer received an alarming e-mail from a former executive
at the company’s largest foreign subsidiary, Wal-Mart de Mexico. In the
e-mail and follow-up conversations, the former executive described how
Wal-Mart de Mexico had orchestrated a campaign of bribery to win market
dominance. In its rush to build stores, he said, the company had paid
bribes to obtain permits in virtually every corner of the country.
The former executive gave
names, dates and bribe amounts. He knew so much, he explained, because
for years he had been the lawyer in charge of obtaining construction
permits for Wal-Mart de Mexico.
investigators to Mexico City, and within days they unearthed evidence of
widespread bribery. They found a paper trail of hundreds of suspect
payments totaling more than $24 million. They also found documents
showing that Wal-Mart de Mexico’s top executives not only knew about the
payments, but had taken steps to conceal them from Wal-Mart’s
headquarters in Bentonville, Ark. In a confidential report to his
superiors, Wal-Mart’s lead investigator, a former F.B.I. special agent,
summed up their initial findings this way: “There is reasonable
suspicion to believe that Mexican and USA laws have been violated.”
The lead investigator
recommended that Wal-Mart expand the investigation.
Instead, an examination by The
New York Times found, Wal-Mart’s leaders shut it down.
Neither American nor
Mexican law enforcement officials were notified. None of Wal-Mart de
Mexico’s leaders were disciplined. Indeed, its chief executive, Eduardo
Castro-Wright, identified by the former executive as the driving force
behind years of bribery, was promoted to vice chairman of Wal-Mart in
2008. Until this article, the allegations and Wal-Mart’s investigation
had never been publicly disclosed.
But The Times’s examination
uncovered a prolonged struggle at the highest levels of Wal-Mart, a
struggle that pitted the company’s much publicized commitment to the
highest moral and ethical standards against its relentless pursuit of
Under fire from labor critics,
worried about press leaks and facing a sagging stock price, Wal-Mart’s
leaders recognized that the allegations could have devastating
consequences, documents and interviews show. Wal-Mart de Mexico was the
company’s brightest success story, pitched to investors as a model for
future growth. (Today, one in five Wal-Mart stores is in Mexico.)
Confronted with evidence of corruption in Mexico, top Wal-Mart
executives focused more on damage control than on rooting out
In one meeting where the
bribery case was discussed, H. Lee Scott Jr., then Wal-Mart’s chief
executive, rebuked internal investigators for being overly aggressive.
Days later, records show, Wal-Mart’s top lawyer arranged to ship the
internal investigators’ files on the case to Mexico City. Primary
responsibility for the investigation was then given to the general
counsel of Wal-Mart de Mexico — a remarkable choice since the same
general counsel was alleged to have authorized bribes.
The general counsel promptly
exonerated his fellow Wal-Mart de Mexico executives.
When Wal-Mart’s director of
corporate investigations — a former top F.B.I. official — read the
general counsel’s report, his appraisal was scathing. “Truly lacking,”
he wrote in an e-mail to his boss.
The report was nonetheless
accepted by Wal-Mart’s leaders as the last word on the matter.
In December, after learning of
The Times’s reporting in Mexico, Wal-Mart informed the Justice
Department that it had begun an internal investigation into possible
violations of the Foreign Corrupt Practices Act, a federal law that
makes it a crime for American corporations and their subsidiaries to
bribe foreign officials. Wal-Mart said the company had learned of
possible problems with how it obtained permits, but stressed that the
issues were limited to “discrete” cases.
“We do not believe that these
matters will have a material adverse effect on our business,” the
company said in a filing with the Securities and Exchange Commission.
But The Times’s examination
found credible evidence that bribery played a persistent and significant
role in Wal-Mart’s rapid growth in Mexico, where Wal-Mart now employs
209,000 people, making it the country’s largest private employer.
A Wal-Mart spokesman confirmed
that the company’s Mexico operations — and its handling of the 2005 case
— were now a major focus of its inquiry.
“If these allegations are true,
it is not a reflection of who we are or what we stand for,” the
spokesman, David W. Tovar, said. “We are deeply concerned by these
allegations and are working aggressively to determine what happened.”
In the meantime, Mr. Tovar
said, Wal-Mart is taking steps in Mexico to strengthen compliance with
the Foreign Corrupt Practices Act. “We do not and will not tolerate
noncompliance with F.C.P.A. anywhere or at any level of the company,” he
The Times laid out this
article’s findings to Wal-Mart weeks ago. The company said it shared the
findings with many of the executives named here, including Mr. Scott,
now on Wal-Mart’s board, and Mr. Castro-Wright, who is retiring in July.
Both men declined to comment, Mr. Tovar said.
The Times obtained hundreds of
internal company documents tracing the evolution of Wal-Mart’s 2005
Mexico investigation. The documents show Wal-Mart’s leadership
immediately recognized the seriousness of the allegations. Working in
secrecy, a small group of executives, including several current members
of Wal-Mart’s senior management, kept close tabs on the inquiry.
Michael T. Duke, Wal-Mart’s
current chief executive, was also kept informed. At the time, Mr. Duke
had just been put in charge of Wal-Mart International, making him
responsible for all foreign subsidiaries. “You’ll want to read this,” a
top Wal-Mart lawyer wrote in an Oct. 15, 2005, e-mail to Mr. Duke that
gave a detailed description of the former executive’s allegations.
The Times examination included
more than 15 hours of interviews with the former executive, Sergio
Cicero Zapata, who resigned from Wal-Mart de Mexico in 2004 after nearly
a decade in the company’s real estate department.
In the interviews, Mr. Cicero
recounted how he had helped organize years of payoffs. He described
personally dispatching two trusted outside lawyers to deliver envelopes
of cash to government officials. They targeted mayors and city council
members, obscure urban planners, low-level bureaucrats who issued
permits — anyone with the power to thwart Wal-Mart’s growth. The bribes,
he said, bought zoning approvals, reductions in environmental impact
fees and the allegiance of neighborhood leaders.
He called it working “the dark
side of the moon.”
The Times also reviewed
thousands of government documents related to permit requests for stores
across Mexico. The examination found many instances where permits were
given within weeks or even days of Wal-Mart de Mexico’s payments to the
two lawyers. Again and again, The Times found, legal and bureaucratic
obstacles melted away after payments were made.
The Times conducted extensive
interviews with participants in Wal-Mart’s investigation. They spoke on
the condition that they not be identified discussing matters Wal-Mart
has long shielded. These people said the investigation left little doubt
Mr. Cicero’s allegations were credible. (“Not even a close call,” one
But, they said, the more
investigators corroborated his assertions, the more resistance they
encountered inside Wal-Mart. Some of it came from powerful executives
implicated in the corruption, records and interviews show. Other top
executives voiced concern about the possible legal and reputational
In the end, people involved in
the investigation said, Wal-Mart’s leaders found a bloodlessly
bureaucratic way to bury the matter. But in handing the investigation
off to one of its main targets, they disregarded the advice of one of
Wal-Mart’s top lawyers, the same lawyer first contacted by Mr. Cicero.
“The wisdom of assigning any
investigative role to management of the business unit being investigated
escapes me,” Maritza I. Munich, then general counsel of Wal-Mart
International, wrote in an e-mail to top Wal-Mart executives.
The investigation, she urged,
should be completed using “professional, independent investigative
The Allegations Emerge
On Sept. 21, 2005, Mr. Cicero
sent an e-mail to Ms. Munich telling her he had information about
“irregularities” authorized “by the highest levels” at Wal-Mart de
Mexico. “I hope to meet you soon,” he wrote.
Ms. Munich was familiar with
the challenges of avoiding corruption in Latin America. Before joining
Wal-Mart in 2003, she had spent 12 years in Mexico and elsewhere in
Latin America as a lawyer for Procter & Gamble.
At Wal-Mart in 2004, she pushed
the board to adopt a strict anticorruption policy that prohibited all
employees from “offering anything of value to a government official on
behalf of Wal-Mart.” It required every employee to report the first sign
of corruption, and it bound Wal-Mart’s agents to the same exacting
Ms. Munich reacted quickly to
Mr. Cicero’s e-mail. Within days, she hired Juan Francisco Torres-Landa,
a prominent Harvard-trained lawyer in Mexico City, to debrief Mr.
Cicero. The two men met three times in October 2005, with Ms. Munich
flying in from Bentonville for the third debriefing.
During hours of questioning,
Mr. Torres-Landa’s notes show, Mr. Cicero described how Wal-Mart
de Mexico had perfected the art of bribery, then hidden it all with
fraudulent accounting. Mr. Cicero implicated many of Wal-Mart de
Mexico’s leaders, including its board chairman, its general counsel, its
chief auditor and its top real estate executive.
But the person most
responsible, he told Mr. Torres-Landa, was the company’s ambitious chief
executive, Eduardo Castro-Wright, a native of Ecuador who was recruited
from Honeywell in 2001 to become Wal-Mart’s chief operating officer in
Mr. Cicero said that while
bribes were occasionally paid before Mr. Castro-Wright’s arrival, their
use soared after Mr. Castro-Wright ascended to the top job in 2002. Mr.
Cicero described how Wal-Mart de Mexico’s leaders had set “very
aggressive growth goals,” which required opening new stores “in record
times.” Wal-Mart de Mexico executives, he said, were under pressure to
do “whatever was necessary” to obtain permits.
In an interview with The Times,
Mr. Cicero said Mr. Castro-Wright had encouraged the payments for a
specific strategic purpose. The idea, he said, was to build hundreds of
new stores so fast that competitors would not have time to react.
Bribes, he explained, accelerated growth. They got zoning maps changed.
They made environmental objections vanish. Permits that typically took
months to process magically materialized in days. “What we were buying
was time,” he said.
Wal-Mart de Mexico’s stunning
growth made Mr. Castro-Wright a rising star in Bentonville. In early
2005, when he was promoted to a senior position in the United States,
Mr. Duke would cite his “outstanding results” in Mexico.
Mr. Cicero’s allegations were
all the more startling because he implicated himself. He spent hours
explaining to Mr. Torres-Landa the mechanics of how he had helped funnel
bribes through trusted fixers, known as “gestores.”
hes-TORE-ehs) are a fixture in Mexico’s byzantine bureaucracies, and
some are entirely legitimate. Ordinary citizens routinely pay gestores
to stand in line for them at the driver’s license office. Companies hire
them as quasi-lobbyists to get things done as painlessly as possible.
But often gestores play
starring roles in Mexico’s endless loop of public corruption scandals.
They operate in the shadows, dangling payoffs to officials of every
rank. It was this type of gestor that Wal-Mart de Mexico deployed, Mr.
Mr. Cicero told Mr. Torres-Landa
it was his job to recruit the gestores. He worked closely with them,
sharing strategies on whom to bribe. He also approved Wal-Mart de
Mexico’s payments to the gestores. Each payment covered the bribe and
the gestor’s fee, typically 6 percent of the bribe.
It was all carefully monitored
through a system of secret codes known only to a handful of Wal-Mart de
The gestores submitted invoices
with brief, vaguely worded descriptions of their services. But the real
story, Mr. Cicero said, was told in codes written on the invoices. The
codes identified the specific “irregular act” performed, Mr. Cicero
explained to Mr. Torres-Landa. One code, for example, indicated a bribe
to speed up a permit. Others described bribes to obtain confidential
information or eliminate fines.
Each month, Mr. Castro-Wright
and other top Wal-Mart de Mexico executives “received a detailed
schedule of all of the payments performed,” he said, according to the
lawyer’s notes. Wal-Mart de Mexico then “purified” the bribes in
accounting records as simple legal fees.
They also took care to keep
Bentonville in the dark. “Dirty clothes are washed at home,” Mr. Cicero
Mr. Torres-Landa explored Mr.
Cicero’s motives for coming forward.
Mr. Cicero said he resigned in
September 2004 because he felt underappreciated. He described the
“pressure and stress” of participating in years of corruption, of
contending with “greedy” officials who jacked up bribe demands.
As he told The Times, “I
thought I deserved a medal at least.”
The breaking point came in
early 2004, when he was passed over for the job of general counsel of
Wal-Mart de Mexico. This snub, Mr. Torres-Landa wrote, “generated
significant anger with respect to the lack of recognition for his work.”
Mr. Cicero said he began to assemble a record of bribes he had helped
orchestrate to “protect him in case of any complaint or investigation,”
Mr. Torres-Landa wrote.
“We did not detect on his part
any express statement about wishing to sell the information,” the lawyer
According to people involved in
Wal-Mart’s investigation, Mr. Cicero’s account of criminality at the top
of Wal-Mart’s most important foreign subsidiary was impossible to
dismiss. He had clearly been in a position to witness the events he
described. Nor was this the first indication of corruption at Wal-Mart
de Mexico under Mr. Castro-Wright. A confidential investigation,
conducted for Wal-Mart in 2003 by Kroll Inc., a leading investigation
firm, discovered that Wal-Mart de Mexico had systematically increased
its sales by helping favored high-volume customers evade sales taxes.
A draft of Kroll’s report,
obtained by The Times, concluded that top Wal-Mart de Mexico executives
had failed to enforce their own anticorruption policies, ignored
internal audits that raised red flags and even disregarded local press
accounts asserting that Wal-Mart de Mexico was “carrying out a tax
fraud.” (The company ultimately paid $34.3 million in back taxes.)
Wal-Mart then asked Kroll to
evaluate Wal-Mart de Mexico’s internal audit and antifraud units. Kroll
wrote another report that branded the units “ineffective.” Many
employees accused of wrongdoing were not even questioned; some “received
a promotion shortly after the suspicions of fraudulent activities had
None of these findings, though,
had slowed Mr. Castro-Wright’s rise.
Just days before Mr. Cicero’s
first debriefing, Mr. Castro-Wright was promoted again. He was put in
charge of all Wal-Mart stores in the United States, one of the most
prominent jobs in the company. He also joined Wal-Mart’s executive
committee, the company’s inner sanctum of leadership.
The Initial Response
Ms. Munich sent detailed memos
describing Mr. Cicero’s debriefings to Wal-Mart’s senior management.
These executives, records show, included Thomas A. Mars, Wal-Mart’s
general counsel and a former director of the Arkansas State Police;
Thomas D. Hyde, Wal-Mart’s executive vice president and corporate
secretary; Michael Fung, Wal-Mart’s top internal auditor; Craig Herkert,
the chief executive for Wal-Mart’s operations in Latin America; and Lee
Stucky, a confidant of Lee Scott’s and chief administrative officer of
Wal-Mart typically hired
outside law firms to lead internal investigations into allegations of
significant wrongdoing. It did so earlier in 2005, for example, when
Thomas M. Coughlin, then vice chairman of Wal-Mart, was accused of
padding his expense accounts and misappropriating Wal-Mart gift cards.
At first, Wal-Mart took the
same approach with Mr. Cicero’s allegations. It turned to Willkie Farr &
Gallagher, a law firm with extensive experience in Foreign Corrupt
Practices Act cases.
The firm’s “investigation work plan”
called for tracing all payments to anyone who had helped Wal-Mart de
Mexico obtain permits for the previous five years. The firm said it
would scrutinize “any and all payments” to government officials and
interview every person who might know about payoffs, including
“implicated members” of Wal-Mart de Mexico’s board.
In short, Willkie Farr
recommended the kind of independent, spare-no-expense investigation
major corporations routinely undertake when confronted with allegations
of serious wrongdoing by top executives.
Wal-Mart’s leaders rejected
this approach. Instead,
records show, they decided Wal-Mart’s lawyers would supervise a far more
limited “preliminary inquiry” by in-house investigators.
The inquiry, a confidential
memo explained, would take two weeks, not the four months Willkie Farr
proposed. Rather than examining years of permits, the team would look at
a few specific stores. Interviews would be done “only when absolutely
essential to establishing the bona fides” of Mr. Cicero. However, if the
inquiry found a “likelihood” that laws had been violated, the company
would then consider conducting a “full investigation.”
The decision gave Wal-Mart’s
senior management direct control over the investigation. It also meant
new responsibility for the company’s tiny and troubled Corporate
The unit was ill-equipped to
take on a major corruption investigation, let alone one in Mexico. It
had fewer than 70 employees, and most were assigned to chasing
shoplifting rings and corrupt vendors. Just four people were
specifically dedicated to investigating corporate fraud, a number Joseph
R. Lewis, Wal-Mart’s director of corporate investigations, described in
a confidential memo as “wholly inadequate for an organization the size
But Mr. Lewis and his boss,
Kenneth H. Senser, vice president for global security, aviation and
travel, were working to strengthen the unit. Months before Mr. Cicero
surfaced, they won approval to hire four “special investigators” who,
according to their job descriptions, would be assigned the “most
significant and complex fraud matters.” Mr. Scott, the chief executive,
also agreed that Corporate Investigations would handle all allegations
of misconduct by senior executives.
And yet in the fall of 2005, as
Wal-Mart began to grapple with Mr. Cicero’s allegations, two cases
called into question Corporate Investigations’ independence and role.
In October, Wal-Mart’s vice
chairman, John B. Menzer, intervened in an internal investigation into a
senior vice president who reported to him. According to internal
records, Mr. Menzer told Mr. Senser he did not want Corporate
Investigations to handle the case “due to concerns about the impact such
an investigation would have.” One of the senior vice president’s
subordinates, he said, “would be better suited to conduct this inquiry.”
Soon after, records show, the subordinate cleared his boss.
The other case involved the
president of Wal-Mart Puerto Rico. A whistle-blower had accused the
president and other executives of mistreating employees. Although
Corporate Investigations was supposed to investigate all allegations
against senior executives, the president had instead assigned an
underling to look into the complaints — but to steer clear of those
Ms. Munich objected. In an
e-mail to Wal-Mart executives, she complained that the investigation was
“at the direction of the same company officer who is the target of
several of the allegations.”
“We are in need of clear
guidelines about how to handle these issues going forward,” she warned.
The Inquiry Begins
Ronald Halter, one of
Wal-Mart’s new “special investigators,” was assigned to lead the
preliminary inquiry into Mr. Cicero’s allegations. Mr. Halter had been
with Wal-Mart only a few months, but he was a seasoned criminal
investigator. He had spent 21 years in the F.B.I., and he spoke Spanish.
He also had help. Bob Ainley, a
senior auditor, was sent to Mexico along with several Spanish-speaking
On Nov. 12, 2005, Mr. Halter’s
team got to work at Wal-Mart de Mexico’s corporate headquarters in
Mexico City. The team gained access to a database of Wal-Mart de Mexico
payments and began searching the payment description field for the word
By day’s end, they had found
441 gestor payments. Each was a potential bribe, and yet they had
searched back only to 2003.
Mr. Cicero had said his main
gestores were Pablo Alegria Con Alonso and Jose Manuel Aguirre Juarez,
obscure Mexico City lawyers with small practices who were friends of his
from law school.
Sure enough, Mr. Halter’s team
found that nearly half the payments were to Mr. Alegria and Mr. Aguirre.
These two lawyers alone, records showed, had received $8.5 million in
payments. Records showed Wal-Mart de Mexico routinely paid its gestores
tens of thousands of dollars per permit. (In interviews, both lawyers
declined to discuss the corruption allegations, citing confidentiality
agreements with Wal-Mart.)
“One very interesting
postscript,” Mr. Halter wrote in an e-mail to his boss, Mr. Lewis. “All
payments to these individuals and all large sums of $ paid out of this
account stopped abruptly in 2005.” Mr. Halter said the “only thing we
can find” that changed was that Mr. Castro-Wright left Wal-Mart de
Mexico for the United States.
Mr. Halter’s team confirmed
detail after detail from Mr. Cicero’s debriefings. Mr. Cicero had given
specifics — names, dates, bribe amounts — for several new stores. In
almost every case, investigators found documents confirming major
elements of his account. And just as Mr. Cicero had described,
investigators found mysterious codes at the bottom of invoices from the
“The documentation didn’t look
anything like what you would find in legitimate billing records from a
legitimate law firm,” a person involved in the investigation said in an
Mr. Lewis sent a terse progress report
to his boss, Mr. Senser: “FYI. It is not looking good.”
Hours later, Mr. Halter’s team
found clear confirmation that Mr. Castro-Wright and other top executives
at Wal-Mart de Mexico were well aware of the gestor payments.
In March 2004, the team
discovered, the executives had been sent an internal Wal-Mart de Mexico
audit that raised red flags about the gestor payments. The audit
documented how Wal-Mart de Mexico’s two primary gestores had been paid
millions to make “facilitating payments” for new store permits all over
The audit did not delve into
how the money had been used to “facilitate” permits. But it showed the
payments rising rapidly, roughly in line with Wal-Mart de Mexico’s
accelerating growth. The audit recommended notifying Bentonville of the
The recommendation, records
showed, was removed by Wal-Mart de Mexico’s chief auditor, whom Mr.
Cicero had identified as one of the executives who knew about the
bribes. The author of the gestor audit, meanwhile, “was fired not long
after the audit was completed,” Mr. Halter wrote.
Mr. Ainley arranged to meet the
fired auditor at his hotel. The auditor described other examples of
Wal-Mart de Mexico’s leaders withholding from Bentonville information
about suspect payments to government officials.
The auditor singled out José
Luis Rodríguezmacedo Rivera, the general counsel of Wal-Mart de Mexico.
Mr. Rodríguezmacedo, he said,
took “significant information out” of an audit of Wal-Mart de Mexico’s
compliance with the Foreign Corrupt Practices Act. The original audit
had described how Wal-Mart de Mexico gave gift cards to government
officials in towns where it was building stores. “These were only given
out until the construction was complete,” Mr. Ainley wrote. “At which
time the payments ceased.”
These details were scrubbed
from the final version sent to Bentonville.
Investigators were struck by
Mr. Castro-Wright’s response to the gestor audit. It had been shown to
him immediately, Wal-Mart de Mexico’s chief auditor had told them. Yet
rather than expressing alarm, he had appeared worried about becoming too
dependent on too few gestores. In an e-mail, Mr. Rodríguezmacedo told
Mr. Cicero to write up a plan to “diversify” the gestores used to
“Eduardo Castro wants us to
implement this plan as soon as possible,” he wrote.
Mr. Cicero did as directed. The
plan, which authorized paying gestores up to $280,000 to “facilitate” a
single permit, was approved with a minor change. Mr. Rodríguezmacedo did
not want the plan to mention “gestores.” He wanted them called “external
Mr. Halter’s team made one last
discovery — a finding that suggested the corruption might be far more
extensive than even Mr. Cicero had described.
In going through Wal-Mart de Mexico’s database of
payments, investigators noticed the company
was making hefty “contributions” and “donations” directly to governments
all over Mexico — nearly $16 million in all since 2003.
“Some of the payments
descriptions indicate that the donation is being made for the issuance
of a license,” Mr. Ainley wrote in one report back to Bentonville.
They also found a document in
which a Wal-Mart de Mexico real estate executive had openly acknowledged
that “these payments were performed to facilitate obtaining the licenses
or permits” for new stores. Sometimes, Mr. Cicero told The Times,
donations were used hand-in-hand with gestor payments to get permits.
When Mr. Halter’s team was
ready to interview executives at Wal-Mart de Mexico, the first target
was Mr. Rodríguezmacedo.
Wal-Mart de Mexico in January 2004, Mr. Rodríguezmacedo had been a
lawyer for Citigroup in Mexico. Urbane and smooth, with impeccable
English, he quickly won fans in Bentonville. When Wal-Mart invited
executives from its foreign subsidiaries for several days of discussion
about the fine points of the Foreign Corrupt Practices Act, Mr.
Rodríguezmacedo was asked to lead one of the sessions.
It was called “Overcoming
Challenges in Government Dealings.”
Yet Mr. Cicero had identified
him as a participant in the bribery scheme. In his debriefings, Mr.
Cicero described how Mr. Rodríguezmacedo had passed along specific
payoff instructions from Mr. Castro-Wright. In an interview with The
Times, Mr. Cicero said he and Mr. Rodríguezmacedo had discussed the use
of gestores shortly after Mr. Rodríguezmacedo was hired. “He said,
‘Don’t worry. Keep it on its way.’ ”
Mr. Rodríguezmacedo declined to
comment; on Friday Wal-Mart disclosed that he had been reassigned and is
no longer Wal-Mart de Mexico’s general counsel.
Mr. Halter’s team hoped Mr.
Rodríguezmacedo would shed light on how two outside lawyers came to be
paid $8.5 million to “facilitate” permits. Mr. Rodríguezmacedo responded
with evasive hostility, records and interviews show. When investigators
asked him for the gestores’ billing records, he said he did not have
time to track them down. They got similar receptions from other
Only after investigators
complained to higher authorities were the executives more forthcoming.
Led by Mr. Rodríguezmacedo, they responded with an attack on Mr.
The gestor audit, they told
investigators, had raised doubts about Mr. Cicero, since he had approved
most of the payments. They began to suspect he was somehow benefiting,
so they asked Kroll to investigate. It was then, they asserted, that
Kroll discovered Mr. Cicero’s wife was a law partner of one of the
Mr. Cicero was fired, they
said, because he had failed to disclose that fact. They produced a copy
of a “preliminary” report from Kroll and e-mails showing the undisclosed
conflict had been reported to Bentonville.
Based on this behavior, Mr.
Rodríguezmacedo argued, the gestor payments were in all likelihood a
“ruse” by Mr. Cicero to defraud Wal-Mart de Mexico. Mr. Cicero and the
gestores, he contended, probably kept every last peso of the
Simply put, bribes could not
have been paid if the money was stolen first.
It was an argument that gave
Wal-Mart ample justification to end the inquiry. But investigators were
skeptical, records and interviews show.
Even if Mr. Rodríguezmacedo’s
account were true, it did not explain why Wal-Mart de Mexico’s
executives had authorized gestor payments in the first place, or why
they made “donations” to get permits, or why they rewrote audits to keep
Bentonville in the dark.
Investigators also wondered why
a trained lawyer who had gotten away with stealing a small fortune from
Wal-Mart would now deliberately draw the company’s full attention by
implicating himself in a series of fictional bribes. And if Wal-Mart de
Mexico’s executives truly believed they had been victimized, why hadn’t
they taken legal action against Mr. Cicero, much less reported the
“theft” to Bentonville?
There was another problem:
Documents contradicted most of the executives’ assertions about Mr.
Records showed Mr. Cicero had
not been fired, but had resigned with severance benefits and a $25,000
bonus. In fact, in a 2004 e-mail to Ms. Munich, Mr. Rodríguezmacedo
himself described how he had “negotiated” Mr. Cicero’s “departure.” The
same e-mail said Mr. Cicero had not even been confronted about the
supposed undisclosed conflict involving his wife. (Mr. Cicero flatly
denied that his wife had ever worked with either gestor.) The e-mail
also assured Ms. Munich there was no hint of financial wrongdoing. “We
see it merely as an undisclosed conflict of interest,” Mr.
There were other discrepancies.
Mr. Rodríguezmacedo said the
company had stopped using gestores after Mr. Cicero’s departure. Yet
even as Mr. Cicero was being debriefed in October 2005, Wal-Mart de
Mexico real estate executives made a request to pay a gestor $14,000 to
get a construction permit, records showed.
The persistent questions and
document requests from Mr. Halter’s team provoked a backlash from
Wal-Mart de Mexico’s executives. After a week of work, records and
interviews show, Mr. Halter and other members of the team were summoned
by Eduardo F. Solórzano Morales, then chief executive of Wal-Mart de
Mr. Solórzano angrily chastised
the investigators for being too secretive and accusatory. He took
offense that his executives were being told at the start of interviews
that they had the right not to answer questions — as if they were being
read their rights.
“It was like, ‘You shut up. I’m
going to talk,’ ” a person said of Mr. Solórzano. “It was, ‘This is my
home, my backyard. You are out of here.’ ”
Mr. Lewis viewed the complaints
as an effort to sidetrack his investigators. “I find this ludicrous and
a copout for the larger concerns about what has been going on,” he
Nevertheless, Mr. Herkert, the
chief executive for Latin America, was notified about the complaints.
Three days later, he and his boss, Mr. Duke, flew to Mexico City. The
trip had been long-planned — Mr. Duke toured several stores — but they
also reassured Wal-Mart de Mexico’s unhappy executives.
They arrived just as the
investigators wrapped up their work and left.
A Push to Dig Deeper
Wal-Mart’s leaders had agreed
to consider a full investigation if the preliminary inquiry found Mr.
Cicero’s allegations credible.
Back in Bentonville, Mr. Halter
and Mr. Ainley
wrote confidential reports to Wal-Mart’s top executives in
December 2005 laying out all the evidence that corroborated Mr. Cicero —
the hundreds of gestor payments, the mystery codes, the rewritten
audits, the evasive responses from Wal-Mart de Mexico executives, the
donations for permits, the evidence gestores were still being used.
“There is reasonable
suspicion,” Mr. Halter concluded, “to believe that Mexican and USA laws
have been violated.” There was simply “no defendable explanation” for
the millions of dollars in gestor payments, he wrote.
Mr. Halter submitted an “action
plan” for a deeper investigation that would plumb the depths of
corruption and culpability at Wal-Mart de Mexico.
Among other things, he urged
“that all efforts be concentrated on the reconstruction of Cicero’s
Mr. Cicero, meanwhile, was
still offering help. In November, when Mr. Halter’s team was in Mexico,
Mr. Cicero offered his services as a paid consultant. In December, he
wrote to Ms. Munich. He volunteered to share specifics on still more
stores, and he promised to show her documents. “I hope you visit again,”
Mr. Halter proposed a thorough
investigation of the two main gestores. He had not tried to interview
them in Mexico for fear of his safety. (“I do not want to expose myself
on what I consider to be an unrealistic attempt to get Mexican lawyers
to admit to criminal activity,” he had explained to his bosses.) Now Mr.
Halter wanted Wal-Mart to hire private investigators to interview and
monitor both gestores.
He also envisioned a round of
adversarial interviews with Wal-Mart de Mexico’s senior executives. He
and his investigators argued that it was time to take the politically
sensitive step of questioning Mr. Castro-Wright about his role in the
By January 2006, the case had
reached a critical juncture. Wal-Mart’s leaders were again weighing
whether to approve a full investigation that would inevitably focus on a
star executive already being publicly discussed as a potential successor
to Mr. Scott.
Wal-Mart’s ethics policy
offered clear direction. “Never cover up or ignore an ethics problem,”
the policy states. And some who were involved in the investigation
argued that it was time to take a stand against signs of rising
corruption in Wal-Mart’s global operations. Each year the company
received hundreds of internal reports of bribery and fraud, records
showed. In Asia alone, there had been 90 reports of bribery just in the
previous 18 months.
The situation was bad enough
that Wal-Mart’s top procurement executives were summoned to Bentonville
that winter for a dressing down. Mr. Menzer, Wal-Mart’s vice chairman,
warned them that corruption was creating an unacceptable risk,
particularly given the government’s stepped-up enforcement of the
Foreign Corrupt Practices Act. “Times have changed,” he said.
As if to underscore the
problem, Wal-Mart’s leaders were confronted with new corruption
allegations at Wal-Mart de Mexico even as they pondered Mr. Halter’s
action plan. In January, Mr. Scott, Mr. Duke and Wal-Mart’s chairman, S.
Robson Walton, received an anonymous e-mail saying Wal-Mart de Mexico’s
top real estate executives were receiving kickbacks from construction
companies. “Please you must do something,” the e-mail implored.
Yet at the same time, records
and interviews show, there were misgivings about the budding reach and
power of Corporate Investigations.
In less than a year, Mr.
Lewis’s beefed-up team had doubled its caseload, to roughly 400 cases a
year. Some executives grumbled that Mr. Lewis acted as if he still
worked for the F.B.I., where he had once supervised major
investigations. They accused him and his investigators of being
overbearing, disruptive and naïve about the moral ambiguities of doing
business abroad. They argued that Corporate Investigations should focus
more on quietly “neutralizing” problems than on turning corrupt
employees over to law enforcement.
Wal-Mart’s leaders had just
witnessed the downside of that approach: in early 2005, the company went
to the F.B.I. with evidence that the disgraced former vice chairman, Mr.
Coughlin, had embezzled hundreds of thousands of dollars. The decision
produced months of embarrassing publicity, especially when Mr. Coughlin
claimed he had used the money to pay off union spies for Wal-Mart.
Meanwhile, Wal-Mart de Mexico
executives were continuing to complain to Bentonville about the
investigation. The protests “just never let up,” a person involved in
the case said.
Another person familiar with
the thinking of those overseeing the investigation said Wal-Mart would
have reacted “like a chicken on a June bug” had the allegations
concerned the United States. But some executives saw Mexico as a country
where bribery was embedded in the business culture. It simply did not
merit the same response.
“It’s a Mexican issue; it’s
better to let it be a Mexican response,” the person said, describing the
thinking of Wal-Mart executives.
In the midst of this debate,
Ms. Munich submitted her resignation, effective Feb. 1, 2006. In one of
her final acts, she drafted
a memo that argued for expanding the Mexico investigation and giving
equal respect to Mexican and United States laws.
“The bribery of government
officials,” she noted dryly, “is a criminal offense in Mexico.”
She also warned against
allowing implicated executives to interfere with the investigation.
Wal-Mart de Mexico’s executives had already tried to insert themselves
in the case. Just before Christmas, records show, Mr. Solórzano, the
Wal-Mart de Mexico chief executive, held a video conference with Mr.
Mars, Mr. Senser and Mr. Stucky to discuss his team’s “hypothesis” that
Mr. Cicero had stolen gestor payments.
“Given the serious nature of
the allegations, and the need to preserve the integrity of the
investigation,” Ms. Munich wrote, “it would seem more prudent to develop
a follow-up plan of action, independent of Walmex management
The Chief Weighs In
Mr. Scott called a meeting for
Feb. 3, 2006, to discuss revamping Wal-Mart’s internal investigations
and to resolve the question of what to do about Mr. Cicero’s
In the days before the meeting,
records show, Mr. Senser ordered his staff to compile data showing the
effectiveness of Corporate Investigations. He assembled statistics
showing that the unit had referred relatively few cases to law
enforcement agencies. He circulated copies of an e-mail in which Mr.
Rodríguezmacedo said he had been treated “very respectfully and
cordially” by Mr. Senser’s investigators.
Along with Mr. Scott, the
meeting included Mr. Hyde, Mr. Mars and Mr. Stucky, records show. The
meeting brought the grievances against Corporate Investigations into the
open. Mr. Senser described the complaints in Mr. Lewis’s performance
evaluation, completed shortly after the meeting. Wal-Mart’s leaders
viewed Mr. Lewis’s investigators as “overly aggressive,” he wrote. They
did not care for Mr. Lewis’s “law enforcement approach,” and the fact
that Mr. Scott convened a meeting to express these concerns only
underscored “the importance placed on these topics by senior
By meeting’s end, Mr. Senser
had been ordered to work with Mr. Mars and others to develop a “modified
protocol” for internal investigations.
Mr. Scott said he wanted it
done fast, and within 24 hours Mr. Senser produced a new protocol, a
highly bureaucratic process that gave senior Wal-Mart executives —
including executives at the business units being investigated — more
control over internal investigations. The policy included multiple “case
reviews.” It also required senior executives to conduct a “cost-benefit
analysis” before signing off on a full-blown investigation.
Under the new protocol, Mr.
Lewis and his team would only investigate “significant” allegations,
like those involving potential crimes or top executives. Lesser
allegations would be left to the affected business unit to investigate.
“This captures it, I think,” Mr.
Hyde wrote when Mr. Senser sent him the new protocol.
Four days after Mr. Scott’s
meeting, with the new protocol drafted, Wal-Mart’s leaders began to
transfer control of the bribery investigation to one of its earliest
targets, Mr. Rodríguezmacedo.
Mr. Mars first sent Mr.
Halter’s report to Mr. Rodríguezmacedo. Then he arranged to ship Mr.
Halter’s investigative files to him as well.
In an e-mail, he sought Mr. Senser’s advice on how to send the
files in “a secure manner.”
Mr. Senser recommended FedEx.
“There is very good control on those shipments, and while governments do
compromise them if they are looking for something in particular, there
is no reason for them to think that this shipment is out of the
ordinary,” he wrote.
“The key,” he added, “is being
careful about how you communicate the details of the shipment to José
Luis.” He advised Mr. Mars to use encrypted e-mail.
Wal-Mart’s spokesman, Mr.
Tovar, said the company could not discuss Mr. Scott’s meeting or the
decision to transfer the case to Mr. Rodríguezmacedo. “At this point,”
he said, “we don’t have a full explanation of what happened.
Unfortunately, we realize that until the investigation is concluded,
there will be some unanswered questions.”
Wal-Mart’s leaders, however,
had clear guidance about the propriety of letting a target of an
investigation run it.
On the same day Mr. Senser was
putting the finishing touches on the new investigations protocol,
Wal-Mart’s ethics office sent him a booklet of “best practices” for
internal investigations. It had been put together by lawyers and
executives who supervised investigations at Fortune 500 companies.
“Investigations should be
conducted by individuals who do not have any vested interest in the
potential outcomes of the investigation,” it said.
The transfer appeared to
violate even the “modified protocol” for investigations. Under the new
protocol, Corporate Investigations was still supposed to handle
“significant” allegations — including those involving potential crimes
and senior executives. When Mr. Senser asked his deputies to list all
investigations that met this threshold, they came up with 31 cases.
At the top of the list: Mexico.
After the meeting with Mr.
Scott, Mr. Senser had told Mr. Lewis in his performance evaluation that
his “highest priority” should be to eliminate “the perceptions that
investigators are being too aggressive.” He wanted Mr. Lewis to “earn
the trust of” his “clients” — Wal-Mart’s leaders. He wanted him to head
off “adversarial interactions.”
Mr. Senser now applied the same
advice to himself.
Even as Mr. Halter’s files were
being shipped to Mr. Rodríguezmacedo, Mr. Stucky made plans to fly to
Mexico with other executives involved in the bribery investigation. The
trip, he wrote, was “for the purpose of re-establishing activities
related to the certain compliance matters we’ve been discussing.” Mr.
Stucky invited Mr. Senser along.
“It is better if we do not make
this trip to Mexico City,” Mr. Senser replied. His investigators, he
wrote, would simply be “a resource” if needed.
Ten days after Mr. Stucky flew
to Mexico, an article about Wal-Mart appeared in The Times. It focused
on “the increasingly important role of one man: Eduardo Castro-Wright.”
The article said Mr. Castro-Wright was a “popular figure” inside
Wal-Mart because he made Wal-Mart de Mexico one of the company’s “most
Wall Street analysts, it said,
viewed him as a “very strong candidate” to succeed Mr. Scott.
For those who had investigated
Mr. Cicero’s allegations, the preliminary inquiry had been just that —
preliminary. In memos and meetings, they had argued that their findings
clearly justified a full-blown investigation. Mr. Castro-Wright’s
precise role had yet to be determined. Mr. Halter had never been
permitted to question him, nor had Mr. Castro-Wright’s computer files
been examined, records and interviews show.
At the very least, a complete
investigation would take months.
Mr. Rodríguezmacedo, the man
now in charge, saw it differently. He wrapped up the case in a few
weeks, with little additional investigation.
“There is no evidence or clear
his report concluded, “of bribes paid to Mexican government
authorities with the purpose of wrongfully securing any licenses or
That conclusion, his report
explained, was largely based on the denials of his fellow executives.
Not one “mentioned having ordered or given bribes to government
authorities,” he wrote.
His report, six pages long,
neglected to note that he had been implicated in the same criminal
That was not the only omission.
While his report conceded that Wal-Mart de Mexico executives had
authorized years of payments to gestores, it never explained what these
executives expected the gestores to do with the millions of dollars they
received to “facilitate” permits.
He was also silent on the
evidence that Wal-Mart de Mexico had doled out donations to get permits.
Nor did he address evidence that he and other executives had suppressed
or rewritten audits that would have alerted Bentonville to improper
Instead, the bulk of Mr.
Rodríguezmacedo’s report attacked the integrity of his accuser.
Mr. Cicero, he wrote, made
Wal-Mart de Mexico’s executives think they would “run the risk of having
permits denied if the gestores were not used.” But this was merely a
ruse: In all likelihood, he argued, Wal-Mart de Mexico paid millions for
“services never rendered.” The gestores simply pocketed the money, he
suggested, and Mr. Cicero “may have benefited,” too.
But he offered no direct proof.
Indeed, as his report made clear, it was less an allegation than a
hypothesis built on two highly circumstantial pillars.
First, he said he had consulted
with Jesús Zamora-Pierce, a “prestigious independent counsel” who had
written books on fraud. Mr. Zamora, he wrote, “feels the conduct
displayed by Sergio Cicero is typical of someone engaging in fraud. It
is not uncommon in Mexico for lawyers to recommend the use of gestores
to facilitate permit obtainment, when in reality it is nothing more than
a means of engaging in fraud.”
Second, he said he had done a
statistical analysis that found Wal-Mart de Mexico won permits even
faster after Mr. Cicero left. The validity of his analysis was
impossible to assess; he did not include his statistics in the report.
In building a case against Mr.
Cicero, Mr. Rodríguezmacedo’s report included several false statements.
He described Mr. Cicero’s “dismissal” when records showed he had
resigned. He also wrote that Kroll’s investigation of Mr. Cicero
concluded that he “had a considerable increase in his standard of living
during the time in which payments were made to the gestores.” Kroll’s
report made no such assertion, people involved in the investigation
His report promised a series of
corrective steps aimed at putting the entire matter to rest. Wal-Mart de
Mexico would no longer use gestores. There would be a renewed commitment
to Wal-Mart’s anticorruption policy. He did not recommend any
disciplinary action against his colleagues.
There was, however, one person
he hoped to punish. Wal-Mart de Mexico, he wrote, would scour Mr.
Cicero’s records and determine “if any legal action may be taken against
Mr. Rodríguezmacedo submitted a
draft of his report to Bentonville. In an e-mail, Mr. Lewis told his
superiors that he found the report “lacking.” It was not clear what
evidence supported the report’s conclusions, he wrote. “More
importantly,” he wrote, “if one agrees that Sergio defrauded the company
and I am one of them, the question becomes, how was he able to get away
with almost $10 million and why was nothing done after it was
Mr. Rodríguezmacedo responded
by adding a paragraph to the end of his report: They had decided not to
pursue “criminal actions” against Mr. Cicero because “we did not have
“At the risk of being cynical,”
Mr. Lewis wrote in response, “that report is exactly the same as
the previous which I indicated was truly lacking.”
But it was enough for Wal-Mart.
Mr. Rodríguezmacedo was told by executives in Bentonville on May 10,
2006, to put his report “into final form, thus concluding this
No one told Mr. Cicero. All he
knew was that after months of e-mails, phone calls and meetings,
Wal-Mart’s interest seemed to suddenly fade. His phone calls and e-mails
“I thought nobody cares about
this,” he said. “So I left it behind.”
Alejandra Xanic von Bertrab and James C. McKinley Jr.
contributed reporting from Mexico City.
The Era of Big Box Retail Dominance Is Coming to an
End March 30, 2012
David Welch Chris Burritt Lauren Coleman-Lochner
Best Buy Co. (BBY) said yesterday it was closing 50 big stores and
opening 100 smaller ones, the world’s largest electronics retailer was
adjusting to reality: The era of big-box retail dominance is coming to
The new mantra is small box. While Best Buy,
Wal-Mart Stores Inc. (WMT) and
Target Corp. (TGT) are still opening large stores, all are putting
increasing emphasis on smaller ones. Best Buy plans to double the number
of its smaller Best Buy Mobile stores by 2016. Wal-Mart is building as
many as 100 small-format stores this year, while Target is opening five
After 50 years of putting mom and pops out of
business, big-box retail is having a mid-life crisis. A slow economy has
hurt same-store sales, narrowing margins at big stores. Meanwhile,
consumers, armed with price-comparison technology, are visiting more
stores seeking deals or exclusive merchandise rather than making
one-stop, fill-the-cart excursions.
“We’re undergoing a seismic shift,” said Natalie Berg,
an analyst with Planet Retail in
“People are still cutting back. People are buying more products online
so there is a real case for downsizing stores.”
Big-box retailers essentially come in two flavors: so-
called category killers such as Best Buy that focus on one type of
merchandise, and discounters like Wal-Mart and Target, which sell a
broader range of goods.
Since the recession, big-box retailers have struggled.
Until its third fiscal quarter last year, Wal-Mart had posted eight
consecutive quarters of declining sales at stores open more than 12
months. Best Buy posted five straight quarters of profit decline before
reporting a $2.6 billion loss on March 29, while analysts forecast
declining same-store sales and profit for Target this year.
Since June 2009, when the recession officially ended,
Wal- Mart shares have advanced 26 percent and Best Buy has dropped 28
percent, both trailing the 39 percent gain for the 32-company Standard &
Poor’s 500 Retailing Index. Target shares gained 48 percent in that
Big-box retail was born in 1962. That’s the year that
Wal- Mart, K-Mart and Target all opened their first large
discount stores. As they grew, the new big boxes began offering
broad selection and low prices to a growing population of suburbanites
who had left the cities in their new cars, searching for their piece of
the American Dream.
Big boxes boomed in the go-go 1990s. Fueled by an
inflated stock market and loose credit, Americans expanded farther into
the suburbs and filled their new homes with appliances and
consumer goods, said John Lupo, a retired Wal-Mart executive who now
sits on the board of AB Electrolux. The housing boom propelled the
big-box retailers into the new millennium. Then came the crash and
consumers pulled back.
Other forces are conspiring against the big-box model.
Baby Boomers no longer have kids at home and don’t need to stock up
on food and packaged goods. Their kids are marrying later and delaying
having their own children, meaning fewer are buying houses that need to
be updated and furnished.
“Right now you have a trough in the need for big-box
retail,” said Bryan Gildenberg, an analyst with the Cambridge,
Massachusetts-based research firm Kantar Retail.
Hence the rush to open smaller stores. By 2016,
Richfield, Minnesota-based Best Buy plans to have as many as 800 Mobile
Stores, up from 305 now. It’s part of Chief Executive Officer
Dunn’s plan to generate revenue from warranties, accessories and
connections between phones, tablets and other electronics.
The increasing emphasis on smaller stores still leaves
room for big stores, according to Dunn.
“We see those stores as an important part of a network
in conjunction with our small-box stores, our online capabilities and
our on-phone capabilities that allow customers to reach us anytime,
anywhere, anyhow they choose,” he said in a telephone interview. “While
I don’t see this as a decline of the big boxes, the multi-channel
approach that we are taking will require less square footage.”
Wal-Mart, which is based in Bentonville,
is also sticking with big stores. While the company aims to add at least
three times as many Neighborhood Markets as in 2011, it plans to add up
to 150 supercenters, compared with 122 last year.
“The supercenter is still what works best for us,”
said Deisha Galberth Barnett, a Wal-Mart spokeswoman. “We will continue
to work to grow the presence of supercenters.”
Shoppers’ stampede online is also hurting big-box
chains. The biggest beneficiary of that shift is
Amazon.com Inc. (AMZN), which is grabbing market share from
Wal-Mart, Best Buy and Target.
“The biggest challenge for big boxes is increasing
consumer confidence in making online purchases,” said
Arnold, an analyst at Edward Jones & Co. in
who rates Best Buy and Wal-Mart as buys. “Best Buy is arguably more
exposed than the Wal-Marts of the world that are heavy in the food,
apparel and consumables category. In the case of consumer electronics,
it comes down to price.”
If Best Buy and its big-box ilk are to survive,
they’ll have to evolve and do a better job of integrating their brick-
and-mortar locations with their Web stores, Arnold said.
“While big-box retailers are struggling, they aren’t
going away,” Arnold said in a telephone interview. “They are shifting to
smaller formats and investing in online retailing.”
On a warm, sticky winter
morning, I waited nervously in a parking
lot in Foshan, a city in southeastern China's smog-choked Pearl River
delta, for a man I'd never met. His name was Mr. Ou, and he ran the
sprawling factory in front of me, a jumble of offices, low-slung
buildings, and warehouses. Though the factory was teeming with workers,
a Subaru SUV and BMW coupe were the only cars in the lot. Drab, gray
worker dormitories loomed nearby, and between them ran a dusty road that
led to the factory. At last a young man emerged from an office building.
He motioned for me to follow him in.
I settled onto a plush leather couch and absorbed the
decor. Framed awards and certificates covered the walls. A
shopping-cart-size wooden frog stood sentry in the center of the
room. Ping golf clubs leaned against one wall; a Rolling Stones
commemorative electric guitar gathered dust behind a chair. And
there were grills: a small kettle grill on a desk, a brushed-steel
gas grill on the far side of the room, grills stacked atop other
grills. This was Mr. Ou's trade: supplying Western retailers with
the cooking apparatus of patio parties and Fourth of July bashes.
The young man closed the door. He took the chair to
my right, lit a cigarette, and met my stare as if to say, Let's
get on with it. Only then did I realize I was not talking to an
Mr. Ou had the good looks of a judge on one of
those breathless Chinese talent shows. He wore a tailored blazer, an
expensive-looking watch, polished leather shoes, and colorful
striped socks. He asked why I'd come to China, why I cared about his
factory. An American consultant, I said, had suggested I tour his
operation, Foshan Juniu Metal Manufacturing, because Mr. Ou was part
of a hallmark sustainability program launched by the company I had
come to China to investigate—Walmart.
Mr. Ou said all this in a smoky rattle of a
voice, but he perked up when he talked about this program.
"As the biggest retailer in the world," he told me, "Walmart
has a responsibility to do this." For the energy efficiency
program, he submitted monthly reports to Walmart and met
with a Walmart consultant about energy-saving equipment. But
he had his doubts. While Walmart executives preached
sustainability, its buyers pushed him to lower prices by 3
or 5 percent each year. Operating on the thinnest of margins
and scrambling to keep up with Walmart's demands, he said,
factories just don't have the time or capital to invest in
green projects. "They will work the suppliers to death," he
After our meeting, Mr. Ou's
assistant, who looked slightly older than Mr. Ou, took me
around the factory grounds, 25 acres in all. One- and
two-story buildings lined the road, and a bilious-looking
river cut through the property. When I asked, the assistant
said its pollution came from other factories. We passed
through a dark, ear-splittingly loud packaging facility
where, amid stacks of Styrofoam blocks and plastic-wrapped
metal parts, workers eyed us warily before turning back to
the production line. Kingsford grill boxes reached high
toward the ceiling, WAL-MART printed on the side.
Near the end of the tour, the assistant
led me inside a hangarlike plant filled with the whine of
heavy machinery. Workers in jeans and T-shirts operated
heavy presses, stamping metal sheets into grill lids. We
sidled up to an unoccupied machine. Bits of metal glittered
at its base like coins in a fountain. The assistant motioned
for me to look closer, then pointed to a shoebox-size metal
box affixed to one side that read "Mascot." When turned on,
he proudly explained, this box slashed electricity usage. I
had asked to see the factory's energy efficiency
investments, and this was it.
Soon after, the assistant led me back to
the parking lot. The tour was over. Mr. Ou gave me his card
and told me to stay in touch.
It was never made clear to me how those
energy-saving boxes exactly worked. What I did know was that
Mr. Ou had welcomed me into his factory, served me tea,
answered my questions, and let me snoop around. He seemed
like a forward-thinking businessman with a strong belief in
sustainability—exactly the right type to carry forward
Walmart's vision for a leaner, greener supply chain in a
country smothered by pollution.
Except, as far as Mr. Ou was concerned,
that vision never came to life. And no one, he later told
me, ever explained why.
campaign to green everything
from its break rooms to its global supply chain is one of
the most publicized, and controversial, experiments in
American retail. The company had made a halfhearted attempt
in the '80s and '90s, with a few green products and
ecofriendly stores. But this latest effort was different. It
was sweeping, embracing every part of the company's
business. It emanated directly from the CEO's office. And,
perhaps most remarkably, some of Walmart's erstwhile critics
in the environmental movement—the Environmental Defense Fund
(EDF), Natural Resources Defense Council (NRDC), and World
Wildlife Fund, among others—got on board. Former Sierra Club
president Adam Werbach was hired to spread the green message
among Walmart's 1.4 million US employees.
Almost seven years into the program, many
environmentalists remain convinced that Walmart is serious
about sustainability—and that its actions can have a major
impact on the world economy because of the gravitational
pull of its vast network of suppliers, customers, and
employees. Walmart's environmental initiatives in China have
been heralded—most recently by
Orville Schell in The Atlantic—as a key force
in spurring other corporations to embrace sound
environmental practices. My reporting—more than a year of
research that took me from Arkansas to China—suggests a more
complex, less flattering story: Walmart has made laudable
though modest progress on many of its goals. But with the
global economic slowdown tugging at the company's profit
margins, people involved with the environmental campaign say
the momentum seems to be stalling or vanishing entirely.
Since launching its sustainability
program, Walmart has pledged to eliminate waste, use only
renewable energy, sell more organic produce, support small
farmers, and slash its energy footprint. That's no easy
task: Each second, 330 people buy something from one of
Walmart's 8,970 stores worldwide. With 2.1 million
workers, it is the world's largest private employer. Its
carbon footprint—from its stores, distribution centers,
company offices, corporate jets, and so on—totaled 21.4
million metric tons in 2010, more than that of half the
world's countries, according to data Walmart provided to the
Carbon Disclosure Project.
But that figure
doesn't include Walmart's supply chain, a web of more
than 100,000 suppliers from Tennessee to Turkey, Cambodia to
Mexico. These companies fall largely into two categories:
Some make house-brand products to Walmart specifications:
Great Value (food), George (clothing), Mainstays
(furniture). Then there are name-brand products, like Del
Monte pineapples, Coleman tents, and Bic pens. Sometimes, a
brand will make a Walmart-specific product; General
Electric, for instance, sells kitchen appliances exclusive
to Walmart and is subject to Walmart's factory regulations.
But neither the house-brand nor name-brand suppliers
necessarily produce the jeans, tents, or toothbrushes they
sell to Walmart. That work is done by contractors and
subcontractors, which include many unregulated "shadow"
factories—and that's where some of the most carbon-heavy,
polluting parts of the manufacturing process happen.
Counting all the suppliers, factories,
mills, farms, and so on in its supply chain, Walmart
estimates its totalcarbon footprint is closer to
at least 200 million metric tons. And even that estimate
doesn't include all of the companies Walmart does business
with, such as its distribution trucking firms.
In the past, Walmart's outsize carbon
footprint had made the company a favorite target of
environmentalists. But in 2009, as hope for a congressional
cap-and-trade deal evaporated and the Copenhagen climate
talks ended in a stalemate, they began to see Walmart in a
different light: If they could make the world's largest
retailer greener, other businesses might follow suit. EDF
had opened its own office near Walmart headquarters in
Bentonville, Arkansas, embedding its employees in the "belly
of the beast," as one staffer put it. "Even though they're a
party of last resort, they're our only hope at the moment,"
said Linda Greer, an NRDC scientist who works with Walmart.
"They have the potential to change the world."
Key word: potential. So far the
company has made strides on only some of its goals. It says
it has boosted its truck fleet's efficiency by 60 percent,
eliminated hazardous materials from most electronics it
sells, cut plastic bag use by more than 20 percent since
2007, and sold 466 million compact fluorescent lightbulbs in
But interviews with key insiders and the
company's own reports reveal that on some of its biggest
promises, Walmart's results are underwhelming:
At a glitzy Beijing confab in 2008,
pledged to make Chinese suppliers agree to comply with
labor and environmental laws and standards starting in
January 2009. (All other suppliers were to comply by 2011.)
As of its
2011 Global Responsibility Report, Walmart had no
updates except to say that the compliance agreement "is
committed to eliminate 25 percent of solid waste from
its US stores by October 2008. In its 2011 responsibility
report, Walmart said it had no data for 2005, 2006, and
2007. Instead, it touted a "waste-redirection" rate of 64
percent in the 2010 fiscal year.
In 2008, Walmart pledged to boost energy
efficiency by 20 percent per unit produced at 200 Chinese
factories, including Mr. Ou's, by this year. In April 2011,
it announced 119 factories had hit the target. Yet later
that month, EDF, a crucial partner in China, left the
program over Walmart's lack of cooperation, several sources
told me. By year's end, the program was dormant.
Walmart's goal to reduce greenhouse gas
emissions by 20 percent at its stores and distribution
centers worldwide by 2012 was half met by the time of the
2011 responsibility report.
And even where Walmart has made its goals,
questions linger. The retailer says every supplier making
private-label and non-name-brand goods has provided the name
and location of every factory involved in making those
products. Yet Walmart concedes that the use of murky
subcontractors is widespread in China, Africa, the Middle
East, and Bangladesh. Walmart also won't provide details
about how it achieved its goal, whether suppliers
were asked or compelled to share factory information, and
whether any suppliers lost orders or were fired for
unsatisfactory responses. My repeated attempts to get
Walmart to answer specific questions yielded little in the
way of hard data but plenty of PR speak. "We believe the
sheer volume and ambition of our goals—and our annually
reported progress—speak for themselves," a spokeswoman wrote
me in one typical exchange.
That's why I decided to go see for myself.
buying Chinese-made goods in 1993. The country's first
supercenter opened three years later in Shenzhen. Today, the
company directly employs 96,800 people in China and operates
357 Chinese stores. Walmart's supply chain includes some
30,000 Chinese factories, which produce an estimated 70
percent of all of the goods it sells. Walmart's global
sourcing headquarters, the nerve center for its
international operations, is also located in Shenzhen, a
booming city on the southeastern coast.
In December 2010 I arrived in Foshan, a
city in the heart of Guangdong province. Known as the
"workshop of the world" and bordering Hong Kong, Guangdong
is packed with factories that churn out Barbies and bras,
tube socks and toilet brushes, iPhones and plasma TVs. The
province's gross domestic product in 2010 was $690 billion,
more than the
GDP of Argentina, Saudi Arabia, or South Africa.
Walmart has connected other journalists
with its suppliers and corporate officials in China in the
past two years, but it had declined a half-dozen requests
from me. And locating these sources on my own proved no easy
task. The company closely guards all information about who
makes its products. Aside from Mr. Ou, almost everyone
connected to Walmart I met in China insisted I not use their
real names for fear of being blackballed by Walmart and
Which is why I'll call the former Walmart
factory auditor I met one Saturday night Michael Chao. Chao
was in his mid-30s and spoke good English. We couldn't talk
in public, he said, so we relocated to a friend's office a
few blocks away.
Chao joined Walmart as an auditor in 2004
after two years at an independent auditing firm. He spent
four years at Walmart, which, combined with his previous
gig, was plenty long enough to understand how auditing in
China really works.
Walmart helped spawn the supplier auditing
industry. After a scathing NBC Dateline report in
uncovered child labor at a Walmart supplier in
Bangladesh, the company denied the allegations but then
supplier code of conduct that, among other things,
outlawed child and prison labor. Other big-name companies
followed suit, and soon there was a market for companies
that could police those firms. Today, Walmart's auditors
inspect factories, meet with managers, scrutinize wage
records, and interview individual workers to look for labor,
health, and safety violations.
They have recently tried to keep an eye
out for environmental issues as well, but it hasn't been
easy, since the inspectors are already overtaxed. Auditing
is a demanding job, Chao told me. Burnout is common.
Factories often cook their books, keeping two sets of
records—the real ones, and a clean version for the auditors.
Managers coach employees to lie. And a passel of companies
help suppliers fudge their numbers and pass compliance
Sometimes the auditors themselves are
corrupt, Chao said, willing to overlook violations in
exchange for a hongbao—a bribe. (Hongbao
means "red envelope," usually a bill-shaped sleeve filled
with cash given as a gift at family celebrations.) Walmart,
which has publicly acknowledged firing auditors for taking
bribes, says it investigates all reports of corruption. But
Chao told me that they can't catch all the crooked auditors.
Walmart hired a crop of young college
graduates to replace auditors who were inured to corruption,
but challenges remained. Like off-the-books subcontracting.
In China, auditors typically see only "five-star" factories,
so named for China's rating system for hotels and
restaurants. These companies, he explained, obey the law,
treat their workers fairly, pay decent wages, and ensure
safe working conditions, by local standards. But Walmart and
others often demand more than their five-star suppliers can
produce, so a company scrambling to fill a massive order
for, say, action figures will outsource to a shadow factory.
A shadow factory can be a mom-and-pop
operation in someone's house, or it can be a full-fledged
factory hidden on the same property as a five-star.
Regulations don't apply inside a shadow factory, Chao said.
Consultants and experts who've worked in China for decades
say there are tens of thousands of shadow factories, and
that up to 70 or even 80 percent of five-stars will
outsource more than half of a given production order to
shadow factories. At Walmart, Chao said, "We would look in
the system which shows the [five-star] factory has only 300
people to handle an operation receiving massive production
orders worth millions of dollars. How does it add up?"
Good auditors aren't blind to this, he
noted. But they don't have time to hunt down all the shadow
factories, and they feel pressure not to cause trouble or
stop orders from being filled.
Chao recalled one case at Walmart when his
boss received a confidential tip about a toy supplier
outsourcing production to a strange location. Chao and a
colleague staked out the supplier. When a truck emerged,
they jumped into a waiting taxi and tailed it until the
truck pulled into a prison. Upon further investigation, Chao
confirmed that the factory was using inmate labor and got
Walmart to pull its orders from the supplier.
He told me that story not to trumpet his
or Walmart's detective skills—he said the auditors likely
missed many more shadow factories than they caught—but to
stress the slippery nature of the supply chain. Walmart's
American brass, Chao said, doesn't have a complete enough
understanding of Chinese manufacturing. "They have the basic
concept, but the top management knows nothing about how to
make it work" at the ground level, he said. "So they can
say, 'Oh, a sustainability program,' but they can do
Chao isn't the only one to question
Walmart's auditing. In 2009, the advocacy group
China Labor Watch obtained documents from a Walmart
packaging supplier on how to hide or adjust safety and
environmental records; how workers should lie to auditors
about wages, benefits, and working hours; and how to conceal
a shadow factory. Another investigation by the group
uncovered forced overtime, phony pay stubs, poor living
conditions, and the use of hazardous chemicals at a Walmart
shoe factory. Walmart-hired auditors had previously raised
no concerns with either plant.
Li Qiang, China Labor Watch's executive
director, told me that Walmart's auditing process has been
plagued with fraud for years. In 2007, Li, who says he's met
with Walmart officials numerous times, urged the retailer to
scrap its corruption-riddled internal auditing program.
Walmart followed his advice, but Li discovered that the
problems hadn't disappeared. In November 2011,
a lawsuit filed by Li's group against Intertek, an
international third-party auditing company, describes how in
December 2009 an Intertek auditor took a bribe from a
Dongguan toy factory while overlooking "extensive fraud" in
pay and hours records. (An Intertek spokeswoman said the
suit "has no merit" but declined to comment on specific
allegations.) In its 2011 Global Responsibility Report,
Walmart briefly hinted at this problem: "Lack of complete
transparency to production practices [in China] has hindered
our ability to implement meaningful change at the factory
Li said these problems were systemic. "If
the fraud in the auditing system isn't solved," he told me,
"I'm far from optimistic about Walmart's environmental
ago, Shenzhen was a drab
fishing village on the South China Sea, a place so remote it
didn't have a single traffic light. Then, as part of his
economic reforms, Communist Party leader Deng Xiaopeng named
Shenzhen the country's first
"special economic zone," with laissez-faire trade
policies and favorable manufacturing laws put in place to
lure foreign investment. Shenzhen's economy exploded, its
GDP climbing from $31 million in 1979 to $107.8 billion in
2007. Today Shenzhen is China's third-largest port city,
packed with skyscrapers, nightclubs, and fancy hotels. Among
the most luxurious is the Shangri-La, where, on any given
morning, buyers for American retailers mill around the
marble-floored lobby waiting for rides to factories. I sat
down in the bar one Friday and ordered a cappuccino that
arrived with the letters "S-L" spelled in froth.
I was there to meet Terry Foecke
(pronounced FAKE-ee), a consultant spearheading Walmart's
factory energy efficiency program in China. In a lobby full
of Westerners, Foecke cut an unmistakable figure—thickly
bearded, 6-foot-3, with a broad belly and hip square-framed
glasses. He was an unlikely Walmart ally: a soft-spoken,
almost professorial progressive who quoted George Bernard
Shaw and told me he spoke out against runaway consumerism at
his Unitarian church back home in Minnesota.
Foecke's actual employer was the
Environmental Defense Fund, which in 2008 partnered with
Walmart on the campaign to make factories more energy
efficient. That degree of separation gave him the freedom to
talk openly about implementing one of the retailer's most
ambitious efforts: shrinking energy usage by 20 percent at
200 Chinese suppliers by 2012, the same program Mr. Ou had
participated in. Foecke spent many days on the road,
visiting factories and performing "rapid assessments"—two-
or three-hour sweeps through a factory to pick out quick and
easy ways to save energy and money. Foecke and his crack
team of sleuths could find up to 60 percent in energy
savings in a single visit, pulling down banks of lights that
illuminated empty space or plugging leaky equipment.
Foecke wanted me to ride along on one of
his assessments. But Walmart officials denied multiple
requests to do so, and so I had to settle for Foecke's
colorful written accounts. Here he is walking through an
aging factory that makes plastic Christmas trees and other
"Then it was on to the plastic injection
molders. Wow, I thought I had stumbled into Mr. Wizard's
Wayback Machine and somebody dialed in '1960.' Wide-open
hoppers (hard to keep the polymer dry that way; causes lot
of rejects), leaking hydraulics bandaged up with rags;
filthy motors everywhere, and more compressed air than I
believe I have yet seen used. They have 50-60 smaller
molders crammed into the space someone in [Minnesota] would
use for a 3-car garage, all actuated with compressed air
instead of hydraulics, making bark and twigs and stems and
such, sometimes even co-molding a stem onto a
previously-made flower. P admitted later that the place made
him jumpy, certified safety engineer that he is. The lack of
safety guards and [emergency fail-safe] switches and doors
and just plain space WAS impressive in a how-do-they-do-it?
way. I got speared in the belly by an actuator, but in my
defense the darn thing traveled a good foot into the manway."
But there were flaws with Foecke's
program. Walmart said the participants in it were "top"
suppliers, suggesting they had been chosen for their size.
In fact, most of the 200 participating factories were simply
those whose forward-thinking owners, like Mr. Ou, had
volunteered, Foecke said. (And, of course, none of the 200
were shadow factories.) Also, the data in Foecke's program
were self-reported. Foecke said he'd accepted Walmart's
"inspire, not require" philosophy at the outset. Once
Walmart expanded the program, he hoped it'd make energy
metering mandatory. Otherwise, he explained, "the factories
can say whatever they want, and when you have self-reported
data it's built on sand. I said [to Walmart], 'You can do
this for a while, but eventually cut the crap.'"
Yet two years into the program, well past
the point where Foecke had expected it to be expanded
dramatically, it was still stuck in the pilot phase. He'd
seen similar hesitance on environmental issues at other
companies, and that had usually spelled doom for energy
efficiency programs. "It happens all the time," he said.
"You go into big organizations, you get atomic decay, and
unless there's something else there that drags it to the
next level and starts integrating it, it becomes the flavor
of the month."
A casual reader
of the business pages could
pinpoint the source of Walmart's hesitation. From 2009 to
suffered seven straight quarters of declining sales in
its US stores, a historic slump blamed on anemic job growth,
weak demand, and high gas prices. Walmart responded by
unveiling "It's Back," a plan to reclaim its original,
bargain-seeking customer base by restocking 8,500 down-home
products it had axed in an effort to declutter its shelves
and class up its image. It also revived the popular "Action
Alley," steeply discounted pallets of merchandise stacked up
in the middle of the aisles. "It's Back" left suppliers and
environmental partners wondering if this doubling-down on
its crusade to be the cheapest retailer around might come at
the expense of sustainability.
One insider who watched this unfold was
Michelle Mauthe Harvey, an expert and EDF staffer. In 2007,
Harvey opened EDF's office in Bentonville, the Ozark country
town that is home to Walmart's headquarters. Bentonville was
the site of
Sam Walton's first store, a five-and-dime that opened in
1951. In the decades that followed, Walmart transformed the
town into a thriving international business hub. At least
750 companies that do business with Walmart have offices in
the area, from Procter & Gamble to Levi Strauss to
DreamWorks. Cushy subdivisions ring the town, and both the
median household income and average home value easily
outpace the state average.
On a blisteringly hot summer day last
June, I met Harvey over brisket and sweet tea at Whole Hog
Café, a barbecue joint near the Walmart headquarters. Harvey
is embedded inside Walmart, attending internal meetings and
interacting with key players. She lauded Walmart for its
ambitious goals but winced when I brought up "It's Back" and
what it meant for sustainability. She said this roll-back
initiative led some suppliers to think Walmart was stalling
on sustainability as it grappled with slumping sales.
"What's been concerning to us is the number of people who
contact us and say, 'Is Walmart still interested in
sustainability?'" She added, "There are still those [inside
Walmart] who fall into the annoyed camp, who aren't entirely
sure it's really necessary."
Consider Walmart's buyers, Harvey said,
the people who negotiate with suppliers and help decide what
makes it onto Walmart's shelves. If Walmart's sustainability
ideal was to become reality, it needed to become part of
buyers' day-to-day decision making, a criterion on which
they were evaluated. For instance, would the buyers be
encouraged to choose a T-shirt that costs a half cent more
apiece because it used safer chemicals or was dyed at an
environmentally friendly mill? When Walmart embraces that
notion, Harvey said, "that's when sustainability is really
"Is it there yet?" I asked.
"It's not there yet."
After nearly a year of my asking for an
interview with a company official in Bentonville about the
sustainability program, Walmart finally put me in touch with
Jim Stanway, a rumpled-looking Brit who worked in the energy
sector before joining Walmart in the late '90s to help trim
its energy bills. We met in a small conference room at the
Sam Walton Development Center, accompanied by a Walmart
flack who took notes throughout the interview.
A man who admits he's "morbidly attracted
by complexity," Stanway was Walmart's point man in working
with the Carbon Disclosure Project to calculate that
Walmart's carbon footprint was greater than that of many
industrialized countries. Stanway is now leading the
campaign to cut 20 million metric tons of greenhouse gas
emissions from Walmart's supply chain by 2015.
Stanway rattled off his success stories,
including uniting the fractious dairy industry behind using
low-carbon cattle feed and methane digesters and selling
Hollywood on the virtues of slimmer DVD packaging. A little
plastic here, some cardboard there, and you're talking
millions of dollars in savings. Not only did suppliers see
their costs shrink, so did customers. "We want to show
things where we can deliver customer value on price and
quality, and lower costs for suppliers," Stanway said.
I'd hoped to ask Stanway about China, but
the flack, who insisted on vetting all interview questions
days beforehand, ruled out those questions, routing them to
Walmart China. Despite four more requests, I never heard
is a sharp-witted, veteran scientist and director of the
public health program at the Natural Resources Defense
Council. She spoke to me about a program she started in 2007
"Clean by Design," which has brought together companies
like Walmart, Gap, Nike, and H&M to develop a set of best
practices for Chinese dye and finishing mills, one of the
most energy-intensive sectors in the apparel industry.
Greer told me in 2010 that she'd turned to
Walmart and other private companies for lack of other
options. "We really couldn't count on the Chinese
environmental department to even come close to catching up
on this in my lifetime," she said. "The private sector
stands alone, being the only functioning additional party
over there." She was no Walmart cheerleader but believed the
company was making a sincere effort. "They've made a lot of
ambitious promises, many of which were maybe naive in terms
of how hard they are to implement."
But when I checked in with her again last
fall, her guarded optimism had given way to discouragement.
She and her team had spent a year and a half assembling 10
best practices to reduce water, chemical, and energy use at
the mills; their suggested repairs and upgrades paid for
themselves in eight months' time and, in some cases, saved
energy use by 25 to 30 percent. The next step was putting
the guidelines into practice, showcasing their benefits to
lure other mills into the program. She asked the corporate
partners for the names of four or five mills. Nike, Gap, and
the others came through. Walmart gave her only one viable
Greer was bitterly disappointed. "They're
not even up at the plate swinging at those balls," she told
me. (Walmart says it "continues to believe in—and promote"
Greer's program but gave no specifics as to how.)
In October 2005, Walmart
announced plans to transform itself into one of the greenest
corporations in the world. Then-CEO Lee Scott
called sustainability "essential to our future success as a
retailer." The company has been especially vocal about shrinking its
environmental footprint in China, its manufacturing hub. But do the
facts on the ground match Walmart's rhetoric? This was the question
that had brought me to Mr. Ou.
dragged on his cigarette, mulling my questions. "Okay," he finally
said. "I will tell you what you want to know."
He was 33 years old and came from a manufacturing
family. His parents ran a factory making packaging for barbecue
grills and then, in 1994, began producing the grills themselves. By
2004, when Mr. Ou took over from his parents, Walmart was a major
customer. In 2008, Mr. Ou signed his operation up as one of 200
plants whose energy efficiency Walmart would seek to increase by 20
An energy efficiency consultant who also works with
Walmart (and requested anonymity; I'll call him Martin) echoed those
observations. He said there was overwhelming support for Walmart to
succeed in China, given the ripple effect that would have in Chinese
commerce. Yet 2011, he told me, was widely seen as a disappointing year.
"The word on the street in China is: 'Where is Walmart?'" he said.
"Because we haven't seen them continue to move forward in 2011."
Martin brought up a major Walmart supplier, a network
of factories making name-brand products. (He asked that I not reveal the
brand, but it's a household name.) Like Mr. Ou once did, this supplier
submitted scorecards on energy and water use to Walmart. The retailer's
response: silence. Martin said the supplier admitted to him that the
data was "total crap," but it never heard from Walmart one way or
another. Martin summed up the supplier's attitude toward Walmart
scorecards like this: "Walmart sets a new target, everybody gets all
excited, runs around for six months, and then everything kind of slows
down and the wheels fall off."
Eight months after my first conversation with Terry
Foecke, I caught up with him again in Minnesota. Seeing little appetite
from Walmart to expand the factory efficiency program, he'd ditched it
to start his own energy consulting business. Foecke sounded more
befuddled than bitter—he'd always seen Walmart's factory project as a
small but important first step. "It was key that they expand the
program—that's what we put on the table" in the beginning, he said.
"Until they're willing to do that, it's not quite greenwashing, but it's
Mr. Ou witnessed the demise of Foecke's program
firsthand. When I reconnected with him last winter, he said Walmart had
stopped asking him for reports on Juniu's energy usage. No one told him
why. As far as he could tell, Walmart had canceled the program. Mr. Ou
said he'd not lost his appetite for energy efficiency but admitted it
was more difficult to make progress without Walmart's pressure and
expertise. "I spent a lot of time and energy," he said. "It really is a
pity that Walmart stopped the program." (Walmart says it's still
finishing the pilot phase of the program.)
If there is any silver lining to Walmart's wavering on
sustainability in China, it's that other major retailers have made
significant progress. Foecke's current clients include IKEA and Levi's,
companies that he said took a different approach to suppliers, building
more durable relationships. It wasn't a perfect model—IKEA has issues
with shadow factories, too—but he was allowed to walk into factories,
suggest changes, and speed up the sustainability process.
Foecke still credits Walmart for nudging other
companies, and he told me he would work with them again. But he remained
somewhat discouraged by what he'd seen. "I really do think they're very
distracted by the weakening economy, and they don't want to spend any
money on anything right now," he told me.
The NRDC's Greer said Walmart's partners had every
right to be critical of the company. "I would say we, the environmental
community, have been enormously patient...We've not only been patiently
waiting, we've been actively helping." She went on, "At this point, we
don't see that they're trying." When Walmart fell short on her Chinese
mill program as part of its goal to cut 20 million metric tons of
greenhouse gas emissions from its supply chain, she says, "I thought,
'There they go again.' It breeds cynicism. Is this just a PR effort, or
is this something they're serious about?"
stream of headlines about the widening gap between rich and poor for
months now, but this is pretty remarkable: Just six members of the
Walton family, heirs to the Walmart fortune, possess wealth equal to
that of the entire bottom 30 percent of Americans.
That’s according to a new
analysis by Sylvia Allegretto, a labor economist at the University
of California at Berkeley’s Center on Wage and Employment Dynamics.
The calculation is based on data from 2007, the most
recent round of the Federal Reserve Board’s Survey of Consumer Finances,
measures the net worth of Americans. (The extensive survey is
performed once every three years, and the 2010 edition is expected to be
released next year.)
Allegretto then compared those numbers to the net
worth of the six members of the Walton clan as reported on the Forbes
400 list in 2007. They are all children or children-in-law of the
founders of Walmart. Their total net worth that year: $69.7 billion.
That’s equal to the wealth of the poorest 30 percent
of all Americans, according to Allegretto’s calculations.
One of those Waltons, by the way, is Alice, whose
effort to create a world-class museum in Arkansas by purchasing hundreds
of millions of dollars of art was recently
profiled in the New Yorker. More information on the other Waltons is
Any epoch of capitalism allegedly premised on competition is visible
only from the rearview mirror. It is a leftist truism that in the
process of competition, capitalism destroys competition. Competition,
therefore, is transformed into its opposite: monopoly. Capitalism no
longer survives by enlarging competition, but rather through its
The supreme outcome of the contemporary globalization of monopoly
capital has been an amplification of world exploitation, poverty rates,
wealth disparities, and food insecurities. Since the mid-1970s the rate
of world growth has stalled by nearly 70%. And one consequence of
decelerating rates of growth has been a turn to financialization since
about 1980 by giant firms unable to find sufficient high return
investment outlets in production. Large corporations gradually began to
rely on speculative investments made possible by highly leveraged assets
and as a result have fomented financial crises of unfathomable
proportions at a time when state systems everywhere are increasingly
subject to the vagaries of the “market” and are forced to subsidize the
failures of corporate capitalism through taxpayer sponsored “bailouts.”
Leaders at national, regional, and municipal levels have begun to
ameliorate the resulting fiscal crises by disinvesting in social
services and creating more regressive tax systems, thereby intensifying
the effective level of exploitation. Hence, the internationalization of
monopoly capital, rather than contributing to the stabilization of
global systems, is aggrandizing crises in both the scarcely indistinct
private and public sectors.
Inequality, in all its repugnance, has become deeper and more
entrenched. Today the richest 2% of adult individuals own more than half
of global wealth, with the richest 1% accounting for 40% of total global
assets. Although the gap in per capita income between the richest and
poorest regions of the world fell from 15:1 to 13:1during the golden age
of Keynesianism, it increased by 19:1 by 2002. And from 1970 to 2009 the
per capita GDP of developing countries (excluding China) averaged a mere
6.3% of the per capita GDP of the G8 countries (the United States,
Japan, Germany, France, the United Kingdom, Italy, Canada, and Russia).
The opening decade of the twenty-first century has seen surges of food
crises, with hundreds of millions of people chronically food-deprived,
in an era of rising food prices and widespread speculation. In a report
released last week by The World Hunger Organization 17.2 million U.S.
households were food insecure in 2010, the highest level on record, as
the Great Recession continues to wreak havoc on families across the
country. On a global scale, the World Bank reports that over half the
global population lives on less than $2.50 per day and over 800 million
people go hungry daily. And according to UNICEF nearly 8 million human
beings died in 2010 because they were simply too poor to stay alive.
Meanwhile, the U.N. reported in 2005 that the richest 500 people in the
world earned more than the poorest 416 million. According to the same
report the richest 350 people in the world own assets commensurable to
more than 50% of the world’s population. And finally, according to a
1998 UN Development Report the wealthiest 15 people on the planet have
assets that exceed the total annual income equal to the poorest 98% of
those living on the African continent.
The transcendent irony of the internationalization of monopoly capital
is that this entire thrust toward monopolistic multinational-corporate
development has been justified at every turn by a neoliberal ideology
rooted in the vaulted rhetoric of “free market” competition. Claims like
these are specious to the point of logical cruelty.
For example, if Wal-Mart were a country— according to a June, 2011
Report issued by Business Insider— its revenues would exceed the GDP
Norway, the 25th largest economy in the world. In less than three
minutes Business Insider debunks the mythology of free-market
ideologues: Yahoo is bigger than Mongolia, Visa is bigger than Zimbabwe,
Nike is bigger than Paraguay, McDonalds is bigger than Latvia,
Amazon.com is bigger than Kenya, Apple is bigger than Ecuador, Ford is
bigger than Morocco, Bank of America is bigger than Vietnam, General
Electric is bigger than New Zealand, Chevron is bigger than the Czech
Republic, and Exxon- Mobil is bigger than Thailand. The monopolization
of big business is endemic to capitalism. And the monopolization of
capitalism produces corporatism. And corporatism bastardizes any
prospect of establishing accessible and accountable democratic
institutions and practices.
Take, for instance, the unrivaled monopolization of the U.S. financial
sector. In 1990, the ten largest domestic financial institutions held
only 10% of total financial assets. Today they own 70%. (Former U.S.
Secretary of Labor asks “how else could we explain their apparent
coordination on charging debit card fees?”) The largest five U.S. banks
now hold $11 trillion in assets. Big banks ought to be partitioned (or
destroyed). Perhaps we could learn from the Sherman Antitrust Act of
1890, a piece of legislation designed not only to encourage economic
efficiency by reducing the market power of economic giants like
railroads companies but also to thwart companies from becoming so large
that their political power would undermine the democratic process.
The “capitalist” aspiration is ultimately one of irreducible
self-annihilation. Corporate capitalists consecrate and condemn
competition in the same breath and in so doing mistake mirrors for
windows, growth for progress, and competition for contradiction.
This article was published at NationofChange at: http://www.nationofchange.org/wal-mart-larger-norway-exposing-myth-capital-competition-1322835390.
All rights are reserved
In a push to expand across California without interference,
Wal-Mart is increasingly taking advantage of the state’s
initiative system to threaten elected officials with costly
special elections and to avoid environmental lawsuits.
The Arkansas-based retailer has hired paid
signature gatherers to circulate petitions to build new
superstores or repeal local restrictions on big-box stores.
Once 15 percent of eligible voters sign the petitions, state
election law puts cash-strapped cities in a bind: City
councils must either approve the Wal-Mart-drafted measure
without changes or put it to a special election.
As local officials grapple with whether to
spend tens of thousands or even millions of taxpayer dollars
on such an election, Wal-Mart urges cities to approve the
petition outright rather than send it to voters.
While most development projects don’t
attract much controversy, Wal-Mart has become a lightning
everywhere it goes in California. Backers of organized
labor have demonized the company for opposing unions and
paying low wages, while other critics say its superstores
cripple local businesses and increase sprawl.
Now, Wal-Mart’s use of the initiative
process has angered elected officials who say the company’s
political strategy effectively holds them hostage.
“They circumvented the system and
blackmailed the town,” said Rick Roelle, a councilman in
Apple Valley, where Wal-Mart pushed through a superstore
proposal in April. “We’ve had controversial projects, but we
were never bullied like Wal-Mart.”
Wal-Mart and its supporters argue that the
strategy helps speed up development that can boost
employment and tax revenue, as well as low-price shopping.
The initiative process, according to the company, pressures
cities only because it shows the strong community support
“The initiative process was an opportunity
that allowed voters to voice their support for the benefits
that Wal-Mart would bring their community, including jobs,
affordable groceries, increased tax revenue, and
infrastructure improvements,” Wal-Mart spokeswoman Delia
Garcia said in a statement.
The company has employed the same
well-honed strategy across the state, from the Central
Valley agricultural community of Kerman to the Silicon
Valley suburb of Milpitas to the High Desert town of Apple
Valley, where the main street has a special crosswalk button
for horse riders.
Wal-Mart has ramped up the campaign in the
last year, pushing through four new superstore projects and
fighting big-box regulations in San Diego. The company
spent $2 million on the effort, paying election lawyers,
campaign consultants and public relations firms.
Wal-Mart often rallies a crowd of
supporters at city council meetings to back up its position.
Pastor Ray Smith, president of a group called Pastors on
Point, asked his followers to support Wal-Mart in San Diego.
He spoke passionately against an ordinance imposing new
regulations on superstores, saying other stores don’t hire
enough African Americans.
At one city meeting, he called on a group
of young people to stand and told the city council, “You
want to stop the violence? We need jobs.”
Wal-Mart paid Smith’s church to bus
supporters to council meetings and shuttle young people who
gathered signatures for a ballot initiative petition against
the regulations. Wal-Mart’s local political committee also
paying $13,400 in salary and consultant payments to
Smith directly, in addition to $5,500 labeled “van/bus
Smith said the campaign filings were
incorrect. “They did rent our buses … but I was never a
consultant for them,” he said.
Wal-Mart uses the ballot initiative
process in part to shield its superstores from lawsuits
California Environmental Quality Act. The landmark 1970
law requires state and local agencies to review and mitigate
the environmental and traffic impacts of development
projects. Lawyers often sue Wal-Mart, contending that the
review didn’t go far enough.
The company has found a loophole: Once it
switches to a ballot initiative, the law doesn’t apply.
Other companies occasionally pursue ballot
initiatives on development projects. But Wal-Mart is the
main player, and California is the main battleground.
Wal-Mart’s successful strategy raises
questions about whether California’s communities – dogged by
economic woes – can afford an aggressive use of the state’s
system of direct democracy. Other interest groups could use
the same strategy to pressure elected officials, as medical
marijuana advocates recently did to defeat pot club
regulations in San Diego.
This year, four cities approved Wal-Mart’s
initiative petition without an election. One of them, San
Diego, repealed its own superstore regulations in the face
of an election that could have cost $3.4 million. Only
Menifee in Riverside County held a special election, costing
taxpayers $79,000. Wal-Mart spent nearly $400,000 there −
and won handily.
The strategy violates the spirit, if not
the letter, of state environmental law, said Richard Frank,
former California chief deputy attorney general for legal
“It is disturbing because it appears to be
a fairly overt circumvention of the CEQA process,” said
Frank, now director of the California Environmental Law &
Policy Center at the UC Davis School of Law.
Wal-Mart argues that it closely adheres to
California’s extensive regulations. The strategy is
necessary, it says, to avoid spurious lawsuits targeting the
company for political reasons. The retailer points out that
it goes much of the way through a lengthy planning process,
allowing for an environmental impact report and public
input, before heading to the ballot box.
“In many places around the state,” Garcia
said, “we often obtain store approvals but are subjected to
special interests that attempt to use political and legal
challenges to unfairly delay a store’s construction.”
Ironically, since the 1990s, activists
often have used ballot initiatives to block Wal-Mart stores.
Wal-Mart turned that strategy on its head
when it began proposing its own initiatives. The company
suffered a sobering,
nationally publicized loss in Inglewood in 2004. The
company spent more than $1 million on a ballot measure to
open a superstore there. Unions fought back, and voters shot
But Wal-Mart hasn’t lost in California
In 2007, Wal-Mart used the initiative process
to force Long Beach to repeal an ordinance banning certain
superstores that sell groceries. The council, facing tough
budgetary times, decided the city couldn’t afford an
election, giving in to the company. In 2009, Wal-Mart
defeated a big-box ban in Salinas the same way.
Last year, city councils approved Wal-Mart
superstore initiatives without an election in the small Gold
Country city of Sonora and the Mojave Desert military base
community of Ridgecrest. This year, with five victories, has
been Wal-Mart’s busiest.
Wal-Mart continues to see a big
opportunity for growth in California. The company already
212 stores and employs 67,525 people in the state.
Proposals start with planning
On the road to a superstore ballot
initiative, Wal-Mart starts out following the normal
process: The local planning commission reviews the company’s
detailed plans to address traffic and environmental impacts.
Once the planning commission approves the project, lawyers
working for environmental or other anti-Wal-Mart interests
often challenge the decision, setting the stage for a
But before the city council gets a chance
to weigh in, Wal-Mart pulls its proposal and starts
circulating an initiative petition detailing the same
To Wal-Mart’s supporters, the planning
commission’s public hearings and stamp of approval provide
sufficient oversight. Some planning experts, however, argue
that the city council’s review is an important part of the
process. Councils normally can make their approval of big
development projects conditional on certain changes, like
requiring developers to widen a road for additional traffic
or help pay for a nearby public park.
In Fresno County, Kerman Councilman Doug
Wilcox, for example, wanted to weigh in on whether students
at a nearby school were sufficiently protected from
increased Wal-Mart traffic. The company’s strategy didn’t
give him the opportunity.
“The strong-arm tactics and the way that
they did it just left a bad taste in my mouth,” Wilcox said.
The city manager, on the other hand,
argued in a strongly worded report to city council that the
project had been rigorously reviewed, exceeded standards and
would provide hundreds of thousands of dollars in tax
revenue. The report opposed holding a special election,
which it said, “could be viewed as simply a tactic to delay
the project and reject the will of the citizens of Kerman.”
Other city officials blame Wal-Mart’s
tactics on the handful of lawyers who routinely sue over
big-box projects using the California Environmental Quality
Act. They believe the lawyers are abusing the environmental
regulations and blocking economic growth with frivolous
The lawyers maintain their claims have
merit, pointing to court victories against Wal-Mart and
settlements under which the company agreed to make
Wal-Mart points to a
news report by the Wall Street Journal last year that
Safeway Inc. hired Massachusetts-based The Saint Consulting
Group to run anti-Wal-Mart efforts throughout California. A
Saint spokesman said the firm never sued Wal-Mart directly
but declined to say whether Saint financially backed
lawsuits. Wal-Mart tried to determine whether Saint was
behind any California lawsuits, but hasn’t been able to
identify any cases.
Either way, the legal wrangling takes
time, and to Wal-Mart and its supporters, the initiative
strategy is an effective and legitimate way to cut through
“I’m upset that there’s circumstances in
California that would make it necessary to do that,” said
Apple Valley Mayor Scott Nassif. “They’ve got a target on
their back, apparently, so that’s just the reality of
For each initiative, Wal-Mart creates and
funds a political committee with
the city’s name, like it did with Apple Valley Consumers
for Choice. The company relies on a stable of prominent
firms to handle legal filings and communications strategies.
The company looks for a local resident to
formally propose the initiative. Attila Csikos offered to be
that person in Menifee, a recently incorporated city whose
growth has been driven by master planned communities. Csikos
said he likes Wal-Mart’s low prices and supports the
“It should be up to the will of the
people, not the regulations of a city council,” he said.
which can run longer than 60 pages, create special
development rules for a specific area allowing for a
superstore. They include language that bars appeals for
future administrative approvals.
National Petition Management,
which often handles Wal-Mart’s signature drives, works fast.
In Milpitas, near San Jose, Councilwoman Althea Polanski was
impressed that Wal-Mart garnered 6,000 signatures in 16
days. The county registrar found that 3,745 signatures were
valid, more than 15 percent of Milpitas’ 24,000 registered
“That speaks very, very clearly to me that
a majority of the people in this city want an expanded
Wal-Mart,” Polanski said at an April council meeting.
If the petition is signed by 10 percent of
registered voters, it can go on the next regularly scheduled
ballot. Fifteen percent triggers a special election that
must be held between 88 and 103 days later, which can be
much more costly. In Milpitas, it would have cost $436,000.
The only other option is to approve the
initiative as Wal-Mart wrote it.
Councilwoman Debbie Giordano originally
supported Wal-Mart but was alarmed by the initiative
strategy. She worried it could be used by other activists to
open marijuana dispensaries.
“I think that’s a dangerous formula for
government,” Giordano said. “What does that say? Go use your
money and your power, go get the signatures, and then we’re
going to force you to do whatever.”
Giordano’s fear already has been realized
in San Diego. On the heels of a successful Wal-Mart effort
there, a group of medical marijuana supporters brought a
ballot initiative to repeal regulations on pot clubs.
Putting it on the next ballot would have cost up to
$841,000. The council repealed its own marijuana ordinance,
as council members bemoaned the costs of an election.
Money plays critical role
Sometimes, council members ask Wal-Mart to
pay for the election. This year in the Bay Area city of
Pittsburg, for example, another developer offered to pay for
the election costs of its ballot initiative. But Wal-Mart
“We are not embarrassed by our decision to
move to an initiative and to allow the electorate to
overwhelmingly weigh in, but we are not prepared to cover
any costs for an election,” Wal-Mart spokesman Aaron Rios
said at an Apple Valley Town Council meeting in April.
Rios pointed out the council could avoid
an election by approving the petition and asked his
supporters in the audience if they supported that, eliciting
Apple Valley Mayor pro tem Barb Stanton, a
Tea Party Patriot member who told the audience “most all of
us love Wal-Mart,” was surprised to hear the company
“It’s your initiative, your process, and
to bend us over for 180 − excuse me that term, but I mean,
come on, $180,000 is a lot of money, and it’s just wrong,”
Stanton said to Rios. “I’m fully in favor of going to the
ballot, but at your cost.”
“And again,” Rios responded, “we’re not
prepared to accept that cost.”
In the end, the council voted to approve
Wal-Mart’s petition outright. Councils in Milpitas and
Kerman did the same thing.
Wal-Mart’s Rios had urged the Menifee City
Council to avoid a vote as well. But a split council opted
to pay for a special election. Wal-Mart spent $397,000 on
its political effort there. There was no official
opposition. About 11,000 people voted, and Wal-Mart won 76
percent of the vote.
Cory Briggs and Brett Jolley, the same
lawyers who challenged Wal-Mart’s projects, are now suing
Apple Valley, Menifee,
Milpitas and Sonora over the company’s use of the
“It’s allowing a very small percentage of
registered voters to essentially hijack the local land use
process,” Jolley said. “A concept that is designed to allow
the citizenry to have the ultimate say in legislative
matters is really now being abused to keep the citizenry out
of the process altogether.”
Jolley, who doesn’t disclose who finances
his lawsuits, represents community groups like the
Milpitas Coalition for a Better Community. Briggs, who
represents a group called Citizens for Responsible Equitable
Environmental Development, or CREED-21, said he works on a
Wal-Mart handles legal costs for the
cities, as required by a provision in the superstore
n San Diego, Wal-Mart’s initiative battle
was not over a specific superstore, but rather an ordinance
requiring an economic impact study for new big-box stores.
The regulation was favored by unions and strongly opposed by
Wal-Mart drafted a petition to repeal the
ordinance. It needed signatures from 5 percent of registered
voters to force a special election.
In all, Wal-Mart spent more than $1
million on campaign consultants, mailings and advertising on
the political effort in San Diego. National Petition
Management collected nearly 54,000 signatures in 18 days,
forcing either a repeal or a special election that could
have cost taxpayers up to $3.4 million.
In February, council members – including
Todd Gloria, the ordinance’s main proponent – overwhelmingly
voted to repeal the big-box regulations. With the city
facing a budget deficit, Gloria said he had to worry about
keeping libraries open, not spending on special elections.
SAN FRANCISCO, Oct 27 (Reuters) - Women pursuing
discrimination claims against Wal-Mart filed a reformulated lawsuit
before a San Francisco federal court on Thursday, alleging the world's
largest retailer treats its female workers in California unfairly.
The revised lawsuit follows a reversal by the U.S.
Supreme Court in June of a decision by the 9th Circuit Court of Appeals,
which had upheld a 2004 certification of a nationwide class of up to 1.5
million current and former Wal-Mart workers.
The Supreme Court had split, 5-4, on whether the
female employees, in different jobs and with different supervisors at
3,400 stores, had enough in common to be lumped together in a single
class-action lawsuit. The majority concluded that the plaintiffs had not
met the threshold to justify their certification as a class under Rule
23(a)(2) of the Federal Rules of Civil Procedure, which demands a
showing of "questions of law or fact common to the class."
In the revised lawsuit, the plaintiffs narrowed their
proposed class along geographic lines. The plaintiffs' complaint seeks
certification for a class that has suffered discrimination as current or
former Wal-Mart employees in California.
Wal-Mart attorney Theodore Boutrous Jr. said the
plaintiffs' arguments still rely on the same theories that the Supreme
Court rejected. "These lawyers seem more intent on alleging classes for
their publicity value than their legal virtue," Boutrous said in a
The revised complaint requests certification of
injunctive and monetary relief classes under different provisions of the
federal rules. Certification for a class seeking injunctive relief is
sought under Rule 23(b)(2), whereas certification for those seeking
monetary relief is sought under Rule 23(b)(3). In their prior
complaints, certification was sought jointly under both rules. The
complaint estimates that there are more than 45,000 women in each of the
injunctive and monetary classes.
In its decision in June, the Supreme Court held
unanimously that the appeals court had erroneously upheld certification
of the plaintiffs' claims for monetary relief in the form of back pay
under Rule 23(b)(2).
The Supreme Court found that the rule provides the
basis for certification "only when a single injunction or declaratory
judgment would provide relief to each member of the class." In the case
of back pay, the court explained, each member of the class "would be
entitled to an individualized award of monetary damages." As a result,
the court concluded that certification under Rule 23(b)(2) was
The case, in U.S. District Court, Northern District of
California, is Betty Dukes et al v. Wal-Mart Stores Inc, 01-2252.
For the plaintiffs: Brad Seligman and Jocelyn Larkin
of the Impact Fund and Joseph Sellers, Christine Webber and Jenny Yang
of Cohen Milstein Sellers & Toll.
For Wal-Mart: Frederick Brown, Mark Perry, Michele
Maryott, Rachel Brass, Theane Kapur and Theodore Boutrous of Gibson Dunn
(Reporting by Dan Levine and Poornima Gupta;
additional reporting by Rebecca Hamilton in New York)
After trying to mollify its critics
in recent years by offering better health care benefits to its
Wal-Mart is substantially rolling back coverage for part-time
workers and significantly raising premiums for many full-time staff.
Citing rising costs, Wal-Mart, the nation’s largest
private employer, told its employees this week that all future part-time
employees who work less than 24 hours a week on average will no longer
qualify for any of the company’s
health insurance plans.
In addition, any new employees who average 24 hours to
33 hours a week will no longer be able to include a spouse as part of
their health care plan, although children can still be covered.
This is a big shift from just a few years ago when
Wal-Mart expanded coverage for employees and their families after facing
criticism because so many of its 1.4 million workers could not afford or
did not qualify for coverage — rendering many of them eligible for
Under pressure from states saddled with rising
Medicaid costs and from labor unions and community groups, Wal-Mart had
agreed to offer part-time employees, even those averaging less than 24
hours a week, health care insurance after a year on the job, shaving a
year off the eligibility requirement. Wal-Mart also said that it was
offering health plans that cost its employees about $250 a year for
At the time, the moves were considered a departure
from some of its major rivals and large employers, more than half of
whom offer no company-sponsored health plan for part-time workers.
On Thursday, the company would not say what percentage
of its work force was part time or worked fewer than 24 hours a week.
Greg Rossiter, a Wal-Mart spokesman, said the decision to deny coverage
to new part-time employees resulted from the company’s revamping of its
health care offerings in light of rising costs.
“Over the last few years, we’ve all seen our health
care rates increase and it’s probably not a surprise that this year will
be no different,” Mr. Rossiter said. “We made the difficult decision to
raise rates that will affect our associates’ medical costs. The
decisions made were not easy, but they strike a balance between managing
costs and providing quality care and coverage.”
The company said the changes were not a result of the
federal health care law. But the higher rates along with steep
spikes in premiums for other plans this year are likely to stoke the
national debate over the year-old legislation that has pitted President
Obama and Democrats against Republicans opposed to the changes.
Challenges to the law by several states are now before the Supreme
These moves are also occurring in a postrecession
period when Wal-Mart has been struggling to regain its footing after
months of disappointing or flat sales. And with unemployment still
hovering around 9 percent, employers may feel less compelled to offer
expansive benefits to people desperate for work.
Nationwide, employer-sponsored health premiums are up
9 percent, and increases of 5 percent or more are predicted for next
year, with workers shouldering higher burdens on premiums and
In 2009, Wal-Mart said 52 percent of its employees
obtained health coverage through it, but on Thursday it declined to give
Documents on Wal-Mart’s health and other benefit
offerings were obtained by The New York Times from the Organization
United for Respect at Walmart, a union-backed group of Wal-Mart
employees that is seeking to pressure the company to improve wages and
In Wal-Mart’s 2012 health offerings, premiums will
increase for some plans by more than 40 percent, although many of their
workers pay relatively low premiums in comparison to more generous plans
offered by other employers. But many Wal-Mart employees complain that
their low premiums are accompanied by high deductibles that sometimes
exceed 20 percent of their annual pay.
Wal-Mart’s new health offerings will require many
employees who smoke to pay a significant penalty. They will be required
to pay an extra $10 to $90 each pay period — $260 to $2,340 a year — if
they want health coverage.
Several other large employers have begun charging
higher premiums to employees who smoke, according to Mercer, a benefits
consulting firm. Among the largest employers, about 28 percent vary
their premiums based on
Mr. Rossiter defended the penalty for smokers, saying,
“Tobacco users generally consume about 25 percent more health care
services than nontobacco users.”
In its health care brochures, Wal-Mart told its
employees that diseases caused by tobacco result in $96 billion in extra
health care costs nationwide. And it noted that some other prominent
companies, including Home Depot, Macy’s and PepsiCo, charge smokers more
as part of their health plans.
Tammy Yancey, a $9.50-an-hour gas
attendant at a Sam’s Club in Pinellas Park , Fla., complained that she
would no longer be able to afford health insurance from the company. Ms.
Yancey, a smoker, said her premiums would jump to $127.90 every two
weeks — or $3,325 a year — up from $53.80 at present, when she earns
$12,000 a year from her job.
“I won’t be able to afford the insurance,” she said.
“And I really can’t go without insurance because I have a heart
Dan Schlademan, director of Making Change at Walmart,
a union-backed campaign, condemned the changes.
“No wonder people are protesting in the streets,” he
said. “This is another example of corporations putting profits ahead of
what’s good for everyday Americans. It’s outrageous and damaging to many
hard-working families that the biggest corporation in America is
increasing health care costs for many employees by 40 percent.”
Wal-Mart says that its health care plans are
affordable and competitive compared with those of its competitors. “We
are proud to be among a few companies that continue to offer an
affordable associate-only medical option for about a dollar per day or
$15 per pay period,” Mr. Rossiter said. He noted that many companies
offer health plans that start at $75 a week or more for each two-week
Companies frequently do not offer coverage to
part-time workers. About 42 percent of large employers offer benefits to
part-time employers, according to the 2011 survey by the Kaiser Family
Foundation, which tracks changes in benefits. And some of Wal-Mart’s
competitors, like Home Depot, do not offer their part-time workers the
same health plans they offer full-time workers. Instead, those employees
can enroll in plans that sharply limit the amount of coverage.
Wal-Mart also significantly reduced the amount of
money it contributes to the savings accounts workers can use to pay for
medical bills that are not covered under their plan. Last year, the
company put $1,000 into accounts for families but it will cut the amount
by half for next year to just $500. Companies typically put more money
into these accounts as a way of encouraging employees to choose these
plans, which cost employers less than traditional policies.
While Wal-Mart defends its decision to reduce these
contributions, few companies have made similar cuts, according to
Mercer. Companies are continuing to try to do what they can to encourage
employees to enroll in these plans, said Beth Umland, who oversees the
company’s benefits research.
Barbara Collins, a sales associate at the Wal-Mart in
Placerville, Calif., said that the premiums for the H.M.O. plan for
herself and her 5-year-old son would rise to $18 every two weeks from
$10. Her big concern, she said, was that her deductible would jump to
$5,000 a year, from $1,000 — a daunting amount considering she earns
$19,000 a year. “I don’t know how I’ll be able to afford it if I go to a
doctor or to
physical therapy,” she said.
WASHINGTON -- Investigators in California have
discovered numerous labor law violations at a massive warehouse
handling Walmart goods, according to state officials.
At the warehouse in Riverside County, Calif.,
operated by Walmart contractor Schneider Logistics, inspectors
with the state labor department found that two of the temporary
staffing agencies who supply manual labor have not been keeping
track of how much money workers are owed.
One firm, Impact Logistics, Inc., was
issued a $499,000 fine for not providing itemized wage
statements to the workers who unload and load products at the
facility. The company was also issued a warning for failing to
maintain time records, and another staffing agency, Premier
Warehousing Ventures, was issued a similar warning. There are
around 200 workers at the warehouse.
A spokesman for Impact Logistics said in a
statement that the company is cooperating with the
investigation. "It is our utmost goal to be one hundred percent
complaint with the state's laws concerning wage requirements for
employees, and we consider our people to be our company's
Jim Pittman, chief operating officer of
Premier, said the company plans on proving that it was actually
in full compliance with the law. "My employees mean the world to
me," Pittman said. "It is our intent to abide by all of the
labor laws whether it be in California or the other states we
None of the workers in the warehouse are
employed directly by Walmart, but labor department officials
said the products inside were bound for Walmart stores. Dan
Fogleman, a Walmart spokesman, said the company has reached out
to Schneider to assess the situation.
"This facility is run by a third party, and
this is an issue involving some of their subcontractors,"
Fogleman said. "Although we're not involved in this matter, the
contracts we have in place with third parties require that they
follow the law, and that’s something we fully expect."
State Labor Commissioner Julie A. Su told
HuffPost that many workers were not given proper pay stubs, and
it appears that some may not have been paid for all the time
they worked. Although many workers have already been interviewed
on-site and off, she said the agency will be carrying out a
fuller investigation in the coming weeks.
Su added that the layers of subcontracting in
warehouse work can make it difficult to enforce labor law.
"Certainly that’s one of the challenges," she
said. "Warehouses are one example of the ever-increasing
contracting out of labor. It's difficult for enforcement, and in
many instances it's a deliberate effort to avoid compliance."
Wage and safety complaints are not uncommon in
American warehouses. The Morning Call recently
sweatshop-like conditions for workers toiling in an Amazon
distribution center in Pennsylvania. Workers there said the
supervisors refused to open bay doors citing the possibility of
employee theft, and the warehouse grew so hot on some days that
ambulances waited outside at the ready to treat workers for heat
Schneider, the Walmart contractor, was not
cited in the California inspection, since the workers are
employed directly by the labor staffing agencies and not by the
A Schneider spokeswoman told HuffPost in a
statement that the company has cooperated with the
investigation: "We expect the agencies we work with to comply
with all California and federal labor laws. We believe that we
are in full compliance with applicable laws and regulations. We
expect our vendors to fulfill their responsibilities as well."
The Riverside facility is one in a massive
network of warehouses in California's Inland Empire region. Many
of the facilities receive clothing, electronics and other dry
goods coming from China that are bound for retail stores
throughout the United States. Some of the country's biggest
retailers use warehouses in the area, but workers in the
warehouses are often employed through layers of subcontracting,
blurring the lines of accountability.
Sheheryar Kaoosji, research and policy
director at the worker advocacy group Warehouse Workers United,
told HuffPost that the allegations against the temp companies
operating in the Riverside facility are common in Inland Empire
warehouses. He said the mostly Latino workers are often hired on
a temporary basis and end up earning around the minimum wage.
Temp workers are more vulnerable to alleged
abuses than direct hires, he said, and many of them are paid
according to a confusing piece-rate schedule.
"Workers don't know how much they're being
paid -- they're not showed on their paychecks," Kaoosji said.
"Five or six years ago, there was a higher percentage of direct
hires. That's been slowly eroding. Every year there are more
people employed through the agency."
In addition to the Riverside facility,
Schneider Logistics operates an extensive Walmart distribution
center outside Chicago, Ill. Earlier this year, workers at that
filed a class-action lawsuit against Schneider accusing the
company of violating labor laws.
At the time, Robert Hines, who has worked on a
temporary basis in Chicago-area warehouses for years, told
HuffPost that he wasn't compensated for what was often grueling
work in the Schneider-operated facility.
"I noticed after a couple of weeks that my
checks didn't match my hours," said Hines, who claims he was
shorted on overtime as well. "People are breaking their backs,
trying to feed their families and be right."
Citing the California case, Su said that
without proper pay stubs it can be impossible for a worker to
know whether or not he's been paid appropriately.
"In this industry and others like it, this
example makes it very clear that the failure to provide a wage
statement is part and parcel of an effort to exploit workers,"
A group of Wal-Mart Stores employees seeking better
wages and working conditions marched on the retailer's headquarters but
said it was turned away without meeting with company officials.
BENTONVILLE, Ark. — A group of
Wal-Mart Stores employees seeking better wages and working
conditions marched on the retailer's headquarters Wednesday but said it
was turned away without meeting with company officials.
Around 100 members of Organization United for Respect
at Walmart (OUR Walmart) said they assembled so as to "offer solutions
for improving the company's ailing U.S. store operations," on the same
day of the company's annual investor conference.
The group, which formed a year ago, previously
gathered at Wal-Mart's annual meeting in June where it met with a
company representative. A spokesperson for the company was not
immediately available for comment Wednesday.
the US retailer, has been ordered to close seven stores in south-western
China after police detained a number of store managers following
allegations that employees labelled ordinary pork as organic.
The company would not say how many of its store managers in the city of
Chongqing had been detained but said it was co-operating with an
investigation by the Chongqing Administration of Industry and Commerce.
“We believe the closure has come about as a result of the recent
investigation in some of our stores in
Chongqing” due to the alllegations of mislabelled pork, Walmart said in
a statement. The stores are to remain closed for 14 days and would allow
it time “to focus on implementing corrective actions.”
Paul French, an analyst at Access Asia, a marketing consultancy in
Shanghai, said large retailers in China have been in trouble before for
mislabelling food products, particularly for selling food after its
sell-by date. But this was the first instance he knew of where a product
was passed off as organic when it was not, he said.
Following a scandal earlier this year involving a
toxic additive fed to pigs in China,
labelling a meat as organic would be a way of boosting sales, he said.
“The problem in China is we have no central [organic] certification
authorities,” Mr French said. “£1000 in an envelope will get you the
certificate you need.”
Huang Bo, head of the industry and commerce bureau, said Walmart had
been punished 21 times in Chongqing since 2006 for violations such as
false advertising and mislabelling products. In the latest episode,
Walmart was fined Rmb2.69m ($423,548), according to Xinhua, the official
Chinese news agency. The company declined to comment on the fine.
The company said it had sent staff to the south-western Chinese city
several days ago to work with the authorities.
Late last month, China’s Ministry of Agriculture said it had arrested
nearly 1,000 people involved in the manufacture and sale of the illegal
additive. China’s largest meat processing company earlier this year was
found to have sold pigs that had been fed the toxic additive clenbuterol
In January, Walmart and
were fined for overcharging on promotional items. After Walmart was
found to have misstated prices on promotional items at three stores, it
pledged to refund consumers five times the difference between the price
on the promotional label and the price at the cash register if the
incident was repeated.
Walmart’s annual sales in China are just $7.5bn – a fraction of its
global revenues of $420bn – but are growing at a double-digit pace. The
company has encountered difficulty translating the potential of the
market into financial reward, making its first profit in China in 2008,
12 years after entering the country.
The company has also had to deal with personnel changes. In May,
chief financial officer and chief operating officer in China both
citing personal reasons. The company declined to comment further on the
The Financial Times Limited 2011. You may share using our article tools.
In a August 16th news release from Wal-Mart corporate
headquarters in Bentonville, Arkansas, the Walton Family Foundation
announced investments totaling more than $71.8 million awarded to
various environmental initiatives in 2010, with over $36 million alone
handed over to Marine Conservation grantees including Ocean Conservancy,
Conservation International Foundation, Marine Stewardship Council, World
Wildlife Fund and Environmental Defense Fund (EDF).
The Recreational Fishing Alliance (RFA), a national
grassroots recreational fishing organization, on August 17 slammed the
Walton Family Foundation's contribution of $36 million to ocean
privatization efforts through "catch shares" programs and the creation
of so-called "marine protected areas."
The foundation, set up by the family who founded Wal-Mart, announced
this week "its efforts to help fund the demise of both the recreational
and commercial fishing industry while also working to ensure that the
next generation of sportsmen will have less access to coastal fish
stocks than at any point in U.S. history," according to a news release
In a August 16th news release from Wal-Mart corporate headquarters in
Bentonville, Arkansas, the Walton Family Foundation announced
"investments" totaling more than $71.8 million awarded to various
environmental initiatives in 2010. The foundation handed over $36
million alone to Marine Conservation grantees including Ocean
Conservancy, Conservation International Foundation, Marine Stewardship
Council, World Wildlife Fund and Environmental Defense Fund (EDF).
Critics of Wal-Mart, the largest retailer in the world, have blasted the
company for decades for being able to sell its products at cheap prices
only by employing sweatshops, undercutting competitors, wielding its
market power to cripple both competitors and suppliers, and flouting
national and international health, safety, labor, and environmental
standards. Anti-corporate globalization opponents have long regarded
Wal-Mart as a virtual "Darth Vader" of retailers, as documented in the
film, "The High Price of Low Cost." (http://www.youtube.com/watch?v=uJMYZwL8sPA).
Greenwashing Wal-Mart's image
However, in 2006 the retail giant hired Adam Werbach, former Sierra Club
president, to "polish" its image (http://reclaimdemocracy.org/walmart/2006/green_greenwashing.php).
This latest release is apparently part of a carefully orchestrated
campaign to greenwash its image - and extend control over public trust
According to the release, the Walton Family Foundation "focuses on
globally important marine areas and works with grantees and other
partners to create networks of effectively managed protected areas that
conserve key biological features, and ensure the sustainable utilization
of marine resources - especially fisheries - in a way that benefits both
nature and people."
"We focus our work in the United States' primary river systems and in
some of the world's most ecologically significant marine areas," said
Scott Burns, director of the foundation's Environment Focus Area and the
former director of marine conservation at the World Wildlife Fund. "It's
important to us to protect and conserve natural resources while also
recognizing the roles these waters play in the livelihoods of those who
The RFA countered that these specially managed areas of coastal waters
are also referred to as "marine protected areas" or "marine reserves,"
and the end result is denied angler access, of little or no benefit to
the very people whom Wal-Mart claims to benefit.
Marine protected areas without real protection
"A quick visit to the Ocean Conservancy website should be telling enough
for anglers interested in learning where Wal-Mart's profits are being
spent," said RFA executive director Jim Donofrio. "These folks are
pushing hard to complete California's network of exclusionary zones
throughout the entire length of coastline, and they've made it very
clear that they would like to see the West Coast version of the Marine
Life Protection Act (MLPA) extended into other coastal U.S. waters."
Grassroots environmentalists, fishermen, California Indian Tribes, civil
liberties activists and environmental justice advocates have criticized
Governor Arnold Schwarzenegger's Marine Life Protection Act (MLPA)
Initiative, privately funded by the shadowy Resources Legacy Fund
Foundation, for its numerous conflicts of interest, institutional racism
and the violation of numerous state, federal and international laws.
The so-called "marine protected areas" established under the MLPA
Initiative fail to protect the ocean from oil drilling and spills, water
pollution, wave and wind energy projects, military testing, corporate
aquaculture, habitat destruction and all other human impacts upon the
ocean other than fishing and gathering. In an extreme case of corporate
greenwashing, Catherine Reheis-Boyd, the president of the Western States
Petroleum Association, served as chair of the MLPA Blue Ribbon Task
Force that created these questionable "marine protected areas."
The release also said that targeted marine protected areas moving
forward include Indonesia, Colombia, Costa Rica, Ecuador, Panama, the
Gulf of California and the Gulf of Mexico. It will be interesting to see
if these marine protected areas, like California's MLPA Initiative, will
disrespect and fail to acknowledge the sovereign gathering rights of the
indigenous people of these countries and regions.
Will these marine protected areas be like the one imposed by the Mexican
government that denied members of the Cucapa Tribe the right to fish in
the Colorado River Delta, spurring the Zapatistas (EZLN) and the Tribe
to set up a "peace camp" from February to May 2007 to affirm their
sovereign rights? (http://www.counterpunch.org/bacher04212007.html)
Donofrio said of Ocean Conservancy in particular, "Here's an
organization which has publicly opposed creation of artificial reefs
used by Wal-Mart's tackle buyers, in some cases openly advocating for
their removal, yet the Walton family is handing over tons of money for
Wal-Mart boycott follows Safeway boycott
"Shopping for fishing equipment at Wal-Mart is contributing directly to
the demise of our sport, it's supporting lost fishing opportunities and
decreased coastal access for all Americans," Donofrio said. "I hope all
RFA members across the country will remember that when it's time to gear
up, but I would also wonder if perhaps our industry can help spread the
message and support our local tackle shops by also pulling product off
RFA in April announced its support of a national boycott of the Safeway
Supermarket chain, including Genuardi's in New Jersey, Pennsylvania and
Delaware, because of that corporation's support for California's
widely-contested MLPA initiative.
"Apparently Safeway has gotten some bad advice from the people in the
ocean protection racket, a community to which the California-based
mega-corporation is now donating profits," said Jim Martin, West Coast
Regional Director of the RFA. "Safeway says it is supporting groups that
make a difference like the Food Marketing Institute's Sustainable
Seafood Working Group, the Conservation Alliance for Seafood Solutions
and the World Wildlife Fund's Aquaculture Dialogues, but it's little
more than corporate greenwashing."
Donofrio believes it's time that Wal-Mart was added to the angler
boycott list as well.
"The Walton family created this huge corporate entity that has
threatened the vibrancy of our local retail outlets, and now they're
essentially doing the same thing with our fishing communities," Donofrio
"Much like Safeway has done with their financial investment in the
environmental business community, Wal-Mart apparently prefers customers
buy farm-raised fish and seafood caught by foreign countries outside of
U.S. waters, while denying individual anglers the ability to head down
to the ocean to score a few fish for their own table," noted Donofrio.
Foundation pushes catch shares program
The Walton Family Foundation is also working "to create economic
incentives for ocean conservation," while candidly pledging their
support for "projects that reverse the incentives to fish unsustainably
that exist in 'open access fisheries' by creating catch share programs,"
according to the official news release.
A broad coalition of commercial and recreational fishing, consumer and
environmental groups is opposing the catch shares programs being pushed
by NOAA Administrator Jane Lubchenco, a former vice-chair of the Board
of Directors of Environmental Defense, because these programs amount to
the privatization of public trust resources by concentrating fisheries
in the hands of a few corporate hands. Wherever catch shares have been
introduced, local fishing communities, fish populations and the
environment have been devastated.
"A catch share, also known as an individual fishing quota, is a
transferable voucher that gives individuals or businesses the ability to
access a fixed percentage of the total authorized catch of a particular
species," according to Food and Water Watch. "Fishery management systems
based on catch shares turn a public resource into private property and
have lead to socioeconomic and environmental problems. Contrary to
arguments by catch share proponents – namely large commercial fishing
interests – this management system has exacerbated unsustainable fishing
“Fish are a public resource," explained Wenonah Hauter, Food & Water
Watch Executive Director. "Unfortunately, private investment groups and
even some public interest groups have shamelessly and publicly compared
access to fish to the stock market and are treating it like an
investment that can be bought and sold for personal profit. They’re
aiming to model the fishing business after big agribusiness on land,
with giant commercial operations controlling the market.” (http://www.fishnewseu.com/latest-news/world/6013-food-a-water-watch-launches-campaign-against-catch-shares.html)
Donofrio emphasized, "Our local outfitters and tackle shops along the
coast have had to face an immense challenge by going up against
Wal-Mart's purchasing power during the last decade, but now that the
Walton family is so up front about their opposition to open access
fisheries, it's hard for me to believe that any sportsmen would ever be
interested in shopping there again."
"California anglers have been outraged to learn that money they spend at
a Safeway grocery store might end up in the hands of anti-fishing groups
like the EDF and the Ocean Conservancy, so I hope more anglers will join
the national boycott by sending a message to Wal-Mart as well as
Safeway," Martin added.
Sam and Helen Walton launched their "modest retail business in 1962"
with the guiding principle of helping "increase opportunity and improve
the lives of others along the way," according to the Walton Family
Foundation website. It is that principle the foundation says, that makes
them "more focused than ever on sustaining the Walton's timeless
small-town values and deep commitment to making life better for
individuals and communities alike."
RFA said grassroots efforts to combat the corporate anti-fishing,
pro-privatization agenda are more than just an uphill climb.
"The EDF catch share coffers are already filled to the top, while Pew
Charitable Trusts has billions in reserve," Donofrio said. "When you add
another $36 million annual commitment from the Walton family each year,
I can't see how our local efforts can get anywhere unless the national
manufacturers step up and openly denounce this corporate takeover once
and for all."
"The individual anglers and local business owners are being denied
opportunity, and I hope the federal trade representatives are willing to
get onboard with their support of real small-town values," Donofrio
said, adding that Ocean Conservancy and EDF combined received more than
$10 million in Walton Family Foundation grants in 2010.
EDF: RFA is 'just wrong'
Tom Lalley, communications director for the Oceans Program,
Environmental Defense Fund, responded to RFA's release by claiming, "RFA’s
contention that the contribution in question was made by Wal-Mart is
"The contribution was made by the Walton Family Fund and not Wal-Mart,"
he told http://www.fishnewseu.com.
"These are two different entities. There is no connection between the
two other than the fact that the fund’s money comes from private
holdings of the same Waltons who started and managed Wal-Mart, but none
of the money comes from the existing company. So it was the family, and
specifically the family’s foundation, that made a contribution for
sustainable fishing and ocean conservation, and not the store."
"That's B.S.," Martin said, responding to Lalley's statement. "The
foundation money is Wal-Mart money sheltered from taxation to push the
Walton's family agenda."
"Mr. Lalley is putting a false spin on this issue," added Donofio. "The
fact is that the Walton family's money comes from the profits on the
Wal-Mart stores that they founded. The Waltons are still in the top
management tier of the company."
Commercial fishermen join recreational anglers in denouncing Wal-Mart
and Walton Family Foundation
Zeke Grader, executive director of the Pacific Coast Federation of
Fishermen's Associations (PCFFA), praised the RFA for criticizing the
Walton Family's contributions to ocean privatization efforts and
welcomed the organization's call for a Wal-Mart boycott.
"Wal-Mart is wrong on this issue, just as it has been in the past on
labor and community issues," said Grader. "The privatization of public
trust resources is the antithesis of conservation."
"I've been boycotting Wal-Mart for decades and it's absolutely great
that recreational and commercial fishermen are together on this," noted
It is worth noting that Conservation International and the Nature
Conservancy, the two top recipients of Walton Family Foundation funds,
are known throughout the world for their top-down "environmental"
programs that run roughshod over local communities to achieve their
corporate greenwashing goals.
The Nature Conservancy in California is a strong backer of state and
federal plans to build a peripheral canal or tunnel to export more
Sacramento-San Joaquin River Delta water to corporate agribusiness and
southern California water agencies. Canal opponents, including
recreational anglers, commercial fishermen, Delta residents, family
farmers and California Indian Tribes, believe the construction of the
canal would result in the extinction of Central Valley steelhead,
Sacramento River chinook salmon, Delta smelt, longfin smelt and other
imperiled fish populations.
About the Recreational Fishing Alliance:
The Recreational Fishing Alliance is a national, grassroots political
action organization representing recreational fishermen and the
recreational fishing industry on marine fisheries issues. The RFA
Mission is to safeguard the rights of saltwater anglers, protect marine,
boat and tackle industry jobs, and ensure the long-term sustainability
of our Nation's saltwater fisheries. For more information, call
888-JOIN-RFA or visit
MLPA Initiative Background:
The Marine Life Protection Act (MLPA) is a law, signed by Governor Gray
Davis in 1999, designed to create a network of marine protected areas
off the California Coast. However, Governor Arnold Schwarzenegger in
2004 created the privately-funded MLPA "Initiative" to "implement" the
law, effectively eviscerating the MLPA.
The "marine protected areas" created under the MLPA Initiative fail to
protect the ocean from oil spills and drilling, water pollution,
military testing, wave and wind energy projects, corporate aquaculture
and all other uses of the ocean other than fishing and gathering.
The MLPA Blue Ribbon Task Forces that oversaw the implementation of
"marine protected areas" included a big oil lobbyist, marina developer,
real estate executive and other individuals with numerous conflicts of
interest. Catherine Reheis Boyd, the president of the Western States
Petroleum Association who is pushing for new oil drilling off the
California coast, served as the chair of the MLPA Blue Ribbon Task Force
for the South Coast.
The MLPA Initiative operated through a controversial private/public
"partnership funded by the shadowy Resources Legacy Fund Foundation. The
Schwarzenegger administration, under intense criticism by grassroots
environmentalists, fishermen and Tribal members, authorized the
implementation of marine protected areas under the initiative through a
Memorandum of Understanding (MOU) between the foundation and the
California Department of Fish and Game (DFG).
Tribal members, fishermen, grassroots environmentalists, human rights
advocates and civil liberties activists have slammed the MLPA Initiative
for the violation of numerous state, federal and international laws.
Critics charge that the initiative, privatized by Governor Arnold
Schwarzenegger in 2004, has violated the Bagley-Keene Open Meetings Act,
Brown Act, California Administrative Procedures Act, American Indian
Religious Freedom Act and UN Declaration on the Rights of Indigenous
MLPA and state officials refused to appoint any tribal scientists to the
MLPA Science Advisory Team (SAT), in spite of the fact that the Yurok
Tribe alone has a Fisheries Department with over 70 staff members during
the peak fishing season, including many scientists. The MLPA Blue Ribbon
Task Force also didn't include any tribal representatives until 2010
when one was finally appointed to the panel.
NEW YORK (MarketWatch) — Walmart
U.S., seeking to reverse eight straight quarters of negative same-store
sales, has retooled its marketing message to tout “everyday low prices,”
brought back product assortment and placed products in the center of
busy aisles to drive demand.
But those initiatives may not be enough to
fix the biggest unit of the world’s largest retailer Wal-Mart Stores
Inc., according to Morgan Stanley analyst Mark Wiltamuth, who started
coverage of the company with an equal-weight rating. He started the
retailer’s smaller rival Target Corp. with an overweight rating.
Read story about Wal-Mart’s annual shareholders meeting
Walmart’s “bigger problem: many consumers no
longer think Walmart has the lowest prices,” Wiltamuth said.
Three-fifths of the shoppers think that
compared to a couple of years ago, Walmart’s prices, while still better
than most stores, are no longer the lowest, according to Wiltamuth’s May
survey of 1,513 consumers, 1,149 of which had shopped at Walmart in the
previous three months.
The survey showed only one in four shoppers
believe Walmart’s everyday prices are “significantly lower” than grocery
stores, a perception that’s key to driving sales, with about a quarter
thinking the company’s prices are “at parity” with supermarket prices
and 3% thinking that Walmart’s prices are even higher, the analyst said,
adding grocery represents more than half of the company’s total sales.
“Merely having prices that are viewed as
slightly lower is not good enough,” Wiltamuth said, adding the
percentage of shoppers who buy more at Walmart increased to 44% from 23%
when they think the retailer’s prices are “significantly” lower instead
of “slightly” lower than grocery stores.
Walmart’s pricing lead over the grocers has
narrowed to 15% to 20% lower from as much as 30% lower when he did his
2008 grocery pricing surveys, the analyst said.
“The strength of Walmart’s low price image is
closely tied to customer spending,” he said. “Walmart may have to start
reducing prices to stimulate its sales.”
He forecast same-store sales at Walmart U.S.,
73% of the Bentonville, Ark.-based company’s profit, to continue to
decline for the rest of the year. Reversing it won’t come easy even if
Walmart starts to lower prices, the analyst said.
While two-thirds of the chain’s categories,
including food and health items, are posting positive comparable sales,
“the discretionary categories that have yet to turn are more dependent
on the low income shopper who is struggling the most,” he said.
Any move on the part of Walmart to lower its
prices to widen its discount price gap may in turn have negative
implications for supermarket chains Safeway Inc. and Supervalu Inc. and
Kroger Co., the analyst said. He has an underweight rating on Safeway
SWY-0.72% and Supervalu SVU-0.81% and rates Kroger KR
+0.26% equal weight.
Outside of the U.S., Wiltamuth said he
expects profit margin at Wal-Mart’s international unit, about 21% of the
corporate earnings, will be hurt as the company converts Brazil and
other parts of Latin America to its “everyday low prices” strategy,
instead of using pricing changes such as promotions and sales. The
company’s recent purchases including South Africa’s Massmart also may
dilute profit in the near term.
Read story on Wal-Mart pitching ‘everyday low prices’
On the other hand, the analyst gave a nod to
the company’s Sam’s Club wholesale membership club chain, about 6% of
“While it is often ignored by investors, it
is the eighth largest retailer in the U.S. and we estimate it is sixth
largest food retailer by sales,” he said.
Sam’s Club, whose shoppers have average
household income of $75,000 to $80,000 compared to in the low $40,000s
for Walmart U.S., has also benefited from the recovery of upper-income
consumers while its initiatives such as E-values that give personalized
discounts to members also proved successful, according to the analyst.
Target’s overweight rating
For Target, Wiltamuth’s rating in part
depends on the company’s growth opportunity as it prepares to enter the
While the Minneapolis-based retailer is in an
investment phase for its Canadian entry, once it begins operations there
in 2013, he expects Canada alone would add 54 cents a share to Target
profit by 2016.
“We expect Target’s home, softline, and
seasonal goods to fare well against a weak department store offering and
other retailers who are more focused on hard goods” in Canada, he noted.
In the U.S., while shoppers also are
pressured by macroeconomic concerns, Target’s moves to add fresh foods
through its PFresh initiatives and the offer of 5% discounts through the
use of its namesake credit and debit cards could each add 1 to 2
percentage points to same-store sales this year, he said.
Target’s shares also are cheap, having
dropped 15% this year, compared with the 7% increase of the S&P, he
“In our view, investors are overly focused on
near-term (per-share profit) and the uncertainty surrounding the
magnitude of Canada startup dilution,” he said.
Andria Cheng is
a MarketWatch reporter based in New York.
A Giant Fix Jun 27, 2011 12:00 PM, By JON SPRINGER
With shoppers and stores still struggling, Wal-Mart goes back to the
Here We Grow Again
Wal-Mart's return to positive comp territory will be
related to a return to new store building, including a new small format
(Walmart Express) and a revamped grocery store, rechristened Walmart
Market, the company promised. At the same time, it has cut back on the
Supercenter renovation program that marked Project Impact.
Simon said moderated Supercenter growth since 2007 has
negatively affected comp sales since those stores tend to perform best
in their second, third and fourth years. The company since fiscal 2007
reduced new square footage growth to 1.5% last year — from around 8% in
past years — as it focused more on remodels. Net new supercenters opened
in the same period fell from 277 in fiscal 2007 to 135 in fiscal 2010.
Wal-Mart is looking to build as many as 200 new stores
next year — its most since 2007, which will invigorate comps after they
join the base after one year of operation, Simon projected.
Around 180 Walmart Market grocery stores
have been approved by the retailer's real estate committee, which could
grow the current fleet from 185 stores (155 Neighborhood Market and 30
Amigo stores in Puerto Rico) to 300 stores by 2013. The pipeline also
15 to 20 new small stores known as Walmart Express. These
15,000-square-foot units promise a more convenient shopping option — and
appear to be the company's answer to a call for such a vehicle voiced by
observers at this time a year ago.
“The Express store to me looks like the kind of place
that if I were Walgreens, CVS or Wawa, I'd be looking at pretty
closely,” Richard George, a professor of food marketing at St. Josephs
University, Philadelphia, told SN. “I think what they're trying
to do is a convenience store without the convenience-store pricing, and
that could be interesting.”
These options can support growth by being faster to
develop and build than supercenters, and easier to move into denser
urban markets where Wal-Mart has yet to penetrate. The Market format —
grown only gradually since its founding in 1998 — is now also delivering
the same kind of returns as the Supercenter, Simon said. It appears to
some observers to be finally realized in full.
“The Neighborhood Market is the best I've seen it. It
looks like a fully functioning supermarket. You look at that concept and
say, ‘Yes, I could open 500 of them,’” Marcotte said. “It's not a
concept store anymore, it's a working model. Is it an exciting store?
Not particularly, but it works. It's perfectly adequate in terms of
addressing people's needs. I see it being fully competitive with other
In the meantime, Simon said he has substantially
scaled down the company's Supercenter remodel program, admitting the
renovations under Project Impact were more expensive and disruptive than
the struggling retailer could tolerate. With scheduled Project Impact
renovations on hold, a new remodeling program reduces the duration of
each renovation from 18 weeks for Project Impact to five weeks, mainly
by “eliminating the massive adjacencies and macro space changes that
were in Project Impact,” Simon said — primarily moving pharmacies and
Funds saved by this approach will help pay for new
builds, he added.
The company in the meantime is making a bet on
technology becoming a growth vehicle. Simon noted that even Wal-Mart's
Express stores will support the “site-to-store” initiative allowing
shoppers to buy anything Wal-Mart sells online and pick the item up at a
local store — a program that could serve to eliminate the downside of
less room for general merchandise at the smaller vehicles. The company
also this year made an estimated $300 million
purchase of the Silicon Valley start-up Kosmix, with the idea of
using its aggregation of social media data for e-commerce.
These and other efforts underway at Wal-Mart are to be
supported by a new commitment to everyday low cost, Simon said, noting
that Wal-Mart's massive size gives it opportunity to leverage sales like
“Our numbers are so big that, for example, if we can
remove just one second from a transaction through a process change at
the register, that's $30 million,” Simon said. “And if you think about
that, we have lots of seconds. We have lots of half-seconds. And we're
working on those things every single day to be more productive.”
It's this kind of return to the basics that has some
convinced that Wal-Mart can overcome its same-store sales woes even as
its shoppers confront ever more skillful competitors and continued
economic challenges. Simon said Wal-Mart could see positive comps again
“I'm not ready to write off Wal-Mart,” said George.
“Their mission has always been fix things and make them better. And I
think they've got a strategy to do that.”
Sen. Barbara Boxer wants the Federal Trade Commission to
investigate whether Walmart is giving consumers as much as it
should when they use gift receipts to return items.
The California Democrats says she should know
soon whether the FTC will take a look.
A probe by CBS stations
KOVR in Sacramento
and KYW in
Philadelphia found that Walmart customers returning items
using gift receipts weren't always getting back the full amount
originally paid for the items.
In some cases, the refunds were much less than
the original prices.
CBS News spent $106.85 at Walmart, but the
gift receipts returned $62.32. The total loss was $44.53.
Sally Greenberg, executive director of the
National Consumers League, told CBS News, "I think it's
reprehensible. ... Consumers are cynical enough about company
policy. This just adds to their sense of mistrust and
The retail giant blamed the problem on
confusion among some of its cashiers, resulting in their not
following company policy.
Lorenzo Lopez, a Walmart spokesperson,
provided CBS News with a video statement in which he says, "It's
our expectation to refund the original purchase price when
returning an item with a gift receipt."
Following the investigation, Walmart says, it
issued a memo to its more than 3,800 stores nationwide to make
sure all employees know that consumers with gift receipts should
receive a full refund for the original amount paid.
It's also worth noting -- not all store items
have the same return policies. So, Ming added, "You've got to be
clear on the rules before you buy that next gift."
world of big-box discounters, Target enjoys a reputation as a model
corporate citizen that sells the latest in cheap chic. That’s a
sharp contrast to the image of Wal-Mart, the world’s largest
retailer, which labor unions have pilloried for years, accusing it
of providing skimpy wages and benefits and skirting various labor
But the arrows are about to come flying at
Target’s famous bull’s-eye logo. The nation’s largest union for
retail workers has embarked on its first broad campaign to unionize
The union, the United Food and Commercial Workers,
is trying to organize 5,000 workers at 27 Target stores in the New
York City area. A majority of workers at the Target store in Valley
Stream, N.Y., have already signed cards supporting unionization, and
a government-supervised election there on June 17 will be the first
time in more than two decades that Target workers will vote on
whether to join a union.
“A lot of people are going to be shocked that
Target workers would consider unionizing because of its very good
image and because it’s known as such a fantastic philanthropic
organization,” said Burt Flickinger, a retailing consultant who has
worked on projects for both the union and Target suppliers.
The union decided to focus on Target after
employees in Valley Stream, on Long Island, asked for help in
unionizing. Echoing longstanding complaints by some Wal-Mart
workers, the store’s employees complained that many of them earned
too little to support a family or afford health insurance, forcing
some to rely on food stamps and Medicaid for their children.
“What we want from Target is simply this: we need
a living wage where we can get by,” said Sonia Williams, a logistics
employee in Valley Stream who said she earns $11.71 an hour, plus a
$1-an-hour night differential.
Target says its wages are competitive and its
employees do not need a union.
Interviews with 10 of the store’s employees
suggest that an important issue behind the unionization drive is
frustration about being assigned too few hours of work, sometimes
just one or two days a week.
Retailers are increasingly assigning such short
workweeks as they seek to build an extensive roster of workers to
fill their ever-changing scheduling needs. But some Target workers
say that means they are offered too few hours to qualify for the
company’s health plan.
Ms. Williams, who receives $200 a month in food
stamps to help her and her 18-year-old son, complained that she was
often assigned just three days of work each week, down from full
time when she started nearly nine years ago.
So far, the union’s organizing efforts have not
turned belligerent as it hopes to convince Target employees that it
wants to work with the company, not hurt it. In contrast, the union
has never been shy about attacking Wal-Mart — hurling invective,
organizing protests and lobbying officials to block the retailer’s
plans to expand in New York, Chicago and other cities unless it
agrees to improve wages and benefits.
Union officials assert that Target’s wages and
benefits are only slightly better than Wal-Mart’s.
Jim Rowader, Target’s vice president for employee
and labor relations, said the company provided “great benefits,
flexible scheduling and great career opportunities for workers in
all stages of life.”
He said Target emphasized building trust between
managers and employees. “When you talk about bringing a union into
that mix, certainly based on the culture we have and the one we’re
trying to build, we don’t think a union or any third party will
improve on anything,” he said.
None of Target’s 1,755 stores in the United States
are unionized, nor are any of Wal-Mart’s 4,420 American stores. The
union has tried over the last decade to unionize Wal-Marts in
Minnesota and Las Vegas and a Target in Minnesota, but fierce
antiunion campaigns by the retailers deflated the efforts before
they even came to a vote.
Mr. Flickinger said unions had been loath to
undertake large-scale organizing drives against retailers, like the
new one against Target in New York, because of obstacles like high
employee turnover, the fear of some workers that they would be fired
for supporting a union and the aggressive opposition by many
companies toward unionization.
But Mr. Flickinger said the recession and
retailers’ increasing use of part-time workers had improved the
climate for organizing even though union membership had been sliding
and unions were on the defensive nationwide. “Unions feel it might
be the best of times for organizing in retail because many workers
can’t afford the health benefits and many can’t even afford to shop
in the stores where they work,” he said.
Patrick J. O’Neill, the union’s organizing
director, said it was vital to try to unionize big-box stores.
“Retail is a major employer in our economy,” he said. “If we don’t
want the middle class to go away, we’ve got to do something about
improving the wages and benefits for retail workers.”
About 12 percent of all American workers are
unionized, but just 4.7 percent of retail workers are in unions.
Kroger is the retailer with the most unionized workers: 200,000.
While the organizing drive is going full tilt in
Valley Stream, the United Food and Commercial Workers has just
started reaching out to employees at the other New York-area
Targets. It is distributing fliers, asking workers to sign pro-union
cards, and lining up support from community groups.
Tashawna Green, a stock clerk in Valley Stream,
said a union was needed to help increase her pay, $8 an hour after
one year there, and her hours, often six to 17 hours a week.
“I just feel that a union is going to help us,”
she said. “If they ask for better hours, they get better hours. If
they ask for respect, they get respect.”
Like many of her co-workers, Ms. Green, 21, a
native of Jamaica, hails from the Caribbean, where unions are
generally more popular than in the United States.
Ms. Green, the mother of a 5-year-old, said she
would like to work four or five days a week, but is often assigned
two days and then earns just $120 for the week. “It’s very hard to
support yourself on that,” she said. “Sometimes I have to borrow
money from people.I’m lucky that I’m able to stay
with an aunt who understands. I try my best to pay her rent of $200
Ms. Green said it was maddening that although many
employees were desperate to work more hours, managers ask them
whether they have any friends who are looking for jobs. Several
workers said they were perplexed that the store hired 13 new workers
in recent weeks.
Target defended its compensation and scheduling
“The wages and benefits provided at the store are
at or, frankly, above the market for comparable retail jobs, union
or nonunion,” Mr. Rowader said. He said the store’s overall payroll
hours had not declined, although individuals might be working fewer
In campaigning against the union, Target is also
distributing fliers. One says: “Like any other failing business the
union needs to increase revenue to stay in business. Taking dues
from new members is the only way for them to get more money.”
Betsy Wilson, who earns $10.50 an hour after
working in Valley Stream for two years erecting merchandise
displays, opposes having a union — and the dues payments that would
come along with one. “Basically if you do your job, you won’t have
any problems,” she said.
John Budd, a professor of human resources at the
University of Minnesota, said the public’s ambivalence about unions
could play a big role in the outcome of the Target unionization
The workers’ call for higher wages may win little
support, he said. “But the public may be much more sympathetic when
someone is working just 10 hours a week and is asking for more
"We need to uphold the law, we need to apply the law
and we need to allow this project to move forward. I believe that not to
do so would be un-American." So stated Rohnert Park (Sonoma County,
California) City Councilwoman Amy Breeze last year when the council
voted to approve a controversial Wal-Mart supercenter-despite a year
long campaign against the project by a broad coalition of labor,
environmental, and community organizations.
The Living Wage Coalition of Sonoma County challenges Ms. Breeze's
definition of Americanism. Though we respect her point of view, we think
she is dead wrong. Wal-Mart, we believe, has betrayed fundamental
American values. As the largest retailer and private employer in
America, no other company has such a profound impact upon our economy
and labor markets. It is time for Wal-Mart to change, or face a growing
opposition to its plan to build at least one supercenter in every county
There is no better authority on the American economy and American
values than our 32nd President, Franklin D. Roosevelt. Roosevelt
proposed an 'Economic Bill of Rights' in 1944 that would guarantee all
Americans "an American standard of living higher than ever known."
Roosevelt believed that all Americans, according to Stanford historian
David Kennedy, regardless of race, religion, or gender, were "entitled
to a job, a living wage, decent housing, adequate medical care, a good
education" as well as social insurance such as old age pensions, and
unemployment and disability benefits. FDR's Economic Bill of Rights,
also known as the 'Second Bill of Rights,'
asserted that every business should operate in a marketplace free
from unfair competition and monopoly control.
Let's compare FDR's vision with Wal-Mart's business practices and ask
these questions: What are America's values? What economic rights are all
Americans entitled to?
The President proclaimed in 1933, "No business which depends for
existence on paying less than living wages to its workers has any right
to continue in this country. By living wages I mean more than a bare
subsistence level-I mean the wages of a decent living."
Does Wal-Mart meet the "living wage" test? A typical full-time
Wal-Mart worker in 2009 earned $11.75 an hour according to the company.
This wage level is well below a self-sufficiency or living wage for
Sonoma County which the Insight Center for Community and Economic
Development in 2009 set at $14.90 an hour, a rate that will enable two
parents working full-time to support two children and to pay for
housing, food, health care, transportation, and childcare.
FDR's vision embraced "the right of every family to a decent home."
Yet, according to the Center for Housing Policy, in 2009 a family in
Sonoma County needed to earn $98,112 a year to afford the median priced
home of $322,000. However, the annual family income of two parents
working full-time at Wal-Mart is $41,548, or just 42% of the income
needed to afford the median-priced home. In fact, the income of the
typical Wal-Mart family is so low as to qualify for the Department of
Housing and Urban Development Section 8 rent subsidies.
Isn't earning an income sufficient to purchase a home or to afford
the rent the bedrock of American values?
Roosevelt's Bill of Rights included "the right to adequate medical
care and the opportunity to achieve and enjoy good health." Yet the
Kaiser Family Foundation reported that in 2009 less than 50% of Wal-Mart
employees and their children received health benefits. In comparison,
Raley's, Safeway, and Costco in Northern California provide health care
benefits to 80% of their employees. Who picks up the tab when uninsured
Wal-Mart employees fall ill?
A UC Berkeley Center for Labor Research and Education 2004 study
found that uninsured Wal-Mart employees in California relied on programs
like Medi-Cal and Healthy Families at an annual cost of $32 million to
the taxpayer. Moreover, Wal-Mart employees who lack medical insurance
also rely on hospital emergency rooms and public clinics. According to
the New American Foundation, in 2006 the state of California and all its
counties spent $1.8 billion annually to provide uncompensated care to
1.3 million uninsured adults. What are real American values in this
sorry state of affairs?
Roosevelt claimed that all Americans should receive "protection from
the economic fears of old age, sickness, accident, and unemployment."
Yet Wal-Mart does not offer employees a retirement program that
guarantees a fixed monthly income. After one year on the job, Wal-Mart's
employees receive a 401K with employer profit-sharing contributions. Due
to low pay, unpredictable shift assignments, and the demanding workload,
more than 50% of Wal-Mart employees quit in their first year, so only a
minority of workers are employed long enough to become eligible for the
Roosevelt was a strong supporter of organized labor and stated that
the federal government must protect the "fundamental individual right of
a worker to associate himself with other workers and to bargain
collectively with his employer." He championed the passage of the
National Labor Relations Action in 1935 that guaranteed the right of all
workers to form a union and to bargain for better pay, benefits, and
working conditions. Roosevelt declared, "If I were a worker in a
factory, the first thing I would do is to join the union."
But not one Wal-Mart in the United States is unionized. Human Rights
Watch, in a 2007 report, decried Wal-Mart's legal and illegal
union-busting tactics and claimed that "the retail giant stands out for
the sheer magnitude and aggressiveness of its antiunion apparatus and
actions" and "based on our research we conclude that the cumulative
effect of Wal-Mart's panoply of anti-union tactics, is to deprive its
workers of their internationally recognized right to organize."
To add injury to insult, Wal-Mart managers and supervisors cut labor
costs by refusing to comply with labor protections such as the Fair
Labor and Standards Act of 1938. In 2008, the company settled 63 federal
and state class-action lawsuits charging that Wal-Mart violated wage and
hour laws, failing to pay its workers for overtime and off the clock
work and denying workers meal and rest breaks.
Wal-Mart agreed to pay at least $352 million and up to $640 million
to present and former employees.
The company also faces the largest class action suit in history on
behalf of 1.6 million past and present female employees for wage
discrimination and promotion gender-bias. So how does Wal-Mart's record
of union busting, disregard for federal labor law, and systematic
discrimination against women square with basic American values?
Finally, Roosevelt emphasized in his Economic Bill of Rights that all
businesses had the right "to trade in an atmosphere of freedom from
unfair competition and domination by monopolies." A recent Retail
Forward report found that for every super center that opens in a major
metropolitan area, two existing supermarkets will close. UC Irvine
economist David Neumark concluded in a 2007 study that for every new job
created by Wal-Mart in a county, 1.5 jobs are lost elsewhere as existing
retailers and grocers lose market share or shut down -and remember that
according to the New York University Brennan Center in 2007, the average
wage of a Wal-Mart employee was 26% less than other large merchandise
stores and 18% less than large grocery stores.
'Always lower prices' is a consequence of Wal-Mart's relentless quest
to drive down labor rates. The Wal-Mart way is based upon poverty-wage
jobs and destroying local business, particularly union and nonunion
grocers that pay a living wage and provide comprehensive benefits. Is
this the American way?
Good jobs and career mobility, equal opportunity and
nondiscrimination, fair competition and corporate accountability, and
respect for worker's rights are fundamental American values. Wal-Mart
needs to live-up to these values-and it can afford to do so.
Wal-Mart's global sales surpassed $400 billion, and profits were
$13.4 billion in 2008. According to Forbes magazine, the combined
wealth of Wal-Mart founder Sam Walton's four children, who hold 40% of
the company stock, was more than $84 billion in 2010-an amount greater
than the combined annual income of the bottom 40% of Americans, or about
120 million people.
So what's it going to be: Wal-Mart's brand of naked greed or the
values of Roosevelt and his Economic Bill of Rights? What's really
"un-American," Councilwoman Breeze?
Martin J. Bennett teaches American history at Santa Rosa Junior
College and serves as Co-Chair of the Living Wage Coalition of Sonoma
County. For more about the anti-Wal-Mart superstore campaign in Sonoma,
click here (
(Reuters) - The
largest class-action sex-discrimination lawsuit ever is being argued
before the U.S. Supreme Court on Tuesday, pitting Wal-Mart Stores Inc (WMT.N)
against female employees who seek billions of dollars.
The justices will
decide whether the small group of women who began the case 10 years ago
can represent a huge nationwide class that may include millions of
current and former employees who accuse the world's largest retailer of
nation's high court will not be deciding whether Wal-Mart engaged in
intentional sex discrimination in pay and promotions at 3,400 U.S.
stores since the end of 1998.
An eventual Supreme
Court ruling, expected by late June, is likely to uphold or undo the
class certification, a decision that could determine whether the lawsuit
proceeds to trial.
Here are some
scenarios of what could happen next:
UPHOLDS LAWSUIT'S CLASS-ACTION STATUS
In a defeat for
Wal-Mart, the case would go back to the federal judge in San Francisco,
who has already proposed a two-stage trial.
In the first stage,
a judge or a jury would decide whether Wal-Mart should be found liable
for a pattern of intentional sex discrimination.
The second phase
would decide possible remedies such as punitive damages; back pay, which
makes up the difference between actual pay and the amount if there had
been no discrimination; and injunctive relief, such as requiring
Wal-Mart to change its pay and promotion systems.
Alexandra Lahav, a
University of Connecticut law professor, wrote in a recent law review
article that the case does not threaten a ruinous verdict for Wal-Mart.
attorney, Theodore Boutrous, has told the Supreme Court in legal
documents the class involved potentially millions of women with claims
for billions of dollars in back pay and possible punitive damages.
Attorneys for the
women did not give a total figure, but said individual claims for back
pay would be small, an average of $1,100 per year for hourly workers.
Chris Graja, an
Argus Research analyst who follows Wal-Mart, has said the case will keep
the retailer in the spotlight.
"remains a major financial risk for Wal-Mart but we believe the
potential expenses have been well reported on Wall Street and in the
media," he wrote in a February report when Wal-Mart issued its
continues to contest the claims and the legal proceedings related to
those claims very aggressively. The recent settlement of another group
of suits suggests that the company is well aware of the importance of
being a good citizen and trying to look forward," Graja said.
equity analyst at the Chicago-based Morningstar Inc investment research
company, said Wal-Mart has plenty of cash if it needed to make a payout.
"It would take a
seismic ruling against the company to have an impact on the valuation,"
he said. "When you're dealing with the largest company out there, a
lawsuit would have to be one of the larger payouts to really have a
material impact on the fundamentals of the business."
He calculated that
even in the unlikely event that there is eventually a $25 billion award
against Wal-Mart, that would not dramatically affect Morningstar's
valuation of the firm.
REJECTS LAWSUIT'S CLASS-ACTION STATUS
The Supreme Court
could reverse the appeals court's ruling and send the case back with
instructions to decertify the class, as Wal-Mart has requested.
But the case would
not be over. Individual plaintiffs who brought the lawsuit, such as
Betty Dukes, a Wal-Mart greeter at a store in Pittsburg, California,
could pursue their claims.
Depending on how
the court rules, the plaintiffs might be allowed to collectively pursue
their claims for an injunction changing employment practices, but not
for money damages.
Or the court could
rule the case was wrongly certified as a class action under a provision
mainly used in lawsuits seeking relief such as an injunction. The court
could tell the judge to consider if it can be certified under another
part of the law dealing mainly with money damages.
Lurking in the
background is a possible settlement.
attorney arguing Wal-Mart's case, declined to speculate on a possible
settlement if the company loses before the Supreme Court. An attorney
for the plaintiffs also declined comment on any settlement.
Asked if there
could be a deal, equity analyst Hottovy said, "That's always a
possibility, especially in a case like this where instead of dragging it
out over a long period of time it may be in Wal-Mart's favor to propose
corporate supporters have said huge class-action lawsuits put
inappropriate pressure on defendants to settle.
But attorneys for
the female employees disagreed. "With over $400 billion in sales and $14
billion in profits last year, that is an argument that could not be
credibly made," they said in a brief filed with the court last year.
(Additional reporting by
Jessica Wohl in Chicago, Editing by John Whitesides
In an end-game that an opponent of a big-box store on
North Auburn’s 18.5-acre site said Monday was disappointing but not
unexpected, Bohemia Properties has sold the much-fought-over property to
While the project still faces a potential court
battle, the $10 million purchase by the Benton, Ark.-based retailing
giant signals an end to debate over whether a Costco or a Wal-Mart – or
some other big-box retailer – would land the prime piece of real estate
near Luther Road and Highway 49.
Steve Cavolt, Bohemia spokesman, said that it came
down to Wal-Mart meeting Bohemia managing partner Jim Conkey’s terms and
conditions for a sale.
“But it was between Costco and Wal-Mart,” Cavolt said.
“Both were right there.”
The transaction was recorded Jan. 29 with the Placer
County Clerk-Recorder-Registrar’s Office but only acknowledged Monday.
Cavolt said the sale wasn’t made public partly because of a potential
lawsuit by the Alliance for the Protection of the Auburn Community
Environment (APACE) group and because of business reasons.
Victoria Connolly, a nearby resident to the Bohemia
site and one of the APACE leaders, said the fight is continuing, with
the group intending to appeal the project in court.
“APACE is disappointed to hear this news however, it
supports what we have been saying all along, that this was going to be a
Wal-Mart supercenter,” Connolly said. “It reveals that Mr. Conkey has
spent years trying to deceive the community about this project by saying
that it was going to be something else, such as Costco. It is still our
intent to fight this project and the significant impact it would have on
the Auburn community.
Cavolt said Conkey has been insistent that the
agreement include language indicating Wal-Mart would try to hire local
contractors on the construction project. The estimated construction cost
is about $30 million.
During the Bohemia project approval process before the
Placer County Planning Commission and Board of Supervisors, Conkey
received support from the Placer County Contractors Association,
hard-hit by the construction downturn.
Opponents such as activist Dale Smith have been
critical of the Wal-Mart project on several fronts, including its use of
out-of-area contractors in other communities and the congestion and
safety problems they said a big-box store would create on Highway 49 and
Cavolt said an agreement that could mean local jobs
for contractors was a big factor in Conkey’s decision-making process.
“Basically what it boiled down to was that they would
try to get local contractors jobs on the project,” Cavolt said. “Jim
Conkey was definitely in favor promoting local subs. The Wal-Mart is
going to create 350 jobs for the Auburn area and hundreds of jobs for
contractors and he was definitely trying to promote that.”
A Wal-Mart spokesman couldn’t be reached for comment
but with a court case still in front of the project, timing on a
construction start and opening date would likely be difficult to
determine at this time.
During the lengthy approval process, no
representatives from either Costco or Wal-Mart came forward to talk
about a project Cavolt said was intentionally not going to identify a
potential site owner. Cavolt said that past experience forced him to not
identify either store because if an agreement fell through, he would
have to start the process over again.
Instead, Cavolt secured a use permit and environmental
documentation from the county for a generic, 155,000 square-foot
building and gas station.
“Yes, it’s a Wal-Mart,” Cavolt said Tuesday,
confirming sale information the county now has on file. “It was a
personal business decision on Jim Conkey’s part. They met his terms so
they the deal on his property.”
Project site developed during World War II as the
Cal-Ida Lumber Mill, producing crates for fruits and vegetables
Cal-Ida sold to the DeGeorgio Corp. in 1969
Mill bought by Bohemia Lumber Co. in 1978
Lumber mill operations shut down
All structures had been demolished on property
Environmental documents approved for home-improvement
center, retail-office buildings and a 150-unit apartment complex on a
site that included what is now the 10-acre Plaza shopping center. Option
to build not exercised and expired in 1991.
Wal-Mart store proposed on 18-acre Bohemia site.
Project approved by Planning Commission but appeal by neighbors upheld
by Board of Supervisors and project denied.
Auburn-Bowman Community Plan changes site’s
designation from industrial to commercial
Revised Wal-Mart plan submitted that eliminated auto
center and Canal Street as secondary access. Board and Planning
Commission OK’d project but after a lawsuit, plans withdrawn.
Planning Commission considers plan to rezone land for
114-home subdivision. But application withdrawn after 2007 housing
New plan submitted for 155,000 square-foot retail
building with fueling station
Bohemia developer Jim Conkey proposes to change
project description to allow emergency-pedestrian access only at Canal
Wal-Mart-Costco-type store on Bohemia site supported
on 4-1 vote by North Auburn Municipal Advisory Council
With Planning Department support, the Placer County
Planning Commission votes 6-1 to approve clearances to build the planned
Alliance for the Protection of the Auburn Community
Environment files an appeal to the Board of Supervisors on the Planning
Placer County supervisors give their support to the
Bohemia development, clearing the way for a court battle over a possible
Costco or Wal-Mart in North Auburn
December 29, 2010
Bohemia Properties sells the 18-acre site to Wal-Mart
March 28, 2011
Bohemia Properties confirms North Auburn site has been
sold to Wal-Mart
Source: Placer County Planning Department, Journal
Wal-Mart's slogan may be "Save Money. Live
Better," but rival Target is challenging it by offering even lower
prices on everyday products.
Two recent price comparisons of
household goods revealed that Target's prices are lower than at No.
1 retailer Wal-Mart.
Craig Johnson, president of retail consulting firm
Customer Growth Partners, compared 35 brand-name items sold at Wal-Mart
Target stores in New York, Indiana and North Carolina. They
consisted of 22 common grocery goods such as milk,
10 general merchandise products such as
furnishings; and three
health and beauty items.
Target's shopping cart rang in at $269.13 (pre-tax), a
hair lower than the $271.07 charged at Wal-Mart.
"For the first time in four years, our price
comparisons between the two has shown that Target has a slight edge over
Wal-Mart," said Johnson. A smaller study by Kantar Retail found similar
Wal-Mart typically maintains a 2% to 4% price
advantage over Target. But in January, Johnson noticed that some
products were cheaper at Target.
That has continued into February, he said.
If you factor in additional discounts offered to
Target's Redcard customers, the savings gap widens more considerably
between the two discounters.
Said Johnson, "When you add the Redcard's 5% discount,
the price gap widens to 5.7%."
Not all Target customers are Redcard holders. Target
declined to say how many customers are members. However, 7.4% of
Target's total sales in the fourth quarter were Redcard transactions,
said Target spokeswoman Molly Koenst.
Wal-Mart does not offer a similar program.
"This is a real win for consumers given the huge
increase in gas prices lately," said Johnson. "Consumers have little
control over gas prices but they do have control over what they buy and
where they shop."
Target's undercutting of Wal-Mart's prices didn't happen overnight, said
"Target stepped up its game during the recession," he
said. "The company caught up with Wal-Mart on making its supply chain
more efficient so it could bring down prices on items people frequently
Groceries are big traffic
generators, and Wal-Mart still dominates Target there. About half the
items that Wal-Mart sells are groceries.
Johnson estimates that 15% to 20% of Target's
merchandise are groceries. Koenst declined to confirm those numbers but
said 16% of Target's sales in 2009 were food and
Chewing over the numbers:
Kantar surveys just one Wal-Mart and one Target store in Massachusetts
and found Target's prices in January were about 2.8% lower than
Among the goods that Kantar compared, cheaper health
and beauty items, and particularly
smoking cessation gum, helped Target beat Wal-Mart.
(Updates with union comment from third paragraph.)
March 22 (Bloomberg) -- South Africa’s
Competition Tribunal postponed all hearings into Wal-Mart Stores Inc.’s
bid to buy control of Massmart Holdings Ltd. until May after unions said
a planned partial delay would harm their case.
The tribunal had agreed earlier with
the unions and the government to hold talks on factual evidence this
week and delay hearings with economists until May. The deal was meant to
allow governmental departments to gather more information about the
world’s largest retailer’s 16.5 billion-rand ($2.4 billion) bid for
control of Massmart. Unions later objected to having some hearings this
“We felt it would be harshly
prejudicial to our position,” said Michael Bride, deputy director for
global strategies at the North American United Food and Commercial
Workers International Union, in a phone interview from Pretoria today.
It would be “much fairer” for hearings to take place after all documents
are submitted, Bride said.
Wal-Mart offered in September to buy 51
percent of Massmart as it chases international expansion to make up for
a U.S. slowdown. The bid has been opposed by unions concerned about jobs
and local manufacturing, while the government told the court that the
proposed purchase raised “very significant public interest issues, and
might not be capable of being justified.”
Massmart fell as much as 2 percent to
131.02 rand in Johannesburg trading after news of the delay. The stock
was down 1.3 percent at 3:41 p.m.
A Massmart purchase would be the
biggest by Bentonville, Arkansas-based Wal-Mart since its $11 billion
takeover of U.K. retailer Asda Group Ltd. in 1999. Massmart is South
Africa’s largest food and general goods wholesaler.
The tribunal has scheduled hearings
from May 9 to May 13, with May 16 set aside for closing arguments,
according to Nandi Mokoena, a spokeswoman for the Pretoria-based
Bride said his group wants antitrust
authorities to ensure that if Wal-Mart enters the country, “it does so
on a basis that will promote economic development rather than destroy
The government affidavit questioning
the sale was “poorly motivated and highly opportunistic,” said Mark
Garden, Massmart’s legal counsel and a director at law firm ENS. The
departments of economic development, agriculture, and trade and industry
submitted the opinion to the court.
Massmart said Jan. 17 that it will
continue to honor existing agreements with workers if the transaction
with Wal- Mart is concluded.
--Editors: David Risser, Tom Lavell
To contact the reporter on this story: Renee Bonorchis
in Johannesburg at firstname.lastname@example.org
To contact the editors responsible for this story:
Frank Connelly at email@example.com; Edward Evans at firstname.lastname@example.org.
Two of the world’s largest food sellers -- Walmart and Supervalu (the
company of grocery stores chains like Shaws and Albertsons) -- are
destroy the world's ocean population by selling massive quantities of
Ninety percent of the seas' top predators have already disappeared.
fish like bluefin tuna, orange roughy, and shark -- the same species
the seafood coolers of the two companies.
After pressure from Greanpeace, Change.org members, and others, Trader
Costco, and Target have all pulled many imperiled species from their
prevent further catastrophe. But Walmart and Supervalu keep pushing
species toward the brink of extinction.
Their survival -- and the survival of the entire ocean ecosystems
part of -- could rest on the decision making of Walmart and Supervalu.
They may hold billions of dollars in purchasing power, but they’ve got a
weakness—consumer demand. If shoppers pressure these supermarkets to
their acts, they’ll have no choice but to make sustainable seafood the
Wal-Mart Stores here said Wednesday the first Walmart
Express locations will open between May and early summer in three rural
towns in northwest Arkansas.
The stores, each of approximately 15,000 square feet,
will be located in Gentry, Prairie Grove and Gravette, with construction
due to start on the Gentry unit next week and work on the other two
scheduled to start later in the month, Steve Restivo, a chain spokesman,
He confirmed local reports that the stores will have
about 12 aisles, with one side wall and part of the back wall allocated
to produce, refrigerated foods and frozen foods, but he declined to
comment on other layout features, including where the stores' pharmacies
will be located.
Asked to say what differences there might be among the
three locations, Restivo replied, "That's still being determined." He
declined to say where or when the fourth Express store would open.
Wal-Mart has indicated it expects to open 40 Express
stores this year, although supercenters will continue to be the
company's primary expansion format. "Walmart Express can be part of the
solution in urban and rural communities where residents don't have
access to healthy, affordable food," Restivo said.
In a hard-hitting submission to
the Competition Tribunal three government departments have criticised
Wal-Mart and Massmart for their unwillingness to make any binding
commitments that would address public interest concerns about the impact
of the merger on local procurement, food security and broad-based black
economic empowerment (BEE).
“A merger of the size of the
proposed Wal-Mart/Massmart transaction, and with the size and leverage
of the parties which are involved, could, if not properly regulated, go
some way towards undermining the New Growth Path”, the departments said.
A key condition sought by the
three departments is that the merged entity will “at least maintain or
increase the percentage of pre-merger local procurement by product
The departments’ submission
suggests that Wal-Mart and Massmart’s initial “willingness to co-operate
in an attempt to alleviate those concerns” faded significantly last
month after the Competition Commission recommended unconditional
approval for the proposed merger.
The submission is also critical
of Massmart’s unwillingness to provide the Economic Development
Department (EDD) with information necessary for an indepth analysis of
the likely impact of a merger between Wal-Mart and Massmart.
The submission, which was made
on behalf of the EDD, the Department of Trade and Industry and xDon't Department of Agriculture, Forestry and Fisheries, requests the tribunal
to postpone the hearing scheduled for March 22 to 24.
The departments have requested
the postponement because they now believe that as a result of “the
refusal of the merging parties to make any tangible or enforceable
commitments, particularly with regard to procurement and small
(especially broad-based BEE) businesses”, it is necessary for them to
intervene more actively in the merger proceedings.
According to the submission,
such intervention will require consideration of the negotiations that
were facilitated by the EDD, as well as analysis of information that was
sought from the merging parties in November but has still not been
The decision to intervene
actively in the tribunal’s proceedings marks a significant change in the
EDD’s initial approach to the merger. While the Competition Act empowers
the EDD to address public interest issues relating to a merger, the EDD
has chosen in this instance to use this power to facilitate discussion
between the merging parties and affected parties, such as the trade
Ten days after the proposed
transaction was announced last September, the minister of economic
development and the minister of trade and industry met with
representatives of the two companies and their financial advisers.
At that stage, “the merging
parties were not only receptive to the concerns voiced by (the)
government, but also indicated a clear willingness to co-operate in an
attempt to alleviate those concerns”, the submission said.
Despite not being provided with
the information required to analyse the public interest aspects of the
merger, and despite being given information that “presented the merger
in a more positive light (than) would appear to actually be the case”,
the EDD was keen to encourage the negotiations between Massmart and the
However “since the commission’s
recommendation that the merger be approved unconditionally, the EDD-facilitated
negotiations have stalled”.
It appears that since the
commission’s favourable recommendation, which was influenced by the
prospect of a negotiated agreement between Massmart and the unions, the
two merging parties have become “less flexible” on the issues of
concern. - Ann Crotty
LONDON—African retailer Massmart Holdings Ltd. said the South African
competition commission recommended approval of
Inc.'s proposed $2.4 billion offer to buy a controlling stake in the
company, even as labor unions plan to protest against the deal in a
The proposed acquisition marks the Bentonville,
Ark.-based retail giant's first foray into the growing sub-Saharan
African market. The potential deal is opposed by local unions, concerned
that the "Walmartization" of local industry will lead to job losses.
A customer exits a Game supermarket, part of Massmart
Holdings Ltd, in Johannesburg, South Africa.
A competition tribunal hearing now needs to be scheduled
before a final ruling on the transaction. No date has been set for the
tribunal hearing, Massmart said over the weekend.
"It is difficult to predict exact timing [of the hearing]
as this is largely dependent on the availability of suitable dates on
the Tribunal's roll," said Massmart Chief Executive Grant Pattison.
In January, Massmart said almost 98% of its shareholders
voted in favor of the deal to sell a 51% stake to Wal-Mart at 148 rand a
share. The transaction needed the support of at least 75% of Massmart
Massmart operates several wholesale and retail chains,
including Game general-merchandise stores, Builders Warehouse for
construction and Makro warehouse-club stores. The bulk of the company's
288 stores are in South Africa, although Massmart also operates in 13
other sub-Saharan countries.
Labor unions plan to present their case against the deal
at the upcoming hearing. Unions are concerned that Wal-Mart's entry into
South Africa will limit local manufacturers and food processors from
being able to compete, leading to job losses and the demise of local
"We will submit our opposition to the deal at the
tribunal," a Saccawu spokesman said. "Imports of Chinese garments
already caused job losses and decimated the garment industry here. We
are worried Wal-Mart can add to that in a country with already high
Massmart said it's holding discussions with the South
African Commercial, Catering and Allied Workers Union to respond to the
union's concerns. The two retailers previously said they will continue
to honor all existing union agreements and South African labor law if
the deal goes ahead. Massmart said Saccawu represents 41% of its
TEHACHAPI – This small mountain town, known for its scenic
landscapes and country-style living, may soon have its very own
The city’s planning commission approved the center Jan. 31, even
though some residents are opposed to the idea.
About 200 people showed up at the Jan. 10 meeting to protest the
supercenter. Commissioners said they weren’t prepared for such a
"If you people think that only Kmart and one of the markets will be
taken out, which is a big take out, you guys have got your head in
the wrong place," said resident Ted Kitzmiller.
Walmart representatives attended the meeting to speak to the
community about their plans.
"Our customers are telling us that they would like to see a Walmart
store in Tehachapi," said Amelia Neufeld, the senior manager for
Walmart public affairs.
"They're tired of driving down to Bakersfield and Antelope Valley to
do their shopping,” she added.
The new Walmart will provide 300 new jobs and bring in new sales tax
revenues, Neufeld said
Now residents have a two-week time period in which to file an appeal
of the planning commission’s decision. If an appeal is filed, the
project goes back to the city council, which would make the ultimate
SAN DIEGO - San Diego business leaders who oppose an
ordinance that requires developers of big box superstores to perform
costly economic impact studies urged the City Council Friday to repeal
Opponents of the ordinance, passed in November, turned in enough
petition signatures to force a public vote, and council members will
decide next week whether to repeal the measure or call a special
Now that council President Tony Young has publicly stated that he will
vote to repeal, and with Lorie Zapf replacing ordinance supporter Donna
Frye on the ballot, it appears there are enough votes to rescind the
"A lot of us have been around long enough to know nothing is final (with
the City Council) until all the (voting) buttons are pushed on the
dais," said T.J. Zane of the Lincoln Club of San Diego County. "We're
going to keep the pressure on."
If the ordinance is not overturned, then a coalition called "San Diego
Consumers for Choice" will campaign for its defeat in a vote of the
public, according to Zane.
Supporters of the "Ordinance to Protect Small and Neighborhood
Businesses" say economic impact studies are necessary to determine the
impact a large store might have on the surrounding neighborhood. It
targets new retailers that are larger than 90,000 square feet and
generate more than 10 percent of their revenue from groceries.
Opponents claim it amounts to a virtual ban on Wal-Mart because it
employs non-union labor.
On Thursday, Wal-Mart proposed to build about a dozen new stores in San
Diego, ranging from neighborhood groceries to superstores, but a
spokeswoman said it would be difficult to carry out the plan if the
measure was still in effect.
The City Council will acknowledge receipt of the petition signatures on
Monday, then vote on the possible repeal on Tuesday.
Maggie Sans, Wal-Mart's vice president of public affairs, said Thursday
no building sites have been identified, but "it is our intent to serve
the city of San Diego across the city."
The proposed stores would range from smaller neighborhood markets of
30,000 square feet to superstores, Sans said.
It would be easier to fulfill the company's promises if the "Ordinance
to Protect Small and Neighborhood Businesses" was not in effect, she
The law requires developers and big retailers, such as Wal-Mart, to
submit costly economic impact studies before new stores can be built
that are larger than 90,000 square feet and generate more than 10
percent of their revenue from groceries.
Mayor Jerry Sanders vetoed the ordinance, but it was overridden by the
Earlier this week, the city clerk determined that the measure's
opponents gathered enough signatures to force a public vote on the
The City Council now has to decide whether to rescind the law or call a
special election, which would cost around $3 million.
Repeal became the likely result when council President Tony Young became
the fifth council member to support rescinding the measure.
Young has repeatedly asked for a Wal-Mart in his southeast San Diego
district, which only has two major grocery stores.
"The fact is, consumers are getting the short end of the stick in my
district," Young said.
Sans said she would not guarantee that Wal-Mart would build in the area,
which includes Encanto, Lincoln Park and Skyline, but the company is
studying potential sites.
Massmart store, Macro, in a Johannesburg suburb
Monday, Jan 17, 2011. The South African chain's
shareholders have overwhelmingly accepted Wal-Mart's
offer to buy 51 percent of their company paving the
way for the giant U,S,-based retailer to enter
A South African chain's shareholders
have overwhelmingly accepted Wal-Mart's offer to buy
51 percent of their company, the chief executive
said Monday, paving the way for the giant U.S.-based
retailer to enter Africa.
Massmart said the proposal was
approved by 97 percent of shareholders who voted
Monday - 75 percent had been needed. Wal-Mart
offered 148 rand (about $20) per share in a 17
billion rand (about $2 billion) deal.
The deal will have to be approved by
South Africa's anti-monopoly regulators.
Massmart CEO Grant Pattison said once
the deal goes through, Massmart will continue to
operate the stores and continue to be listed on the
Johannesburg Stock Exchange, while Wal-Mart will be
the main owner. Massmart runs about 290 big box,
pharmacy, electronics and other stores in 14 African
"They are a great retailer and we
really are looking forward to learning something
from them, and teaching them something about
Africa," Pattison told The Associated Press. "We're
excited because they're coming as our partners."
Wal-Mart, based in Bentonville,
Arkansas, has 8,692 stores in 15 countries, among
them Brazil, China and India. But it has not until
now ventured into Africa.
South Africa has the most developed
economy on a continent slowly emerging from grinding
poverty, and one that fared better than other parts
of the world during the global recession. Consulting
firm McKinsey & Company has concluded that global
business cannot afford to ignore Africa's potential,
or its growing middle class. The World Bank has said
the continent is finally seeing the results of years
of market reforms and investment in education and
Business here has welcomed Walmart's
arrival as recognition of the potential of the
continent's economy, and of the reach South African
retailers have throughout Africa.
South African labor groups, though,
say that Wal-Mart is anti-union. Wal-Mart has said
it would respect contracts and is committed to
working with South African unions.
Sidumo Dlamini, president of the
powerful Congress of South African Trade Unions, was
at Massmart's Johannesburg headquarters for Monday's
shareholders' vote. He said that while the approval
was expected, he was disappointed.
The deal holds "nothing for the
workers. We have empirical evidence from other
countries where Wal-Mart is operating. It has never
done anything for the workers," Dlamini said.
Labor activists from South Africa and
abroad addressed the shareholders' meeting. One of
the speakers, Michael Bride of the 1.3
million-member United Food and Commercial Workers
International Union of USA and Canada, said he had
not expected shareholders to turn down the offer.
"Shareholders can be forgiven for
voting in their own interest," Bride said.
Among those with major Massmart
holdings are South Africa's government-owned Public
Investment Corp., which invests on behalf of civil
service pension funds, and Scotland's Aberdeen Asset
Management. Massmart workers, most of whom are
black, also have a stake through a trust set up as
part of a South African campaign to help those
denied economic opportunities under apartheid.
Bride said the next step for the
unions would be appealing to South African
regulators, in hopes of - if not stopping the deal -
persuading the government to impose conditions.
Among the provisions unions want are guarantees
Wal-Mart will buy local, which Bride said would
protect jobs in a country with unemployment of at
least 25 percent.
Pattison, the Massmart CEO, said he
had assured unions no jobs would be lost and no
labor contracts violated. And he said consumers
"We would have failed if we don't
bring prices down," he said.
Gerard Heath, a businessman pushing a
load of sugar and bulk-pack toilet paper out of one
of Massmart's Makro big box stores Monday, said
lower prices would be just one benefit. He hoped
African factories would find global markets for
their products through Wal-Mart, and that Massmart's
local rivals would be pushed to improve service.
"It will make Africa a lot more
competitive," Heath said.
Nozipho Mkhonza, who works at a
printing company and buys supplies for work and home
at Makro, said she now needs to visit several stores
to find all the items on her shopping list. She
hoped that with Wal-Mart backing, Makro would widen
its product range.
"If I can find everything under one
roof," Mkhonza said, "all the better for me."
Now that most supermarkets are learning to co-exist with supercenters,
Wal-Mart Stores may create a new round of competitive challenges as
it contemplates opening more medium-sized stores and developing a
smaller urban model.
After months of industry speculation, Wal-Mart
formally disclosed plans two weeks ago to begin opening medium-sized
units of 30,000 to 60,000 square feet — with close to 40 units scheduled
to open during 2011 — and to begin testing a smaller store of under
30,000 square feet as well.
“Since traditional supermarkets generally have more
expensive cost structures, less flexible unionized labor and preexisting
margin pressures, it would be difficult for them to compete on price
with these new Wal-Mart stores,” Neil Currie, executive director of UBS,
New York, told SN.
Mark Wiltamuth, executive director of Morgan Stanley,
New York, said he believes Safeway and Supervalu would have the most
exposure to Wal-Mart's new-store strategy.
Leon Nicholas, director of retail insights for Kantar
Retail, Cambridge, Mass., suggested supermarkets begin planning now to
get a jump on Wal-Mart.
“If I were a supermarket operator with plans to open
‘X’ number of stores in the next few years, I might reconsider and open
X-plus before competition for real estate sites becomes too intense,”
“So if I'm
Kroger, I might look for more Marketplace locations, and if I'm
Eagle, I might look for more Express locations — formats that
provide good returns and better sales per square foot.”
However, observers differed on how quickly the new
formats are likely to grow.
Even if Wal-Mart moves forward with an expansion of
Neighborhood Market “full force,” Jim Hertel, managing partner at
Willard Bishop, Barrington, Ill., told SN, “it will have to find
and identify real estate and go through extensive permit processes, so
it could be as long as 18 months before it could even start to open
stores, which means it could be three to five years before those
new-format stores become a real retail threat.”
Nicholas also said it could be 2014 or 2015 before the
number of medium- and small-sized Wal-Marts pose a major threat to
traditional supermarket operators.
Wiltamuth said he believes the real threat may come a
lot sooner. “While only 30 to 40 of these [medium and small-sized]
stores will hit the market in 2011, the real estate pipeline is ramping,
and [it's possible] the new Neighborhood Market pipeline could be in the
350 range in 2012.”
Currie said he believes Wal-Mart wants to grow its
store base as quickly as possible, “but investors don't want it to spend
a lot of capital, so I would not expect any degree of massive openings
until it's proven the new formats work and ensured the returns are
Once it does decide to move forward, however, the
rollout could be rapid, Currie added. “While it may take some time for
Wal-Mart to feel it has refined these [new] formats to a point where it
is ready for a full-scale rollout, there is potential for it to open
more than 400 of these smaller-format stores per year.
“While this level of store openings would be
challenging, it would be manageable, given that smaller-format retailers
such as Walgreens and
Family Dollar have opened more than 500 stores per year at their
For Daniel Binder, an analyst with Jefferies & Co.,
New York, Wal-Mart has already proven the viability of the medium-sized
format, pointing out that Neighborhood Market's return-on-investment is
approaching that of a supercenter, “and EBITDA margins are apparently at
least as good as the best EBITDA margins in the grocery industry — in
the 5% to 6% range.
“Although that level of profitability would likely be
dilutive to Wal-Mart earnings, the investment in Neighborhood Market
stores has come down considerably over five years, and the company is
now investing 78% of what it used to, allowing the company to achieve an
ROI near supercenter levels,” Binder explained.
“So on a near-term basis, Neighborhood Market is
primed for a rollout.”
Speaking at the Wal-Mart investor conference two weeks
ago, Bill Simon, president and chief executive officer of Walmart U.S.,
said, “There are hundreds and hundreds if not thousands of opportunities
in the U.S. for small formats. Some would be in fill-in markets we have
already developed, but many, many, many of them exist in urban markets
and small towns where we have no market share.”
Although Simon said the medium-sized stores will be
similar to Wal-Mart's Neighborhood Market, he did not disclose what
store banner it will use, though some observers are referring to the
format as “Neighborhood Market” in their assessments.
According to one school of thought, if Wal-Mart opts
to invest most of its capital the next few years in international
acquisitions, then any large-scale rollout of new formats in the U.S.
would be relatively slow — a scenario that would give supermarket
operators a chance to chart their course more deliberately.
“These medium- and small-sized stores may not grow at
the rate Wal-Mart grew supercenters, when it was opening close to 200 a
year,” Nicholas told SN.
As Wiltamuth and Currie suggested, the rollout could
exceed that number.
Hertel of Willard Bishop, however, said it might be
too soon to predict any widespread Neighborhood Market rollout from
Wal-Mart, given past history.
“I'm a bit skeptical about plans to expand
Neighborhood Market because we've heard that promise from Wal-Mart in
the past, yet very little has come of it. So I'm taking this discussion
with a grain of salt.”
Art Turock, principal with Art Turock & Associates,
Kirkland, Wash., was also skeptical. “Wal-Mart talked four years ago
about growing Neighborhood Market and nothing happened — and it's opened
small stores like Marketside in Phoenix that it doesn't plan to
“I was very aware of the threat supercenters posed
when the company first started opening them, but I do not have the same
fear, worry or anxiety about Wal-Mart doing something small.
“It certainly has done well with supercenters, which
is a more efficient format, but the company's track record indicates it
doesn't do that well with smaller stores.”
Turock said he sees the combination of Save-A-Lot and
Rite Aid in the Southeast as a more convenient, more viable approach to
Wal-Mart told the investor conference earlier this
month the medium-sized stores would be similar to its 42,000-square-foot
Neighborhood Market format. Though the development of Neighborhood
Market has been slow, particularly by Wal-Mart standards — with only 181
locations opened since 1998 — the company said changes to the format
have made it more viable as a growth vehicle.
During his presentation at the conference, Simon said
the Neighborhood Market format has become a more attractive expansion
vehicle over the last couple of years due to several “significant
“One of the first things we realized was that the
prescription business at the stores' pharmacies was driving a
disproportionate share of sales vs. the pharmacies in the supercenters,”
Simon explained, “so as the share of that business and the profits
improved, so did the top and bottom lines.
“We also changed our merchandising approach. For many
years we were sending the same items in the same quantities to
Neighborhood Markets as to supercenters, but we changed that in the last
couple of years [by catering more to specific neighborhood needs].
“In addition, we began operating that format
differently. Three years ago we had one market manager typically
overseeing eight supercenters and two Neighborhood Markets, which meant
most gave their attention to the eight, not the two. Once we made some
structural changes to align the leadership in the stores and in the
markets to focus on operational improvements, business improved — and
our produce business also improved as we added more efficiencies,” Simon
According to Hertel, if the changes Wal-Mart has made
to Neighborhood Market make it a more viable format, then it could be a
very powerful competitive vehicle, especially in some urban food
ShopRite's PriceRite and Giant Eagle's Valu King represent the next
generation of killer formats because they are priced very aggressively,
albeit with some third-tier brands, and they seem to do a good job
meeting the needs of local communities, particularly ethnic
“That's the standard Neighborhood Market will have to
meet, though I'm still skeptical about Wal-Mart's follow-through on its
Wal-Mart officials did not give out many specific
details about the smaller-format stores during the investor conference.
“Most markets around the globe have been successful with smaller stores,
so we have a ton of institutional knowledge in our company, and we will
continue to learn from our global counterparts,” Simon said.
Binder said stores under 30,000 square feet are
“prevalent and successful” throughout Wal-Mart's international markets,
“and the development of a prototype at Walmart U.S. will be drawing off
“The company plans to take this format into
high-density urban regions where real estate availability and cost are
key issues, and also out to rural markets where populations do not
justify a larger format.
“This is not necessarily a dollar-store format, and
given the small number of stores that will be introduced initially — and
without further insight into how these stores will be merchandised —
it's far too early to call them a competitive threat [to dollar
stores],” Binder said.
Nicholas said he expects Wal-Mart's smaller units to
be “similar to a food-and-drug store but with a site-to-store
“It will look like a Neighborhood Market, with a
pharmacy, a limited assortment of HBC and over-the-counter drugs and a
limited assortment of food and non-edibles, but it will also have the
capability of serving as a pickup point for items ordered from
This approach would be particularly desirable in an
urban market, Nicholas pointed out, where people tend not to be home
during the day and would not want something delivered to their
apartments. “But with Wal-Mart's highly efficient distribution, it could
deliver products to these small stores where customers could pick them
“Currently, Wal-Mart is having merchandise in some
cities delivered to FedEx locations that serve as instant distribution
points, which has enabled Wal-Mart to expand its footprint with zero
capital investment. These small urban stores would allow Wal-Mart to do
what it does best, which is to distribute goods.
“It's an approach other companies could try, but they
lack the scale of Wal-Mart to make it practical,” Nicholas said.
Currie suggested Wal-Mart could make an acquisition to
hasten expansion of its smaller format, noting that Rite Aid, Camp Hill,
Pa., would be an attractive target, “since Rite Aid's stores fit
Wal-Mart's real estate needs, with numerous units over 20,000 square
feet in urban areas to which Wal-Mart could bring its own processes and
efficiencies, with clear potential for improvement.”
Most of Rite Aid's stores are located on the East and
West coasts, with many in such urban areas as New York, Boston,
Washington, D.C., and Los Angeles, where Wal-Mart does not have a major
Given that Rite Aid's East Coast stores are smaller —
averaging 11,000 square feet compared with a 20,000-square-foot average
on the West Coast — and given that the Western stores are “better
equipped to serve as a combination pharmacy/food retailer,” Currie
noted, Wal-Mart could pursue an acquisition of just one segment of Rite
ANTIOCH -- Wal-Mart's bid to expand
its store here into a Supercenter is headed to court after an
environmental group sued to block the plan last week.
Antioch's approval of a 33,575-square-foot expansion
of the Lone Tree Way store in September violates its own municipal code
and state environmental law, representatives from a coalition of
environmental and labor groups said in a suit filed in Contra Costa
County Superior Court.
The suit, filed by California Healthy Communities
Network, will delay the company's plan to bring its first Supercenter
store featuring a full-service grocery to the East Bay. Wal-Mart Stores
Inc. is responsible for all city legal costs in the suit.
City Attorney Lynn Tracy Nerland could not be reached
for comment Monday.
Council members said they were not surprised by the
Angie Stoner, a Wal-Mart spokeswoman, said the company
"At a time when the city is facing potential
bankruptcy and record unemployment rates, it is troubling to see, yet
again, out-of-town special interest groups abusing the (environmental)
process," she said.
The area surrounding the store has undergone
substantial change since the environmental documents for Williamson
Ranch Plaza were approved in 1998, according to the lawsuit.
As a result, Antioch should have prepared a subsequent
environmental study that addresses new issues and changes to the
severity of other issues, mainly the
proposed expansion's effect on local grocers in the trade
area, said Phil Tucker, the group's project director.
Antioch's general plan also requires leaders to consider
imposing reasonable conditions on approvals to protect public health and
City leaders ignored substantial evidence from three
months of public meetings showing that the approval of the expansion
would harm public health and welfare, according to the suit.
The City Council's approval Sept. 28 was a reversal of
its initial decision to deny the project on the grounds that an
environmental study for the project underestimated the potential effects
on the area's economy.
The council based the approval in part on a state
appellate court decision this year involving a San Diego redevelopment
project that raised questions about a city's ability to consider
possible environmental effects when looking at a design review
Attorneys for Wal-Mart and an attorney retained by the
city argued that an environmental study was not required to approve the
The council did what was legally required,
Councilwoman Martha Parsons said Monday.
"The process to approve this project was legally
defective," he said. "We believe the original decision of the council,
before city staff intervened, was appropriate and correct."
Wal-Mart has been trying for six years to expand its
Antioch store to include a bakery, produce section and full-service
The City Council narrowly defeated a larger expansion
plan in 2007.
No scheduled court date for the lawsuit has been set.
— A proposal to provide further scrutiny for big-box stores that want to
sell groceries in San Diego is rekindling the debate over whether
supercenters spell the demise of small business or whether they’re
saviors for hard-pressed families out for affordable goods.
The San Diego City Council in a special meeting
Wednesday is scheduled to consider a draft ordinance that would require
retailers such as Walmart to fund an economic impact analysis to
determine whether their stores would harm surrounding neighborhoods and
Councilman Todd Gloria said the proposal is essential
to ensure the city is not working at cross-purposes when it permits
big-box retailers at the same time it aims to promote small
businesses. About 92 percent of businesses in the city are
“What we’re simply seeking
to do is provide them a voice in the process,” Gloria said. “If
these (super) stores are as incredible as they claim to be, I would
think that would show up in the reports.”
Steven Restivo, a spokesman for Walmart, said it
boiled down to consumer choice.
“With the city facing significant unemployment
challenges and historic budget deficits, we just don’t see the sense
in creating fast-track legislation that’s going to stand in the way
of opportunities to generate new tax revenues, create jobs and
improve access to affordable food,” Restivo said.
Critics of the big-box proposal, including
Councilman Kevin Faulconer, say now is not the time to place
arbitrary roadblocks before top sales-tax generators. The meeting
comes a day after voters weigh in on Proposition D, a ballot measure
to authorize a temporary increase in the city sales tax of a half
cent on the dollar.
Detractors also questioned the unprecedented way
the proposal was being brought forward. This is the first time since
the city assumed a strong-mayor form of government that a potential
override vote was scheduled in advance of a hearing, officials said.
In the past five years, the council has considered about three
ordinances per year at special meetings, the majority of which were
time-sensitive, records show.
Councilman Carl DeMaio said proponents
deliberately scheduled the hearing after Election Day, and set a
Dec. 2 meeting to override a possible mayoral veto before two
council members facing term limits leave office.
“It’s hypocritical for Todd Gloria and members of
the City Council to be pushing a larger sales tax while scheduling a
complete giveaway to the labor unions,” DeMaio said. “But they’re
worried District 6 will change hands and there’s only so much time
Of the two candidates running for Councilwoman
Donna Frye’s District 6 seat, Republican Lorie Zapf opposes the
draft ordinance. Her opponent, Democrat Howard Wayne, did not return
repeated voice messages for comment. When contacted by a reporter,
Wayne said he was “too busy” and hung up.
The city three years ago banned large retailers
with full-service groceries only to reverse course a month later
when Frye dropped her opposition to Walmart Supercenters. A
representative for Frye, who advocated requiring such economic
studies when she opted not to support the ban, said the councilwoman
was reviewing the ordinance and has met with both sides on this
issue. “She will make a decision about how she will vote after
listening to public testimony at the scheduled public hearing,” said
Kevin Smith, Frye’s deputy chief of staff.
A supercenter — big-box retailers with more than
90,000 square feet and more than 10 percent of floor space dedicated
to nontaxable items such as groceries and prescription drugs — would
be required to evaluate how many jobs would be created and
displaced. A traffic study and how the store would affect wages and
benefits in the neighborhood would also be necessary.
Gloria said of particular concern were older
communities such as Hillcrest, North Park and City Heights, which
were decimated when modern department stores moved into Mission
Valley in the 1960s. Several studies show big boxes with full
groceries having deeper impacts on neighborhood businesses than
other large shops, he said.
“Our neighborhood grocery stores provide good jobs
and good health benefits to those workers,” said Mickey Kasparian,
president of the United Food and Commercial Workers Union Local 135.
“Why taxpayers should have to pay for Walmart employees’ benefits is
Labor organizers contend that nonunionized workers
often end up in taxpayer-supported health clinics and emergency
Others have decried Walmart’s “bullying tactics,”
including attempts to confound consumers with full-page newspaper
ads that are “deceptive, wrong and show what massive wealth can do
to corrupt the system,” said Lorena Gonzalez, head of the San
Diego-Imperial Counties Labor Council.
The small-business “voice in the process is being
represented by the people they elected and Walmart is trying to
prevent that,” Gonzalez said. “In some ways, I cannot believe we are
having this big of a public fight in asking a massive retailer that
if they want to put in a massive store they have to complete these
There are no pending supercenter applications on
file. If approved by the council, the ordinance would take effect 30
days after a final vote.
Wal-Mart Stores Inc. is
planning to open dozens of small stores in the nation's cities, in an
effort to push back against the dollar chains and other competitors
nibbling at its customers.
The prospect of Wal-Mart stores dotting America's
biggest cities would change the urban landscape and the profile of the
world's largest retailer, known for its blocky suburban edifices stocked
with low-cost goods. The new stores, roughly a quarter to a third the
size of a supercenter, largely will sell groceries.
Bill Simon, head of Wal-Mart's U.S. stores business,
said Wal-Mart envisions opening in the next few years 30,000- to
60,000-square-foot Neighborhood Market groceries and new, smaller
outlets modeled on the bodegas it operates in Latin America. Its
supercenters average 185,000 square feet.
Mr. Simon said he believes there is room for
"hundreds" of small Wal-Mart stores in the U.S., offering food and
consumer staples. The retailer first will test their urban appeal with
30 to 40 stores over the next few years before a full-scale launch.
The move is an about-face for Wal-Mart. At the start
of the recession, it focused on attracting more middle-class customers
who were "trading down" to discount stores by remodeling to feature
neater aisles, fashionable clothing, and eye-grabbing discounts on fewer
But Wal-Mart now admits the gambit alienated many of
the blue-collar customers who had made it a retail behemoth in the first
place. So after shuffling executives, the company is hurriedly restoring
the ungainly pallets of merchandise to its center-store aisles and
reworking its marketing strategy to emphasize the "every day low prices"
formula that the company's late founder Sam Walton made famous.
"Sometimes we will try things, and sometimes they work
and sometimes they don't," Chief Executive Mike Duke said. "Getting back
to every day low price across a wide assortment of products is really
the right approach."
Sales have fallen for five consecutive quarters at
Wal-Mart U.S. stores open at least a year, a key benchmark for retail
businesses. The company's U.S. store growth has also stalled as it has
begun running out of rural and suburban markets for its warehouse-sized
supercenter stores, leaving large cities such as New York, Chicago and
Los Angeles as the company's last frontiers for domestic expansion.
Wal-Mart has made a push to show it is a socially
responsible giant; it now, for instance, offers better health benefits
than most of its retail rivals, and is requiring suppliers to limit
their carbon emissions. Yet Wal-Mart has struggled at cracking the big
cities amid stiff opposition from organized labor—even as its archrival,
Target Corp., and other big-box chains such as
Best Buy Co. make a steady march into urban areas with similar
products, stores and nonunion workers.
Wal-Mart now discloses wages to convince critics that
its pay is equal or better than competitors'; in New York hourly wages
average $12.20, nearly $5 more than the state's minimum wage and $2
above the New York City retail median, which was $10.04 in 2009
according to the Fiscal Policy Institute, a nonprofit group financed by
A spokesman for New York Mayor Michael Bloomberg said
he would welcome the company.
"We shouldn't tell businesses that want to invest and
create jobs in New York City that they can't," said spokesman Andrew
Brent. "New Yorkers are already voting with their feet when they drive
outside the City to shop at stores that aren't in the five boroughs"
that make up New York.
Still, urban foes say they continue to battle every
Wal-Mart with special reserves of vitriol, for a simple reason: It's
Wal-Mart, a company with a history of anti-union tactics and worker
disputes, including an ongoing gender discrimination lawsuit that is the
Wal-Mart won the right to build its second and third
stores in Chicago earlier this year after years of lobbying. But when
New York politicians and union leaders learned Wal-Mart was eyeing a
shopping center called Gateway II for its first store in the city
earlier this year, they rallied at City Hall to deliver a rude message:
"Wal-Mart can say they are a different company, but we
are not going to roll the dice in New York City," said New York City
Council Speaker Christine Quinn. "Target in no way has the history of
employment problems that Wal-Mart has. You can't teach an old dog new
Yet Wal-Mart's move to go small is about more than
trying to sidestep longstanding urban foes with stores that require
fewer zoning approvals. Wal-Mart faces new challenges from bare-bones
outlets including Germany's Aldi and chains such as
Dollar General Corp.
Lower cost rivals have expanded exponentially since
the recession, offering small sizes of staple items such as milk and
toilet paper to attract strapped consumers who in some cases could not
afford the super-sized versions of the items sold at Wal-Mart.
"I am not focused on any one competitor," Mr. Simon
said when questioned by analysts about whether the small-store shift was
spurred by dollar stores, but he added: "Do they have a head start?
Yeah, they do, they have 20,000 [stores]."
Mr. Simon would not specify which cities Wal-Mart
wants to enter, replying, "Yes. All of that," when asked whether coastal
cities such as California's were a possibility. But he joked that he had
liked the musical selections during a dinner the prior evening, which
included "New York, New York" being sung by a choir of Wal-Mart workers.
Wal-Mart currently has no stores in the Big Apple.
Wal-Mart expects to build the new stores without
raising overall capital expenditures by shifting money from supercenter
remodeling budgets, he said. The company plans to spend between $7.5
billion and $8 billion on equipment, new stores and updates in the U.S.
during its fiscal 2012, roughly the same as this year.
Wal-Mart did not detail how many workers the smaller
stores would employ, but Wal-Mart's mid-sized groceries, called
Neighborhood Market, average about 95 workers each at more than 180
stores, mainly in the south.
"In this environment, we should be thriving," Mr.
Simon said, explaining that weak economy posed an opportunity to gain
In addition to convenience stores, Wal-Mart faces
growing competition from
Amazon.com Inc. and other e-commerce retailers that have added
household staples to their selections of electronics, books and music.
To fend them off, Wal-Mart will begin allowing
customers this month to place orders online and retrieve the goods at
800 stores, a program it called "Pick Up Today."
Wal-Mart also said it was expanding an experiment in
which customers who live in urban areas with few or no Wal-Mart stores
can order merchandise online and have it delivered free to a nearby
FedEx location. The test is expanding to New York, Chicago, San
Francisco and Washington, D.C., on Thursday, after beginning this summer
in Boston and Los Angeles.
Yet Wal-Mart is recognizing that its biggest untapped
market may be urban markets such as New York. There, potential customers
such as retirees Marvin and Rhoda Treibitz say they would welcome a
retailer they believe would bring greater variety and cheaper prices.
"I wouldn't mind at all if Wal-Mart opened, and I am
speaking as a retired union man," said Mr. Treibitz, a former motion
picture operator, as he exited a Brooklyn shopping center where Target
and Best Buy have already opened shop.
LOUISVILLE, Ky. & BENTONVILLE, Ark.--(BUSINESS
WIRE)--Today, Humana Inc. (NYSE: HUM) announced an innovative
Medicare Part D prescription drug plan, co-branded with Wal-Mart Stores,
Inc. (NYSE: WMT) or (“Walmart”), that can provide significant savings on
monthly plan premiums and prescription medicine copayments and
cost-shares for Medicare beneficiaries, including seniors and people
The Humana Walmart-Preferred Rx Plan (PDP)
offers one low national monthly plan premium of $14.80 – according to
CMS,1 the lowest national plan premium in 2011 for a
standalone Medicare Part D plan premium offered in all 50 states and
Washington, D.C. This new co-branded prescription drug plan can save a
typical Medicare Part D beneficiary who enrolls in the Humana Walmart-Preferred
Rx Plan (PDP) an estimated average of more than $4502 in 2011
on plan premiums and prescription medication copayments and cost-shares
when compared with the average total costs for a Part D prescription
drug plan in 2010. With nearly 18 million Americans relying on Medicare
Part D for their prescriptions,3 the Humana Walmart-Preferred
Rx Plan (PDP) provides an affordable prescription solution for those who
need it most.
“One of the primary goals of health care reform is to
make health coverage more affordable – and that’s what we’re doing with
the introduction of this low-cost Medicare Part D plan,” said William
Fleming, PharmD, vice president of Humana Pharmacy Solutions.
“People are more likely to take the medications prescribed for them when
they can afford those medications. And adhering to prescription-drug
regimens can enable people to be healthier and prevent future illness.
At Humana, we believe that this prevention helps people live healthier
lives and achieve lifelong well-being.”
“We know every dollar counts, especially when you live
on a fixed income. We believe no one should have to choose between
buying their groceries or their medications,” said John Agwunobi,
M.D., president of Walmart’s Health and Wellness division.
“Financial health is a fundamental part of a person’s well-being. At
Walmart, the customer is always front and center, and that is why we are
committed to doing everything we can to ensure seniors have access to
the medications they need at a price they can afford.”
Humana Walmart-Preferred Rx
Plan (PDP): Benefits and Details
One low monthly rate
nationwide. The monthly plan premium is
less than $15 a month for everyone, regardless of where they live.
According to CMS, the
$14.80 monthly plan premium is the lowest national plan premium
in 2011 for a standalone Medicare Part D prescription drug plan
offered in all 50 states and Washington, D.C.1
The Humana Walmart-Preferred
Rx Plan (PDP) offers a monthly plan premium of $14.80, which is
less than half the weighted 2010 national average for Medicare
Part D prescription drug plans’ monthly plan premiums.4
when plan members use preferred pharmacies like
Walmart, Neighborhood Market or Sam’s Club pharmacies:
(at preferred pharmacies) on generic prescriptions start as low
as $2 when plan members use preferred pharmacies.
Copayments as low as
$0 for generic prescriptions filled via Humana’s RightSource
home-delivery prescription service.
A broad competitive
formulary comparable to other plans, with
a list of prescription drugs included in the plan available at
How to Enroll in the Plan:
Call, Click or Go
Information on the plan is available starting today;
annual enrollment for Medicare plans begins Monday, Nov. 15, 2010, and
continues through Dec. 31, 2010. To get more information on the Humana
Walmart-Preferred Rx Plan (PDP) and to learn more about these savings:
Call Humana to enroll at
1-800-899-0441. For TTY, call 711, 8 a.m. to 8 p.m., seven days a
humana-medicare.com or medicare.gov to enroll.
Click on walmart.com/rxplan
or samsclub.com/rxplan for additional plan details and links to
Visit a Walmart store tospeak to a Humana representative.
including many staffed by Humana representatives, are available
in approximately 3,000 Walmart stores across the country.
Medicare beneficiaries can click on “Find a Location Near You”
at walmart.com/rxplan to locate an on-site Humana
Medicare Part D Background
Medicare Part D is the prescription drug program
supported by the federal government. According to the Kaiser Family
Foundation,nearly 18 million people are currently enrolled
in a standalone Part D plan3 and Families USA reports that
seniors generate one-third of all prescriptions filled in the United
Humana Inc., headquartered in Louisville, Kentucky, is
one of the nation’s largest publicly traded health and supplemental
benefits companies, with approximately 10.3 million medical members and
approximately 7.3 million specialty-benefit members.
Humana is a full-service benefits-solutions company,
offering a wide array of health and supplementary benefit plans for
employer groups, government programs and individuals.
Over its 49-year history, Humana has consistently
seized opportunities to meet changing customer needs. Today, the company
is a leader in consumer engagement, providing guidance that leads to
lower costs and a better health plan experience throughout its
diversified customer portfolio.
More information regarding Humana is available to
investors via the Investor Relations page of the company’s Web site at
http://www.humana.com, including copies of:
Annual reports to
Securities and Exchange
Most recent investor
Quarterly earnings news
Replays of most recent
earnings release conference calls
Calendar of events
(includes upcoming earnings conference call dates and times, as well
as planned interaction with research analysts and institutional
Wal-Mart Stores, Inc. (NYSE: WMT), or “Walmart,”
serves customers and members more than 200 million times per week at
more than 8,400 retail units under 55 different banners in 15 countries.
With fiscal year 2010 sales of $405 billion, Walmart employs more than 2
million associates worldwide. A leader in sustainability, corporate
philanthropy and employment opportunity, Walmart ranked first among
retailers in Fortune Magazine’s 2010 Most Admired Companies survey.
Additional information about Walmart can be found by visiting
www.walmartstores.com and on Twitter at
http://Twitter.com/Walmartnews. Online merchandise sales are
Editor’s Note:B-roll containing store, customer and product images can be accessed
via the online newsrooms at walmartstores.com/RxPlan and humana.com or
at the satellite time below:
Schedule/Coordinates for B-roll Package:
2 Savings estimate is
based on a comparison between 1) the projected average nationwide
out-of-pocket costs for the 2011 benefit year for the average Medicare
beneficiary who enrolls in the Humana Walmart-Preferred Rx Plan (PDP)
and fills their prescriptions in-store at preferred pharmacies like
Walmart, Sam's Club, and Neighborhood Market pharmacies, and 2) the
projected average nationwide out-of-pocket costs for the 2010 benefit
year for the average Medicare beneficiary. Calculations based in part on
industry average PDP premium and benefit information from the “Medicare
Part D 2010 Spotlight, Medicare Prescription Drug Plans in 2010 and
Key Changes over Five Years”, an independent review and analysis of
CMS data by the Kaiser Family Foundation (September 2010). Actual
savings may vary. For some beneficiaries, actual out-of-pocket costs may
be more. Savings estimate may be updated when 2011 benefit year data
becomes publicly available.
(Reuters) - Health insurer Humana Inc (HUM.N)
and Wal-Mart Stores Inc (WMT.N)
will team up to offer a U.S. Medicare prescription drug coverage plan
next year that will have the lowest premiums in the country, the
companies said on Friday.
The Humana Walmart-Preferred Rx Plan will cost $14.80
per month in premiums for prescription drug coverage in all 50 states
and Washington, D.C., the companies said in a joint press release.
The monthly premium is less than half the average
premium for Medicare prescription drug plans this year, the companies
Other features of the plan include co-payments for
generic drugs as low as $2 when using preferred pharmacies such as
Walmart and Sam's Club, and no co-pays for some generic prescriptions
filled through Humana's mail-delivery service.
About 18 million Medicare beneficiaries are enrolled
in plans that offer prescription drug coverage only, according to the
Kaiser Family Foundation think-tank.
Humana is one of the largest providers of plans under
Medicare, the U.S. government health coverage program for seniors.
The Louisville, Kentucky-based insurer expects the
low-price plan will help it expand membership in its Medicare
stand-alone prescription drug plans, as well as expand its mail-order
Wal-Mart expects to expand its prescription volumes
through the co-branded plan, according to Humana.
The low-priced plan may spark concern on Wall Street
that Humana is overly sacrificing profit margins to gain membership.
Humana said it expects the co-branded plan's profit margin "will
contribute" to its overall target of a 5 percent pretax operating
Wal-Mart Stores Inc. is
planning an aggressive push into urban markets with a new
small format that's a fraction of the size of its
NEW YORK -- Wal-Mart
Stores Inc. is planning an aggressive push into urban
markets with a new small format that's a fraction of the
size of its supercenters.
The expansion, expected
to be spelled out next month at the retailer's meeting with
analysts at its headquarters in Bentonville, Ark., is aimed
to pump up sluggish U.S. sales.
Real estate executives
said that over this past summer, the world's largest
retailer has been scouring for small locations, around
20,000 square feet, in urban areas including New York City,
San Francisco and other cities. That size is larger than a
typical drugstore but smaller than a supermarket.
"I see this as a smart
move, instead of coming into a market as a 900-pound
gorilla," said Faith Consolo, chairman of real estate firm
Prudential Douglas Elliman's retail leasing division. She
noted that Wal-Mart has been talking to landlords and
"They're on an
aggressive roll," she added. "This is a creative time.
Everyone is thinking out of the box."
She noted that in New
York City, Wal-Mart has been looking in Queens and the lower
part of Manhattan.
Since 2008, Wal-Mart has
been testing smaller stores called Marketside. They now
total four and average 15,000 square feet. The format
focuses on fresh food. And the discounter now has almost 200
Neighborhood Market by Wal-mart stores, which offer a mix of
fresh food, pharmacy, beauty, stationary and pet supplies
and are about 42,000 square feet.
Wal-Mart has been
shrinking its supercenters, which carry a wide assortment of
food and general merchandise, to about 150,000 square feet
from 195,000 square feet. But the company has maintained
that it plans to use smaller formats in urban markets.
In a note to investors
Monday, Brian Sozzi, analyst with Wall Street Strategies,
said he believes the new 20,000-square-foot stores would
likely fuse the Marketside and Neighborhood Markets
"Wal-Mart needs to have
a store concept that brings in customers more than once
every two weeks when paychecks are distributed," he wrote.
He added that using the Marketside Stores as a vehicle for
growth is too limiting, and that Neighborhood Markets are
too big to enter cities.
Steven Restivo said Monday that "while we have not shared an
exact size of the small format ... we continue to evaluate a
wide range of stores sizes across the country and will
consider any format that puts us closer to our customers."
Bill Simon, the new
president and CEO of Wal-Mart's U.S. business, told
investors last week at a Goldman Sachs retail conference,
said that "we will have a healthy mix of supercenters and
small formats, including our grocery format, Neighborhood
Market and smaller formats," he continued. He added that in
particular, Wal-Mart is looking to open stores that are
similar to the formats in Mexico, Central America, and Latin
"We are going to beg,
borrow, steal and learn from them as quickly as we can,
because it is important for our urban strategy," he added.
Wal-Mart, which now has
more than 4,000 stores in the U.S. has hit a wall in the
U.S. The company just reported its fifth straight quarterly
decline in revenue at stores opened at least a year,
considered a key indicator of a retailer's health.
during the recession as affluent shoppers traded down to
cheaper stores. But stubbornly high unemployment and tight
credit are still squeezing its main U.S. customers,
lower-income workers who are having even more trouble
stretching dollars to the next payday because of tight
credit and an unemployment rate stuck at almost 10 percent.
The discounter's own merchandising gaffes have also
contributed to the company's revenue figure's decline.
Wal-Mart's rival Target
Corp. is set to spell out more details of its urban strategy
on Friday to the media at its headquarters in Minneapolis.
Target had told analysts in January that it plans to open in
the next few years smaller stores of 60,000 to 100,000
square feet. That compares with its current average of
125,000 square feet. But real estate executives including
John Bemis, head of Jones Lang LaSalle Inc.'s retail leasing
team, say Target also is looking at 20,000-square-foot
"I think 20,000 makes
more sense than 80,000 square feet," Sozzi said.
Tuolumne County residents have filed a formal complaint with the
California Fair Political Practices Commission against Wal-Mart
for illegally circulating a petition to force a special election
on a proposed expansion of their Sonora store.
July and August, Wal-Mart paid local residents to collect
signatures to place the initiative on the ballot. Though
Wal-Mart gathered a sufficient number of signatures, they did
not form a political committee to report their activity. Under
California law, signature-gathering efforts on behalf of
proposed ballot initiatives must disclose their activities to
the California Secretary of State’s office. Wal-Mart has failed
to submit these disclosures, according to the Secretary of
State, thus making the entire effort illegal.
signatures are gathered for a ballot initiative, the Sonora City
Council may vote to hold a special election or simply approve
the project. The Council voted on September 20th to
order a 30-day impacts study and will vote on the matter at
their October 18th meeting. Wal-Mart’s Public
Affairs Manager, Amelia Neufeld, attended the Monday night
hearing to urge the council to immediately adopt the ordinance.
Wal-Mart’s haste can only be construed as an attempt to push the
initiative through the approval process before their signature
gathering violations could be discovered.
County Clerk and Sonora City Clerk each claim that the other has
the responsibility of collecting campaign reports from local
candidates and on ballot issues. Neighbors are concerned that
not only has Wal-Mart ignored the law, but the local government
bodies who are responsible for enforcing the law appear to be
confused as to what their responsibilities are.
The FPPC can
take the violations to court where the signature effort can be
invalidated and fines can be levied against Wal-Mart.
ballot initiative is part of a renewed Wal-Mart effort to
trample on California’s environmental laws across the state.
Just weeks ago, lobbyists for the giant retailer attempted to
orchestrate a back room deal that would exempt many of their new
store proposals from the state’s environmental laws, known as
the California Environmental Quality Act (CEQA). When watchdog
groups discovered that Wal-Mart was behind the effort, the deal
CEQA is the
state law that requires state and local agencies to disclose
and, if possible, reduce the negative environmental impacts of
development projects. CEQA makes environmental protection a
mandatory part of the decision making process, and is one of the
most comprehensive of such laws in the country.
SACRAMENTO - As the California
Legislature raced through the final hours of this session's lawmaking
Tuesday, dueling budget proposals went nowhere, while environmentalists
and corporate interests traded victories and defeats.
With just a half-hour before a midnight deadline, the
powerful oil and chemical industry lobbies defeated a bill that would
have been the first statewide ban on plastic carryout bags in the
nation. Republicans and several Democrats said charging for recycled bag
alternatives would "tax the poor" and turn a consumer choice into a
The 19 billion plastic bags consumed by Californians
each year and the environmental impacts they cause were little discussed
as the bill headed toward failure.
A bill that would exempt major retailers from a
portion of California's landmark environmental protection law is
speeding through the Legislature in the final hours of its 2009-10
session, circumventing normal public review.
Assembly Bill 1581, which would waive
environmental review when a retailer is moving into an existing
building, is buried in a crowded docket of bills headed for votes
today, the final day for legislation to be passed and sent to the
governor. The bill represents the latest example of how special
interests have managed to hijack the legislative process, a pattern
exposed in Mercury News articles last month.
Wal-Mart Stores Inc. has asked the US Supreme Court to block female
employees from suing on behalf of as many as 1.5 million women in what
would be the largest sex-bias suit against a private employer in US
The world’s largest retailer appealed a 6-to-5 lower
court decision allowing women who have worked at Wal-Mart since 2001
to be part of a single class-action lawsuit.
The justices will probably say later this year
whether they will hear the case.
The workers are seeking billions of dollars in back pay, Wal-Mart
told the justices. Claims of workers around the country are too
diverse for a single case, the company said.
“The class is larger than the active-duty personnel
in the Army, Navy, Air Force, Marines, and Coast Guard combined —
making it the largest employment class action in history by several
orders of magnitude,’’ argued Wal-Mart, the largest US private
It is accused of paying women less than men for the
same jobs and giving female workers fewer promotions. The lawsuit
was filed in 2001 by six women.
The ruling “is well within the mainstream that courts
at all levels have recognized for decades,’’ said Brad Seligman, an
attorney for the workers. “Only the size of the case is unusual.’’
The company says no pay disparity exists at most
Wal-Mart agreed in 2008 to pay as much as $640
million to settle lawsuits claiming it cheated hourly workers on
Approves Wal-Mart Supercenter Wal-Mart
Opponents Called "Un-American"
by Al Norman
Wal-Mart Watch, August 2, 2010
On May 10,
2009, Sprawl-Busters reported that a newspaper poll in Rohnert Park,
California indicated that the public is losing enthusiasm for big box
The Santa Rosa Press Democrat reported that its
readers were "generally opposed to many of the pending big-box plans in
Sonoma County, including a proposed Lowe's in Santa Rosa and a Wal-Mart
expansion in Rohnert Park."
54% of readers opposed a plan by Wal-Mart to
expand its Rohnert Park store on Redwood Drive by 32,000 s.f., and
another 12% were unsure.
Only 34% supported Wal-Mart's expansion plans.
"Please, we do not need an expanded Wal-Mart in Rohnert Park," wrote a
Rohnert Park resident. "I never go to that store."
A day after the Rohnert Park
City Council gave the go ahead for the controversial expansion of
Wal-Mart, divisions remained razor sharp over the proposed supercenter.
The council late Thursday overturned - and
sharply rebuked - an April vote by the city Planning Commission, which
had unanimously rejected the application by Wal-Mart, the world's
biggest retailer, to add a grocery to its Redwood Drive store.
"The Planning Commission didn't do their job and
shame on them,"
Councilman Joe Callinan said in supporting the
supercenter near the end of a 5 ?-hour meeting that drew hundreds of
people to City Hall.
The commission had worried about the effect on
other Rohnert Park grocery stores and said the expansion would be
inconsistent with a section of the city's general plan that calls for
encouraging supermarkets to be "close to where people live."
But the council, in a 4-1 vote with Councilman
Jake Mackenzie opposed, said the project's benefits were greater than
its potential negative impacts and the project was consistent with city
land use policies.
Overturns Planning Commission Decision to Deny 35,000 sq. ft. Expansion
Into Super Center
peer into council chambers through locked doors at Thursday night’s
special meeting of the Rohnert Park City Council. The council met to
decide the fate of Walmart’s expansion into a super center, drawing
hundreds of people to the meeting, most of whom spoke to the council on
Park City Council approved Walmart’s expansion into a super center at a
special meeting Thursday night.
‘Don’t be afraid to do what’s the right thing,’ and unfortunately you
could hear here tonight, this is a very divided issue,” said Mayor Pam
Stafford. “There was no overwhelming feeling one way or the other, but
even if there was one overwhelming feeling over the other, that’s not
how we get to decide this issue... we have to do it based on the law.
legal and staff reports have told us this is consistent with our General
With that, the
council voted to repeal the planning commission’s decision, thereby
allowing Walmart to expand into a super center, adding 35,000 sq. ft.
and including a full grocery store.
“I can’t see where
the benefits will not outweigh the significant impacts. I think the
benefits are much greater,” said council member Joe Callinan.
“We have been
preaching economic development, and we have one of our biggest sales tax
companies in Rohnert Park wanting to expand, I think we would look
really silly if we didn’t agree with that.”
Reading from a paper,
council member Amie Breeze said, “Both of these businesses are part of
our community, by my definition, this makes them both local.” She added,
“I feel confident that from the reports we have read... there are
benefits to this project that do outweigh the significant environmental
member Jake Mackenzie, the city’s longest standing council member, was
the single naysayer in the votes. “I would like to have seen... actual
evidence that supports that there will be sales tax revenue increases to
this city... or any overall increase in jobs to Rohnert Park.”
“no” echoed in the otherwise silent city hall.
recollecting the vote regarding the proposed casino just outside city
limits, during the vote Thursday night he said, “I would like to point
out to this council that I personally believe there are grounds for
legal action to be taken in this matter.”
Belforte said she did not appreciate the tactics used to sway public
opinion in this debate, citing a flyer saying the council was “bulleyed”
into voting for the expansion and her personal cell phone number
distributed for residents to call with their comments. She stressed,
however, that this did not sway her vote.
“I do believe this
will drive economic development,” she said. “I do see this as a benefit
for the city as well.” She continued, “I don’t think the city council
should, in any way, decide which businesses we choose and which
businesses we don’t choose.”
comment, which was extensive at the five-hour meeting, representatives
from Walmart were given 15 minutes to present their case. They touched
on sales tax revenue, the potential closing of Pacific Market and
interpretation of the city’s General Plan, which was cited in the
planning commission’s denial.
According to Angie
Stoner, spokeswoman for Walmart, the Rohnert Park store generated
$600,000 in sales tax revenue last year. If this is a total number,
which Walmart was unable to confirm before deadline, Rohnert Park’s
share would be about 11 percent of that, or $66,000. The share of sales
tax revenue increases to about 16 percent after a voter-approved sales
tax increase goes into effect in October.
Regarding a possible
increase in sales tax revenue from the grocery expansion, Stoner said,
“According to the California Board of Equalization, our American Canyon
store experienced an increase of 35.4 percent in taxable retail sales
since a Walmart store with groceries opened there in 2007.”
A 35 percent sales
tax revenue increase coupled with Rohnert Park’s sales tax increase
would mean about $127,000 annually, or almost double the revenue the
city currently receives. But the expansion will not be complete for a
couple years and Measure E, the sales tax increase, expires in five
years. Stoner did not supply data or say where her sales tax figures
With about 80 extra
seats in the lobby and 40 outside, police were keeping a strict count on
the number of people inside city hall. Standing room only would be an
understatement. A speaker was set up outside for overflow attendance.
One city employee estimated 100 speaker cards turned in, each given two
minutes to say their peace.
Many were from out of
town, but a significant portion were RP or Cotati residents. Many were
objecting to or agreeing with Walmart based on ideological principals.
Co-Chair of the Living Wage Coalition of Sonoma County said before the
meeting, “Walmart would like to put a super center in every county,” but
the impact to local markets would be detrimental. “One super center
equals all retail wages in the county going down by 1 percent.”
“the leading opponent of the project,” Bennett said, would oppose the
same project in any city in the region. “The regional impact will go far
beyond Rohnert Park,” he said.
Steve Butler, a Santa
Rosa attorney representing Pacific Market, said, “I do believe (the
Walmart expansion) is contrary to your General Plan... (which) states
‘maintain land use patterns that maximize residents’ accessibility to
neighborhood shopping centers.’ I would respectfully submit that this
project would clearly violate that policy as well as other transit and
air quality policies of your General Plan.”
City Engineer Darrin
Jenkins confirmed after public comment, however, that the project “is
consistent with the city’s General Plan policies.”
employees, and owner Ken Silveira also spoke to the council, describing
their bleak situation. Silveria wrote a letter to the city stating his
store would close if Walmart was allowed to expand. A study sponsored by
the market also showed the job loss and economic blight would be
significant if Pacific Market were to close, which was likely if Walmart
expanded to include a grocery section roughly the size of Pacific
But Stoner responded
to these claims, saying, “We’ve met with the owner of Pacific Market and
proposed multiple ways that we can assist in getting their business on
more solid ground over the next couple years before an expanded store
would open. They have responded with silence.
Save for a request to
be bought out.”
She added, “Though it
is convenient to blame Walmart, it is simply not true that our expansion
will ultimately determine the fate of their store here.” Some comments
from the public were emotional.
“I’d like to be able
to buy my milk at a grocery store a short distance to my house, I don’t
want to be standing in line next to some guy buying a gun at Walmart,”
said Suzanne Sanders of Rohnert Park.
Shirley Slack of
Santa Rosa cited a list of items currently available at Walmart for less
than other RP stores, saying, “In this economy, we need this Walmart
Crystal Robert, of
Santa Rosa said she shops at the Rohnert Park Walmart. “I just think
that there should be more opportunities for us lower income families to
be able to go to Walmart and find everything that they need there.”
Jan Ogrin, who owns a
business in Santa Rosa but lives in RP, was awaiting the council’s
decision as a factor in where she would continue to locate her business.
“The decision you’re making tonight is really a very major policy
decision, and is speaking of where your loyalty lies.”
bluntly, “I’m here to find out if it would be safe for me to consider
moving my business to Rohnert Park or should I stay in Santa Rosa.”
Wal-Mart Debate Heats Up:
Hundreds show up at City Hall to Weigh In On Proposal To Add Grocery to
Rohnert Park Store
by Paul Payne
Santa Rosa Press Democrat
July 30, 2010
A bid by Wal-Mart to open
what would be Sonoma County's first Supercenter by adding a grocery to
its Rohnert Park store was hanging in the balance late Thursday night as
opponents and supporters argued their case before the City Council.
"The only way Wal-Mart could conceivably offer
any monetary benefit to Rohnert Park would be by cannibalizing the
economies of the surrounding communities," Healdsburg resident Robert
Thomas Thunderhorse, a Rohnert Park resident who
described himself as a low-income senior, said the council's decision
would have political consequences. "If this council votes for the
expansion of Wal-Mart, it will show those people in need that you care
for them," he said.
"If you vote against it, you will be remembered
The San Francisco Bay Area has become the epicenter
battles in California to halt proposed Wal-Mart
sell both general merchandise and groceries.
Both the City of Antioch in Contra Costa County and
the City of
Rohnert Park in Sonoma County will consider
this week. The outcome could derail Wal-Mart's
strategy to build at
least one supercenter in each county of the state.
In April, the Rohnert Park Planning Commission
unanimously denied the
Wal-Mart proposal to enlarge its existing discount
store into a
supercenter. Wal-Mart has appealed the decision to
the city council.
On July 29 the Rohnert Park City Council will decide if it will
approve a proposal by Wal-Mart to expand its Rohnert park store by
more than 40,000 square feet, becoming a super center selling both
groceries and retail. Rohnert Park's Planning Commission voted to
turn down Wal-Mart's proposal in April, but the company appealed the
decision to the city counsel.
There are pros and cons regarding this massive project though the
negatives far outweigh the positives. What can be said in favor of
the proposal, and has been in a number of letters to the Press
Democrat, is that it will provide a place for inexpensive foods and
goods to many people on very limited incomes. It can also be said
that it will provide more jobs in the community though these are very
low-paying ones, most with no health benefits.
Counter to the argument for jobs gained is the potential for jobs
lost by local businesses that might well be forced to close; good
jobs paying decent wages and providing benefits, such as Pacific
Market, Oliver's and other groceries, and the 50-60 local and
regional businesses that would be affected by their closure. Just a
few of these local suppliers are Amy's Organics, Alvarado Street
Bakery, Wildwood Natural Foods, Redwood Hill Farms, Kozlowski Farms
and La Tortilla Factory. Nationally Wal-Marts has wiped out thousands
of local businesses and their suppliers leading to an urban decay in
neighborhood shopping centers where stores like Pacific Market are
the anchor and draw for other small businesses.
Therefore the potential for jobs lost would far surpass jobs gained.
Finally, in favor of the expansion it's argued that it will increase
tax revenue for the city, but this is debatable. Most of the
expansion will be for nontaxable food items, and what the super
center might provide in increased tax revenue may well be offset by
decreased tax money from affected local businesses.
Wal-Mart has become a retail behemoth by keeping costs low: wages,
health benefits, reducing full timers to part time, keeping unions
out and buying cheap goods from foreign sources. Giants like
Wal-Marts have closed tens of thousands of local independent
businesses nationally, including pharmacies, hardware stores,
bookstores, groceries and other retailers.
According to a University of Missouri report that examined 1,749
counties where Wal-Mart located and the resulting loss of jobs were
taken into account, "The superstores contributed just 30 jobs on
average" Furthermore, most of the dollars that go to Wal-Mart stores
leave the local economy. A policy study authored by Stacy Mitchell, a
senior researcher with the Institute for Local Self-Reliance, cites a
report by the firm Civic Economics, which found that, "Every $100
spent at an independent store generates $23 more in local economic
activity than $100 spent at a chain."
In addition local businesses tend to be much more community involved
than large out-of-state chains when it comes to charitable
contributions and participation in community services and
neighborhood organizations. Profits generated from Wal-Marts go back
to corporate headquarters in Arkansas, whereas locally generated
business revenue stays primarily in the community.
The Rohnert Park
Planning Commission unanimously denied a Wal-Mart
proposal to enlarge its existing discount store into
that sells both groceries and general merchandise.
appealed the decision to the city council.
The economic and environmental impacts of a
supercenter will extend
far beyond the City of Rohnert Park. All county
residents should be
concerned about this proposal. The controversy
questions about future growth and the necessity for
and regional planning to promote equitable and
Development in the county is inevitable. According
to the Association
of Bay Area Governments, the population of Sonoma
increase by twenty-three percent over the next
twenty years. In 2008,
voters approved a landmark initiative to meet this
creating the two-county SMART train that will run on
to Highway 101 from Cloverdale to Larkspur. The
build-out of the
train system provides the opportunity for
'transit-oriented development' (TOD) around the
fourteen SMART train
stations--development that could accommodate ninety
percent of the
projected population growth.
TOD is densely-built, mixed-use development within
one-half mile of
transit stations, accessible by bike and foot, and
with a variety of
retail, office, and small businesses. Through
land-use planning and
public funding, municipalities can promote
development near transit
stations that includes good jobs paying
affordable housing for all income groups, open
space, and walkable
The proposed 170,000 square-foot Wal-Mart
one-quarter mile from the site of the planned
Rohnert Park SMART
train station is a direct threat to such careful and
The labor, environmental, and local business
the Wal-Mart supercenter believe it undermines
compact and equitable
development in Rohnert Park and violates the city's
general plan. The
project undercuts transit-oriented development's
efforts to reduce
low-wage work, support local business, tackle global
warming, and lay
the foundation for a robust regional economy.
Nearly one third of the employees in the county are
'working poor' and do not earn self-sufficiency
wages. According to
the Insight Center for Community and Economic
Development in 2008,
two parents working full-time in Sonoma County must
each earn $14.90
an hour or $62,940 a year to pay for food, housing,
child care, and transportation.
Sonoma State economist Robert Eyler reports that the
contribute to job quality decline and increase the
problem of working
poverty. According to his analysis, the county will
jobs---mostly good jobs that pay hourly wages for
ranging from $17.67 per hour at Pacific Market to
$23.36 at Raley's
and Safeway. The Wal-Mart super center will employ
450 workers, and
according to the company, the typical full-time
worker at Wal-Mart
earns $12.10 an hour.
With regard to global warming, the supercenter will
effects on air quality and greenhouse gas emissions.
In order to
comply with AB 32, a 2006 state legislative measure,
all nine cities
and the county have pledged to reduce greenhouse gas
twenty-five percent by 2015. However, the Eyler
report notes, Pacific
Market will close if the supercenter is built, and
customers will drive an extra 28,400 miles each week
to shop for
Further, Stacy Mitchell, author of Big Box Swindle,
vehicle miles driven per customer will increase
because a supercenter
draws shoppers from a greater distance than a
discount store. Indeed,
since Wal-Mart's rapid expansion in the late 1970s,
per household to shop has skyrocketed by three
hundred percent, while
total household driving increased by seventy- five
As for local business, there are sixty local
suppliers that provide
produce and merchandise to Pacific Market, and more
supply Oliver's in Cotati. Wal-Mart suppliers, on
the other hand, are
nearly 100% national and global firms (and that
means increased truck
traffic into the county). The 'Go Local' movement
that patronizing local businesses ensures that more
dollars remain in
the community. Studies by Civic Economics
locally-owned firms produce two to three times more
within the local economy than national chains
locally-retained profits, wages paid to local
from local suppliers, and contributions to local
The Rohnert Park City Council should uphold the
decision of the
planning commission, reject the Wal-Mart
supercenter, and refocus the
city's planning process to promote sustainable
Martin J. Bennett teaches American history at Santa
College and serves as Co-Chair of the Living Wage
Coalition. He is a
board member of Sonoma County Conservation Action
and the North Bay
Dept. of Social Science
Santa Rosa Junior College
1501 Mendocino Ave.
Santa Rosa, Ca.
(707) 527-4873 Office
(707) 522-2755 Fax
(707) 939-8933 Home Office
Who paid pro-Walmart demonstrators $100 apiece? July 15, 2010
By Max Brooks
Low on inspiration? Open your
wallet. "Let me just first thank each and every one of the
residents that are here today—I'd like to really acknowledge
them," said Ninth Ward alderman Anthony Beale, speaking in the
chamber of Chicago's City Council on Thursday, June 24. "It's
residents like this who really give me the energy and drive to
fight on their behalf."
Beale gestured toward the sea of
white filling the spectators' gallery, men and women all wearing
T-shirts sporting slogans that championed the project the
council's zoning committee was about to approve: construction of
a Walmart Supercenter in Pullman.
But it's possible not everyone
felt as strongly about the project as their T-shirts did. Around
7:30 that morning, about a hundred Walmart supporters had filed
onto two yellow school buses in front of the 63rd and Harper
headquarters of the Woodlawn Organization (TWO). A south-side
fixture, this social services organization is run, at least
nominally, by president Georgette Greenlee-Finney, but it's
heavily influenced by her husband, Leon Finney Jr., the City
Hall insider who became TWO's executive director in 1969. He no
longer holds a formal office at TWO, but he remains chief
executive officer of its sister organization, the Woodlawn
Community Development Corporation, which manages projects for
the Chicago Housing Authority and develops real estate
throughout the south side.
Many of the TWO partisans might
sincerely have desired more jobs and retail options in Pullman.
But they were also motivated by the promise of $100.
Aaron Garel, a 30-year-old
Woodlawn native, was one of these protesters. Garel, known on
the street as "Little" and "Little Man," says he used to be a
drug dealer and a member of the Black Stones, a gang with ties
to the old Blackstone Rangers. Three prior convictions on drugs
and weapons charges make it hard for him to find work. When a
friend, a TWO organizer, called him two weeks before the June 24
committee meeting and asked if he wanted to go downtown and make
some money, he jumped at the chance. Besides, he believed in the
cause: the south side did need
more jobs, and if Walmart wanted to open a store, why not?
Garel says his friend told him to
come to TWO's headquarters at 1 PM on Monday, June 21. When he
got there, 15 minutes late, about 200 people were already
gathered inside Tre's, a nearby restaurant and catering business
part-owned by Finney. A TWO organizer addressed the crowd.
"He said it's about jobs, that
they're trying to get people who are passionate about getting
jobs for African-Americans and not just about looking to get
money," Garel remembers. But there'd be money too, the organizer
emphasized: $100 for two days' work.
The recruits signed up, were
issued T-shirts and placards that said IT'S ABOUT JOBS, and
filed onto four school buses that took them downtown. The TWO
white shirts joined other demonstrators who were
marching around City Hall chanting, "We need jobs," and
after about an hour Garel and 100 others were led inside to show
solidarity as Beale and a Walmart official held a news
Half the recruits headed back
downtown Tuesday for a rally outside City Hall that rang with
bleat of vuvuzelas. The other half, Garel included, were
assigned to show their support before Thursday's zoning
On Thursday morning, about 100
white shirts gathered on the street in front of TWO. Two buses
carried them north on Lake Shore Drive into the Loop, where they
rallied with about 250 other Walmart supporters organized by
Alderman Beale's staff. (Beale says none of the supporters he
turned out was paid, though Walmart did pick up the tab for
The meeting that followed the
rally turned out to be uneventful. The Chicago Federation of
Labor had finally given prolabor aldermen the green light to
vote for the project, which the zoning committee then approved
unanimously. Without waiting for adjournment, the TWO contingent
was whisked out of the chamber and onto the idling buses. Back
in Woodlawn, an organizer told them to show up at Tre's between
3 and 6 that afternoon for their money. Garel got there at five.
A TWO organizer had him sign a form and handed him a $100 bill.
Alderman Beale assured me neither
his organization nor Walmart had paid any of the supporters,
mostly Ninth Ward residents, who he'd brought to City Hall for
"I'd never do that," he said. "My
integrity is extremely important to me. My staff worked
extremely hard organizing folk legitimately."
Did he ask Finney or TWO to help
"No, not at all," Beale said.
"You have people who have their own agendas, opportunists who
try to insert themselves into any debate."
I called Walmart officials to ask
if they knew about or had paid for the TWO demonstrations, but
they didn't return my calls. Neither did TWO officials. But Leon
Finney had acknowledged to me, months earlier, that last year
TWO paid people to circulate petitions championing a pro-Walmart
"Jobs or Else" campaign. (Garel says he got $25 a day for that
TWO's budget is almost entirely
funded by tax dollars, and when public money's involved,
nonpartisanship is generally expected. More than $4.4 million of
TWO's $4.9 million budget for fiscal 2007-'08 (the last year for
which tax returns and related documents are available) came from
government agencies, including the Illinois Department of Human
Services, Chicago Public Schools, and the city of Chicago. That
was the year TWO managed to find
busloads of people eager to show the Plan Commission,
which Finney sits on, how ardently the public supported
moving the Chicago Children's Museum to Grant Park. It was also
the year Charles Holley, a Walmart executive vice president,
wrote TWO a company check for $25,000.
06/02/2010 by Ian Bauer, Milpitas
San Jose Mecury News
"The end result of our meeting tonight is the Walmart expansion is
denied," said Mayor Bob Livengood to the hundreds of Walmart supporters
and opponents who crammed into the Milpitas City Hall Council Chambers
Milpitas City Council voted 4-1 June 1, with Councilwoman Debbie
Giordano dissenting, to overturn on appeal Milpitas Planning
Commission's prior approval to allow Walmart to build a nearly
18,500-square-foot addition to allow liquor sales, groceries and 24-hour
operation at 301 Ranch Drive.
Months of debate followed by three hours of testimony from more than 50
speakers at the meeting culminated in applause after the council's
Appellant group Milpitas Coalition for a Better Community a loosely knit
band of Milpitas and San Jose residents and labor representatives was
formally opposed to what many in the group called Walmart's job-killing
Supercenter that would destroy smaller local businesses, create more
traffic, air pollution and crime and ruin the city's overall quality of
The local anti-Walmart group claimed the project's final environmental
impact report and conditional use permit for the expansion should not
have been certified, that the project did not meet the requirements of
the California Environmental Quality Act, and the project was
inconsistent with state and local planning and zoning laws.
Prior to the council vote, Walmart representatives and Milpitas
Coalition members were granted 15 minutes each to present their
respective sides on an expansion that aimed to add to the southern
portion of Walmart's existing 131,725-square-foot store, expanding the
business to nearly 150,200 square feet.
"We are concerned that our community will be negatively impacted by this
expansion," Arthur Balangue, a Milpitas Coalition spokesman and Save
Mart employee, told the council.
Balangue said Milpitas was "already over-served by supermarkets" that
sold groceries and fresh produce and added Walmart's planned Supercenter
would kill jobs at other stores such as Save Mart. "The single fact is
if this expansion is approved it will close down more stores," Balangue
Conversely, Walmart representatives said the Milpitas store was popular
among residents, that it had been a community partner for years donating
monies to the city and community groups since it opened here in 1994,
and they urged the council to uphold the prior ruling.
"We were very pleased with the planning commission's decision and hope
you will also vote for this small expansion and move this project
forward," Angie Stoner, a Walmart spokesperson, told the council.
Stoner added the new store would provide a more customer friendly
shopping experience with a deli, a bakery and fresh produce. She added
the opposition's opinions of Walmart were based on perceptions: "And
their aim is to keep out competition."
In addition, she noted that Target would soon open a "super store" a
couple of miles away in North San Jose off state Route 237 that could
potentially suck more sales tax dollars from City of Milpitas. Stoner
said Walmart contributes about $500,000 in sales tax to the city's
"As the mayor and council, you all want to keep your tax dollars local,"
But the majority of people who came to the meeting many wearing
fluorescent yellow and green "Say No To Walmart" stickers on their
chests said a bigger Walmart would be detrimental to the city.
"Obviously, this store will not pay good wages to anybody," Jose Garcia,
a Milpitas resident, said. "There's no wealth, no good paying jobs
Opponents also said Walmart destroys choice and competition with its
"predatory pricing" tactics.
"Maybe it helps some people, but it hurts a lot of us in the long run,"
Debbie Rankin, a Milpitas resident, said. Others cited crime as a
"A 24-hour operation in a remote part of town is asking for trouble,"
Greg Reeves, a Save Mart employee, said.
Phil Tucker, a California Healthy Communities Network representative,
said other Walmart Supercenter stores including one in American Canyon
had dramatically increased crime in that area.
Speakers also cited inadequate pay to those people Walmart hires.
"This is about values, this is about wages and benefits and this is
still the most expensive place to live," Brian O'Neil, a Service
Employees International Union county chapter chair, said.
O'Neil added Walmart's project conflicted with the Milpitas General Plan
and did not promote business retention.
Raymond Quebec, a Save Mart bagger, said Walmart's expansion would close
businesses here and leave City of Milpitas more vulnerable and dependent
for sales tax dollars from the big box retailer.
"As those businesses close, Walmart will be even more important to
Milpitas," Quebec said. "We'll be forced to give in to whatever they
need... I ask you to vote no' and keep Walmart small and manageable."
Walmart supporters many wearing white, blue and yellow "Walmart"
stickers on their chests stated the store is inexpensive and convenient.
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF MILPITAS DENYING
CONDITIONAL USE PERMIT AMENDMENT NO. UA09-0002, SITE DEVELOPMENT
PERMIT AMENDMENT NO. SA09-0003, WALMART EXPANSION PROJECT, A REQUEST
TO ALLOW FOR AN 18,457 SQUARE FOOT BUILDING EXPANSION TO ACCOMMODATE
GROCERY AND ALCOHOL SALES AND FOR THE INSTALLATION OF RELATED
BUILDING AND SITE IMPROVEMENTS FOR THE PROPERTY LOCATED AT 301 RANCH
DRIVE (APN 22-29-016), MILPITAS, CA 95035.
WHEREAS, on January 26, 2009, Walmart Stores, Inc., submitted an
application to the City of
Milpitas for an amendment to its current site development permit to
allow for an 18,457 square foot building expansion, remodel of the
exterior building façade, installation of associated site improvements,
replacement of existing signage with Walmart's new corporate branding,
and an amendment to its current conditional use permit to allow for
grocery and alcohol sales. The property is located within the General
Commercial Zoning District and Site and Architectural Overlay (C2-S);
WHEREAS, on March 24, 2010, the Milpitas Planning Commission held a duly
hearing on the Project's development application and approved the
application, subject to conditions of approval; and
WHEREAS, on April 1, 2010, the Milpitas Coalition for a Better Community
filed an appeal of
the Planning Commission approval. The City Council reviewed the
application for hearing de novo and held a duly noticed public hearing
on the matter on June 1, 2010 and considered public testimony and
reviewed various written submissions and materials and the underlying
NOW, THEREFORE, the City Council of the City of Milpitas hereby finds,
resolves as follows:
1. The City Council has considered the full record before it, which may
include but is not
limited to such things as the staff report, testimony by staff and the
public, and other
materials and evidence submitted or provided to it. Furthermore, the
recitals set forth
above are found to be true and correct and are incorporated herein by
2. The project is inconsistent with the Milpitas General Plan as
a. The project does not encourage stable and balanced economic pursuits
strengthen and promote development, contrary to Policy 2.a-I-3.
b. The project does not promote a strong economy which provides economic
opportunities for all Milpitas residents within the existing
environmental, social fiscal
and land use constraints, contrary to Policy 2.a-I-5.
c. The project does not promote the creation of a balanced economic base
that can resist
downturns in any one economic sector, contrary to Policy 2.a-I-6.
d. The project does not provide opportunities to expand total employment
and promote business retention, contrary to Policy 2.a-I-7.
e. The project does not foster community pride and growth through
beautification of existing development, contrary to Policy 2.a-I-10.
f. The project would draw community, economic and business focus away
Center and Midtown, contrary to General Plan.
1 Resolution No. ____
3. The proposed location of the project will be injurious or detrimental
improvements, and/or the public health, safety, and general welfare. The
cause urban decay and neighborhood deterioration impacts that cannot be
mitigated through conditions of approval.
4. Based on the foregoing findings and the evidence in the record, the
City Council hereby
denies the application for Conditional Use Permit Amendment No.
UA09-0002 and Site
Development Permit Amendment No. SA09-0003.
PASSED AND ADOPTED this day of June 1st, 2010, by a 4-1 vote
May 12 (Bloomberg) --
Wal-Mart Stores Inc. agreed to pay as much as $86 million to settle a
class-action lawsuit claiming it failed to provide vacation and other
wages owed to thousands of California employees when they left the
company, lawyers for the former workers said in a court filing.
About 232,000 former
employees in California will share in the settlement, according to court
filings yesterday by attorneys for the workers in the group lawsuit.
represents a monumental result for class members,” the lawyers said in
Former workers accused Wal-Mart of
failing to pay them holiday and overtime wages they earned before they
left the company, or not paying those earnings within the time specified
by state law, according to a 2006 complaint filed in federal court in
California law requires employers to
pay all wages owed to fired workers immediately, and employees who quit
must be paid all earnings within 72 hours. Employers that violate the
law can be required to pay as much as 30 days of wages to workers.
The former employees accused Wal-Mart
of manipulating hourly workers’ time sheets to avoid paying overtime or
making them wait days or weeks before paying their vacation wages after
Wal-Mart, the world’s largest retailer,
didn’t concede in the settlement that any wages it owed hadn’t been
paid, according to yesterday’s filings
“Wal-Mart has agreed to continue the
use of various electronic systems and other measures designed to
maintain compliance with its wage-and-hour policies and applicable law,”
the company said today in a statement on its website. “The settlement
will not impact the company’s results of operations for the first or
second quarter of fiscal 2011.”
Greg Rossiter, a spokesman for
Bentonville, Arkansas-based Wal-Mart, declined to comment.
The settlement includes $12 million in
unpaid vacation wages and $74 million in potential penalties and
interest on the unpaid earnings, according to filings by the workers’
lawyers. The exact amount Wal-Mart will pay depends on how many former
workers participate in the settlement. Wal-Mart will pay at least $43
million under the agreement, according to the filings.
Wal-Mart, the largest U.S. private
employer with 1.4 million workers, agreed in 2008 to pay as much as $640
million to settle 63 federal and state class-action lawsuits claiming
workers were cheated out of wages.
Yesterday’s settlement of the overtime
and vacation pay case in California isn’t part of the 2008 agreement,
said Louis Marlin, an attorney at Marlin & Saltzman in Irvine,
California. He declined to comment further.
The case is Smith v. Wal-Mart,
06-02069, U.S. District Court, Northern District of California
at the Gate: Wal-Mart ‘does Detroit’ as the privatized predators attempt
to storm the gates of four Detroit High Schools
The following investigative story was compiled
through the help of Donna Stern, spokesperson and organizer for ‘By Any
Means Necessary’ (www.bamn.com), many
brave Detroit teachers who were willing to speak out, and an 11th
grade student at Frederick Douglass Academy for Young Men, in Detroit,
Michigan, whom I will refer to in this article as ‘Jamal’, so as not to
reveal his identity for fear of reprisal. I cannot thank all of them
enough for their courage and willingness to allow me to share this story
with you, the reader, and to fight for public education not beholden to
the corporate barbarians who sell our kids for cash.
Crucible” by Arthur Miller in favor of the crucifixion by business
When Jamal, an 11th grade student, arrived
at his English class in January of this year, he thought he would be
continuing with his reading and analysis of The Crucible, by Arthur
Miller. The Crucible is 11th grade reading for the
Frederick Douglass Academy for Young Men, a 6-12 high school in Detroit,
Michigan . Jamal was sadly mistaken. As he took his seat in class the
teacher notified all students that they would be shifting their focus,
just for awhile she told them, from the reading and analysis of
literature to the construction of a mock ‘resume’ or ‘job application’.
The ‘resume’ or ‘job application’ the students were to produce in their
class was to be based on a ‘resume template’ handed out by the English
teacher, by which students would then create their own ‘applications’.
Jamal was shocked. Why would his English class shift
from reading high quality works of literature to engaging in mock resume
and job application constructions? Jamal, upon hearing from the
teacher about the shift in curriculum, raised his hand and asked the
teacher point blank, “What is this all about?” The English teacher told
him, as his class mates sat silent, that the resume was the brainchild
of Wal-Mart and that in conjunction with the Frederick Douglass
Academy for Young Men, the transnational corporation had thought
the experience of constructing and then filling out a job application
would be a good academic experience for the young 11th
graders to engage in. Jamal was stumped. “What kind of resume or job
application will it be”, he went on to ask his teacher. “Oh”, she
responded, “it would have questions such as: ‘Do you need a job? What
kind of skills do you have, Where have you worked in the past, What is
your work experience, What kind of work skills do you possess”, all
typical questions that would appear on an application for employment at
Incredulous, Jamal raised his hand once again and
asked, “Is this lesson, this resume thing mandatory”. The teacher told
Jamal that no, it was not mandatory and that he did not have to do it.
It was a ‘voluntary lesson’, he and the class were told, and students
were not required to complete the job application/resume. At this point
Jamal, in open voice in front of his 11th grade class told
the teacher in no uncertain terms: “I’m not doing this!” “Why don’t
you want to do it”, the teacher queried as the other students sat
silently in their seats.
Jamal told me, when I spoke with him on the phone in
late February, that he told the teacher, in front of the 11th
grade class that he would not do a resume or job application from
Wal-Mart because it was insulting. He reported to me he told the class
and the teacher that The Frederick Douglass Academy had a good
reputation, that he and other students wanted to go to college, and that
they wished to become business men, doctors, lawyers, professionals and
young leaders in their community. He told the class and the teacher
that he wanted to go to Harvard one day, have a career and that to be
forced to fill out phony resumes for Wal-Mart was an insult to both his
integrity, his right to an education and a pockmark on the school. The
teacher did not reply, but while Jamal sat in silence, she handed out
the resume templates to other students who then began to get to work
constructing the Wal-Mart job application.
When the class terminated Jamal had a small
conversation with the teacher. He told me that she seemed distressed,
frightened and really did not wish to talk about the fact she had been
told, evidently by the school administration, to have students engage in
the Wal-Mart lesson plan at the expense of any study of The Crucible;
she indicated that basically she was asked to suspend her curriculum.
Jamal did say that during the conversation the teacher did state she
thought Robert Bobb, the Eli Broad graduate who runs Detroit Schools as
the Emergency Financial Manager was “crazy” and he said the
teacher seemed embarrassed and confused by the whole episode.
According to Jamal, it seemed evident she was mandated
to interrupt her literature lesson by the school administration and that
in subsequent days following the event, the teacher had her students
read the work of Henry David Thoreau on civil disobedience. This, Jamal
assumed, was to atone for the sin of allowing Wal-Mart to snake its way
into the school and/or to educate the young men and really was a silent
message of support the teacher was delivering to students, like Jamal,
who wished to oppose the full out attack on public schools by the
purveyors of privatization.
Jamal later discovered that it was not just his class
that was asked to do the mock resume for Wal-Mart, but it was the whole
school. The lesson, he told me, was given through English classes to
all 11th grade students, and not just at Frederick Douglass
Academy; the lesson had made its way to three other high schools that
had been targeted by the retail chain. Western International High
School was targeted, Detroit International Academy (the sister school of
Frederick Douglass, an all girls schools), and Westside High School were
all in the firing line. The four high schools had been selected by
‘administrators’ in conjunction with Wal-Mart and other corporate
business interests. But that’s not all: the schools had also been
sought out to host “internships” by Wal-Mart; eleven weeks (11) of job
readiness/soft skills training that would replace the curriculum, but as
an ‘elective’. All of this was, as we will see, cleverly designed by
the skilled manipulators.
This was just the beginning of what would become a
public circus and a public relations quandary for the retail chain,
Robert Bobb and the obsequious politicians bound to turn learning into
training, education into servitude.
Jamal and BAMN fight back
It was at this point that Jamal told me that he had
recently contacted ‘By Any Means Necessary’ (www.bamn.com) a national
civil rights group that fights for integration, an end to racism, and
for public schools and against privatization. Jamal was so upset that
Wal-Mart would be ushered into his school like a revolting skin eruption
that he sought support to fight the giant retailer and the privatization
of the curriculum. He wanted to organize parents, students and teachers
to squelch the corporate swelling and secret operating plan of Robert
Bobb and his corporate paymasters. For a more though expose on Bobb,
his privatization history, his cultivation as an Eli Broad minion and
his cronyism and transfer of public funds to private corporations please
see (Weil, D. Detroit Teachers fight obsequious politicians http://dailycensored.com/2010/02/14/detroit-teachers-fight-back/).
The Frederick Douglass Affirmation proudly states “We
are determined to get the root of success, not just the fruit of
success.” When we decided to come to this school, we were deciding to
make our dreams and aspirations a reality. We came here to learn and
grow. We wanted our lives to have meaning, and we were going to be
somebody. Frederick Douglass Academy was built to create leaders. Its
purpose is to give students the opportunity to get a real education and
get into schools like U of M. Frederick Douglass Academy is a beacon of
hope for many Detroiters. We cannot let our hopes be trampled. We
deserve MUCH more than Walmart (ibid).
Jamal indicated to me that most of the students in his
school created and filled out the resume/job application lessons in
their classes despite the fact he had hoped the flyer would dissuade
them (he did state that few ever turned them in). He also told me they
were to turn the finished ‘product’ into their English teachers when the
lesson was done, who then were evidently told to quarter back the stack
of student work to the administration. What would the administration do
with it? Why would they want it? Whose interest would it serve?
theatre of the insane, purveyors of the inane: “THE KICKOFF”
After the Wal-Mart resume fiasco and after Jamal’s
teacher had introduced Henry David Thoreau into her class, new flyers,
this time drafted by the Neighborhood Legal Services Michigan (NLSM)
were distributed to the students at the four high schools targeted by
the giant retailer, the flyers formerly announced what Jamal had
correctly assumed; that on February 11, 2010 there would be an assembly
at the four high schools chosen by Wal-Mart for internships to promote
the program. The flyer, of which I have a copy, was titled: DPS HIGH
SCHOOL ASSEMBLIES TO KICKOFF! I’M IN GETTING READY FOR WORK! JOB
READINESS TRAINING PROGRAM AT FOUR (4) DETROIT PUBLIC HIGH SCHOOLS. The
flyer went on to note what Jamal and his fellow students had suspected:
“Neighborhood Legal Services Michigan (NLSM), Walmart
stores, Detroit Public Schools (DPS) and community/employer partners
will KICKOFF the “I’m in! Getting ready for work! Job Readingess
(sic)/Soft skills training program at DPS, aimed at delivering 11 weeks
of job readiness/soft skills training at four (4) Detroit Public High
Schools (copy of flyer from Wal-Mart” (ibid).
The “kick-offs” as they were known, according to the
flyer would serve to:
“inform DPS students, staff and parents of the
initiative which Wal-Mart stated would prepare DPS students for the 21st
Century Workforce as students balance school and work in the pursuit of
higher education” (ibid).
The flyer went on to try to excite students, faculty
and staff by promoting the fiction that:
“The KICKOFFS will be fun, exciting, engaging and
inclusive in sharing program goals, objectives and expectations.
Information about the program and sign-up process will be provided. The
KICKOFFS will include the Debut of a positive version of a “I’m in!”
song written and performed by hip hop sensation Julia’n (Motor City
Hits) and other DPS students” (ibid).
The flyer also mentioned that a host of ‘political and
corporate dignitaries’ and ‘luminaries’ would be present at each road
company ‘KICKOFF’ and the guests included such personages as judges,
church representatives, city council members, Michigan State University
members, Robert Bobb, the Emergency Financial Manager for DPS, Mayor of
Detroit Dave Bing, Congressmen, including John Conyers, Senator Martha
Scott, community leaders, employers, clergy, dancers, music, parents,
students and yes, Governor Jennifer Granholm herself – the political
charlatan that appointed Robert Bobb. Truly a Kabuki show.
According to the Wal-Mart flyer:
“The job readiness/soft skills training program is
designed to get employable youth ready to work, teach job
readiness/retention skills, help young people explore the various career
opportunities that are available to them and assist them in planning for
the (sic) futures accordingly. DPS students will receive eleven (11)
weeks of job readiness/soft skills training, e.g.: How to Balance School
and Work, How to Complete Employment Applications, Resumes, Job
Searching Skills, Interviewing Skills, How do Dress of Success, Conflict
Resolution, Problem Solving, Budgeting, Four (4) Keys to Success,
Positive Attitudes in the Workplace” (ibid). I guess writing is not big
on the list, as the flyers were poorly worded and miserably spelled.
After completion of the 11 week internships students
were told those who participated would be placed in a work-school based
program (low-paying, food stamp eligible jobs) where they would then
work at “job-sites” that were designed to require the skills and
knowledge students learned during the program. What they were not told
is that they would do this for no pay, that they would not be
compensated for their ‘jobs’. They would learn this later, as we shall
The flyer went on to rave about achieving ones’
dreams, growing up as a student, getting ready for work, inspiring
students to excellence, and how, with the new Wal-Mart internships,
“great things are happening in Detroit Public Schools”. Sure, like
hundreds of school closures, laid off teachers, the decimation of arts
and music programs, standardized testing as the great sorting machine of
students and the wholesale putrid privatization plans the flyer never
John W. Cromer, known in Orwellian language as the
‘stability officer for the Stimulus Homelessness Prevention and Rapid
Re-Housing Program at NLSM’, the main organizer for the road show
“We are proud to say, “I’m in at DPS”. We lose so
many high school students to the workplace before graduation. We have
to prepare them for work, but first they need to now how to balance
school and work! This also gives youth a sense of direction to keep
them out of trouble in the first place. We can not keep stuffing “our
adult issues into children shoes and expect for our children to be able
to walk straight! Preparing people for work has to be the central
policy behind any attempt to improve the quality of life…. Thanks to
companies like Wal-Mart, Marriot, Autozone, NLSM and others who hear the
call and step up to the plate for our children” (ibid). More on Cromer
The KICKOFFS were to be held in the auditorium for
each of the four schools selected; all orchestrated for February 11,
2010 — a fantasy of fanfare. These corporate and political predators,
students and their parents were told, could help our children escape
from the shark-filled waters of unemployment, homelessness, poverty,
fear and insecurity. Like Gilded Titans of a century ago, the ruling
elite promised to stand as plutocratic monarchs, inheritors of the new
age of disposability – eager to manage the public’s affairs while
actually undermining the public interest.
Kicking out the
When Jamal entered the auditorium at Frederick
Douglass Academy, he took a seat along with 259 students at the school
and awaited the KICKOFF. It was all becoming clear why students at the
four high schools had been given the job of creating a job application
instead of reading “The Crucible”. Jamal began to see how under a
system of traumatic dislocation, psychic delusion and perpetual
disillusionment he and his fellow students sat at the feet of the
Microphones had been put on stage, banners strung up
and speakers from the assembled community of clergy, politicians,
businesses and of course Wal-Mart lined up to speak to the positive
aspects of the school-to-work program they were creating. Teachers,
staff and of course the students had no choice but to be there; they
were forced to herd into the killing floor of auditorium for the KICKOFF
and as the speakers took the podium, Jamal and his friend, the other
fellow student at Frederick Douglass Academy who had worked with Jamal
to prepare the student statement against Wal-Mart, spoke out loud in
front of many students about the degradation of learning and the low
expectations for students at Frederick Douglass Academy, imposed by the
autocratic authors of the KICKOFF program, now circumstantially and thus
evidentially tied to the resume/job application they had been asked to
do in their English class. According to Jamal, most students seemed to
accept the KICKOFF, or otherwise remained silent at the assembly as it
began. Besides, they were not allowed to speak.
Shortly after the auctioneers had given their pep
talks to students, their rambling messages of work, education as
training and the importance, if not the beauty of the free-market, Donna
Stern from ‘By Any Means Necessary’ (BAMN) took the stage and began to
address the assembled. She had been invited to speak at the assembly by
John Cromer, but not as a BAMN member, but as a parent who had a child
in the Detroit School system. She had been invited by Cromer, as she
told me, probably due to the fact she had been an ACT tutor prep for
students (ACT is one of the standardized tests students must take for
college entry). It seems Cromer and his business community supporters
and political hacks did not even know of Donna’s association with BAMN,
nor were they aware of Jamal’s prior contact with the organization.
According to Donna Stern, she made three points when
she took the microphone to address close to 300 student, teachers,
staff, business elites, politicians, clergy and community members at the
Frederick Douglass Academy for Young Males:
“1. The young men of Frederick Douglass should be
receiving college prep courses, not a Wal-Mart prep education.
2. That it is and was an outrage that the same week
politicians and corporations are celebrating Wal-Mart coming into the
schools, they sent out pink slips to many of the fine arts teachers,
including directors of high quality, long standing programs.
3. That Frederick Douglass, himself, would be turning
over in his grave if he were there to see what was being done in his
name” (e-mail, February 26th, 2010 Donna Stern).
The speech by Stern was not what Cromer and his
cronies had expected and they scurried to whisk Stern off the stage
before she could do more harm to their insidious plan to turn the high
schools into a plantation for business interests. But the real shock to
the KICKOFF originators came when teachers, students and community
members stood, clapped and cheered as Donna hurriedly made her way off
the stage. Her statements resonated with what many if not most of the
teachers and students felt — that students were going to be put on a
school-to-work track, literally turning them over to private corporate
cannibals like Wal-Mart. At the time Stern spoke it was unclear whether
Wal-Mart was going to pay students the minimum wage of $7.25 or whether
they would be able to get away paying the
$4.25 per hour the Department of Labor allows for the first 90 days
of employment of a minor. Of course paying the latter wage could be
perceived as a money saver for Wal-Mart, already viewed by many as the
epitome of capitalism-gone-amuck and dead-end culdasac to underpaid
employment that qualifies one for food stamps.
The issue was clarified by an e-mail from John Cromer
to a teacher at DPS asking if students would be paid for the internship.
The answer was a resounding “NO”:
“No. Students are not paid for the 11 week job
readiness training” (e-mail, February 27th, 2010 from John
Cromer to DPS teacher).
The whole vicious child-exploitation scheme was
exposed in its raw and sweltering form for what it really was: a set-up
hatched by the elite and their obsequious hirelings – from the resume
lesson plan to the KICKOFF itself. The whole conspiracy was planned.
It was and is little more than exploitation condoned and heralded by the
coin operated politicians who blessed the event and shepherded it into
reality, from Governor Jennifer Granholm to to her servant in chief,
Robert Bobb. Their DNA is all over the crime scene.
Mayor of Detroit Dave Bing, Robert Bobb and Governor
of the state of Michigan, Granholm never did attend the KICKOFF, as they
promised, at the assembly on February 11th, deciding instead
to send representatives. Lucky for them. A full-court press interview
with ‘representatives’ and participants had been scheduled after the
KICKOFF with the corporate media, all part of a public relations
gimmick, but according to Jamal the press interviews never occurred.
Stern’s captivating condemnation of the program and its participants on
behalf of BAMN, the students and teachers stole the show and left the
job fair proponents speechless and utterly incoherent at the carnival
they had organized. The corporate media cowered, now wanting to report
the news of resistance as did the politicians and business interests —
all in face of open defiance by teachers, students, staff and BAMN to
the jobs fair program. This was certainly something they did not expect
Jamal began to speak with students immediately after
Stern’s speech, advising them they should not turn in their resumes to
their teachers or the school administration. He also mingled with
students and staff and told me the teachers seemed frightened, as did
students, of being singled out and perhaps retaliated against by
administrators or their ‘spies’. One police officer, a woman who
officially attended the KICKOFF in uniform on behalf of the Detroit
Police Department, suggested openly and aloud that Donna Stern should be
arrested. She complained that Stern was rude, her speech inappropriate,
and told Jamal, “She can’t do that she should be arrested!” Jamal
confronted the officer directly and stated that it was Stern’s first
amendment right to speak at the assembly but the officer would not back
down, repeating that BAMN”s presence was inappropriate and that there
should be police retaliation for her presence and her remarks. No
arrest was made, however, this time. As we will see, this was
not the first time the heavy presence of Detroit Police was seen at
When I spoke to Donna Stern she told me that after her
short comments condemning the program, the microphone was taken from her
by the KICKOFF backers and that she immediately left the KICKOFF stage
for she intuitively knew that her remarks would upset the KICKOFF
founders and could possibly put her in harms way from the police who
have been continuously used by Robert Bobb and Detroit Federation of
Teacher’s union boss, Keith Johnson to frighten and intimidate teachers
at public forums (Weil, D. Detroit Teachers fight obsequious
politicians, union bosses and privatizations planshttp://dailycensored.com/2010/02/14/detroit-teachers-fight-back/).
This KICKOFF was to be no different, as police mingled
with what was now an excited and fired up crowd of both teachers and
students. Although Jamal stated that Wal-Mart brochures carpet bombed
the KICKOFF along with other business flyers, the assembly had been
virtually destroyed by the activism and defiance displayed by Donna
Stern and echoed in the vocal support for her comments by teachers,
staff, community members and students.
The KICKOFF’s were not the success that Wal-Mart and
the city administrators and politicians had hoped for. In fact, at this
date there are no internships actually scheduled at the four high
schools. Everything has been placed on hold. Jamal informed me in a
phone interview that the strategy of the students was now to organize
students and teachers, to create flyers denouncing the Wal-Mart business
plan, to attend more BAMN meetings, grow the opposition to the Wal-Mart
takeover of 11 weeks of instructional time and to organize petitions and
media events denouncing the program and thus prevent Wal-Mart’s entry
into Detroit Public Schools.
FOX and Friends
Shortly after the failed KICKOFF, Donna Stern told me
she appeared on the morning show, FOX and Friends with none
other than John Cromer. The fiasco had caused blowback and media
attention and Cromer of course was there to defend the program and its
adherents. Stern told me that Cromer spoke about “how students needed
to stop wearing their pants low, like in prison, and begin to make
themselves presentable for employment purposes”. Stern tried to point
out to Cromer that the Frederick Douglass Academy had a dress code and
that the male students were required to wear shirts and ties, that no
students resembled the stereotype painted by Cromer. To no avail,
Cromer had already stereotyped Detroit students and their families as
vestiges of gangs and prisons. All of this is part of the new war on
Why did Robert
Bobb, John Cromer and his elite business cronies target four successful
Detroit High Schools for a Wal-Mart internship?
The answer to the above question is still unknown, a
mystery. The four high schools selected by the curriculum assassins
were all considered well performing high schools. Frederick Douglass,
according to Jamal, had been a “bad boy’s school” up to a few years ago
but in 2008, he told me, 75% of the students who graduated went on to
college and in 2009 the percentage of graduates who went on to college
was 100%. Of course this could include phony for-profit colleges like
the University of Phoenix or other ‘for-profit’ ‘drive-by universities,
but still, these are hardly failing schools. In fact, some of the
students at these schools are doing an exceptional job, and it is not
due to the help of Wal-Mart or other corporate predators that have
nothing but disdain and low-expectations for minority students. The
support comes from the public sector, not the money changers.
Central Michigan University has in place what is
called an “Upward Bound,” program. In 2009 the Upward Bound program
celebrated 10 years of service as a college preparation program that
provides tutoring, academic advising, community service, early
intervention methods, and many other socially enlightened programs.
There are more than 800 UB programs throughout the United States that
assist low-income, first- generation college students and disabled
individuals from middle school through post-baccalaureate programs.
CMU’s program is stationed both at The Detroit International Academy, in
Detroit, and CMU’s Campus Office in Warriner Hall. The program focuses
its work on high school students at the Detroit International
Academy for Young Women and the Frederick Douglass Academy for Young Men,
two of the four schools put in the cross-hairs by Wal-Mart, Robert Bobb
and John Cromer, and the program has been a success.
In November of 2009 Detroit freshman Alexis Bailey who
was only 18, yet garners the respect of peers and elders as a
first-generation college student, proudly proclaimed:
Before entering the program, Bailey had a 3.6 grade
point average but had some troubles in school.
“Before the program I was bad. I was always smart, the
program just gave me that extra push to do what I needed to do” (ibid).
After the program she had 4.0. She said she eventually
wants to become a judge and hopes to make the program proud. In an
interview she did with CentralMichiganLife, an online news paper Bailey
“I want to let them know they succeeded in helping me
Ask Detroit senior Fatima Sylvertooth and she will
tell you what she knows about having motivation and the importance of
“When I was in the program it shed hope to my future
helping me to understand that there is more to life than my
neighborhood. I’ve learned to take responsibility in the things you
value; and my education was one of them. The only limit we have in life
is the one we set for ourselves, others can believe in us, but we must
also believe in ourselves” (ibid).
While growing up, Sylvertooth acknowledged that she
had challenges of her own and was sometimes discouraged. She had been
given the message early on that her life was not equal to those more
affluent and white. She had been indoctrinated with low-expectations
and pounded with messages she would not succeed.
“I thought I was supposed to fail, and I didn’t
understand why (UB) cared so much, the only person in my family who was
my biggest encouragement was my mom” (ibid).
Getting students to believe that they are supposed to
fail, that they shouldn’t be on a college track, that music and arts is
not important, that literature is untenable for them is the goal of
Robert Bobb, John Cromer, Wal-Mart and the rest of the privatizers.
Getting poor, minority students on an early ‘vocational track’ for
low-paying service jobs seems to be the priority for this morbid band of
bandits and thieves. Attacking public education with work-fair projects
and setting low-expectations for students while slashing and burning
authentic curriculum is what Robert Bobb and his cohorts are taught at
the Eli Broad Academy as you can see in the articles I reference above.
After all, why teach the science and the arts to low-achieving students
who will just end up working at Wal-Mart anyway, like Cromer insinuated?
This is better left for the elite.
Not according to Cromer. Over a luncheon shortly
before the event, John Cromer, of NLSM and Rita, Cindy and Jim, of
Wal-Mart Stores talked about the need of preparing our youth for the
workforce and wondered how we could get to the officials of Detroit
Public School (DPS).
“We met the Emergency Financial Manager, Mr. Robert
Bobb, of DPS. He approved it has a pilot program in public 4 high
schools. With the success of this program we hope to be in all of the
Detroit Public high schools this summer and Fall 2010”.
When Cromer was asked, “How do you respond to
criticism of the program training kids to be ’subservient workers?”,
“This is completely untrue. We have to start from
somewhere. We are teaching transferable skills that can be applied in
every line of work including the Four Keys to Success, Problem Solving
Skills and Conflict Resolution. Most introductions into the workforce
for our youth start at places like retail stores, fast-food restaurants,
etc. This program will teach them how to build a resume, complete a job
application and how to dress for success- “get their pants off the
ground” for job searching activities (e-mail from Donna Stern re: Cromer
When asked what the student response has been in
regards to the Wal-Mart internships, Cromer crooned:
“Youth used to have paper routes, and have other means
to earn money: shovel snow, cut grass, etc. Our youth today need money.
Of course they are excited. They are very welcomed of the idea. We need
to find a way to connect their excitement with employment, and set
standards for summer employment that dictates some kind of measurement
in academic achievement, attendance and conduct while in school- that
leads to a summer or part time job. Our youth are just ready for
someone to come along any give them a sense of direction that will keep
them out of trouble in the first place” (ibid).
And as to the role of private business entering
Detroit Public High Schools, Cromer had this to say:
“Government can not do it all. Our youth need to be
motivated to achieve. We used to have programs in Detroit that helped
to develop youth leadership skills. We are losing so many youth to the
workforce or to the juvenile justice system. Thanks to the
participating companies we can get them ready to complete job
applications, resumes and even teach them how to dress how to dress for
job searching activities. Our youth are going to these companies anyway
for work. It is our responsibility as “this Village” to get them
ready. We are connecting to the employers. And if we get employers and
teachers to speak the same language, we can build a better and new
America starting in cities that are already struggling like Detroit MI”
Finally, when pressed as to how he should respond to
criticism that the program brings private corporations into public
schools and then ultimately influences curriculum, Cromer turned his
privatization cards face up:
“That would be a good thing. It is important to teach
transferable skills. The purpose is to prepare students for
employment. Why wouldn’t employers what to have some involvement?
Employers translate into business which is designed by the market, and
then the economy. These are companies that are close enough to the
market to know what it is going to take to compete in the global market
and boost the American economy. So, we need to get our youth prepared
to compete” (ibid).
John Cromer and the privatizers have shown they are
simply another example of Milton Friedman’s economic wet dream – the
commodification and privatization of education.
For now, the Wal-Mart internship program has been put
on hold, much to the chagrin of Wal-Mart and the other ‘business
partners’. You can thank Jamal, Donna Stern and Detroit teachers and
the Detroit community for this.
As Donna Stern and I were finishing up a discussion by
phone a few days ago, she and I mused over what is clearly emerging as
the billionaire philanthropists’, corporate business elite and giant
transnational corporations’ plan for Jamal and his class mates at
Frederick Douglass and the other three Detroit High schools – turning
public schools into vocational schools, stripping out arts, literature,
music in favor of low-paying service jobs where students learn early
that they are not supposed to go to college, that their lives have been
predetermined by the Gods of capitalism. What they need to learn, in
the eyes of the privatizers, is not to think critically about society
and their place in it but to ask, “Do you want fries with that, Sir?”
Like peasants on the lord’s manor they are to be treated like cattle
readying for the long herd.
This is the economy these capitalist behemoths are
manufacturing for the 21st century, Delirium USA, and they
make no bones about it. Let us hope that Jamal, Donna, BAMN and Detroit
teachers and the Detroit community are successful in letting the
politicians and the corporate elites know that this is never going to be
acceptable, that their children and students will not be exposed to a
message that tells them they are supposed to fail and dead end service
jobs at Wal-Mart is all they can accomplish in life. The message must
be the opposite of that promoted by corporate America: that providing a
decent, equitable public education to all students is what is needed –
by any means necessary.
By Tomas Sarmiento
and Cyntia Barrera Diaz,
December 7th, 2009
[back to top]
Mexico's top retailer Wal-Mart de
Mexico, or Walmex, said on Sunday it had signed a deal to buy Walmart
Centroamerica, the local division of Wal-Mart Stores, Inc.
Walmex said in a statement it would
pay 1.4 billion pesos ($110 million) in cash and would issue around 593
million new shares to compensate minority investors in the Central
America retail chain who agreed to be paid in shares.
Walmart Centroamerica is the main
supermarket chain in Guatemala, El Salvador, Honduras, Nicaragua and
Costa Rica, with 519 stores.
Wal-Mart Stores, Inc owns 51 percent
of Walmart Centroamerica, with the remainder in the hands of local
investors and the deal gives it control in Central America as the U.S.
company also has a majority share of Walmex.
A company executive once said,
Wal-Mart is the only retailer in the world without a traffic problem.
Thats not necessarily true. Sure, the retailer has no trouble
attracting droves of customers to its stores these days. When it comes
to Facebook, however, Wal-Mart (WMT) has struggled to gain traction
relative to its rivals. As of October, fewer than 18,000 people had
declared themselves fans of Wal-Marts page. Around the same time,
competitor Target (TGT) had nearly half a million fans. ( Target is
included in The Big Money Facebook 50 , our ranking of the brands doing
the best job on Facebook.) This type of discrepancy might not have
seemed like a big deal two years ago, when Wal-Mart was first jumping
into the budding social network at a time when a handful of other big
brands were just testing the waters. But since Facebooks audience
recently hit 350 million and retail rivals have proven their popularity
on the site, Wal-Mart has been under pressure to do a better job.
Wal-Mart has enjoyed a banner year, as
customers have flocked to the store for its budget-friendly reputation.
The retailer, with some $400 billion in revenues last year, seems to
have no trouble connecting with the American consumer when it comes to
everyday shopping decisions. But ringing up sales at the cash register
requires a different strategy than winning fans on Facebook. The social
network is a space where a company doesnt need to be successful as much
as it needs to be liked. Stock performance means little, but brand
equity means everything. And thats something that Wal-Mart has finally
started to figure out.
Earlier this fall, Wal-Marts fan page
was sparse. The retailer had not posted anything on the page. A small
number of people had left a smattering of comments on Wal-Marts wall,
the pages public-message board. While some offered compliments, there
were many disparaging posts as well. A few people wrote that they were
just plain confused about why Wal-Mart even had the account on Facebook.
What's this page for? one fan asked.
Wal-Mart was refraining from active
participation on Facebook for a reason. In the past, two big campaigns
it launched on the social network ended up backfiring. In August of
2007, Wal-Mart created a sponsored Facebook group, called Roommate
Style Match, promoting its dorm-room supplies for college students. The
campaign was lambasted for Wal-Marts attempt to tightly control the
discussions on the page (which was eventually flooded with anti-Wal-Mart
Not long after, Wal-Mart paid to
sponsor a free gift on Facebook for a day. That day, 300,000 Facebook
users could send a friend the image of a cellophane wrapped,
ghost-shaped cookie emblazoned with the Wal-Mart logo. A click on the
cookie would redirect users to Wal-Marts Halloween Web site. Critics
bashed the campaign as purely self-serving, some calling it a terrible
social media marketing tactic. Adversaries even created a group on
Facebook urging the site to stop running Wal-Mart ads.
For a while, Wal-Mart let its
opponentswho happen to be vocal and well-organized onlinescare it away
from Facebook. But it turned out that pulling out of the network
altogether wasnt a good idea, either. It made Wal-Mart seem not only
out of touch, but uninterested in the thousands of people who had
expressed interest in its page, according to Jeremiah Owyang, a partner
at the digital consulting firm the Altimeter Group. He says, Its like
having fans outside of their stores in real life but not talking to
them. Sam Walton, Wal-Marts founder, who insisted that all of the
Wal-Mart retail stores employ friendly greeters at their doors,
probably would not have been pleased.
As Wal-Marts company overview on its
Facebook page now says, Sam was a firm believer in listening to what
his customers had to say. That tradition continues today. But now, it
doesnt have to end when you leave the store. Through Facebook, were
able to talk to you. Find out whats on your mind and let you know what
were up to. Perhaps it was this corporate philosophy that pushed
Wal-Mart to try again on Facebook. Or maybe its because Wal-Mart is
making a big push to promote its online sales for the holiday season.
Regardless of its motive, over the past two months, the retailer has
been increasingly active, but this time it appears to have a strategy
that just might work.
Wal-Marts Facebook page administrator
has been regularly posting updates and responding to wall posts. It
recently launched a new charity-related applicationsomething that
worked wonders for Targets Facebook pageand another app to promote
holiday gifts. Wal-Mart is also encouraging employee interaction on the
page. With 1.4 million employees in the United States alone, Wal-Mart
has an army of people who are already intimately connected with the
brand and some who presumably like their jobs. Most of the comments on
the page now are from Wal-Mart staff members. For example, one fan
recently posted i work at store 1832 in Palm Springs. Glad to be
aboard. Another fan wrote, I love my walmart family !!
Wal-Mart has apparently quit worrying
about the negative feedback its bound to get online. Instead, its
trusting that its fan base will grow larger and louder than its
detractors. The page now boasts slightly more than 200,000 fans. It has
grown tenfold in just two months. And according to recent reports,
Wal-Mart is in the process of launching what the executive vice
president and chief marketing officer, Stephen Quinn, calls a very big,
significant initiative on Facebook. It seems that the worlds biggest
retailer is preparing to win over the Facebook community once and for
all. Better late than never.
There aren’t many retailers out there
operating a business in which Walmart (WMT) doesn’t control a huge chunk
of market share, if not lead an entire category. The largest retailer in
the world is the top seller of groceries in the country, and near or at
the top in electronics, toys and clothing.
Walmart probably sells a lot of craft
and fabric materials too, but if so, its business isn’t hurting Jo-Ann
Stores (JAS). The retailer turned in a very strong quarter, with net
income hitting $24.1 million, more than doubling the $10.2 million that
came from the same year-ago period. Sales at stores open at least a year
rose 4.3 percent, a sizable increase in this economy.
Darrell Webb, Jo-Ann’s chairman,
president and chief executive officer, said that Walmart might actually
be helping his 759-store company build market share, in addition to the
fact that smaller retailers in the sector aren’t performing very well.
“Walmart continues to remove fabric departments as they remodel stores,
which is providing further opportunity to build share,” he said during
Jo-Ann’s third-quarter conference call, as quoted by Home Textiles
In an interview with Reuters last
year, CFO James Kerr said Jo-Ann’s advantage its ability to serve as a
superstore for customers seeking fabric and craft materials. “We
differentiate by having a more complete selling assortment, which we
think gives us a competitive advantage,” he said.
Management is trying to further
capitalize on that advantage by increasing its number of large-format
stores, which offer a wider variety of items and framing departments,
while closing smaller units. So far this year, Jo-Ann opened 15 of the
bigger locations and closed 23 smaller stores.
Jo-Ann might perserver in the face of
Walmart, but it is not the only major player in the craft sector. Rival
Michaels Stores (MIK) is larger, with just over 1,000 units, and though
its most recent financial numbers aren’t as impressive as Jo-Ann’s,
they’re improving and solid. Michaels recorded a third-quarter net
income of $15 million, up from a $20-million loss during the same
year-ago period, and same-store sales rose 1.3 percent.
Despite that competition, retail
analysts like Holy Guthrie of Boenning & Scattergood like what they see
from Jo-Ann. In a report on its third quarter reiterating an outperform
rating on the retailer, Guthrie wrote that she expects Jo-Ann to
increase market share and said “sales growth is also expected to
continue into the foreseeable future.”
Wal-Mart Stores Inc., the world’s
largest retailer, has agreed to pay $40 million to as many as 87,500
current and former employees in Massachusetts, the largest wage-and-hour
class-action settlement in the state’s history.
The class-action lawsuit, filed in
2001, accused the retailer of denying workers rest and meal breaks,
refusing to pay overtime, and manipulating time cards to lower
employees’ pay. Under terms of the agreement, which was filed in
Middlesex Superior Court yesterday by the employees’ attorneys, any
person who worked for Wal-Mart between August 1995 and the settlement
date will receive a payment of between $400 and $2,500, depending on the
number of years worked, with the average worker receiving a check for
“The magnitude is large - it’s bigger
than most settlements paid in wage-and-hour cases,’’ said Justin M.
Swartz of New York-based law firm Outten & Golden LLP, who has handled
similar cases, including a pending case against Wal-Mart. “But you would
expect it to be bigger since Wal-Mart is the biggest retailer.’’
Under the terms of the settlement,
neither side is allowed to comment. But in an affidavit filed with the
settlement, the lead counsel for the employees, Philip Gordon of
Boston’s Gordon Law Group, said the accord “dwarfs settlements of
similar class actions against Wal-Mart across the country.’’
“For many employers, this settlement
will serve as a reminder to take the payment of earned wages and
benefits seriously. For many other employers, it will provide comfort
that all Massachusetts businesses must operate on a level playing
field,’’ Gordon wrote in the affidavit. “But most importantly, for
employees of Wal-Mart, it finally pays them their earned wages and it
puts in place systems and processes to ensure that abuses like those
alleged never happen again.’’
The Massachusetts case is similar to
many others that have been brought against the retail behemoth by
employees across the country, most alleging that the Bentonville,
Ark.-based company violated laws by requiring employees to work through
breaks, to work beyond their regular shifts, and similar practices.
Wal-Mart has denied the allegations, but in December, the merchant
agreed to pay up to $640 million to settle 63 federal and state
class-action wage-and-hour lawsuits.
The Massachusetts case, which was not
part of that settlement, was initially filed eight years ago on behalf
of 67,000 people who worked for Wal-Mart in Massachusetts between 1995
and 2005. The two plaintiffs, Elaine Polion and Crystal Salvas, left
Wal-Mart years ago. The case has been moving back and forth for years,
first being certified as a class action, being almost thrown out as a
trial date approached in 2006, and then being revived on appeal and sent
back to trial as a class action by the state Supreme Judicial Court two
This isn’t the first wage case
settlement for Wal-Mart in Massachusetts. In September, the retailer
settled an investigation of violations of state meal-break policies,
agreeing to pay $3 million. The state attorney general investigated
after workers reported they were required to work though meal breaks,
take breaks after having worked more than six hours, or to cut such
breaks short, according to the state.
After some preliminary skirmishes over
the terms of the latest Massachusetts settlement, the lawsuit was set to
go to court this week, but lawyers for the company and employees alerted
the court they would be filing settlement papers instead. In the
settlement affidavit, Gordon said his firm had begun tracking down as
many former Wal-Mart employees as possible.
A phone number could not be located
for Polion, and a phone listing for Salvas was disconnected. Workers
approached yesterday by The Boston Globe at a Wal-Mart parking lot in
Raynham declined to comment on the settlement.
Sean Blais, who worked at a Wal-Mart
in Weymouth for a year before he was fired for texting at work in July,
said he thought the accord “seems reasonable.’’ Blais, 19, said while he
did not notice any discrepancies in his pay, he routinely had trouble
scheduling breaks during his shift.
“You got a 15-minute, unpaid break,
but you usually had to fight to get it,’’ he said.
David Reis, chairman of law firm
Howard Rice’s labor and employment practice in San Francisco, said
Wal-Mart has probably already addressed the alleged practices in the
suit. “Given that this suit was filed more than eight years ago, I would
expect that any alleged suspect pay practices have been remedied by
Wal-Mart long ago and that this settlement is simply a calculated
business decision that it’s cheaper and easier for the company to
resolve the case and move forward than to continue paying its lawyers to
fight it,’’ said Reis.
Prior to the latest Wal-Mart
settlement, the biggest wage-and-hour case payout in Massachusetts was
$14.5 million last year by Canyon Ranch. In that lawsuit, the owners of
the Lenox spa were accused of not passing along gratuities to workers.
The settlement affected 600 workers.
West Virginia Attorney General Darrell
McGraw and a group of prescription drug retailers are debating how the
federal law regarding class action lawsuits pertains to actions brought
by state attorneys general.
As the two sides argue about where
McGraw's lawsuit should be heard, one of the sticking points has become
whether the suit is a class action. CVS, Walgreen, Target, Kmart,
Wal-Mart and Kroger all claim McGraw has filed a class action that
should be handled in federal court.
McGraw, through private attorneys he
hired to represent the State, alleges the companies have been filling
prescriptions with generic drugs and not passing savings along to
"The Attorney General brings
enforcement actions such as this one not as class actions on behalf of a
class of citizens (as in a class action), but under authority conveyed
by state law. No court has held otherwise," the firms representing West
Virginia wrote Monday.
"Nonetheless, defendants claim that
this case - which was not brought as a class action, requires no class
certification, and lacks the essential qualities of a class action -
somehow fits the definition of 'class action' in the Class Action
"That term is defined narrowly in CAFA,
and recent Fourth Circuit precedent requires it be construed strictly in
favor of remand. Any reasonable construction of the term, much less a
strict one, demonstrates this case is not a 'class action' under CAFA, a
conclusion bolstered by abundant evidence of congressional intent to
exclude state attorney general enforcement actions like this one."
McGraw's attorneys are attempting to
have the case remanded to Boone County. The companies disagree, however.
"(B)y bringing this suit to recover
alleged damages for and on behalf of a defined group of West Virginia
citizens, the Attorney General plainly has brought a 'class action' for
the purpose of CAFA, however he may try to characterize it," they wrote
The companies note a Senate Judiciary
Committee wrote that the definition of "class action" should "be
"Its application should not be
confined solely to lawsuits that are labeled 'class actions' by the
named plaintiff or the state rulemaking authority," the committee wrote.
The two sides dispute a ruling in an
antitrust case brought by Louisiana Attorney General Buddy Caldwell
against Allstate Insurance.
The U.S. Court of Appeals for the 5th
Circuit ruled the case should be heard in federal court because it
involved allegations of violations that impacted citizens.
"In Caldwell, because the state
attorney general had sued to recover damages for certain of the state's
citizens (and under a statutory provision that each citizen could have
used himself), the case was a removable 'class action' under CAFA," the
McGraw's attorneys say the court found
the action to be a "mass action," while the companies say there is no
difference between the two.
"Defendants have made no assertion
this case is a mass action, presumably because they must acknowledge
this case does not fit the definition of a mass action, and because the
thought of individually joining all persons and entities who purchased
generic prescription drugs in West Virginia, frankly, is absurd,"
McGraw's attorneys wrote.
They added in a footnote that there is
a difference between class and mass actions. A mass action, they say, is
a civil action in which monetary relief claims of 100 or more persons
are proposed to be tried jointly.
Bailey & Glasser is working with
DiTrapano Barrett & DiPiero on McGraw's case. The two firms have
contributed more than $60,000 to McGraw's campaign fund over the years,
including $11,800 for his 2008 race against Republican Dan Greear, who
decided Thursday to run for Kanawha County Circuit Court judge.
Throughout the recession, wealthier
households "traded down" and started to shop at Wal-Mart (WMT, Fortune
500) for the first time. As a result, the world's largest retailer saw
its market share in general merchandise rise as the economy went south.
Wal-Mart's stock jumped 20% in 2008,
but this year its shares are down about 8%, as investors anticipate a
recovery that could get shoppers -- especially the company's new upscale
clientele -- thinking about more than everyday low prices.
Safe from scrooge
Holiday sales, which make up a third
of the revenue at many retailers, are expected to drop 3.2% from last
year's anemic levels, according to the National Retail Federation.
But while a lackluster shopping season
could send pricier stores reeling, Wal-Mart enjoys a buffer: grocery
sales -- staples that don't fluctuate much with the seasons. Food
accounts for about half the discounter's overall sales.
Moreover, the consumer's quest for
cheap gifts might actually boost Wal-Mart's wallet share. The company
recently launched one of its earliest holiday campaigns ever -- before
Halloween, much less Thanksgiving -- slashing prices on more than 100
toys to $10 apiece for Christmas.
Broadening its appeal
Shoppers tend to stay home when the
economy is bad, but Wal-Mart officials said their foot traffic rose in
this recession. About 17% of that new business came from new customers,
a majority of whom earn more and spend 40% more per visit than typical
But as the economy heals, some of
those customers might migrate back to their preferred stores. So
Wal-Mart is remodeling its locations to appeal to them. The company also
announced plans to start an eco-labeling program for store products to
appeal to green-minded shoppers.
Plus, with unemployment still high,
consumers are likely to be value-oriented for a while, says Morningstar
analyst Joel Bloomer.
Lost in translation?
Wal-Mart already accounts for 10% of
U.S. retail spending, minus autos and restaurant sales. So "long term,
more of its growth will come from overseas," says Brad Hinton, a
portfolio manager for Weitz Funds.
Foreign stores now make up a quarter
of its square footage and sales, but only a fifth of operating income.
Wal-Mart has struggled to adapt to local tastes. It exited South Korea
after stocking stores with dry goods and electronics -- not the food and
beverages that draw Korean shoppers to local discounters.
In Japan, Wal-Mart is only now
expected to turn a profit -- after seven years of losses. Says Hinton:
"It's not as simple as transplanting the U.S. playbook to the rest of
By Anne Marie Mohan,,
December 2nd, 2009
[back to top]
The Sustainability Consortium,
launched last August, clarified its mission and strategies today, while
debunking the misconception that it is working on a “sustainability
index” for Walmart. This information, along with a comprehensive
dialogue on the types of product data to be collected and shared around
sustainability were the topics of a 90-minute Webcast, “Inside the
Sustainability Consortium,” presented by GreenBiz.com on Dec. 2.
Consortium co-chairs, Dr. Jay S. Golden of the School of Sustainability,
Barrett Honors Faculty, at Arizona State University, and Dr. Jon Johnson
of the Sam M. Walton College of Business at the University of Arkansas,
were the event’s guest speakers.
In July, Walmart released news that it
would be creating a Sustainable Product Index, saying, “the company
[Walmart] is helping create a consortium of universities that will
collaborate with suppliers, retailers, NGOs, and government to develop a
global database of information on the life cycle of products — from raw
materials to disposal. Walmart has provided the initial funding for the
Sustainability Index Consortium and has invited all retailers and
suppliers to contribute.”
During the Webcast, Dr. Golden
clarified the nature of the relationship between Walmart and the
consortium, confirming that Walmart was a founding partner of the
consortium, but that the consortium does not have “an index governing
board.” What the consortium does have is a steering committee made up of
CPGs, NGOs, government agencies, and others interested in “advocating
for good business.”
Noted Dr. Johnson, “Walmart
understands that multiple retailer engagement is necessary if this
initiative is going to work.” Retailer Walt Disney has also signed on as
a partner in the consortium.
Dr. Johnson added that the consortium
does not believe that the scientific community is qualified to make
value judgments regarding the relative life-cycle data of products. By
separating itself from the creation of indexes and certifications, he
said, the consortium will be able to preserve its integrity.
What’s it all about? As Dr. Johnson
and Dr. Golden explained, the consortium was established to pull in the
best practices and information from the myriad of LCA data and
certification guidelines surrounding products’ environmental impacts in
order to produce standardized, transparent tools and methodologies that
can be used to make good business decisions.
Said Dr. Johnson, “If you don’t
account for the environmental impacts of a product over its entire life
cycle, you are bound to make bad decisions. A good, scientific system
that drives innovation is vital.”
The consortium was established around
six principles, Dr. Johnson explained: • Science- and outcome-based
processes • Focus on impact • Transparent data and methods • Need for
speed, “balanced with a need to heed.” • Obsess on affordability,
accessability, and scalability • Innovation that creates value. “We’re
not in it for the sake of metrics,” Dr. Johnson emphasized. “We want to
create value for members of the supply chain.”
Another certification to slap on the
package? Regarding the issue of certifications, or the “Tower of
Ecobabble,” as Dr. Johnson referred to it, the consortium has no desire
to add to the 400-plus certification programs related to sustainability
available today in the marketplace. However, Dr. Johnson noted, the
consortium is very interested in understanding the “landscape of
Dr. Golden agreed: “We are trying to
understand the science behind the labels. We want to use good science
and build upon it, leveraging it as best as possible.” Once the
consortium makes its LCA data available, retailers and packagers, such
as Walmart, will then be free to use it within their own certification
programs and labeling.
Tangible results The Sustainability
Consortium’s near-term goal is the creation of a data tool available to
all members of the supply chain, using Earthster, a free, open-source,
Web-based software. Now in its beta form, Earthster is a drag-and-drop
system that allows users to easily compute their products’ LCA
The software then allows producers to
benchmark themselves versus industry averages, and optionally to
click-to-report environmental and social attributes of their processes
and products to the marketplace, without revealing any proprietary
Said Dr. Johnson, “We look to
Earthster to become the de facto standard tool for LCA.”
Currently, the consortium’s goals
focus on enabling innovation in the business community, although future
initiatives may include efforts around consumer education. “We want to
look at opportunities to communicate in new ways to consumers,” said Dr.
Golden, “but this will be a few years out.”
By SHERRY JACOBSON,
The Dallas Morning News
December 2nd, 2009 [back to top]
Free swine flu shots will be available
to all Dallas County residents starting next week.
County health officials decided
Tuesday that it was time to expand the vaccination effort beyond the
high-risk groups that have received the scarce H1N1 shots since October.
Three walk-in vaccination clinics will get under way next Tuesday.
"We felt like we got the vaccine out
to the priority groups and that their interest in getting the shots was
waning," said Zachary Thompson, director of Dallas County Health and
Human Services. "If we don't do it now, we may end up having to throw
out vaccine that we don't use."
County health officials said they were
concerned that people were being turned away from local pharmacies where
they had sought the shot but did not meet the guidelines. Local
pharmacists complained to the county that their longtime customers,
including elderly people who were the most vigilant about getting annual
flu shots, were being denied.
It is not known yet if local
pharmacies that have the H1N1 vaccine will be able to distribute it more
widely. Stores can charge up to $20 per shot.
Thompson said he would consult with
area pharmacists later this week. Pharmacies are required to distribute
the vaccine to only high-risk groups, which include pregnant women;
people 6 months to 24 years old; adults ages 25 to 64 who have chronic
conditions such as asthma and diabetes; health care workers; and people
who care for babies under 6 months old.
"We don't think it's a good idea to
keep turning them away, especially when we have vaccine available,"
Thompson said. "They might not come back later." A spokeswoman for the
state health department confirmed that vaccine distribution decisions
could be decided locally.
"From a state perspective, we strongly
encourage providers to focus on the priority groups to protect those
most at risk," said Carrie Williams, assistant press officer for the
Texas Department of State Health Services.
The state issued a news release late
Tuesday urging health care providers to continue to focus on the
"Texas expects to have enough vaccine
in January to make it available to the general population," the
However, officials in Tarrant and
Harris counties made similar decisions to expand their vaccinations,
noting that much more H1N1 vaccine would be arriving soon. The
distribution slowdown has been attributed to manufacturing problems.
Harris began mass vaccination clinics
last week, said Sandy Kachur, a spokeswoman for Harris County Public
Health and Environmental Services. "We think we've achieved a balance of
supply and demand."
Dr. Sandra Parker, Tarrant County's
health authority, urged Texans to get vaccinated before embarking on
holiday travel to areas that could have more severe H1N1 outbreaks. Her
county began administering the shots without restriction Tuesday from a
dozen clinic locations.
Dallas County has received about
70,000 H1N1 vaccine doses and distributed most of them through mass
clinics and local pharmacies over the past few weeks. However, 5,000
doses had not been distributed as of last weekend, indicating it was
time to drop the restrictions, Thompson said.
An additional 370,000 doses were
distributed through doctors' offices and hospitals.
Some local pharmacies are expecting to
receive sizable H1N1 vaccine orders within the next week through the
state health department.
"We will have ample supply of vaccine
to run clinics across North Texas next week," said John Roehm, spokesman
for Mollen Immunization Clinics, which operates inside Walmart stores.
Until the larger vaccine supply
arrives, Mollen will administer a more limited supply of flu vaccine at
seven Walmart stores in the Dallas area, starting today. Each location
will have about 300 doses of vaccine covering H1N1 and seasonal flu,
Roehm said. The clinics and their hours of distribution can be found at
Walmart's clinics will follow the
distribution guidelines required by the vaccine supplier – either the
state or the county, he noted. "We have to work under whatever
guidelines we're given."
A Saturday shot clinic in Richardson,
sponsored by Dallas County, will serve only those in the high-risk
groups who have made an appointment by calling the county's hotline –
214-819-6001. The free H1N1 shots and nasal mist will be distributed
from 8 a.m. to 4 p.m. at St. Barnabas Presbyterian Church at 1220 W.
Belt Line Road, Richardson.
On December 3rd, a 15 year old black
girl will enter a Juvenile Courtroom in Davenport, Iowa to face charges
of shoplifting $39 worth of merchandise from the Wal-Mart superstore on
West Kimberly Road. Hundreds of similar incidents take place everyday in
the Wal-Mart Empire, and most escape notice by the media.
Destiny Crawford, the 15 year old
defendant, denies she stole anything from Wal-Mart. But the ordeal she
went through after the alleged incident doesn't fit the crime.
According to the family, on August 2,
2009, James Crawford Jr. was shopping for groceries at Wal-Mart. James'
teenage sister, Destiny, was in his care while his parents made a short
trip to Chicago. Destiny was accompanied by a schoolmate on the shopping
trip. While James shopped for necessities, the two teenagers wandered
through the aisles, trying on shoes, and looking at trinkets. In the
bakery section, the girls met up again with James, who gave them his
wallet and a bag of dog food, instructing Destiny to pay for the item
with cash at the self-check out and to meet him outside at the car.
James waited in a longer line to pay for the groceries with his EBT
As the two girls left Wal-Mart, two
men--who neither produced identification nor asked the two teenagers for
their I.D.--stopped the girls, and accused them of shoplifting. The men
physically forced the teenagers back into the store. James saw the men
walking his sister and her friend to the other end of the store. He made
his way over to the girls and asked the men what was taking place. He
was told the teens were being taken to an interrogation room. James
stated that he was his sister's guardian and as a minor she needed to
have a parent or guardian present. The Wal-Mart employees told James he
wasn't allowed in the room. A Wal-Mart manager appeared and stated that
she would serve as guardian for Destiny. James refused to agree to his
sister or her friend being questioned without his presence, and he tried
to follow the girls into the interrogation room.
The girls complied with the order to
enter the room, but when James followed, he was pushed out of the way
and the door was shut in his face. James says he could hear the men
yelling at the girls. One asked, "Why don't you people respect us?"
James then called 911. Two Davenport police officers arrived. They
didn't identify themselves to James nor did they ask for his version of
the incident. They took their place in front of the door.
Within seconds of the officers'
arrival, the door to the room opened, and Destiny ran out toward her
brother. Destiny had not been told to stay in the room, nor was she
being physically restrained. She never reached her brother's side. One
of the officers applied an arm bar that put Destiny face down on the
floor of Wal-Mart. The officer then dropped his knee into the middle of
her back. As her forehead hit the floor, Destiny was lifted up by the
back of her shirt and spun around so that her forehead hit the wall. Her
face was then manually turned by the officer and pressed into the wall.
The officer turned Destiny around so that she was facing him and pressed
down on her shoulders until she was sitting on the floor.
As Destiny hit the floor James took a
step forward and said, "That is my sister." The second officer told
James to step back, and he stepped back. But when Destiny's forehead hit
the wall, James stepped forward again and asked, "Why are you doing that
to my sister?" The second officer then put James' hands behind his back.
James says he knew in that instant that this was an entirely new game
and he said nothing else.
James was taken to jail and charged
with two misdemeanors: disorderly conduct and interfering with an
official act. Destiny was put in a squad car. One officer reportedly
took out his stun gun and said to Destiny, "I swear to God I will taze
you if you resist." The stun gun was held twelve inches from Destiny's
head a little above her ear. Upon arriving at the squad car Destiny had
her face forced into the trunk of the car. She was then handcuffed and
read her Miranda rights. A short while later, Destiny was released from
the squad car to her second oldest brother. She was given a ticket for
shoplifting. Destiny was taken to the hospital. She had a concussion,
lacerations and bruises. Her hospital bill totaled $3,000.
This week, 4 months after this
harrowing incident, the Crawford family has still not seen either the
police tapes from this incident, or the Wal-Mart surveillance tapes.
James and his family asked Wal-Mart for a copy of the tape. They were
told by Wal-Mart that the Davenport Police Department had the tape. The
tape eventually showed up in the City Attorney's office. After two
months of having the tape and preparing his case, the City Attorney
offered to let James see the tape if he would go to trial without a
On November 24, 2009, the Assistant
County Attorney in Scott County, Iowa wrote to Destiny's Court-appointed
attorney, indicating that the County had reviewed the Wal-Mart
surveillance video. The Assistant County Attorney said the Wal-Mart tape
was "not material or relevant to the case...It does not show the alleged
theft, it does not contain a confession by Ms. Crawford or the other
involved juvenile, and it does not show the retrieval of the stolen
property." The Assistant County Attorney also acknowledged that he had a
copy of the police video of the incident, which he said was also
'immaterial and irrelevant to the alleged offense." Destiny's lawyer
subpoenaed the Wal-Mart video from the county, but the Assistant County
Attorney says he cannot provide that tape, since it is in the hands of
the Davenport Police. Neither Wal-Mart nor the Davenport Police want a
Rodney King-style video to reach Iowa TV viewers.
So far, the Crawford family has
received no apology from either the Davenport Police, or from Wal-Mart
over the violent arrest of their daughter for allegedly stealing $39
from the world's richest retailer. Wal-Mart has not dropped the charges,
or offered to pay for Destiny's hospital bills.
But they still have time before
Destiny walks into that courtroom.
Which companies come to mind when
investors think of safety?
Microsoft? Wal-Mart? Exxon Mobil?
Those companies are among the largest and most secure in the world, yet
only two carry a AAA credit rating from Standard & Poor's, the highest.
Wal-Mart doesn't, even though a paltry 19% of its capital structure
comes from debt issues and annual revenue exceeds $400 billion. As
companies such as General Electric(GE Quote) and Pfizer(PFE Quote) are
dropped from S&P's top level, and Wal-Mart gains market share during the
recession, investors should consider buying Wal-Mart bonds and shares.
Wal-Mart's total debt stands at about
$40 billion, 41% of which isn't due till 2023 or later. Near-term
refinancing needs for the company are nominal, leaving financing costs
the only concern. While Wal-Mart's financing expenses are low -- the
company has a credit score one notch below the top rating -- its bond
yields are well in excess of government issues.
With about $10 billion in free cash
flow on revenue of $400 billion, can there be any question about
Wal-Mart's ability to repay its commitments? The company continues to
expand globally, ensuring its growth, and a decade-plus track record of
rising sales and profits leaves little doubt the company can weather any
economic condition. Just imagine that the company was founded as
Walton's Five and Dime in Arkansas.
The five companies that carry AAA
ratings by Standard & Poor's are impressive, but none are any safer than
Wal-Mart. The list includes Exxon, Microsoft, Johnson & Johnson,
Berkshire Hathaway and Automatic Data Processing.
Wal-Mart just announce that it is
extending its Cyber Monday Deals all week, in a move that is sure to be
followed by KMART, and others, although, a quick check of KMART’s site
does not show that they have done so yet. Wal Mart has a long history of
driving prices through the floor, and forcing its competitors to follow
suit, so we think Amazon and possibly Best Buy may follow with their own
“cyber week” campaigns. Great news for consumers, but likely a move that
will frustrate other online retailers, particularly smaller ones.
Wal-Mart was on our weekend list of
some of the best Cyber Monday online deals, having also made our list
for the best Black Friday deals. Realizing that consumers are shopping
for a number of electronic items this Cyber Monday (now apparently cyber
week), the retailer has focused many of its deals on popular electronics
like HDTV’s and video game systems. These were items that were slow
sellers earlier this year due to the tough economic situation, but
consumers seem to be eating them up.
Wal-mart’s cyber monday traffic was
apparently down today according to some reports, and that may be the
reason it coined the term “Cyber week.” We’re going to be watching for
the best deals all week.
Experian Hitwise just released its
Cyber Monday stats, with Amazon reportedly topping the list as the most
visited retail website yesterday, seeing a 44% increase in visits
compared to 2008. Amazon received 15.53% of the visits among the top 500
online retail sites. Hitwise says Amazon has been the top visited site
on Cyber Monday since 2006.
Hitwise reports that among the top 500
retail websites, the percentage of U.S. online visits were down 9%o n
Cyber Monday in 2009 compared to Cyber Monday 2008. Wal-Mart was the
second most visited with 9.54% of visits followed by Target with 5.16%.
BestBuy was the fourth most visited with 3.56% followed by JC Penney
with 2.58 %. Walmart took the top spot for the most visited online site
on Thanksgiving Day this year, according to Hitwise but Amazon edged out
Walmart on Black Friday. This is the fifth year in a row that Wal-Mart
was the top visited site on Thanksgiving Day.
Among the top 20 sites visited on
Cyber Monday 2009, Staples saw the largest increase in visits compared
to 2008 with a 61% increase, Barnes & Noble saw a 46% increase.The Apple
Store, which didn't make Hitwise's top 20 sites, saw a 71% increase in
visits on Cyber Monday 2009 versus 2008. Online stores who dropped in
traffic from last year included Overstock.com (down 25%) and Home Depot
Most signs point to a positive trend
when it comes to online sales and traffic this year. Coremetrics
reported that online retailers saw a 13.7 percent increase in sales
compared to last year, and 24.1 percent more than on Black Friday 2009.
According to Hitwise, traffic to retail sites on Black Friday was up 9%.
Of course, Hitwsie is just one metric used to measure traffic for these
sites; comScore also provides an accurate measure for statistics but has
not released its data yet for Cyber Monday.
Wal-Mart is now the largest private
employer in the United States and has the same impact that General
Motors had nearly 50 years ago. This 26-minute video shows why working
people and trade unionists are fighting back and what Wal-Mart has in
store for the communities it is seeking to build stores in. "Fighting
Wal-Martization" is a hard hitting documentary that looks at how the
constant price cutting not only drives local small businesses out of the
community but how this ends up driving down the living conditions of the
very people who shop at Wal-Mart. The video also looks at the healthcare
crisis and how Wal-Mart increases its profits by sending it¹s employees
to public hospitals to get treatment thereby shifting costs back onto
the taxpayer. This video can be used at union meetings, community
meetings and on cable TV to get the message out about the
Wal-Martization of America and what it means to every working person.
Please mail your check of
$20.00 and order form to
Labor Video Project
P. O. Box 720027,
San Francisco, CA 94172
The Case Against Wal-Mart By Al Norman Raphel
Wal-Mart: The Face Of Twenty-First Century Capitalism Edited By
Nelson Lichtenstein The New Press
The Great Risk Shift: The Assault on American Jobs, Families, Health
Care and Retirement By Jacob S. Hacker Oxford University Press
War On The Middle Class: How the Government, Big Business, and Special
Interest Groups Are Waging War on the American Dream and How to Fight
Back By Lou Dobbs Viking, a member of Penguin Group
Momentum: Igniting Social Change in the Connected Age By Allison H.
Fine Jossey-Bass www.joseybass.com
Big-Box Swindle: The True Cost of Mega-Retailers and the Fight for
America's Independent Businesses, By Stacy Mitchell,
Wal-Mart: The Face Of the Twenty-First-Century
Capitalism, Edited by Nelson Lichtenstein, Published by The New
The Bully Of Bentonville - How the high cost of
Wal-Mart's Everyday Low Prices is Hurting America, By Anthony Bianco,
Published by Doubleday
How Wal-Mart is Destroying
America (and the world), By Bill Quinn,
Published By Ten Speed Press, Box 7123, Berkeley, CA 94707,
www.tenspeed.com (pp. 163)
Dunking Wal-Mart, By Al Norman, Published By
Raphel Marketing, 12 S. Virginia Avenue, Atlantic City, New Jersey
www.sprawl-busters.com (pp. 237)
Great American JobsScam, By Greg LeRoy,
Published By Barrett-Koehler Publishers, Inc., 235 Montgomery Street,
Suite 650, San Francisco, CA 94104-2916,
www.bkconnection.com (pp. 257)
and Dimed, By Barbara Ehrenreich, Published By
Henry Holt and Company, LLC, 115 West 18th Street, New York,
States of Wal-Mart, By John Dicker, Published
By Jeremy P. Tarcher (Penguin Group usa),