OSHA investigating fatal accident at New Caney Wal-Mart distribution center

By Howard Roden
The Courier of Montgomery County
May 31, 2006                                                  [back to top]

NEW CANEY - The U.S. Occupational Safety and Health Administration has launched an investigation into the Memorial Day death of a Wal-Mart employee. Montgomery County Sheriff's Lt. Dan Norris said Carl Thomas Holt III, 28, of Kingwood, was crushed Monday afternoon by a stationary pallet elevator at the Wal-Mart food distribution center, located at 20131 Gene Campbell Road. Holt walked under the elevator to retrieve some merchandise that had fallen, Norris said.

"Apparently when he went into the area beneath the elevator, he did so in such a way it did not disable the elevator," Norris said.

According to the police report, the elevator was automatically loaded when it reached the top level and returned to the ground "at a high rate of speed, with some force," crushing the victim.

A co-worker saw the victim and immediately called for an in-house emergency response team, Norris said. After raising the elevator, the co-worker also called 9-1-1.

Holt was pronounced dead at the scene at 1:49 p.m. Monday. Precinct 4 Justice of the Peace James Oren Metts ordered an autopsy.

Personnel at the distribution center referred questions about the accident to Wal-Mart's corporate public relations department. A representative from the multibillion-dollar company did not issue a comment by press time Tuesday.

Vernonia Redden, an assistant director for OSHA in the Houston area, confirmed that an investigation into the fatal accident had begun. Meanwhile, Diana Pederson, of OSHA's public affairs office in Dallas, said the federal agency has up to six months to complete its investigation.

"That's not to say it will take six months, but it allows for a thorough and complete investigation," said Pedersen, adding that an OSHA investigator was already "on site."

If violations are found as a result of the investigation, OSHA could issue a citation. Citations are usually accompanied by a "monetary penalty," Pedersen said.

The 880,000-square-foot distribution center opened in 2003. Wal-Mart has at least 10 distribution centers and more than 300 discount stores, supercenters and neighborhood markets in Texas.

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'Where's my pay package?'

Investors address board on wage disparity

By Jennifer Waters,
MarketWatch
May 31, 2006                       [back to top]

(Corrects reference to the proportional relationship of top-executive salaries to store-worker pay.) CHICAGO (MarketWatch) -- Along with all the hoopla and grandstanding planned for Wal-Mart Stores Inc.'s marathon annual meeting Friday, there will be a shareholder proposal aimed at reining in the 1,000-to-1 difference in pay scales between executives and store associates. The proposal is one of five offered by investors that will go to the board during the four-hour meeting with nearly 16,000 shareholders at the Bud Walton Arena at the University of Arkansas. Annual meetings for the Bentonville, Ark.-based discount giant are known for their earsplitting corporate cheers and surprise appearances by some of the nation's top performers -- many of whom sell lots of CDs, apparel and other products through Wal-Mart. These gatherings also outshine the usually sober shareholder meetings of some other companies. But there is corporate business that has to be covered at Wal-Mart events, and they often include a number of very pointed proposals for the board. This year's proxy lists concerns ranging from humane treatment of animals to the compensation disparity -- probably the most controversial of all of them. At the top end of the wage scale is Chief Executive Lee Scott, whose estimated $17.54 million compensation package last year included his salary, health and pension benefits, bonuses, profit sharing and stock options, as well as other perks, according to the Interfaith Center on Corporate Responsibility. At the lowest rung is the average pay of the Wal-Mart associate, who makes just north of $17,617 a year, according to the ICCR's math. The organization used an hourly wage of $9.68 -- reported by Wal-Mart -- and multiplied that by 35 hours a week and then again by 52 weeks in the year. That disparity is much larger than the average difference between the chief executive's pay and that of the lowest-paid workers. According to a study completed last year by the Institute for Public Studies, the ratio of chief's pay to the average worker was 431 to 1 in 2004. That was an increase from 2003's 301 to 1 and a gigantic leap from 1990, when top executives made just 107 times that of their average production workers. "You would call that excessive," said Sister Patricia Wolf, ICCR's executive director, about Scott's pay. "And there's not a relationship here with executive compensation and performance." Though Wal-Mart's (WMTWal-Mart Stores, Inc. News , chart, profile, more

Delayed quote dataAdd to portfolio Analyst Create alertInsider Discuss Financials Sponsored by: WMT ) stock has bounced in recent sessions on concerns that higher prices for gas and utilities are stemming sales, the shares have mostly traded sideways in a fairly tight range since November, at an average of $46. In the past year, Wal-Mart's shares have dipped 14%. The proposal was filed by an order of nuns that belongs to ICCR, the Benedictine Sisters of Boeme, Texas, and it asks the board to review Wal-Mart's compensation policies for its senior executives and prepare a comparison with that of the lowest-paid U.S. workers from July 1995 to July 2005. In addition, the proposal calls for an analysis of the disparity "and the rationale justifying the trend," according to the proxy. Fraud suit "An example of why we believe that executive compensation at Wal-Mart is out of control: Wal-Mart's own lawsuit against its former vice chairman [Thomas Coughlin] for fraud against the company by misappropriating Wal-Mart's money was dismissed, because his $15 million retirement package contained a clause forbidding Wal-Mart to sue him for prior events," the proxy stated. Wolf said that the proposal is ICCR's last-ditch attempt to get Wal-Mart's attention. She and her members have worked with the company on a variety of issues for 13 years and are disappointed that there has been no action on this matter. "We aren't satisfied with their response," she added. 'There's not a relationship here with executive compensation and performance.' — Sister Patricia Wolf, ICCR The organization is also unsatisfied with a delay on a promised public-sustainability report that addresses strategies on economic, social and environmental issues. Chief among them: sweatshops. That proposal asks that the report be completed by December. Wal-Mart has made progress with supply-chain issues such as child labor, no forced labor, fair and safe working environments and credit for overtime workers in international countries, according to Wolf. "But there's still a great deal more to do with Wal-Mart in terms of transparency in its supply chain," she said. "The downside of not wanting to take some control of this is the potential of being branded a sweatshop," Wolf added. "It takes a long time to eliminate that kind of image." In the proxy, Wal-Mart said that it is working on the report. Wolf said that the company has told ICCR much the same, but it won't disclose what will be in the report. "For a company that we have worked with for so many years, they should be beyond that point. ... We have a developed a level of mutual respect with management and we did expect that they would be forthcoming," the sister asserted. Fighting over children Child labor is among the issues that WakeUpWalMart.com -- one of a handful of organized efforts devoted to taking on Wal-Mart -- is targeting in fliers that it seeks to hand out to shareholders and also to feature in local advertising. "It would be so easy for Wal-Mart to implement a zero-tolerance policy on child labor," said its spokesman, Chris Kofinas. "We don't understand why they won't do that." The proposal is supported by a number of shareholders, including the California Public Employees' Retirement fund. With more than 19.8 million shares, Calpers already has voted for the proposal and believes it "poses no long-term harm to the company," the pension fund said. Wal-Mart did not comment on any of the proposals. Also making its third appearance on the Wal-Mart proxy is a proposal asking the company's board to document, by race and gender, who received stock options and stock awards as a percentage of compensation. "We want Wal-Mart to look at the ways in which they disperse their options and their compensation," said Margaret Covert, shareholder-action coordinator for NorthStar Asset Management, "Other companies do it. Coca-Cola, for one, does it quite willingly and very nicely." While acknowledging that she doesn't know what the current breakdown is, Covert estimated 60% of the company's associates, or salespeople and store clerks, are women and nearly 30% are of color. "What we can surmise is that the disparity is fairly large," she said. "We know that the top five options receivers last year were all white men." Calpers supports that proposal too, as well as all the others. Wal-Mart opposes the proposal, saying that it has taken diversity into consideration for all of the company's officers. Accounting for money The International Brotherhood of Teamsters is behind a proposal to open the books on political contributions and so-called soft money. With support from the Center for Political Accountability, the proposal is seeking disclosure on where funds from Wal-Mart's political-action committee, Wal-PAC, is allocated, for example. "The problem is that much of Wal-Mart's political spending is not disclosed or easily discovered," said Louis Malizia, assistant director of the Teamster's capital strategies department. The Teamsters worry, for instance, that some funds could be earmarked toward trade associations and tax-exempt organizations that might support ideals that shareholders don't endorse. "Far be it from the Teamsters or any investors to say that Wal-Mart should not be active politically," added Malizia. "It's a powerful entity that has to seek the best advantages for its shareholders and the corporation through the political process. But shareholders need to gauge where [Wal-Mart] is spending and if it's in line with their interests." Wal-Mart opposes the measure, noting that federal and state laws mandate a number of disclosures. "The board has concluded that ample disclosure exists regarding Wal-Mart's political contributions to alleviate the concerns cited," according to the proxy.

Jennifer Waters is a reporter for MarketWatch based in Chicago.

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Wage Disparity On Wal-Mart Shareholder Agenda

Dow Jones Newswires
05-31-06                               [back to top]

CHICAGO (Dow Jones) -- Along with all the hoopla and grandstanding planned for Wal-Mart Stores Inc.'s marathon annual meeting Friday, there will be a shareholder proposal aimed at reining in the 1,000-to-1 difference in pay scales between executives and store associates.

The proposal is one of five offered by investors that will go to the board during the four-hour meeting with nearly 16,000 shareholders at the Bud Walton Arena at the University of Arkansas.

Annual meetings for the Bentonville, Ark.-based discount giant are known for their earsplitting corporate cheers and surprise appearances by some of the nation's top performers -- many of whom sell lots of CDs, apparel and other products through Wal-Mart. These gatherings also outshine the usually sober shareholder meetings of some other companies.

But there is corporate business that has to be covered at Wal-Mart events, and they often include a number of very pointed proposals for the board. This year's proxy lists concerns ranging from humane treatment of animals to the compensation disparity -- probably the most controversial of all of them.

At the top end of the wage scale is Chief Executive Lee Scott, whose estimated $17.54 million compensation package last year included his salary, health and pension benefits, bonuses, profit sharing and stock options, as well as other perks, according to the Interfaith Center on Corporate Responsibility.

At the lowest rung is the average pay of the Wal-Mart associate, who makes just north of $17,617 a year, according to the ICCR's math. The organization used an hourly wage of $9.68 -- reported by Wal-Mart -- and multiplied that by 35 hours a week and then again by 52 weeks in the year.

That disparity is much larger than the average difference between the chief executive's pay and that of the lowest-paid workers. According to a study completed last year by the Institute for Public Studies, the ratio of chief's pay to the average worker was 431 to 1 in 2004. That was an increase from 2003's 301 to 1 and a gigantic leap from 1990, when top executives made just 107 times that of their average production workers.

"You would call that excessive," said Sister Patricia Wolf, ICCR's executive director, about Scott's pay. "And there's not a relationship here with executive compensation and performance."

Though Wal-Mart's (WMT) stock has bounced in recent sessions on concerns that higher prices for gas and utilities are stemming sales, the shares have mostly traded sideways in a fairly tight range since November, at an average of $46. In the past year, Wal-Mart's shares have dipped 14%.

The proposal was filed by an order of nuns that belongs to ICCR, the Benedictine Sisters of Boeme, Texas, and it asks the board to review Wal-Mart's compensation policies for its senior executives and prepare a comparison with that of the lowest-paid U.S. workers from July 1995 to July 2005.

In addition, the proposal calls for an analysis of the disparity "and the rationale justifying the trend," according to the proxy.

"An example of why we believe that executive compensation at Wal-Mart is out of control: Wal-Mart's own lawsuit against its former vice chairman [Thomas Coughlin] for fraud against the company by misappropriating Wal-Mart's money was dismissed, because his $15 million retirement package contained a clause forbidding Wal-Mart to sue him for prior events," the proxy stated.

Wolf said that the proposal is ICCR's last-ditch attempt to get Wal-Mart's attention. She and her members have worked with the company on a variety of issues for 13 years and are disappointed that there has been no action on this matter. "We aren't satisfied with their response," she added.

The organization is also unsatisfied with a delay on a promised public- sustainability report that addresses strategies on economic, social and environmental issues. Chief among them: sweatshops.

That proposal asks that the report be completed by December.

Wal-Mart has made progress with supply-chain issues such as child labor, no forced labor, fair and safe working environments and credit for overtime workers in international countries, according to Wolf. "But there's still a great deal more to do with Wal-Mart in terms of transparency in its supply chain," she said.

"The downside of not wanting to take some control of this is the potential of being branded a sweatshop," Wolf added. "It takes a long time to eliminate that kind of image."

In the proxy, Wal-Mart said that it is working on the report. Wolf said that the company has told ICCR much the same, but it won't disclose what will be in the report.

"For a company that we have worked with for so many years, they should be beyond that point. ... We have a developed a level of mutual respect with management and we did expect that they would be forthcoming," the sister asserted.

Child labor is among the issues that WakeUpWalMart.com -- one of a handful of organized efforts devoted to taking on Wal-Mart -- is targeting in fliers that it seeks to hand out to shareholders and also to feature in local advertising.

"It would be so easy for Wal-Mart to implement a zero-tolerance policy on child labor," said its spokesman, Chris Kofinas. "We don't understand why they won't do that."

The proposal is supported by a number of shareholders, including the California Public Employees' Retirement fund. With more than 19.8 million shares, Calpers already has voted for the proposal and believes it "poses no long-term harm to the company," the pension fund said.

Wal-Mart did not comment on any of the proposals.

Also making its third appearance on the Wal-Mart proxy is a proposal asking the company's board to document, by race and gender, who received stock options and stock awards as a percentage of compensation.

"We want Wal-Mart to look at the ways in which they disperse their options and their compensation," said Margaret Covert, shareholder-action coordinator for NorthStar Asset Management, "Other companies do it. Coca-Cola, for one, does it quite willingly and very nicely."

While acknowledging that she doesn't know what the current breakdown is, Covert estimated 60% of the company's associates, or salespeople and store clerks, are women and nearly 30% are of color. "What we can surmise is that the disparity is fairly large," she said. "We know that the top five options receivers last year were all white men."

Calpers supports that proposal too, as well as all the others.

Wal-Mart opposes the proposal, saying that it has taken diversity into consideration for all of the company's officers.

The International Brotherhood of Teamsters is behind a proposal to open the books on political contributions and so-called soft money. With support from the Center for Political Accountability, the proposal is seeking disclosure on where funds from Wal-Mart's political-action committee, Wal-PAC, is allocated, for example.

"The problem is that much of Wal-Mart's political spending is not disclosed or easily discovered," said Louis Malizia, assistant director of the Teamster's capital strategies department.

The Teamsters worry, for instance, that some funds could be earmarked toward trade associations and tax-exempt organizations that might support ideals that shareholders don't endorse.

"Far be it from the Teamsters or any investors to say that Wal-Mart should not be active politically," added Malizia. "It's a powerful entity that has to seek the best advantages for its shareholders and the corporation through the political process. But shareholders need to gauge where [Wal-Mart] is spending and if it's in line with their interests."

Wal-Mart opposes the measure, noting that federal and state laws mandate a number of disclosures. "The board has concluded that ample disclosure exists regarding Wal-Mart's political contributions to alleviate the concerns cited," according to the proxy.

(c) 2006 Dow Jones & Company, Inc

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Wal-Mart takes cancer-causing children's clothes off shelves

Agence France Presse
31 May 2006                         [back to top]

BEIJING : US retail giant Wal-Mart said it had taken several brands of children's clothes off its shelves in China after they were found to contain a cancer-causing dye.

Wal-Mart stores in Guangdong province were selling nine Chinese brands of children's clothes that contained a dye that could decompose into toxic aromatic amine compounds, the Beijing News reported.

One of Wal-Mart's Beijing stores was also selling some of the brands, the Beijing Daily Messenger said.

Wal-Mart acknowledged Wednesday that children's clothes containing the harmful dye were sold at those shops and said the company had suspended selling them while an investigation took place.

"(This) is unacceptable. We are currently investigating... to prevent similar incidents from happening," Huang Jianling, manager of public relations of Walmart's China head office in south China's Shenzhen city, told AFP.

"We are actively cooperating with relevant government departments."

Guangdong's provincial trade and commerce bureau has issued an urgent order to suspend sales of the substandard children's clothes, the Beijing News said.

Huang declined to say whether those suspect clothes were currently sold in the Wal-Mart's US or other overseas branches.

Wal-Mart operates in 22 Chinese cities.

Copyright © 2006 Agence France Presse. All rights reserved.

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Stocks fall as Wal-Mart, Goldman decline

Tue May 30, 2006               [back to top]

NEW YORK (Reuters) - U.S. stocks fell on Tuesday after Wal-Mart Stores Inc. <WMT.N> said high energy prices held back May same-store sales and a brokerage downgraded shares of General Motors Corp. <GM.N>

Shares of Goldman Sachs <GS.N> fell 0.7 percent to $151.80 after Chief Executive and Chairman Henry Paulson was nominated to replace Treasury Secretary John Snow.

The Dow Jones industrial average <.DJI> was down 50.67 points, or 0.45 percent, at 11,227.94. The Standard & Poor's 500 Index <.SPX> was down 4.91 points, or 0.38 percent, at 1,275.25. The Nasdaq Composite Index <.IXIC> was down 11.17 points, or 0.51 percent, at 2,199.20.

© Reuters 2006. All rights reserved

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Wal-Mart, EP schools employ most of state's CHIP families

By Diana Washington Valdez
El Paso Times
May 29, 2006                                 [back to top]

Employers with the largest number of CHIP-enrolled families in Texas include El Paso's two largest school districts and the most successful retailer in the nation, according to state statistics. Wal-Mart had the single largest number of employees in Texas who turned to the government-subsidized program so their children could receive medical care. The retailer is also one of El Paso's top 10 private employers.

The data provided by the state at the request of the El Paso Times suggests that some major employers may not have affordable medical insurance plans, or that their employees don't make enough to be able to purchase an employer plan.

Dan Fogleman, spokesman for Wal-Mart's corporate office in Bentonville, Ark., said the retailer employs 146,255 Texans, and the state's figure is only a fraction of employees, whose status is difficult to verify.

"We offer quality, affordable and accessible health care insurance for our full-time and part-time associates, with some premiums as low as $11," he said. "We (recently) extended the eligibility for health care insurance to our part-time associates. And, our average hourly wage for full-time employees is $10.04 an hour."

The state-administered Children's Health Insurance Program, which is supported with tax dollars and premiums, is designed to provide health care insurance at a nominal fee to families that don't make enough to pay for private insurance and make too much to qualify for Medicaid, the so-called "working poor."

According to the Texas Health and Human Services Commission, the El Paso Independent School District had 280 families enrolled in CHIP in February 2005 (the most recent data available), and the Ysleta Independent School District had 235 CHIP families.

Gail Randall, spokeswoman for the commission in Austin, said the figures included full- and part-time employees. She also said the state did not have comparable data for Medicaid families.

Jerry Molinoski, the Ysleta school district human resources associate superintendent, said the district has about 9,000 full and part time employees.

"(Ysleta) is a competitive employer and offers salaries that are market driven," he said. "An affordable benefits package is (also) offered to all employees at a cost of $25 per month."

Statewide, school districts represented 12 of the top 20 sources of wages and salaries for CHIP families. Other El Paso CHIP families worked for the University of Texas System, Sears, Dillard's, Home Depot and McDonald's.

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The Number You Have Reached Is Wal-Mart

Sandra O’Loughlin
May 29, 2006                 [back to top]

NEW YORK -- As the world's No. 1 retailer, everyone wants to see and crunch Wal-Mart's sales figures. But that's hard to do as Wal-Mart rarely shares its sales register data.

However, a new report throws light onto Wal-Mart's deep, well-sealed fortress of valuable numbers. The Wal-Mart data is from Information Resources Inc., Chicago, based on "MarketInsight," a proprietary sales tracking service that includes Wal-Mart coverage; and its "Consumer Network," a nationally representative panel of 70,000 households that tracks purchases with handheld barcode scanners.

According to IRI, Wal-Mart garnered an increased share in 12 of the 15 fastest-growing CPG categories during the 52 weeks ending March 19. Some of these increases were fueled by Wal-Mart's expanding base of supercenters, which are bringing new shoppers to the fold. But more in-store spending among its existing customer base also played a significant role.

The sports drink category, for example, saw a 22.4% increase at food, drug and mass merchants—including Wal-Mart—during that period, while coffee went up 11.3%. Wal-Mart's dollar share increased 1.4 points in each of these two categories. However, Wal-Mart failed to keep pace in sales of bottled water, hand and body lotion, and eye cosmetics. These categories grew 17.5%, 14% and 5.6%, respectively, but Wal-Mart's dollar share decreased by 0.2, 0.1 and 1.7 points.

Wal-Mart also has seen sales declines in such non-food categories as kitchen storage (-4.6 share points during the 52-week period), weight control candy/tablets (-3.6) and tights and socks (-3.4). IRI attributes this to Wal-Mart's shift in emphasis from non-food to food categories and also reduced spending by Wal-Mart's lower-income consumers on discretionary purchases. Other categories experiencing declines at Wal-Mart include hair accessories (-2.7), pet supplies (-2.6), batteries (-2.3), facial tissue (-1.8) and footcare products (-1.8).

The IRI study also uncovered a catalyst behind some recent moves by Wal-Mart—including increasing natural and organic food SKUs, enhancing its Web site and testing higher-end retail locations—to attract consumers beyond its traditional nucleus. Some 80% of Wal-Mart's sales are derived from one-third of its shoppers. These heavy shoppers skew in the lower-middle income range, with the majority earning between $25,000-$64,900, and are younger to middle-age. IRI says this segment is vulnerable to "budget squeezing" due to rising gas and home heating fuel costs.

Where Wal-Mart can achieve consumer growth is among higher income and older consumers. Per the study, "Wal-Mart appears to be leveraging healthcare services as a cornerstone in efforts to step up appeal to 55+ consumers . . . Catering to [them] is an imperative for Wal-Mart."

IRI pinpoints CPG categories in which "Wal-Mart's share of heavy-shopper spending is significantly below average." These include soup, carbonated beverages, salad dressing, beer, milk and frozen pizza. "These categories represent strong upside potential for Wal-Mart," said analyst Sheila McCusker. "Manufacturers have an opportunity to partner with Wal-Mart in category development initiatives, including expanded assortment and incremental merchandising." Wal-Mart did not return a call for comment.

"Wal-Mart is transitioning aggressively from division one stores, its traditional format, to supercenters and adding consumables," said Ken Harris, managing director at Cannondale Associates, Evanston, Ill. "If you add packaged goods to hard goods and soft goods, its packaged goods business will go up. They're selling the stuff now, whereas before they didn't. For marketers of consumer packaged-goods, that means anyone in consumables that isn't outpacing Wal-Mart's organic growth isn't performing well. If Wal-Mart is growing at 5% . . . [and] you're not growing faster than that, you're not doing your job right."

© 2006 VNU eMedia Inc. All rights reserved.

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California town the latest to snub Wal-Mart

By Jim Christie
Sun May 28, 2006                    [back to top]

SAN FRANCISCO (Reuters) - The town of Hercules, California, has upscale aspirations and its vision of the good life rules out a Wal-Mart store.

Similarly, three Maine towns are considering a "box-free" zone to prevent Wal-Mart from opening in an area of coastal New England known for its colonial charm, an idea mirroring wealthy and quaint Nantucket's recent ban on chain stores.

The city council of the mixed-race bedroom community of 23,000 east of San Francisco voted this week to invoke eminent domain to block Wal-Mart Stores Inc. from building a 99,000 square foot (9,200 sq meter) store near the town's waterfront.

The area is the centerpiece of Hercules' redevelopment effort, which aims to create a destination on par with high-end Sausalito across the bay. That would complement Hercules' plan to market itself as an "anti-suburb" with new neighborhoods appealing to home buyers nostalgic for old-fashioned residential areas within cities.

The unusual move stunned California's big-box retailers, who usually benefit from eminent domain, which allows government to take private property for its use or for use by third parties if their projects would benefit the public.

"To use eminent domain is such an abuse of the process," said Rex Hime, president of the California Business Properties Association, which represents large retailers.

"We've seen cities come up with land restrictions, we've seen cities come up with environmental restrictions, we've seen cities do any number of things ... but never going so far as to using eminent domain," Hime said. "This is the beginning of a very slippery slope ... Next year those laws could apply to Target, Home Depot, Lowe's; it just keeps right on going."

LOW PRICES, LOW INCOME

Wal-Mart is no stranger to hostility. In a garden variety instance of opposition fueled by union activism, officials in Oakland, California, another San Francisco Bay area city, had tried to bar big-box retailers altogether because Wal-Mart aimed to enter their market.

Wal-Mart faces a different and more confounding source of anger in Hercules -- a "class war," according to Roger Pilon, a legal affairs specialist at the libertarian Cato Institute.

"The people in Hercules are coming across as looking down their noses on those who shop at Wal-Mart, as not wanting 'those people in our neighborhood,'" Pilon said.

Wal-Mart opponents in Hercules say its presence would blight their town, the first in California with planning codes guided by "New Urbanism," a school of urban design focused on pedestrian-oriented neighborhoods mixed with homes and shops and lacking big-box retailers.

"It's the quality of living in Hercules that we're dealing with," said Steve Kirby, a Hercules resident since 1988. "One thing that we don't want is a regional-type business in there that brings in a lot of traffic."

To some in Hercules, Wal-Mart's low prices raise the prospect of low-income visitors from neighboring towns to the north, which have median family income levels well below that of Hercules, and southern neighbor San Pablo, a gritty blue-collar town.

"Hercules is a high-income enclave in a larger lower-income trade area that is currently underserved by retail activity," noted a 2005 analysis done for the town planners by Strategic Economics and Main Street Property Services.

Hercules residents opposed to Wal-Mart say they will press their fight even if the retailer scales down its store plan. Compromise is unlikely, Kirby said: "Now, forget it."

Wal-Mart spokesman Kevin Loscotoff declined to comment on the company's troubles in Hercules, but said the retailer is planning a legal challenge to the city council's action.

© Reuters 2006. All rights reserved.

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Critics Say Wal-Mart Grows Part-Timers to Cut Benefits

By Amy Joyce
Washington Post
May 26, 2006                    [back to top]

Wal-Mart Stores Inc. is shifting a portion of its full-time employees to part-time status, company critics say, which they assert will have the effect of limiting health insurance, even though the company is expanding coverage for its part-time workers. Company spokesman Dan Fogelman said Wal-Mart is not necessarily forcing workers into part-time schedules but is "trying to ensure that our staffing matches our customer shopping patterns. But there is no specific target number in terms of how many associates will be full time versus part time." The majority of Wal-Mart jobs are currently full time, he said.

The criticism arose after WakeUp Wal-Mart obtained detailed copies of the new health plans, which the company confirmed yesterday. The company, which announced the changes in general terms in a press release this month, is offering open enrollment for part-time workers this week only if they also enroll their dependent children, who were not eligible for coverage before. Another open enrollment will be available to all employees in October.

The new benefit plan for "Peak-Time" workers -- Wal-Mart's name for part-timers -- also shortens the waiting period for part-time employees to obtain coverage to one year from two years.

But the plan will be unaffordable for workers who are moved from full-time wages to part-time, said Chris Kofinis, a spokesman with WakeUp Wal-Mart, a group funded by the United Food and Commercial Workers union.

Many plans are offered. The "value plan" has a $23 premium per month for individuals and $65 for families, with a deductible of $1,000 per person and a family maximum of $3,000. The most popular "network saver plan" ranges from $39 to $79 per month with deductibles of $350 to $1,000.

Those workers who are moved to part-time status can keep their current health plan until the end of the year, but they will lose other benefits such as dental and life insurance, and short- and long-term disability as soon as they move to part-time hours, according to the plan document.

Employees are told if they keep the plan they had as full-time employees after they move to part-time status, however, "your cost for this coverage will not change and you may be working fewer hours."

The company has promoted the plan in recent months, saying the coverage is more comprehensive than ever.

"Wal-Mart is one of the few retailers that offers benefits to part-time associates and premiums are as low as $11 per month," said Mona Williams, a company spokeswoman. "With this special open enrollment, we have expanded eligibility and made coverage available to the children of our associates who choose to work part-time."

Full-time Wal-Mart workers have been wary of the pending changes, an employee at a south Florida store said. She spoke on condition of anonymity, fearing she could lose her job for speaking to the press.

She said she discovered last week, after checking upcoming schedules, that her full-time hours in accounting will be cut in about three weeks. She was told last week the company was shrinking her department. She then interviewed for and took a job as a customer service manager.

Part-time status will make coverage difficult, she said. "It would be really hard to afford," she said. Her current plan covers herself, three children and her husband, who is retired. The part-time plan eliminates spouse coverage, and with fewer hours, she does not think she could afford the $3,000 deductible.

A J.P. Morgan Chase & Co. report in January said the company is planning to "right size" its full-time versus part-time mix to improve productivity and reduce store labor costs. According to the report, about 80 percent of employees are full time. The company is seeking to lower that rate to about 60 percent during the next 12 to 18 months, the report said.

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Are big-box stores truly a blessing?

www.chinaview.cn
2006-05-26                      [back to top]

BEIJING, May 26 (Xinhuanet) -- Is Wal-Mart a good thing?

As Wal-Mart and other huge stores are sprouting up in communities throughout the United States, more and more Americans are beginning to question the benefits these mammoth stores are bringing to their lives.

This is the question that many Chinese people, especially those living in major cities, may be asking in the not too distant future when their familiar neighbourhood stores are driven to extinction by the likes of Wal-Mart and Carrefour.

These "big-box" stores, as they are called in the United States, are the symbol of globalization. They derive their strength from the successful application of the global sourcing business model that is built on a highly efficient communication and logistics system.

Such a system has enabled these retail behemoths to source their merchandise from anywhere in the world that offers the best price. Wal-Mart, for instance, accounted for more than 10 per cent of China's total exports to the United States.

Cheap imports together with a tight-fisted management style have combined to boost the competitiveness of the big-box stores, enabling them to steam-roll small-scale retailers, including many mom-and-pop shops and neighbourhood stores, that cannot hope to compete on economies of scale. Consumers are reaping the benefits. They pay less, sometimes as much as 25 per cent for some goods, at the big-box stores than the traditional retail outlets.

The big-box stores are so efficient that together they accounted for an estimated 50 per cent of the consistently high productivity growth rate of the United States in recent years. Such a productivity gain, in turn, has helped keep inflation low despite rising consumer demand and a red-hot property boom.

"The US productivity miracle and the emergence of Wal-Mart-style retailing are virtually synonymous," wrote Kenneth Rogoff, professor of economics and public policy at Harvard University, and formerly chief economist at the International Monetary Fund.

Chinese consumers seem to have welcomed the Wal-Mart-style of retailing with open arms. Having saturated the market in big cities, some foreign retail giants are moving to smaller cities in the relatively more prosperous coastal provinces.

The success of these foreign retailers is serving as a model that has been closely studied and emulated by some of the largest domestic retail enterprises. This could help boost productivity in the service sector which has apparently lagged far behind manufacturing.

Indeed, large retail enterprises can take the lead in promoting China's service sector by adopting the operating models of Wal-Mart and other US big-box stores. The built-in efficiency of these models can bring increased benefits to consumers in the form of lower prices and greater convenience.

But as Professor Rogoff noted, the proliferation of big-box stores is not entirely a benign phenomenon. What concerned Rogoff and others is the effect on low-wage workers and smaller-scale retailers. "While completely legal, studies suggest that Wal-Mart's labour policies exploit regulatory loopholes that, for example, allow it to sidestep the burden of healthcare costs for many," Rogoff wrote. "And the entry of big-box stores into a community crushes long-established retailers," he noted.

Some people may wish to shrug off these concerns as a reasonable price to pay for progress. But there are those who believe that balanced growth must be preserved to ensure sustainability. It is a lot more desirable for Chinese retail enterprises to modify the American model in order to benefit consumers without having to sacrifice employees' welfare. The public will also have to decide whether it is worth preserving a bit of tradition in their communities by keeping small neighbourhood stores in business.

In some US cities, notably San Francisco, neighbourhood grocery stores are protected by strict zoning laws that limit the number and size of supermarkets within a certain area. This is not necessarily the best solution because such laws are usually too inflexible and cumbersome.

It's a matter of lifestyle and only the people can decide what's best for them.

(Source: China Daily)

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Former Wal-Mart exec faces fraud sentence Aug. 11

By MARCUS KABEL
AP Business                        [back to top]

(AP) - SPRINGFIELD, Missouri-A federal judge has set a sentencing hearing Aug. 11 for Thomas Coughlin, the former No. 2 executive at Wal-Mart Stores Inc., who pleaded guilty in January to fraud and tax charges for stealing money, gift cards and merchandise from the world's largest retailer.

Coughlin, 57, faces a maximum of 28 years in prison after pleading guilty to five counts of wire fraud and one count of filing a false tax return. He also could be fined $1.35 million (€1 million).

U.S. District Judge Robert Dawson, who accepted Coughlin's guilty plea in January, set the sentencing hearing for Aug. 11 in his courtroom in Fort Smith, Arkansas.

Prosecutors have recommended a sentence but Dawson sealed the plea agreement pending a presentencing report.

Wal-Mart referred Coughlin to federal prosecutors after discovering Coughlin allegedly had embezzled money from the company and used expense vouchers to buy products as varied as snakeskin boots, hunting trips and Bloody Mary cocktail mix. Wal-Mart estimated losses at up to $500,000. (€392,000).

Wal-Mart Chief Executive Lee Scott has called the ordeal "an embarrassment" for himself and for the company.

Coughlin was a protege of company founder Sam Walton. As vice chairman, he received a base salary of $1.03 million (€807,500) in his final year with the company. He received more than $3 million (€2.35 million) in bonuses and other income in the same period and held about $20 million (€15.7 million) in Wal-Mart stock, according to Securities and Exchange Commission filings.

In documents filed with the court, Coughlin specifically admitted defrauding the company to pay for the care of his hunting dogs, lease a private hunting area, upgrade his pickup truck, buy liquor and a cooler, and receive $3,100 (€2,430) in cash.

Coughlin retired as Wal-Mart vice chairman last year and gave up his spot on the company board in March after Wal-Mart referred him to prosecutors. The matter was taken up by a grand jury in Fort Smith.

In November, former Coughlin subordinate Robert E. Hey Jr. agreed to plead guilty to wire fraud and testify for the government in return for parole instead of prison time.

Besides giving the case to federal prosecutors, Bentonville, Arkansas-based Wal-Mart filed suit last year to end Coughlin's multimillion-dollar retirement agreement and to recover money.

However, that lawsuit was dismissed by an Arkansas judge who said both sides had signed a pledge as part of Coughlin's retirement deal not to pursue any claims against each other for any reasons. Wal-Mart has appealed the dismissal of its lawsuit to the Arkansas Supreme Court.

No mention was made in Coughlin's public filings with the court of his earlier claim that he used money obtained from Wal-Mart to pay for anti-union activism. Wal-Mart has said there was no such project.

Copyright 2006 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

© 1994-2006 FindLaw

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HERCULES/Wal-Mart pledges to fight eminent domain action in court

Patrick Hoge,
SF Chronicle
Thursday, May 25, 2006             [back to top]

Wal-Mart Stores Inc. promised Wednesday to fight the city of Hercules in court if the city's redevelopment agency follows through on its plan to use eminent domain to take 17.27 acres of land from the nation's largest retailer. "That would be the next step, to challenge it legally," Wal-Mart spokesman Kevin Loscotoff said of the Hercules City Council's resolution, adopted unanimously, Tuesday night, authorizing the use of eminent domain. "Our position is that it's wrong," Loscotoff said. "It would mean there's virtually no limit on government's ability to take private property through eminent domain." Hercules officials showed no signs of backing down. They said Wal-Mart repeatedly put forth an inappropriate proposal after buying property that for years had been part of a complex redevelopment project aimed at turning a blighted former dynamite plant into pedestrian-oriented residential and commercial neighborhoods. When Wal-Mart bought land near San Pablo Bay in November, the city already had clearly articulated plans produced with extensive citizen input that called for a neighborhood shopping center of relatively small stores, said Gale Connor, a San Francisco attorney hired by the city to handle the anticipated eminent domain litigation. "The plans were actually very, very specific," Connor said. Wal-Mart, nevertheless, presented three separate proposals, one with the previous landowner and two on its own, each with a Wal-Mart store that exceeded what the city had approved. Wal-Mart's latest proposal, submitted March 31, calls for a shopping center with a 100,000-square-foot main store, although the city previously said the largest store on the site should be 64,000 square feet. The proposed store would have Craftsman-style architectural details, a pedestrian plaza and two outdoor eating areas, and it would present a "villagelike" atmosphere, the company said. Numerous people testified against the Wal-Mart proposal at the City Council meeting Tuesday night, saying the design did not fit the community's desires and excoriating the company's business practices. A smaller number of people spoke in favor of Wal-Mart, saying they wanted the convenience and low prices and for their tax dollars to stay in their city instead of going to neighboring cities that have Wal-Marts. Lawyers for Wal-Mart argued that the council, acting as the Redevelopment Agency, was acting unjustly because the city had not given the company's latest proposal a thorough evaluation. Connor countered that a big-box discount store of any kind at the site would undermine interlocking plans that have already produced hundreds of old-fashioned homes across Refugio Creek, and which call for a mixed-use village of high-density homes and shops in the nearby waterfront district. "This parcel is one piece of a much bigger development puzzle," Connor said. Not only would Wal-Mart be a draw for people outside the community, which would cause traffic problems, but it would undermine the economic assumptions for the nearby retail plans, he said. Indeed, a representative of Oso Trabuco LLC, the company that owns the land along the adjacent waterfront, told The Chronicle recently that plans for the area have been on hold until it is known whether Wal-Mart is coming, because the company's impact on the retail environment would be so profound that the commercial component of the project would likely be cut. Steve Lawton, Hercules Community Development director, said Wednesday that the city Redevelopment Agency is using eminent domain to ensure that the waterfront area does not stagnate and develops as planned. "We're trying to ward off urban blight," he said. Lawton said the city is on the verge of committing to financing $19 million of infrastructure improvements on the waterfront that include moving train tracks and building a ferry terminal, he said. A city appraisal of Wal-Mart's 17 acres has put the value of the land at about $15 million. What "fair market value" the city would actually have to pay, however, would be determined by a jury, Connor said.

Copyright 2006 SF Chronicle

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AMERICAN MORNING

CAROL COSTELLO,
CNN                          [back to top]

Good morning. Good morning to all of you.

It's the people versus Wal-Mart. An update now on a Herculean effort with a twist, this time Wal-Mart is not benefiting from eminent domain. No, a little town turned eminent domain around, using it to beat down a giant. So let the lawsuits begin.

(BEGIN VIDEOTAPE)

CAROL COSTELLO, CNN CORRESPONDENT (voice-over): A packed city hall, these residents of the small San Francisco suburb of Hercules to witness a municipal David take on a retail Goliath.

UNIDENTIFIED MALE: I say throw the bums out.

COSTELLO: The five-member town council voted unanimously to seize 17 acres of waterfront property, on which the nation's largest retailer, Wal-Mart, planned to build a new big box store and shopping center. The town did it by invoking the power of eminent domain, the right to take private property from its owners for the public good.

ARTHUR FRIEDMAN, ATTORNEY FOR WAL-MART: The notion that Wal-Mart has been trying to force upon this community something that it doesn't want or the notion that Wal-Mart has been not caring about this community's vision is simply not true.

COSTELLO: Opponents argued a Wal-Mart mega store would wreck the small town flavor of Hercules.

BRENDA SMITH-JOHNSON, HERCULES RESIDENT: Small businesses to be forced out, total lack of respect for the desires of the majority of citizens in Hercules, our vision crushed.

UNIDENTIFIED MALE: It doesn't fit our community plan that was adopted five years ago of small neighborhood stores.

COSTELLO: Wal-Mart bought this 17-acre site back in November. The company first proposed building a 142,000-square-foot store near the waterfront, but says it scaled back development plans to address concerns of residents.

FRIEDMAN: Wal-Mart has spent close to a million dollars specifically redesigning that application to respond to the desires of this community.

COSTELLO: Wal-Mart says the newly configured store would create hundreds of jobs and inject a half-million dollars in sales taxes into the local economy. At the city hall meeting Tuesday, only five residents of Hercules spoke in favor of Wal-Mart.

UNIDENTIFIED MALE: You've got two stores in here, you cannot make the city work on boutiques. Boutiques don't do it.

COSTELLO: But in the end, there was overwhelming support for Hercules city fathers and the effort to keep Wal-Mart out.

(END VIDEOTAPE)

But it could cost them. The city of Hercules could pay more than $15 million to buy back the property. Wal-Mart rejected the city's offer earlier this year. So it appears the dispute will have to be resolved in court.

S. O'BRIEN: So many of these disputes are. All right, Carol, thank you very much -- Miles.

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Thinking Inside the Box: Anatomy of a Site Fight

by Rick Smith
Published in Social Policy Magazine                    [back to top]

Some things in Florida are as inevitable as the sun rising and setting: summer afternoon thunderstorms, love bugs in the spring, snowbirds in January and, sure as Katherine Harris’s makeup is too thick, Wal-Mart Supercenters sprouting like mushrooms. We can prepare for the summer storms if we know they’re coming. We can scrape love bugs off our windshields with the right tool, and we can avoid jam-packed roads leading to the beaches and theme parks in the winter. Preparing for the invasion of the big boxes is a little trickier, but basically the same. You have to know where and when they’re coming. You have to use the right tools. And you have to be able to tap into a wealth of collective experience to avoid mistakes. It does make a difference.

In the past year, at least fifteen communities have organized to stop Wal-Mart’s march towards market domination in the Sunshine State. From Miramar in the south to Tallahassee in the north, thousands have attended public hearings, hundreds have gathered in street demonstrations, and local politicians have been deluged with phone calls, letters and e-mails in an effort to push back the retail Goliath. The results? Giant 12: Good Guys 3. Nationally the citizen’s resistance record to Wal-Mart’s development is worse than the Tampa Bay Devil Rays, with the good guys winning in about one in every ten fights.

It’s not that citizens don’t have the fight in them. It’s the scope and the money brought into the game by Wal-Mart, which has a war chest of 14 billion dollars for capital expenditures in 2005. They plan to build 40 to 45 new discount centers, 240 to 250 new Supercenters, 25 to 30 new Neighborhood Markets, and 30 to 40 new Sam’s Clubs. They’ve got a flock of attorneys, land use experts, traffic gurus, public relations spinmeisters, corporate flacks, and bagmen ready, willing and able to implement their vision of a “Supercenter every 2 miles in dense urban populations.” While this has spurred hundreds of community fights around the country, once citizens find out a Supercenter is coming, it’s like entering the ring in the 12th round with one arm tied behind their back. At that point, the game is about catching up—on zoning and planning, on traffic studies, and on environmental impacts. Then there are the social effects on a community: crime rates, property values, subsidy issues, economic development and impact on local businesses. By the time we get around to organizing ourselves, raising funds--oh yeah, it takes some money--and looking for experts, the deal is nearly done.

So how does a community get out in front of the game? Is there a “site fight in a box” where you can just take it out, put in the batteries and rock and roll?

Here at the Wal-Mart Alliance for Reform Now (WARN), we’ve shopped for that box. It wasn’t available at Wal-Mart (or Home Depot, or Target). In fact, it flat out didn’t exist. But we knew what it might contain. There would be a mechanism to accurately predict Wal-Mart's expansion in any given area. It would include ways to show the social impacts of that expansion. It would have the organizing tools to deliver the message to affected groups, and, it would provide a clearinghouse for technical expertise. Knowing the elements we needed, we began construction.

Predicting Expansion

Wal-Mart doesn’t just plop down a Supercenter in any old place (though here in Florida they do have a decided preference for wetlands with endangered species). They have mastered the principles of business geography using factors of population density, drive time, socio-economic demographics and available, buildable land, to make the decisions necessary to feed their bottom line. A thorough study of their methodology and the right tools to sift through relevant data has allowed us to replicate the process and predict with accuracy Wal-Mart’s planned expansion.

What that gets us is a map—and the wonder of maps is, you can see where you were, where you’re at and where you’re going.

In Figure 1, you’ll see a picture of Pinellas County in Florida showing Wal-Mart’s locations five years ago. Figure 2 shows Wal-Mart's expansion in the last five years, with the pink areas showing market coverage for a store and the white indicating potential expansion. Figure 3 shows predicted sites for expansion and market coverage areas. Figure 4 shows Wal-Mart’s ultimate plan.

With these maps we can begin to preemptively organize the pieces necessary to increase our effectiveness and broaden the kind of coalitions needed to bring citizens’ voices to the development process. This process can be labyrinthine, with each local governmental body having its own unique bureaucracy to navigate. Once we’re ahead of the game, the first step requires meeting with local planning/codes and zoning officials to understand how things work and get the timeline down. This process can get political: council members need to feel the heat often and early.

Finally, the most important pre-emptive organizing is in the community. A look at figure 4, above, gives us a look at what geographic areas are likely to be affected by a Supercenter. Each of the red X’s represents a unique neighborhood with its own demographic, community needs and community structure. Neighborhood and Homeowners’ Associations can be easily identified and brought into the fray. Community groups, neighborhood churches, PTAs and small businesses in the area can all be brought together around specific issues of concern that will directly impact their neighborhood, their homes, their businesses and their families. The “site fight in a box” can point us to that constituency and lay out the issues of self-interest that can mobilize the greatest numbers.

It’s Never One Wal-Mart

One red X on the map can cause some problems for a surrounding community. Since a Super center can generate 15,000 new cars per day to a site, traffic problems, while not as sexy as child labor violations or the Walton Family’s wealth, are the kinds of issues that can mobilize a local community. The “site fight in a box” can integrate the data and use predictors on the impact to local traffic patterns. The organizing potential for such a tool increases as the map shows adjacent areas and the impact on traffic patterns

New overlays to the map with appropriate data can be run on anything from crime statistics to environmental impact; from potential job loss to impact on local healthcare. The “site fight in a box” can harness “not in my back yard” sentiment to a full-fledged “not in my city” movement, giving us the people, power and political clout that can end the inevitability of further big-box expansion and bring real citizen participation into the economic development decisions that affect us all.

Rick Smith is the Florida Director of Wal Mart Organizing Project which includes the Wal Mart Workers Association and WARN (Wal Mart Alliance for Reform Now).

Copyright WARN 2005

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Tucson: Protest at Walmart in solidarity with the insurgents of Atenco

by: Anonymous
Thursday, May 25 2006          [back to top]

Please join us at a protest at the local Tucson Wal-Mart for Wal-Mart's role in the repression and brutality unleashed on the people of San Salvador Atenco.

Sunday May 28th, 1pm at the Wal-Mart at 1650 W Valencia Road,

For a car pool to the store meet at Dry River ( 657 W. St. Mary's Rd) @ noon. Bring banners, props, drums and bullhorns.

A summary of events in Atenco:

The Zapatista-led Otra Campaña, that has been traveling Southern Mexico since January, spent the last week of April in meetings throughout the Mexico state and D.F. Before they could move on to the following stops of San Luis Potosi or Zacatecas, violent conflict broke out in a town just south of the capital. Peasant flower vendors involved with the People’s Front in Defense of the Land or Frente de Pueblos en Defensa de la Tierra (FPDT) who had been resisting eviction from the Texcoco market place for weeks were forcibly removed and attacked on May 3rd by state police, in preparation for the coming of a new commercial center and Wal-Mart store.

The vendors returned to reoccupy their space before dawn, backed-up by more people from the nearby municipality of San Salvador Atenco (a community notorious for successful 2002 anti-airport battle). Instead of selling flowers, the vendors were now armed with machetes and Molotov cocktails. The police attacked the vendors again, this time with tear gas and batons. During the confrontation the police arrested 40 people, beat a countless number and killed a 14 year-old boy. Eleven cops were taken hostage by protestors and released to Red Cross that night.

On May 4th, over 3500 armed state and federal police entered the towns. More than 200 people were arrested, nearly all were beaten. Of the 47 women arrested in Atenco, 30 reported sexual abuse - “having been violated with penetration of the penis, fingers or other objects” - in formal complaints taken by the federal Attorney General and the National Human Rights Commission (CNDH). A 53 year-old mother reported she had gone to a local store to buy a birthday present for her son reported that she was forced to perform oral sex on three police officers to avoid arrest. Police used prophylactics during the abuse, a strong indication that they came to Atenco with the intention of committing rape.

“We were under orders to beat anything that moved,” stated video testimony from three state police officers, whose identities were protected, “but only out of sight of the media.”

In different parts of Mexico City, protesters began to fill the streets and blockade the highways that lead in and out of the capital. Ongoing protests are happening around the world at Wal-Marts and Mexican Consulates. La Otra Campaña has declared its intention to stay in the state of Mexico until all prisoners are released and the situation is resolved.

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Can You Still Hate Wal-Mart?

It's a shockingly eco-friendly plan from the world's most toxic retailer. Did hell just freeze over?

By Mark Morford
SF Gate Columnist
Wednesday, May 24, 2006                 [back to top]

Sometimes you just have to let the possibility breathe.

Sometimes you just have to allow that something grand and good and healthy might actually be born from the bowels of the dank and ravenous megacorporate world, like flowers from a dung heap, like vodka from old potatoes, even if it comes right alongside the nastiest, most abusive federal environmental policy you will see in your lifetime.

Take Wal-Mart, the most famously offensive, town-destroying, junk-purveying, labor-abusing, sweatshop-supporting, American-job-killing, soul-numbing, seizure-inducing, hope-curdling retailer in the known universe (just ask the fine local town of Hercules), moving upward of $300 billion in cheap mass-produced slurm every year via nearly 5,000 landscape-mauling eyesore stores stretching all the way from Texas to China and Argentina and South Korea and Mexico and your backyard, with U.S. stores accounting for fully 8 percent of all retail sales in our entire nation.

There has been, to date, very little good to say about this most voracious and powerful of low-end, trashy retailers, and certainly nothing from anyone even remotely concerned with the health of the planet and of the attuned consumers who inhabit it. Wal-Mart has always been, quite appropriately, the devil.

Until now. As juicy and warmhearted eco-blog Treehugger mentions in its latest Wal-Mart roundup (and as the New York Times later discussed in its huge "Business of Green" section last week), it seems that back in October, Wal-Mart's president, Lee Scott, delivered a "secret" speech to employees about "21st Century Leadership," in which he outlined a whole slew of what can only be called truly remarkable and potentially world-altering agenda items to help ensure the future health of the world's biggest shopping hell.

And what a speech it was. Packed with all sorts of pledges and goals of such a green and sustainable and forward-thinking nature it might as well have been floating on boats of tofu on waves of Sierra Club blown by winds of Utne Reader. It was, in a word, surreal. And if even half of it is true, more than a little revolutionary.

There was talk of stores eventually being supplied with 100-percent renewable energy. Talk of ultimately creating zero waste, of pledging to reduce packaging materials across the board and create more recyclables and replace PVC packaging in all Wal-Mart branded items with more eco-friendly materials. And when you're talking megatons of plastic, that's saying a lot.

It gets better. Wal-Mart has already committed to selling 100-percent sustainable fish in its food markets. They are already experimenting with green roofs, corn-based plastics and green energy (which is now used to power four Canadian stores, for a total of 39,000 megawatts, amounting to what some estimate is the single biggest purchase of renewable energy in Canadian history). Is this remarkable? Groundbreaking? Utterly confounding? Well, yes and no.

Like any giant company suddenly "embracing" the green initiative (hi, GM and Ford), Wal-Mart's rationale for all of this, of course, has absolutely zero to do with any sort of deep concern for the planet (though it does make for good PR), nothing at all about actual humanitarian beliefs or honest emotion or spiritual reverence, and has absolutely everything to do with the corporation's rabid manifesto: cost-cutting and profit.

The reason Scott promised that Wal-Mart will double the fuel efficiency of their huge truck fleet within a decade? Not to save the air, but to save $300 million in fuel costs per year. The reason they aim to increase store efficiency and reduce greenhouse gasses by 20 percent across all stores worldwide? To save money in heating and electrical bills, and also to help lessen the impact of global warming, which is indirectly causing more violent weather, which in turn endangers production and delivery and Wal-Mart's ability to, well, sell more crap. Ah, capitalism.

Seems Wal-Mart has realized one vital maxim that so many fundamentalist right-wing capitalist GOPers have so far failed to grasp: The apocalypse is just really bad for business.

Consider, furthermore, that Wal-Mart is perhaps one of the most conservative and brutishly arrogant, town-crushingly invasive of red-state companies, donating upward of $2 million to the GOP last year alone. This makes it even more remarkable indeed that Scott "gets" the global-warming crisis in a way not even BushCo is willing to admit. Yet.

"We are looking at innovative ways to reduce our greenhouse gas emissions. This used to be controversial, but the science is in and it is overwhelming. Climate change doesn't cause hurricanes, but hot ocean water makes them more powerful. Climate change doesn't cause rainfall, but it can increase the frequency and severity of heavy flooding. Climate change doesn't cause droughts, but it makes droughts longer. We believe every company has a responsibility to reduce greenhouse gases as quickly as it can."

That's what he actually said. This might not sound like much, and it's completely obvious to anyone who's been paying any sort of attention for the past, oh, 20 years, but might as well be Greek when spoken by a major Republican corporate exec, and might as well be complete vile hellspawn gibberish to a BushCo politician. It is -- or it has been, for endless years -- a blasphemy of the highest order, given how it was always deemed too expensive, too unfeasible for a company to care about pesky things such as the health of the planet. Not anymore.

All this on top of word that Wal-Mart is readying a huge move into organic foods (as I mentioned in a previous column), which is the mixed blessing to end all mixed blessings, given how it will immediately eliminate antibiotics, chemical fertilizers and hormones in tons of mass-produced foods, but also, given pathetic and diluted USDA regulations, will mean the other two vital parts of the organic movement -- ideas of sustainability and of supporting local producers -- are completely trashed.

So there you go. It's the bizarre and surprising case of the greening of Wal-Mart, and it's far from perfect. But there can be no denying it's a start, and a shockingly significant one. Because here's the kicker: As goes Wal-Mart, so goes an enormous chunk of the retail and manufacturing sectors. Like a whale through a krill swarm, their massive girth paves the way.

I do not shop at Wal-Mart. I may never, ever shop at Wal-Mart, given their notoriously horrible labor practices and their brutal business tactics and their effortless murder of all love and hope and joy from the retail experience. They are the George Bushes of the retail world -- drunk with power, cheaply made and full of crap. Not to mention that vaguely nauseating feeling, when you walk through their (or almost any) big-box store, that your soul is being slowly coated in rat saliva.

No matter. They may not have any more heart, they may be doing it for less than luminous reasons -- but who cares? If evil Wal-Mart can go green, anyone can. Isn't that good news? I mean, sort of?

©2006 SF Gate

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A developing situation

John Upton
Tracy Press               [back to top]

Businesses are flocking to cash in on Tracy’s swelling subdivisions and central location, striking fear in the hearts of some local business owners.

A Wal-Mart Supercenter grocery store, a WinCo Foods grocery store and a Raley’s grocery store are likely to be built in 2007.

Mueen Alburatim, manager of Parker Avenue Market, said Wal-Mart would have a “big time” impact on his business.

A store owner in northern Tracy, who asked not to be identified because her corporate office banned her from publicly discussing Wal-Mart and WinCo, said the city should block both of these projects because they will wipe out business in downtown Tracy.

“I think that Wal-Mart in general is killing the economy,” she said. “I think they’re going to impact my sales and my business a lot.”

Nu Wexler from Wal-MartWatch said every Wal-Mart Superstore squeezes an average of two grocery stores out of local markets. He also said small businesses spend more than half of their revenues locally, while Wal-Mart sends more than 85 percent of its revenue outside local areas.

But the Tracy Chamber of Commerce passed a unanimous vote in 2004 in support of Wal-Mart’s expansion because it will strengthen the economy and lift the quality of life in Tracy. Wal-Mart is a member of the chamber.

Wal-Mart is also promising to bring 200 new jobs to Tracy.

The city’s planning commission will weigh a proposal by WinCo Foods tonight to build a 96,000-square-foot grocery store at the corner of Pavilion Parkway and Power Road.

Wal-Mart’s plans to build an 82,000-square-foot supercenter grocery store next to its department store on West Grant Line Road could be only a month away from a planning commission decision.

Raley’s will be the anchor store of 130,000-square-foot Red Maple Village to be built at the corner of Tracy Boulevard and Valpico Road.

WinCo engineering consultant Dan Schack said comparisons between WinCo and Wal-Mart are unfair.

“WinCo doesn’t have the same labor issues,” he said. “WinCo gives its employees the opportunity to either be in a union or to actually have ownership in the organization.”

He said members of the Teamsters union often provide WinCo’s transportation.

Schack also said WinCo’s market is different than that of local grocery stores because it services bulk shoppers rather than those looking for daily purchases.

City Engineer Vicky Lombardo said she has seen a lot of proposals cross her desk for new commercial and industrial buildings during the past few months.

A proposal for a warehouse was submitted earlier this month for 1941 North Chrisman Road, bringing the number of new warehouses proposed for Tracy this year to five.

But that’s not the only addition Tracy will likely see in the coming year.

A Chili’s Grill & Bar is planned for the corner of Grant Line Road and Corral Hollow, Cingular Wireless will build a new telecommunications plant at 607 W. Sixth St., and The Great Plate Bar & Grill on Central Avenue is planning a 10,000-square-foot addition.

Sewers and roads will likely be laid for the Gateway Project, a 538-acre business park, by the end of 2006.

Andrew Malik, Tracy’s economic development director, said that manufacturing, industrial and office growth are all moving forward at similar rates.

Tracy’s population has grown from 55,000 in 2000 to more than 80,000 today and has fueled part of this commercial spurt. But residential expansion is capped by Measure A, the city’s slow growth law.

[back to top]

Predicting the Next Wal-Mart

By John Reeves
www.fool.com
05/24/2006                            [back to top]

"I know no way of judging of the future but by the past." -- Edward Gibbon

It earned the name "category killer," a term used for large companies that put less efficient merchants out of business. When this retailer went public in 1978, it soon became No. 1 in the market, as independent shops closed their doors, unable to compete with the growing colossus.

The future looked bright for the new industry leader in the 1980s and 1990s. The absence of competition and increased demand led to revenues of more than $10 billion per year by the late '90s. Alas, it never saw the competitor in the rearview mirror. In March 2005, the company bowed to the inevitable and accepted a $6.6 billion buyout offer from a consortium of investment firms. The deal was completed in the summer.

Why did Toys "R" Us fail to see the gathering threat posed by Wal-Mart?Perhaps it was unable to adequately predict future trends in its market. An ability to anticipate the future is perhaps the single most important skill that a manager or an investor can possess (which is kinda like saying that an ability to know the final score is the single most important skill required of a gambler). So where do you go to learn about the future?

In the days of old, you might have visited a fortune teller and, for a princely sum, learned that something bad is going to happen to someone you know somewhere down the line. These days, you go to Harvard Business School when you want to see what the future has in store. With this in mind, Fool co-founder David Gardner sat down with Harvard's Clayton Christensen, a professor and consultant who uses innovation to predict business growth and industry change.

When being disruptive is a good thing ... Christensen has identified the concept of innovation -- either sustaining innovation or disruptive innovation -- as crucial to determining the direction of a particular company or industry.

Sustaining innovation could be, for example, a computer company introducing a faster chip in its product. As a result of the improved product, margins should increase, thereby strengthening the company. Disruptive innovation takes root at the low end of the market. According to Christensen, disruptive innovation is the mechanism by which industries are transformed and prior market leaders (such as Toys "R" Us) are toppled. Christensen described disruptive innovation to David as follows:

A disruptive innovation is a new product or service or a new business model that doesn't attack the core market by bringing a better product to established users in direct competition with the leaders in an industry, but rather it comes into the low end of the market, either through a business model that can compete at much lower costs, can compete profitably at lower costs, or brings to the market a product or service that is so much more convenient and simple to use and affordable that a whole new population of people who previously couldn't afford or didn't have the skill to own and use a product can now own one.

There are countless examples of this business principle. Target(NYSE: TGT) and Wal-Mart rose to dominance in discount retailing as former leaders tried to concentrate on higher-margin items. Early on in the computer industry, Apple was disruptive to the likes of IBM and Digital Equipment. More recently, Amazon.com(Nasdaq: AMZN) has mounted a formidable challenge to brick-and-mortar booksellers such as Barnes & Noble(NYSE: BKS) and Borders(NYSE: BGP) by providing an alternative model for selling books and CDs.

Christensen illustrates this principle in some depth by examining the case of Charles Schwab. The following table depicts the typical life cycle of a disruptive firm:

The Life Cycle of a Disruptive Firm

Early Life Cycle Mid-Life Cycle Late Life Cycle

Disruptive company enters the market via the low end Company meets with success and gains market share Company moves upmarket in search of higher margins

Schwab was a discount broker that used the Internet in a disruptive way relative to industry leaders such as Merrill Lynch(NYSE: MER). As Schwab gained market share, it was faced with a dilemma: Go upmarket in search of higher margins or remain downmarket, slugging it out against low-cost competitors in a commodity market. At the moment, the jury is still out on which way Schwab will go. Notably, Merrill Lynch started out as a disruptive innovator itself. According to Christensen, Charles Merrill began his business with the aim of bringing Wall Street to Main Street, and his approach made it easier for average folks to own stocks. Now, Merrill Lynch is ensconced in the upmarket niche, selling its financial products to consumers with high net worth.

The price of experience By studying disruptive innovation, Christensen has learned to recognize certain patterns, and this helps him to determine the future course of a company or industry. The title of his most recent tome, Seeing What's Next: Using Theories of Innovation to Predict Industry Change, provides a useful shorthand for his work. Apparently, corporate America sees a lot of value in Christensen's ideas. The demand for his insights was so strong that he started Innosight, his own consultancy. For $40,000, Innosight will visit your firm and present a two-day innovation-themed workshop. For about $400,000, it might perform a highly detailed analysis to determine whether your firm possesses a potentially disruptive product.

In the interview, David asked Christensen about topics such as biotechnology and the future of the health-care industry -- topics addressed every month in David's Motley Fool Rule Breakers newsletter advisory service.

Seeing what's next Christensen considers biotechnology to be disruptive relative to big pharma, and he sees the future of the entire pharmaceutical industry being turned upside down. Companies that tap into the fundamental changes affecting the industry will win out.

In the area of nanotechnology, Christensen advises investors to go slowly. He explains how understanding the dynamics of the value chain will allow investors to identify the companies more likely to be successful.

One of the more tantalizing parts of the interview came when Christensen discussed the future of the health-care industry. Unlike most experts, he sees significant potential for innovation in this industry. The Minute Clinic in Minneapolis, for example, represents the type of model that might transform the entire industry. This innovative company uses nurse practitioners, located within Target stores and Cub supermarkets, to treat illnesses such as strep throat, sinus infections, and earaches. Apparently, 80% of all health-care events in a family's life consist of 14 very common ailments. Patients can visit the clinics and receive immediate treatment for a modest fee (about $45). Needless to say, business is booming. As David Gardner remarked, "When you combine lower cost with more convenience, you have a killer app in the business world."

The hunt for innovators As someone who once thought the whole personal computer thing was a fad, I should be listening to Professor Christensen, especially because he thinks disruptive technology will play an even larger role in the next 10 years. By my reckoning, almost half of our current Rule Breakers stock picks are disruptive innovators. One of our more disruptive selections, Intuitive Surgical(Nasdaq: ISRG), a maker of surgical robots, is up 150% since we selected it back in March 2005. Another recommendation, Steiner Leisure(Nasdaq: STNR), a leading cruise ship spa operator, is up 86% since it was chosen.

Want to join us in our search for disruptive companies? David Gardner is offering a free 30-day trial to the service -- full privileges included. Your trial will provide you with access to all of our active picks. You'll also be able to read about our two most recent stock selections, which were released last week. If you don't like the service, just cancel. No questions asked. To have a peek at the future, just click here.

This article was originally published on Feb. 23, 2005. It has been updated.

John Reeves does not own shares of any company mentioned above. Amazon.com and Charles Schwab are Motley Fool Stock Advisor recommendations. Wal-Mart is an Inside Value recommendation. The Motley Fool has a disclosure policy.

©1995-2005 The Motley Fool. All rights reserved.

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Town uses eminent domain to thwart Wal-Mart

Hercules, Calif., takes action to keep giant retailer out after citizens object

The Associated Press
May 24, 2006                         [back to top]

HERCULES, Calif. - A San Francisco suburb voted Tuesday to use the power of eminent domain to prevent Wal-Mart Stores Inc. from setting up shop after hearing from dozens of residents opposed to the big-box retailer.

The five-person Hercules City Council voted unanimously to evoke eminent domain after opponents said they worried that Wal-Mart would drive local retailers out of business, tie up traffic and wreck the small-town flavor of this city of 24,000.

"The citizens have spoken. No to Wal-Mart," said Kofi Mensah, who has lived in Hercules for more than two decades and said he values the city's authentic feel.

The overflow crowd that packed into tiny City Hall cheered after the City Council decision to to seize 17 acres where Wal-Mart intended to build a shopping complex.

Attorneys from Wal-Mart told the council that the retailer had spent close to $1 million to redesign the property to the community's liking. They said the council could not claim it was legally necessary to take the land and that the decision set a bad precedent.

‘Where does it end?’ "Today it may be Wal-Mart, but the question is, where does it end?" attorney Edward G. Burg said.

City officials countered that buying the land was acceptable to ensure it was developed to the community's liking and fit in with overall plans for the city.

Wal-Mart spokesman Kevin Loscotoff said after the hearing that the company had not decided how to proceed with its plans in light of the decision.

Wal-Mart's initial proposal for a 142,000-square foot store near Hercules' San Pablo Bay waterfront was rejected by the City Council. So the company submitted a scaled-down plan that included a pedestrian plaza, two outdoor eating areas and other small shops, including a pharmacy.

Hercules said no again, and opponents began raising the possibility of eminent domain, a legal doctrine under which government agencies can take land from its owners for the public good.

Cities sometimes use eminent domain to build roads or redevelop properties, but the owners must be paid fair market value for their land.

The U.S. Supreme Court ruled last year that such seizures are allowable if the construction raises the tax base and benefits the entire community.

Some residents and Hercules city officials say the land, which is currently open space, would be better suited for upscale stores that attract affluent shoppers and give the suburb a classy touch.

New tactic in anti-Wal-Mart campaigns Officials say using eminent domain is a new tactic in a fight that has taken place elsewhere. Communities across the country have kept Wal-Mart out by imposing size caps for businesses and laws that set high minimum pay rates.

Jeri Wilgus, 47, said she was proud of the council for standing up to Wal-Mart and said the town could show others how to fight back against big corporations. "We are setting an example for the rest of the country," she said.

A handful of residents said Wal-Mart could provide a much-needed place to purchase inexpensive goods, particularly for residents who can't drive out of town.

"I know I can go there and get a fair price for a good product," said Glenna Phillips, who has lived in Hercules for 26 years.

© 2006 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

© 2006 MSNBC.com

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HERCULES Vote goes against Wal-Mart

Council OKs using eminent domain to block retailer

Patrick Hoge,
SF Chronicle
Wednesday, May 24, 2006                  [back to top]

The Hercules City Council voted unanimously Tuesday night to take the unprecedented step of using eminent domain to prevent Wal-Mart from building a big-box store on a 17-acre lot near the city's waterfront.

The vote caused most of the 300 people who had packed Hercules City Hall for the meeting to break out in cheers and applause.

"The city of Hercules is very unique. People from the outside have to understand that,'' said Hercules Vice Mayor Ed Balico just before the vote.

During a 90-minute public comment period that preceded the vote, nearly everyone who spoke urged the council to fight Wal-Mart.

"Throw the bums out," Hercules resident Steve Kirby said at the podium of Wal-Mart. "Wal-Mart will never understand what we want."

Another resident, Anita Roger-Fields, expressed concern for small businesses in the city, saying they could be driven out of business by the discount store. "(Wal-Mart is) the worst thing that could happen to our community. They want to crush the competition."

The vote is the latest twist in a battle between the city and the discount-store chain, which wants to build a store near the city's historic waterfront. The city contends Wal-Mart's plan to build a discount store does not fit with its plans to develop the waterfront into a pedestrian-oriented village with high-end shops and homes.

"I'm elated. This is the result we wanted. The fact that it was unanimous is wonderful. Our City Council really came through," said Brenda Smith Johnson, an information technology vice president with JP Morgan Chase in San Francisco who moved to Hercules in 1992. "I know this is going to be a hard fight but we're up to it."

Some residents were infuriated that Wal-Mart had warned that if the City Council voted for eminent domain, the move would cost the city millions.

"I don't like to be threatened and they threatened my community,'' Bob Steiner, a certified public accountant and magician who lives in Hercules, said after the vote.

Only five people spoke in favor of Wal-Mart. "The city has no guarantees that anybody is going to develop the property if they take it away from Wal-Mart," said Hercules resident Andre Wilson.

The vote allows the city to begin proceedings to acquire Wal-Mart's property by force to achieve its redevelopment goals.

Following the vote, Wal-Mart spokesman Kevin Loscotoff said Wal-Mart will evaluate the situation and decide what to do next.

The city was once a company town, home to a dynamite plant that during World War I was the nation's leading producer of TNT, and some turn-of-the-century homes that used to house company officials have been restored. The city plans to continue developing land along the waterfront to fit its vision.

"Why should we have to sell ourselves short when we have this great waterfront," Hercules resident Valerie Wilgus said following the vote.

Some residents have said they would prefer grocery stores such as Whole Foods, Trader Joe's or Andronico's, and specialty shops like those in Berkeley's swank Fourth Street district.

The vote comes after Wal-Mart rejected a city offer to buy its property earlier this year.

Officials from the nation's largest retailer have said they are determined to open a store on the company's 17 acres overlooking San Pablo Bay. In a letter to the city on Tuesday, Wal-Mart attorneys argued that eminent domain was unnecessary because the company had tailored its project to meet the community's desires, downsizing the proposed store and garden center from 167,000 square feet to roughly 100,000 square feet and designing the shopping center to have "a very attractive, village-like appearance.''

But critics countered that Wal-Mart's latest plan was still more than 50 percent larger than a store plan approved for the site before the retail giant bought the property.

The city was the first in the state to adopt a redevelopment code that prescribes the design of streets, building dimensions and some architectural requirements, such as front porches. A key part of the plan called for a waterfront village with high-density housing and shops, a shoreline park, a train station, bus service and even a ferry stop.

©2006 San Francisco Chronicle

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Wal Mart's Acquisition by Shinsegae Affects Lotte Shopping

05/23, 2006              [back to top]

Wal Mart's Acquisition by Shinsegae has affected the stock price of Lotte Shopping and Shinsegae.

Most analysts considered that the decision to take over Wal Mart by Shinsegae was proper and positive to its stock price. And it was said that the total sale price, about 800 billion won, was adequate.

Hong-suk Nah, an analyst with Good Morning-Shinhan Securities, said, "The net asset value of Wal Mart is 727.2 billion won and the real asset value is slightly larger than the net asset value. The average purchasing price for each store was 51.6 billion won, which was equal to the launching of new stores."

Sang-min Ha, an analyst at Mirae Asset Securities, said, "Wal Mart recorded a 10.4 billion loss last year by the actual value method. Loans for acquisition and spending for launching of new stores may be a burden to Shinsegae in short term, however, there will be a synergy effect after 2007."

Meanwhile, the stock price for Lotte Shopping fell to 341,500 won on May 23, the lowest record since its IPO process was completed.

Copyright ⓒ Maeil Business Newspaper. All rights reserved. >

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City of Hercules Battling Wal-Mart Stores

By JUSTIN M. NORTON ,
Associated Press
5.23.2006                            [back to top]

Wal-Mart Stores Inc. is known for its hardball tactics, but the little city of Hercules has come up with some muscle of its own in a bid to keep the big-box retailer out.

The City Council in the affluent Bay Area suburb will hold a hearing Tuesday to consider using the power of eminent domain to seize the 17 acres where Wal-Mart intends to build a shopping complex. It's a novel approach to a fight that has taken place in communities across America.

"We want something good to take that place," said Jeffra Cook, a Hercules resident since 1988. "There aren't a lot of good stories about Wal-Mart."

Cook and other opponents in this bedroom community of 24,000 worry that Wal-Mart will drive local retailers out of business, tie up traffic and wreck its small-town flavor.

Wal-Mart spokesman Kevin Loscotoff accused Hercules of "playing politics" and said turning down a Wal-Mart would deprive the city of much needed revenue. He said some residents want a Wal-Mart in their community.

"We've attempted to meet with the city and haven't been given return phone calls or e-mails," Loscotoff said. "In a case like this you'd certainly hope to have some sort of dialogue."

Wal-Mart's initial proposal for a 142,000-square foot store near Hercules' San Pablo Bay waterfront were rejected by the City Council. So the company submitted a scaled-down plan that included a pedestrian plaza, two outdoor eating areas and other small shops, including a pharmacy.

Hercules said no again, and opponents began raising the possibility of eminent domain, a legal tactic where government agencies can take land from its owners for the public good. Cities sometimes use eminent domain to build roads or redevelop properties, but the owners must be paid fair market value for their land.

The U.S. Supreme Court ruled last year that such seizures are allowable if the construction raises the tax base and benefits the entire community. Some residents and city officials say the land, which is currently open space, would be better suited for upscale stores that attract affluent shoppers and give the suburb a classy touch.

Hundreds are expected to attend Tuesday's meeting. City Councilor Charleen Raines said he can't remember any issue receiving so much attention in the community.

"There's no question there has been a huge amount of public interest in this," she said.

Loscotoff said Wal-Mart remains committed to opening a store in Hercules.

Hercules is the latest California city to clash with the Arkansas-based retail giant, which has ambitious plans to expand its presence in California by 2008.

In 2004, voters in the Southern California city of Inglewood overwhelmingly rejected the company's plans for a Wal-Mart in their community. And Turlock, in rural Stanislaus County, enacted a broad ban aimed at keeping out Wal-Mart and other big-box retailers out, a law that was recently upheld by a federal appeals court.

Other cities across the country have kept Wal-Mart out by imposing size caps for businesses and laws that set high minimum pay rates.

But Wal-Mart has been at least as successful at imposing its will on communities that are less than thrilled to host one of its stores, said Nu Wexler, a spokesman for the activist group Wal-Mart Watch.

In one instance, the company even raised the specter of eminent domain to get a store built in Florida, he said.

"Wal-Mart does not hesitate to employ scorched earth tactics to break into communities that don't welcome them," he said.

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Wal-Mart 'can't back out' of bank plan

Top exec bemoans effort expended in controversy

By Marilyn Geewax
Atlanta Journal-Constitution
May 23, 2006                                    [back to top]

NEW YORK — Wal-Mart Stores Inc. expects to soon get approval from federal regulators to enter banking, but its victory will come at a high cost, a top executive told a bankers conference Monday. "It has been a lot more effort than we ever thought," said Jane Thompson, head of financial services for the world's largest retailer. "But we can't back out now."

Thompson said the Wal-Mart employees who have worked on the banking application have taken a lot of hits from the company's opponents, especially those in unions.

"We all need to have a book on combat duty," she said.

Thompson spoke at a conference called "What's Next: The New Realities in Retail Financial Services," sponsored by Forrester Research. Wal-Mart currently offers basic services such as check cashing and money orders.

Last summer, the company began applying for permission to operate a limited-purpose bank, known as an industrial loan company, to process its own stores' credit and debit card and electronic check payments.

To have this type of branchless bank, it needs permission from regulators in Utah, where the ILC would be based, and from the Federal Deposit Insurance Corp. Neither group of regulators has acted yet, but the FDIC may reach its decision as soon as next month.

But regulators have been bombarded with thousands of objections from community bankers and others who fear that Wal-Mart, based in Bentonville, Ark., will expand the ILC to become a full-service, nationwide banking operation capable of killing off competing banks in small towns by undercutting prices.

Two union-backed groups, WakeUpWalmart .com and Wal-Mart Watch, have been particularly strident in their opposition to Wal-Mart's banking move, spurring many people to write to regulators.

"The unions are attacking every syllable we say," Thompson said.

To harass the company, "they try different tactics" and lately have focused on banking, she said.

The attacks have been so strident that Thompson said they have blown the significance of the ILC application far out of proportion. The in-house bank would not offer retail services to customers but would help the company save about $10 million a year by cutting out the banking middlemen involved in electronic transactions, she said.

But in hindsight, she said the application may not have been worth the trouble. "I'm not sure I wouldn't have just gone out to sell more money orders," she said.

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Wal-Mart tops local police calls, sheriff's office finds

By Scott Hewitt
The Columbian
May 22, 2006              [back to top]

Wal-Mart isn't just the number-one retailer in the universe. It also leads the way in calls for help to local police. No west-county property generates more calls-for-service to the Clark County Sheriff's Office than Wal-Mart on Northeast Highway 99, according to a sheriff's report.

And beating out the entire county for police calls to any "retail, commercial or residential development" is the Wal-Mart retail complex the anchor store and its satellite storefronts and fast-food restaurants at the intersection of Mill Plain Boulevard and Interstate 205.

The list of top police calls, and a brief accompanying analysis, was prepared by Assistant Chief Erin Nolan and crime analyst Brian Salsig "in response to repeated requests from citizen groups, inquiring about the impact of Wal-Mart on law enforcement activity in Clark County," the report's introduction says.

Neighbors are worried about the expected arrival of a Wal-Mart on Northeast 134th Street, near Washington State University Vancouver. Although Wal-Mart itself remains a shadowy presence it is listed as a property owner but not the developer county planners last week approved the generic "Salmon Creek Commercial Center" that's expected to wind up a double-decker Wal-Mart "superstore" offering grocery sales and an underground parking garage.

Plans for the 177,000-square-foot store would make it bigger than the Hazel Dell store (141,000 square feet and no groceries) but not as large as the Mill Plain superstore (209,000 square feet with grocery sales) or the 218,000-square-foot store planned for the Birtcher Business Park in northeast Vancouver.

Here are facts underlined in the sheriff's report.

"Wal-Mart consistently ranks among the top 10 locations locally generating calls for law enforcement service."

The Mill Plain Wal-Mart, 221 N.E. 104th Ave., generated 490 calls for service in 2005.

The Hazel Dell Wal-Mart, 9000 N.E. Highway 99, generated 479 calls.

There were 112 arrests made at the Hazel Dell Wal-Mart in 2005. Fifty-three of those people went straight to jail. Most of the rest were cited and released with a future court date.

"It's not like they're committing murder every day in the parking lot," organizer Bridget Schwarz recently told a meeting of the Fairgrounds Neighborhood Association, where Wal-Mart opponents were putting their heads together in search of legal strategies to challenge the county's approval. "We are not going to be a bunch of hysterical screaming ninnies. We need to be realistic."

But she also mentioned catching a recent television news report about a mobile meth lab that was discovered in the back of somebody's car trunk in the parking lot of the Hazel Dell store.

After factoring in the multiple officers, multiple vehicles, paperwork and transportation-to-jail time required for felonies and other serious calls, the sheriff's office estimates devoting 936 hours last year to law enforcement at the Hazel Dell Wal-Mart.

"The store is not open 24 hours per day, however overnight camping is permitted in the parking lot," the report says. "Deputies are responding to calls for service at that location even when Wal-Mart is closed."

The report notes that large retailers employ sophisticated electronic systems and security agents who make frequent police calls when they've apprehended someone. That may drive crime numbers up for big boxes like Wal-Mart.

"It shows you that our proactive safety measures work," said Sharon Webber, a spokeswoman for Wal-Mart. "They help us prevent and interrupt crime."

Bud Van Cleve, president of the Northeast Hazel Dell Neighborhood Association, said he'd like to see Wal-Mart abandon parking-lot camping.

"Part of it is the nature of a large parking lot, and it has nothing to do with the particular business," he said. "But part of it is their policy, which leads to problems."

According to the report, the Hazel Dell store demands half the time of a full-time sheriff's deputy.

Does Wal-Mart ultimately present a dangerous drain on local law enforcement? "In summary, how much is too much? That is a question best answered by the community," the report concludes.

The Fairgrounds group has hired attorney John Karpinski, who is expected to appeal the county approval of the "Salmon Creek Commercial Center" before the May 23 deadline.

Call count

Top 10 police-call generators countywide in 2005:

1. Wal-Mart complex at Mill Plain and I-205: 740 calls (the Wal-Mart store itself got 490).

2. Southwest Washington Medical Center: 694.

3. WinCo Foods complex at Vancouver Plaza Drive: 651.

4. Westfield Vancouver mall: 609.

5. Village at Bridge Creek apartments, Brandt Road: 484.

6. Wal-Mart on Highway 99: 479. (For west precinct only, this is the top call generator.)

7. Steeple Chase Apartments, Northeast St. Johns Road: 459.

8. Callaham's Mobile Home Park, Northeast Highway 99: 450.

9. Value Motel on Northeast 78th Street: 445.

10. Springfield Meadows apartments on Northeast 66th Avenue: 442.

Source: Clark County Sheriff's Office

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Here's a switch: Wal-Mart leaves a market

Follows Carrefour out of local-dominated South Korea

By Jennifer Waters
& Ilya Garger,
May 22, 2006                     [back to top]

CHICAGO (MarketWatch) - Wal-Mart Stores Inc., in a highly unusual move, is leaving the South Korean market because it's proved too tough for the world's largest retailer to make a profit. Wal-Mart (WMTWal-Mart Stores, Inc. News , chart, profile, more

Delayed quote dataAdd to portfolio Analyst Create alertInsider Discuss Financials Sponsored by: WMT ) said Monday that it is selling its 16 stores there to Shinsegae Co., (SDKXFshinsegae co ltd sp gdr pref s News , chart, profile, more

Delayed quote dataAdd to portfolio Analyst Create alertInsider Discuss Financials Sponsored by: SDKXF ) South Korea's largest retailer, in a deal valued at 825 billion won, or $882 million. Shares of the Bentonville, Ark., retailer edged up to $47.36 amid broadly lower trading. For Wal-Mart, the move also reflects the company's effort to boost what have been flagging returns on capital. And it reflects the difficulty of penetrating South Korea's locally dominated market. The sale price is "roughly equivalent" to Wal-Mart's investment in the stores, a spokesman said. Wal-Mart got into the South Korean market in 1998 by acquiring four Makro Stores. It opened 12 supercenters since then. Other terms of the pact, which still faces regulatory clearance by the Korea Fair Trade Commission, were not disclosed. Shinsegae operates 79 E-Mart hypermarkets and will change the Wal-Mart stores' names to E-Mart. Geographic expansion "As we continue to focus our efforts where we can have the greatest impact on our growth strategy, it became increasingly clear that in South Korea's current environment it would be difficult for us to reach the scale we desired," Mike Duke, Wal-Mart's vice chairman and head of international operations, said in a statement. "We have decided to sell our business to the market leader as we believe this is the best option for our associates, customers and shareholders," he added. The sale comes only months after Wal-Mart made major investments in other geographical areas. In March, Wal-Mart said it had lifted its ownership to 51% in Central American Retail Holding Co. and renamed it Wal-Mart Central America. The division operates 375 supermarkets in Guatemala, El Salvador, Honduras, Nicaragua and Costa Rica. "This additional investment demonstrates our confidence in the partnership and in the future of this business in Central America," Duke said then. The retailer also has made two other strategic international purchases, boosting its holdings in Seiyu Ltd. to 53% and lifting its market position to No. 3 in Brazil with the acquisition of Sonae Distribuicao Brasil S.A.. And more buying opportunities are ahead. "We are continuing to look for growth opportunities all around the world," spokesman Bill Wertz said Monday. Wal-Mart has left an international market only once before and in a much smaller way. In early 1998, Wal-Mart got out of a three-year-old partnership to run two supercenters in Jakarta, Indonesia, which didn't allow foreign investment in retail stores. Financial strategy Getting out of the South Korean market also underscores Wal-Mart's widely publicized commitment to growing what had become flagging returns on investment and capital. In a spate of meetings with analysts and reporters, Chief Financial Officer Tom Schoewe has touted the company's focus on growing profits rather than just sales. "We had an investment of roughly $1 billion in Korea," spokesman Wertz said. "We weren't able to build that investment in the way that we felt was best for the company. We're expecting now to be able to take that capital and invest it in a way that will enable us to grow [return on investment] more quickly." Wal-Mart will continue to operate its global procurement office in Seoul, which exports South Korean products such as apparel, plush toys and home textiles. Wal-Mart is the second Western retailer to beat a retreat from South Korea in the past month. France's Carrefour, (CRERFcarrefour sa ord News , chart, profile, more

Delayed quote dataAdd to portfolio Analyst Create alertInsider Discuss Financials Sponsored by: CRERF ) the world's second largest retailer behind Wal-Mart, sold its 32 South Korean outlets to local retailer E-Land on April 28 for $1.85 billion. The world's largest retailer entered South Korea in 1998 but never managed to rise past fifth place in the competitive and locally dominated market. Last year, Wal-Mart's unit had a loss of $10 million on sales of $720 million. Shinsegae approached Wal-Mart in March about acquiring the South Korea business. Formerly part of Samsung Group, the country's largest conglomerate, Shinsegae was spun off in the 1990s but is still controlled by the sister of Samsung's chairman.

Jennifer Waters is a reporter for MarketWatch based in Chicago.

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Hercules raises stakes in Wal-Mart standoff

City may try eminent domain to take land

Patrick Hoge,
Chronicle Staff 
Monday, May 22, 2006            [back to top]

Leave it to a small East Bay city named Hercules to go toe-to-toe with Wal-Mart.

No other city in America has considered standing up to the nation's largest retailer quite like the bedroom community of 24,000 on the Contra Costa County shore that is named for the Greek mythological hero and was once home to a major dynamite plant.

While other cities have rejected Wal-Mart store proposals, the Hercules City Council is to vote Tuesday on whether to begin eminent domain proceedings to forcibly take 17.27 acres from the company, which wants to put a big-box store near an upscale new residential neighborhood next to San Pablo Bay.

Hercules officials and many residents say they envision the former company town becoming like Sausalito or Tiburon, and they fear that a giant discount store would wreak havoc on a half-decade of planning for a bayside village of high-end shops and homes designed to be friendly toward pedestrians.

"One of the main reasons we were drawn to this area was the character Hercules is aiming for with the new waterfront development,'' said David Robinett, an attorney who moved to the city last year with his fiancee from Sacramento. "There was imagination and vision at the beginning of this process."

Others are more blunt.

"I don't want to have anything ghetto around me and my family,'' said Monique Howell, 25, who 18 months ago paid $652,000 for a two-story Craftsman-style home where she lives with her husband and infant son.

The possibility of the city using of eminent domain comes after the retailer rejected its offer to buy the land earlier this year, and a year after the U.S. Supreme Court ruled that local government can force property owners to sell out to make way for private development that city officials determine would benefit the public.

Wal-Mart promises to put up a fight that will cost the city dearly.

"We think it's clearly wrong for the city to take private property for political reasons,'' said company spokesman Kevin Loscotoff, predicting that litigation would cost the city millions of dollars.

But opponents repeatedly have criticized the company's business practices, calling the company "predatory,'' and saying they would prefer trendy grocery stores like Whole Foods, Trader Joe's or Andronico's, and specialty shops like those in Berkeley's swank Fourth Street district.

Such retail offerings seem appropriate to them for a city that is widely touted as a leading example of New Urbanism for its redevelopment of nearly 430 acres of former industrial land according to principles designed to reduce the need for automobiles.

That approach came out of brainstorming sessions with citizens in 2000, which led the city to become the first in the state to adopt a "form based code,'' which prescribes the design of streets, building dimensions and requirements such as front porches and small yards for homes to allow for wetlands, parks and other public space.

The jewel in the plan is a high-density, mixed-use village near a shoreline park, with a train station, bus service and even a ferry stop to give residents an alternative to the automobile -- the opposite of a typical Wal-Mart store that relies on customers using their cars.

"A big-box store is not part of our plan. It's not what we want, and Wal-Mart has to respect that,'' said Brenda Smith Johnson, an information technology vice president with J.P Morgan Chase in San Francisco who moved to Hercules in 1992.

Already, Wal-Mart's proposal has caused potential investors to wait before committing to building the waterfront area, because if the store is built it would reduce the amount of space for commercial and other tenants, said John Baucke, project director for developer Oso Trabuco LLC of Kern County, which owns the waterfront district.

"Wal-Mart is the black hole. It will suck everything from a retail point of view that competes with it out of existence,'' Baucke said.

Wal-Mart contends that such dire predictions are unjustified, that it has been able to coexist with high-end stores in other communities that have higher median incomes. The company says it has scaled down its proposal to comply with plans that the city approved in 2003 for a neighborhood shopping center at the site, which is at the intersection of John Muir Parkway and Alfred Nobel Drive.

Judy Davidoff, an attorney representing Wal-Mart, said in an interview that the city has virtually no choice but to grant approval for Wal-Mart's plan. "It fits what the community said it wanted,'' she said.

Critics counter that the earlier proposal, which was put forth by the previous land owner, the Lewis Group of Companies, allowed for the largest business to occupy just 64,000 square feet of space, while Wal-Mart wants 100,000 square feet. The goal of such a size limit was to promote a villagelike atmosphere.

Doug Mull, a vice president in Lewis Co.'s Sacramento office, said his company could not find any tenants for the approved shopping center configuration, and the only company that showed any interest was Wal-Mart. As a result, Lewis Co. and Wal-Mart in early 2005 jointly proposed a big-box store dressed up with various architectural details. City officials reacted coldly, and Lewis withdrew the application.

But Wal-Mart persisted and bought the property from Lewis in November, submitting its own plan in December that included a 141,685-square-foot anchor store as well as other smaller stores.

The city then commissioned an economic analysis that concluded Wal-Mart would not serve the needs of Hercules residents and instead would draw lower income residents of surrounding cities. Wal-Mart serves shoppers with a typical annual household income of less than $50,000, the report said -- far less than the average of nearly $90,000 in Hercules.

The analysis, which Wal-Mart vigorously challenged with its own economic studies, said a Wal-Mart store could deter higher-end stores from locating in the waterfront district.

Wal-Mart withdrew its application in February after the city's community development director and planning manager recommended against it. In March, the company submitted its scaled-down application that is similar to what Lewis Co. got approved, with two main buildings and a half-dozen smaller structures for restaurants and other stores.

Opponents, nevertheless, say the fact that the proposed Wal-Mart is 50 percent bigger than what was previously approved for the site should be enough to justify a rejection.

"Wal-Mart should meet the plan that was agreed upon,'' said Jeff Wisniewski, a geotechnical engineer who with his fiancee moved into a home that fronts on a restored creek two years ago. "I love it here, and there are only better things to come,'' he said, "if the city can hold its ground.''

©2006 San Francisco Chronicle

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Wal-Mart to exit from South Korea

BBC News       [back to top]

Wal-Mart is pulling out of South Korea - selling its 16 Korean stores to the country's biggest discount chain. The US retail giant said that withdrawing from the highly competitive market was part of its global strategy.

Shinsegae, will pay 825bn won ($882m; £460m) for Wal-Mart's South Korean operations, if given approval by the country's regulators.

Wal-Mart said it had lost about 9.9bn won in 2005 from its business in the country, on sales of 750bn won.

It launched in South Korea in 1998 but last year ranked bottom of the nation's five discount store chains.

Tough trading

Shoppers, especially women, had been dissatisfied with the food and drinks on offer, said analyst group Hyundai Securities.

Wal-Mart vice chairman Mike Duke said the firm was focussing on where it could achieve most growth.

"It became increasingly clear that in South Korea's current environment it would be difficult for us to reach the scale we desired," he said.

The pull-out comes less than a month after French retailer Carrefour sold its South Korean business to another retail group, E.Land.

© BBC MMVI

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Critics confront Wal-Mart

Merced Sun-Star
May 19, 2006                   [back to top]

Wal-Mart's battle to win the hearts and minds of Merced kicked off Thursday night with the first public meeting on plans to build a 1.2 million-square-foot distribution center in the southeast corner of the city. Wal-Mart handed out information sheets and bottled water at the door. In return the audience handed Wal-Mart representatives a volley of questions about how the 275-acre warehouse facility would affect traffic, air quality and the local economy.

About 150 people attended the session, which was sponsored by Wal-Mart at the Multicultural Arts Center on West Main Street.

Though the forum was meant to answer questions specifically about the distribution center Wal-Mart wants to build here, company representatives were forced to answer for Wal-Mart's controversial image as a behemoth retailer that some say squashes local competition and exploits workers.

"Why do we want to welcome a corporation to Merced that has such a poor record as a corporate neighbor?" asked audience member Tom Grave. "I'm not sure why we see this as an enhancing element for Merced. I think we can do better."

Wal-Mart representatives said they wanted to counter the "misinformation" that they say has been circulating in the local community.

A 20-minute slide presentation listed facts about the center: It could provide up to 900 full-time jobs with starting wages of $13 to $14 an hour; Wal-Mart has not received any tax incentives or government subsidies for building the center; the center would generate a maximum of 900 truck trips daily.

Some audience members responded with their own facts and stories.

Lysa DeThomas, a Merced teacher, said her parents live in New Mexico near a recently opened Wal-Mart Supercenter. DeThomas said her relatives were promised jobs at the supercenter, but the jobs were given to people from outside the area and the wages were lower than promised.

Keith Morris, Wal-Mart's senior manager of public affairs, responded that a distribution center is different from a supercenter.

"But if you're lying about wages at a supercenter why wouldn't you lie about wages at a distribution center?" asked DeThomas.

Morris said Wal-Mart will be under too much scrutiny from local officials to lie about projected jobs and wages.

"If we don't meet these goals, I guarantee you there's going to be officials that will take some action," said Morris.

Many questioners asked Wal-Mart representatives for "something in writing" that would guarantee jobs for local residents.

Morris said the environmental impact report about the distribution center will serve as a kind of written guarantee about how the distribution center will affect the local community.

But, as audience member Nancy Goodban pointed out, the impact report analyzes environmental concerns, not economic ones.

The City Council voted Monday night to award the $344,655 contract to write the report to EDAW, Inc., the same consultants writing the impact report about the proposed 1,200-acre Riverside Motorsports Park near Atwater.

Wal-Mart will pay for the report, but the city selected the consultants to write it, said Morris, to avoid any hint of bias.

That report will outline what Wal-Mart must do to lessen its impacts on traffic, air quality and other environmental factors.

The impact report could take up to a year to complete, said Morris, and then it must go to the Planning Commission for approval.

"We're under a microscope wherever we go," said Morris. "If we put a number out there and it's not correct, I guarantee you it will follow us around wherever we go. You cannot hide from that kind of stuff when you're the nation's largest retailer."

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Judge rejects environmental report on proposed Wal-Mart in Selma

KESQ.com
Associated Press
May 19, 2006                 [back to top]  

SELMA, Calif. -- A Fresno County judge has handed Selma officials and Wal-Mart a setback over a proposal to build a Wal-Mart Supercenter in the city. Saying Selma officials failed to consider the urban decay, energy, air quality and traffic effects of the proposes store, Judge Stephen Kane rejected Selma's environmental impact report.

With the ruling, the city will have to address the concerns cited by the judge and hold a public hearing.

If finally approved, the proposed Wal-Mart Supercenter off Highway 99 would be 225-thousand square feet and would carry food, clothes and other goods.

Wal-Mart recently opened two other of the giant stores in the nearby communities of Hanford and Dinuba.

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Regulator weighs Wal-Mart bank bid impact

Comptroller of the Currency says FDIC will consider other factors to make sure a bank run by retailing giant is not a risk to the deposit insurance fund.

Reuters
May 19, 2006              [back to top]

CHICAGO (Reuters) - A U.S. regulator who will have a vote on Wal-Mart's application to open a bank on Friday said there was room for some subjective considerations about the applicant and its impact on the deposit insurance fund.

Comptroller of the Currency John Dugan, on the sidelines of a Federal Reserve Bank of Chicago event, said the Federal Deposit Insurance Corp. would apply the appropriate legal standards in its decision on Wal-Mart's application.

But he also said the FDIC, which is reviewing the retailer's bid, would consider other factors that might affect the health of the federal deposit insurance fund.

"I think there are subjectives that go to whether an organization that's bringing the kind of wherewithal to a newly chartered institution, to make sure it's not a risk to the deposit insurance fund," Dugan said, in response to a reporter's question about the FDIC's consideration of factors other than the applicable legal standards.

Wal-Mart Stores Inc. (Research) has applied to open a type of bank called an industrial loan company to transmit its electronic payments.

While Wal-Mart has repeatedly said it did not have plans to enter retail banking or offer processing services to other retailers, its application has generated an unprecedented level of opposition from some in Congress, community banks and groups that regularly criticize the retail powerhouse.

Some critics have raised questions about Wal-Mart's corporate character, for example, and urged the FDIC to consider such factors in its review of the application.

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Wal-Mart files to sell 50 billion yen in notes

Thu May 18, 2006              [back to top]

WASHINGTON, May 18 (Reuters) - Wal-Mart Stores Inc. <WMT.N> filed with the U.S. Securities and Exchange Commission on Thursday to sell up to 50 billion yen in notes due 2011.

The world's largest retailer said in the registration statement that it would use the proceeds from the offering to repay some short-term debt that is denominated in yen.

The company has applied to list the notes on the Irish Stock Exchange.

Goldman Sachs International and Lehman Brothers are underwriting the offering.

© Reuters 2006. All rights reserved.

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Schneider National arm to provide Chicago-area warehousing services to Wal-Mart

ProgressiveRailroad.com
5/18/2006                                   [back to top]

Schneider Logistics Inc. subsidiary American Port Services recently obtained a contract from Wal-Mart Stores Inc. to provide Chicago-area warehousing space for products destined for Midwestern distribution centers and stores.

American Port Services will provide the retailer access to 3.4 million square feet of warehouse space in and around the Windy City for imported products moving via rail from West Coast ports to Chicago. The service provider also will develop an import distribution center in Elwood, Ill. — adjacent to BNSF Railway Co.’s Logistics Park-Chicago — which will begin operations in mid-summer.

Schneider Logistics is a subsidiary of truckload and intermodal services provider Schneider National Inc.

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Wal-Mart apologizes for threat

By Elaine Aradillas, Henry Pierson Curtis,
Etan Horowitz and Bob Shaw
The Orlando Sentinel (FL)
May 17, 2006                             [back to top]

PUTNAM COUNTY -- Wal-Mart officials said Tuesday that they are apologizing to homeowners in Putnam County who received a letter from a company representative that threatened the use of eminent domain if they did not sell their property to the company. For several months, Wal-Mart has faced opposition to a planned 800,000-square-foot distribution center just over the Volusia County line. Last week, after several residents complained about the letters, a Wal-Mart spokesman said that the company had no plans to ask Putnam County to use eminent domain to obtain properties. He also said he did not know why the consultant had mentioned the possibility in the letter.

On Tuesday, Keith Morris, the Wal-Mart spokesman, said that after reviewing the letter, company officials decided it was "overly aggressive and did not reflect the company's position." Morris said it was Wal-Mart's fault for not reviewing the letter prior to it being distributed to a half-dozen property owners on Clifton Road.

Morris said the company is deciding whether it wants to cut off its relationship with the consultants who sent the letter. The company wants the land to widen a road that will serve the center and put in a utility line.

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Wal-Mart debate set to resume in Vancouver

CBC News
May 17 2006             [back to top]

Vancouver residents will soon get another opportunity to speak out on the issue of big-box stores – including Wal-Mart and Canadian Tire's proposals for new stores in the city.

Vancouver city council has decided to hold a public hearing on what to do with an industrial area of Marine Drive west of Main Street.

That's where the two retail giants had tried, and failed, to get permission to build in 2005.

The city has three options for the land. It could keep the current policy, which allows applications from big-box stores, it could bar stores like Wal-Mart or it could limit what can be sold by stores in the area.

City council now wants more public input on what to do with the industrial area.

Coun. Peter Ladner said there was some confusion the last time the issue was discussed at council.

"There were two debates going on. One debate was about whether these lands were appropriately used for HOR: Highway Oriented Retail. And the second one was about the merits and demerits of the Canadian Tire proposal and the other one."

City staff will meet with residents, and business and property owners, and there will also be a public meeting at council. No date has been set for the consultations.

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Study finds Wal-Mart contributes to poverty

St. Louis Business Journal
Wednesday May 17              [back to top]

A study focused on the effects of Wal-Mart stores on poverty rates found that an estimated 20,000 families nationwide have fallen below the official poverty line as a result of the chain's expansion. Wal-Mart Stores Inc., based in Bentonville, Ark., ranked No. 5 on the St. Louis Business Journal's most recent list of the area's largest employers. As of Dec. 31, Wal-Mart employed 13,005 people in the St. Louis metro area.

The study -- Wal-Mart and County-Wide Poverty -- written by Stephan Goetz, a professor of agricultural and regional economics at Pennsylvania State University, and Hema Swaminathan for the International Center for Research on Women, was published in the latest issue of Social Science Quarterly.

Authors, Goetz and Swaminathan write that the presence of Wal-Mart was "unequivocally associated" with smaller reductions in family-poverty rates in counties nationwide during the 1990s relative to places that had no stores.

During the last decade, dependence on the food stamp program nationwide increased by 8 percent, while in counties with Wal-Mart stores the increase was almost twice as large at 15.3 percent, according to the study. Although Wal-Mart employs many people living in its communities, for most, the hours worked and the wages paid do not help these families transition out of poverty, the study said.

The study, which sought to identify the independent effect of Wal-Mart stores on changes in U.S. family-poverty rates at the county level, found that one of the greatest effects of a Wal-Mart opening is the closing of mom-and-pop-type operations.

The authors state in the study that "by displacing the local class of entrepreneurs, the Wal-Mart chain also destroys local leadership capacity."

Poverty rates will rise if retail workers displaced from existing mom-and pop-type operations work for Wal-Mart at lower wages because they have no alternatives, all else equal, according to the study.

The demise of mom-and-pop stores leads to the closing of local businesses that supplied those stores, such as wholesalers, transporters, logistics providers, accountants, lawyers and others. Many of these are higher-paying jobs. The study concludes that it is likely that these more highly-educated individuals depart from the rural community in pursuit of better opportunities elsewhere, contributing to the rural-to-urban exodus over the last decade, leaving behind those with fewer opportunities and raising the poverty rate by reducing the number of nonpoor households in the denominator.

Wal-Mart is estimated to employ no more than 2 percent of the average county's work force. The share of Wal-Mart's employment in total county retail jobs is substantially greater than only 2 percent. In addition, the Wal-Mart jobs may be part time as opposed to full time, leading to lower family incomes, all else equal, the study said.

A spokesperson for Wal-Mart was unavailable to comment for this story.

Published May 17, 2006 by the St. Louis Business Journal

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Wal-Mart views China as the next frontier for profits, but the retailer’s non-union policy could prove a stumbling block in the People’s Republic.

YaleGlobal                 [back to top]

The All-China Federation of Trade Unions, known as the ACFTU is backed by the Chinese government and pushes for a change in Wal-Mart’s attitude. The Chinese union does not engage in collective bargaining, organizing more events and discussions about conditions, and the government relies on the union to monitor private firms. While Wal-Mart executives regard unions as divisive and a threat to profitability, China expects its union to quell social instability from persistent unsatisfactory work conditions and low wages. Wal-Mart attracted attention by agreeing to work with the ACFTU, but maintains that it never accepted the request to unionize. Analysts note that the company – looking at China as a consumer market and already dependent on the nation as a supply source – would be foolish to oppose the combined forces of the Chinese government and the ACFTU.

see: China’s Union Push Leaves Wal-Mart With Hard Choice

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Wal-Mart takeover behind attack on Mexican town

By Ruth Vela
www.workers.org
Published May 16, 2006                [back to top]

Mexican police attacked flower vendors in San Salvador Atenco on May 3 as the vendors tried to sell in their usual area, now a future site of a Wal-Mart.

The government-initiated attack against the group of flower producers and their supporters was actually a result of a rarely seen collaboration among Mexico’s three leading political parties—the PRI, the PAN and the PRD—which supported the municipal president of Texcoco in his opinion that the vendors “looked ugly.”

The truth, however, is that small-scale vendors were getting in the way of plans for big foreign companies to take over this town as they have so many others in Mexico and around the world.

The flower vendors were occupying the space in the Texcoco market when they were assaulted by police. The next day before dawn the vendors returned with supporters from the town of Atenco to confront the police and reoccupy their space.

The police again responded with violence, this time using batons and tear gas.

Some 3,000 federal police surrounded the town of Atenco. They were later joined by state and local police. The troops proceeded to launch so much tear gas that the town was engulfed in a cloud. Some protesters were then arrested while others were able to escape and hide.

Police then went from house to house, smashing windows, breaking down doors and arresting more people. During the confrontation, police gunfire killed a 14-year-old boy and left Alexis Benhumea, a 20-year-old economics student at the Autonomous university of Mexico UNAM, in a coma after a teargas canister struck him in the left temple.

Since then, leaders of the People’s Front in Defense of the Land, or what is being called the Atenco movement, have been incarcerated along with hundreds of their supporters and are among the most brutally tortured. There are currently more than 200 political prisoners—women, men and children—captive in Atenco. There have been several reports that police have raped women. In addition the town has been invaded and plundered.

In response to the attacks, people throughout Mexico and the United States have held protests. The Chiapas Center for Independent Media released a statement calling for a boycott of Wal-Mart.

The CMI says Wal-Mart “is an unwelcome guest for many Mexican intellectuals, artists, working people and activists. This is not the first time Wal-Mart has encountered problems moving in on new territory. [Atenco] is a reflection of growing outrage about Wal-Mart’s unethical business practices, notorious union-busting and general disregard for the people affected by their practices.”

The same could be said about all the foreign-owned corporations that move their factories and stores across borders freely, while thousands of people die each year trying to cross those same borders. These people are trying to escape the economic conditions created by imperialism. The people of Atenco are not alone. It is inevitable that workers will continue to rise up and defend themselves. It is their right to do so, by any means necessary, as long as they are confronted with a system where profits come before people.

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China's Union Push Leaves Wal-Mart With Hard Choice

Mei Fong and Ann Zimmerman
The Wall Street Journal
May 13, 2006                                     [back to top]

BEIJING -- As Wal-Mart Stores Inc. pushes into China, its reluctance to allow unions into its stores here is moving the company toward a potential showdown with the government and its biggest trade-union group. The looming confrontation has big implications for the discount retailing giant and for other Western businesses doing business in China. Wal-Mart has long resisted unions in the 15 countries in which it operates, but it cannot afford to stumble in the world's most populous nation.

The outcome is also important for the Chinese government. Former state-run companies have been shedding thousands of workers, and foreign companies like Wal-Mart are creating new jobs. The government is eager for the umbrella group of Chinese trade unions, called the All-China Federation of Trade Unions, or ACFTU, to make inroads with these private employers. Although the federation isn't a government entity, it is backed by the government and has ties to the Communist Party. Its chairman, Wang Zhaoguo, is a member of the party's Central Committee Politburo.

In 2004, the ACFTU publicly identified foreign companies that hadn't unionized. Many companies on the list bowed to pressure and agreed to allow their employees to unionize, which boosted the union group's membership significantly. Wal-Mart attracted headlines for agreeing to work with the group.

The company now says that it did not agree to unionize, but to abide by a Chinese law barring companies from obstructing workers from forming unions. Mike Duke, chief executive of Wal-Mart International, said early this month that as far as he knew, no Wal-Mart worker at any of its 58 stores in China had expressed an interest in forming a union. A company spokeswoman said subsequently that some workers may have discussed it, "but it takes more than scattered interest for the company to be required by law to respond."

Wang Ying, the ACFTU division chief in charge of organizing trade unions at foreign companies, claims that some local unions have had trouble approaching Wal-Mart workers, and that the company has warned workers against speaking with trade-union officials during working hours. According to Ms. Wang, a local union representative in Qingdao approached Wal-Mart workers by pretending to be a customer, but staffers were too scared to talk.

"We pay our workers to take care of customers," says Wal-Mart spokeswoman Beth Keck. "We clearly can't permit a situation where workers are free to engage in political discussion during the work day."

The ACFTU was founded in 1925 and claims a membership of 134 million workers. Among its goals, it says, is "to protect the legitimate interests and democratic rights" of workers. Some international labor experts, however, contend it helps China's leaders control both workers and independent unions, and that the dues it collects are mainly used to organize events. It does not take part in American-style collective bargaining over wages and benefits, although it says it does hold conferences between workers and management.

"If Wal-Mart continues to be against unions, they may not face ACFTU alone, but also the whole of China," says Ms. Wang, hinting that Wal-Mart could face pressure directly from the Chinese government.

From its inception, Wal-Mart has vehemently fought attempts to unionize its stores in the U.S. Its late founder, Sam Walton, believed unions were a divisive force and would make the company uncompetitive. Thus far, Wal-Mart has remained mostly union-free throughout the world.

Vitally Important

China is vitally important to the Bentonville, Ark.-based retailer. Chief Executive Lee Scott has repeatedly said China is the only country where it can feasibly duplicate the size and success it has had in the U.S. Wal-Mart has opened 58 stores in China and has 30,000 employees. It has stepped up store openings throughout the country and expects to open about 20 this year.

China is also a critical supplier of merchandise. Wal-Mart purchased $18 billion in goods directly from Chinese manufacturers last year. It obtained a substantial additional amount of Chinese goods through its suppliers.

John Frisbie, president of the U.S.-China Business Council, a Washington-based trade organization, says foreign companies are not required to set up unions in China unless employees request them. But Chang Kai, professor of School of Labor Relations and Human Resources at Renmin University in Beijing, notes that "companies in China can't obstruct the establishment of trade unions."

ACFTU's goal is to increase the number of foreign companies with unionized work forces. Currently, only about 30% of foreign companies in China have trade unions. Trade groups are aiming for 60% by the end of this year and 80% by 2007.

French retailer Carrefour SA, Wal-Mart's biggest rival, is 70% unionized in China. McDonald's Corp., Motorola Inc. and other Western companies have allowed union organization in areas where workers request it.

Poor working conditions and low wages are generating social unrest and represent a growing threat to China's economic progress. The government is trying to craft a new set of labor laws that give workers greater protections. These rules are likely to give additional power to the ACFTU. Government officials hope the changes will deter the development of more independent unions like those that have formed in southern China's manufacturing heartland.

The proposed rules worry some foreign companies that fear new curbs on their autonomy. The "strict regulations" could raise production costs and "force foreign companies to reconsider new investments or continuing their activities in China," says Serge Janssens de Varebeke, president of the European Union Chamber of Commerce in China, in a letter to China's National People's Congress last month.

Wal-Mart has a history in both the U.S. and abroad of resisting the involvement of any third-parties with its work force. In 2000, a group of butchers in a Texas Wal-Mart supercenter voted to unionize. Shortly thereafter, Wal-Mart announced it was switching to prepackaged beef and reassigned the store's butchers. In Canada, the United Food and Commercial Workers organized a Jonquiere, Quebec, Wal-Mart in 2004. The retailer shuttered the store last year, claiming it was losing money and that union demands would prevent it from becoming profitable.

Acquired Unions

A company spokeswoman says that because Wal-Mart has acquired some existing retailers, employees have union representation in some stores the company controls in Brazil, Argentina, Germany and Japan. In Germany, work councils made up of Wal-Mart employees negotiate on behalf of employees in individual stores.

The Chinese trade-union group has suggested there will be political pressure on Wal-Mart to unionize because Chinese President Hu Jintao and members of China's National People's Congress are placing greater importance on the issue.

In China, companies with unions must contribute 2% of their payrolls as union dues. Under some Chinese provincial regulations, local unions can collect this percentage from companies without unions as well, in order to fund the establishment of trade unions.

ACFTU has said that if Wal-Mart does not acquiesce to trade-union wishes, it may start enforcing this little-used regulation on the retailer. "We have a clear attitude toward Wal-Mart. They must comply with the laws of our country," said Ms. Wang, the ACFTU division chief.

Wal-Mart says it already collects 2% of total wages at each of its Chinese stores and sets the money aside in a fund for its employees in China. Instead of the funneling the money to ACFTU, Wal-Mart says, an employee council at each store determines how to use it. Some stores have used it for employee birthday parties, while others have donated it to charity, Wal-Mart says.

If Wal-Mart interferes with employee efforts to unionize, it could also face more stringent inspections for sanitation and worker health and safety, according to one person familiar with the ACFTU's planning. Wal-Mart says it already has many inspections of its stores and is organized to handle them.

"If Wal-Mart is smart, they should let [ACFTU] in," says Hong Kong legislator and labor union supporter Lee Cheuk Yan, who contends the trade-union group is more interested in increasing its dues-paying membership than pressing for better wages for its members.

The ACFTU acknowledges it is different from many unions in the West. But Li Jianming, a director at the ACFTU, says the organization was instrumental in negotiating 754,000 contracts covering 103 million workers by the end of 2005.

Wal-Mart's Ms. Keck declines to comment on ACFTU's effectiveness. She says Wal-Mart wants a good relationship with the government and a "direct and productive relationship" with its employees as well.

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New York Times exposes Wal-Mart's secret memo to set up right wing front group

By MICHAEL BARBARO
Published: May 12, 2006               [back to top]

Wal-Mart, having helped start an advocacy group that trumpets its contributions to America, is now helping that organization recruit Wal-Mart's suppliers to join the public relations offensive — a move that some vendors say puts improper pressure on them.

The campaign to encourage suppliers to join the advocacy group, called Working Families for Wal-Mart, challenges Wal-Mart's longstanding policy of keeping suppliers at arm's length and shows how eager the company is to fend off a well-organized union-backed campaign critical of its wages and benefits.

Though Wal-Mart provides the advocacy group with significant financial help, the five-month-old Working Families for Wal-Mart describes itself as autonomous, boasting 100,000 members around the country and a 16-member national steering committee that includes a musician, a filmmaker and a minister.

But at least half of the steering committee's members have business ties to Wal-Mart or Working Families for Wal-Mart. Among them are the group's chairman, Andrew Young, who served as both ambassador to the United Nations and as mayor of Atlanta. His firm has a contract with the group.

In addition, Wal-Mart has helped with the recruitment of its suppliers by Working Families for Wal-Mart, even distributing a letter to thousands of suppliers, ostensibly from the group, that began "Wal-Mart is under attack and Wal-Mart and Sam's Club suppliers have the power to do something about it and help protect their businesses."

Wal-Mart denies that its support for the advocacy group constitutes unfair pressure on its suppliers to join the cause. The letter was provided to The New York Times by WakeUpWalmart.com, a group backed by unions that have previously tried to organize Wal-Mart workers in the United States. The group said the letter was sent to them anonymously.

As a result of the close relationship between the company and the Working Families for Wal-Mart, some current and former suppliers say, the advocacy group's membership drive amounts to Wal-Mart's leaning on its suppliers to help burnish the company's image — a request many said would be hard to turn down, given the company's importance to their business.

"The smaller vendors will feel some level of pressure to do this," said Willie Pietersen, the former president of Tropicana, a longtime Wal-Mart supplier, and now a business professor at Columbia University. "The question is, If you say no, are you out of the game?" Another executive, who sits on the board of several Wal-Mart suppliers, said that given Wal-Mart's size, a company faces "implicit pressure to join" the group if asked. The executive spoke only after receiving anonymity, saying he was not authorized to speak publicly about Wal-Mart.

Wal-Mart said it has put no pressure on suppliers to join the advocacy group, and has made clear that membership is voluntary. Robert McAdams, a Wal-Mart spokesman who exhorted suppliers to join Working Families for Wal-Mart during the annual company meeting for suppliers in January, said he explained that "there is no tie between joining Working Families for Wal-Mart and a supplier's ability to do business" with Wal-Mart. Wal-Mart buyers, he added in an interview, never see the list of suppliers who join the advocacy group.

Mr. McAdams said suppliers, tired of watching the company come under attack, are eager to tell stories about the retailer's positive impact on their businesses and communities. The group "is a vehicle that our friends and allies can join," he said.

Ron Johnson, who runs the Wal-Mart office of the Walt Disney Company's consumer product division, learned about the group at the annual company meeting and immediately signed a card left on his chair. "I feel gratitude toward Wal-Mart," Mr. Johnson said. "They have definitely been good to me and my family."

Mr. Johnson, who lives in Bentonville, Ark., where Wal-Mart has its headquarters, said he felt no pressure to join the group nor has any Wal-Mart executive spoken to him about Working Families for Wal-Mart.

"I can see how somebody from the outside might see this as strong-arming," he said. "But it did not feel that way from my side of the desk."Working Families for Wal-Mart was created in December as part of a broad response to a well-financed campaign waged against the company by two large unions. The United Food and Commercial Workers Union has financed WakeUpWalmart.com, while the Service Employees International Union has created a group called Wal-Mart Watch.

Both groups, which have former political operatives on staff, have attacked Wal-Mart's business practices, its treatment of workers and its impact on communities. In response, Wal-Mart has hired Edelman, a major public relations firm, which has created a public relations war room at the company headquarters and reached out to bloggers who support the company.

The members recruited by the Working Families group have, among other things, spoken in favor of Wal-Mart at zoning meetings and testified before a federal agency reviewing Wal-Mart's application to open a bank.

Catherine Smith, a member of the Working Families for Wal-Mart national steering committee, said the group might have started with a mandate from Wal-Mart but "it has grown its own legs and it's happening organically."

Ms. Smith, a vice president at Diversity Best Practices, a work force development firm in Washington that counts Wal-Mart as a member, said she joined Working Families for Wal-Mart after observing the company's commitment to diversifying its management. "The improvement is dramatic," she said.

Wal-Mart will not disclose how much money it has provided to Working Families for Wal-Mart. Asked if the group received financing from a source other than Wal-Mart, a member of the group's national steering committee, Martha Montoya, said, "No, not that I know of."

Wal-Mart has allowed Working Families for Wal-Mart to recruit suppliers twice — at the annual company meeting, held in Kansas City, Mo., and at a small gathering in Irving, Tex. The Working Families for Wal-Mart representative who made the Texas presentation in late April is Terry Nelson, the former political director of the 2004 Bush presidential campaign, whose firm, Crosslink Strategy, consults for both Wal-Mart and Working Families for Wal-Mart.

In a recruitment letter that Wal-Mart helped send to thousands of suppliers, Mr. Nelson wrote that "Working Families for Wal-Mart is recruiting a standing army of supporters from all aspects of Wal-Mart's business." Suppliers, he added "are strong and credible voices in this national debate."

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Wal-Mart Eyes Organic Foods

By MELANIE WARNER
New York Times
May 12, 2006                         [back to top]

Starting this summer, there will be a lot more organic food on supermarket shelves, and it should cost a lot less.

Most of the nation's major food producers are hard at work developing organic versions of their best-selling products, like Kellogg's Rice Krispies and Kraft's macaroni and cheese.

Why the sudden activity? In large part because Wal-Mart wants to sell more organic food — and because of its size and power, Wal-Mart usually gets what it wants.

As the nation's largest grocery retailer, Wal-Mart has decided that offering more organic food will help modernize its image and broaden its appeal to urban and other upscale consumers. It has asked its large suppliers to help.

Wal-Mart's interest is expected to change organic food production in substantial ways.

Some organic food advocates applaud the development, saying Wal-Mart's efforts will help expand the amount of land that is farmed organically and the quantities of organic food available to the public.

But others say the initiative will ultimately hurt organic farmers, will lower standards for the production of organic food and will undercut the environmental benefits of organic farming. And some nutritionists question the health benefits of the new organic products. "It's better for the planet, but not from a nutritional standpoint," said Marion Nestle, a professor of nutrition, food studies and public health at New York University. "It's a ploy to be able to charge more for junk food."

Shoppers who have been buying organic food in steadily greater quantities consider it healthier and better for the environment. Organic food — whether produce, meat or grain — must be grown without pesticides, chemical fertilizers and antibiotics. Then, before it is sold, the food cannot be treated with artificial preservatives, flavors or colors, among other things.

When Wal-Mart sells organic food on a much broader scale, it will have to meet the same Agriculture Department requirements. But nutritionists say the health benefits of many of these new offerings are negligible.

Wal-Mart says it wants to democratize organic food, making products affordable for those who are reluctant to pay premiums of 20 percent to 30 percent. At a recent conference, its chief marketing officer, John Fleming, said the company intended to sell organic products for just 10 percent more than their conventional equivalents.

Food industry analysts say that with its 2,000 supercenters and lower prices, Wal-Mart could soon be the nation's largest seller of organic products, surpassing Whole Foods. Already, it is the biggest seller of organic milk.

While organic food is still just 2.4 percent of the overall food industry, it has been growing at least 15 percent a year for the last 10 years. Currently valued at $14 billion, the organic food business is expected to increase to $23 billion over the next three years, though that figure could rise further with Wal-Mart's push.

Harvey Hartman, president of the Hartman Group, a consulting firm in Seattle that is working with Wal-Mart on its organic food initiatives, asserted: "What Wal-Mart has done is legitimized the market. All these companies who thought organics was a niche product now realize that it has an opportunity to become a big business."

Kellogg and Kraft say they began working on organic Rice Krispies and organic macaroni and cheese before having conversations with Wal-Mart. But David Mackay, chief operating officer at Kellogg, says it was helpful knowing that a big customer like Wal-Mart was enthusiastic about the product.

In July, Kellogg is planning to introduce organic Raisin Bran and organic Frosted Mini Wheats, with packages featuring the word 'organic' at the top in giant letters.

Other food companies say they are working on products at Wal-Mart's direction. General Mills and Pepsi say they plan to introduce new organic versions of some of their well-known brands late in 2006. These products are expected to appear in Wal-Mart first and then at other major retailers.

Officials at General Mills, the producer of Cheerios, Yoplait yogurt and Green Giant vegetables, among other things, and at PepsiCo, which owns the Tropicana and Quaker brands, declined to identify those products.

DeDe Priest, senior vice president for dry groceries at Wal-Mart, said the company had been urging food suppliers for the last year to embrace organic foods. At a recent conference in Rogers, Ark., near the company's headquarters in Bentonville, she said, "Once we let the companies know we were serious about this and that they needed to take it seriously, they moved pretty fast."

Bruce Peterson, head of perishable food at Wal-Mart, said that it aimed to change the way people think about the retailer.

"Consumers that gravitate to organic products don't always think of Wal-Mart as a top-of-mind destination to pick up those products," Mr. Peterson said. "We want to let customers know, 'Hey, we're in that business.' "

The strategy of working with food makers to tie in organic products with well-known brands represents a departure from the approach many of Wal-Mart's competitors are taking. Safeway, Kroger and SuperValu, which is set to acquire Albertsons, have private label organic lines with names like Nature's Best and O that they sell at prices below those of brand organic products.

Mr. Peterson said he thought that Wal-Mart's method would be more effective in appealing to customers because it relies on powerful brand names that have million of dollars in advertising backing them up.

But Wal-Mart's new push worries Ronnie Cummins, national director of the Organic Consumers Association, an advocacy group that lobbies for strict standards and the preservation of small organic farms. He said Wal-Mart did not care about the principles behind organic agriculture and would ultimately drive down prices and squeeze organic farmers.

"This model of one size fits all and lowest prices possible doesn't work in organic," Mr. Cummins said. "Their business model is going to wreck organic the way it's wrecking retail stores, driving out all competitors."

Part of the problem, Mr. Cummins said, is that Wal-Mart is making a push into organics at a time there is already heavy demand and not enough supply.

"They're going to end up outsourcing from overseas and places like China," he said, " where you've got very dubious organic standards and labor conditions that are contrary to what any organic consumer would consider equitable."

Currently, some 10 percent of the organic food consumed in the United States is imported, according to the Agriculture Department. Kelly Strzelecki, an agricultural economist there, said she expected that share to increase.

Mr. Peterson, the Wal-Mart executive, says Wal-Mart is not now getting any of its organic products from overseas, but cannot predict if that will change. And he says Wal-Mart does not pay organic farmers less than others do, in part because the demand is so high. He said the lower prices offered to consumers were made possible by Wal-Mart's enormous volume and by having efficient distribution and inventory systems.

Some organic food advocates also fear that large-scale organic farming will not use the crop-rotation practices of the small farms, hurting the fields and reducing the health benefits of organic food.

Mr. Peterson's view of organic agriculture is markedly different from many of those involved in the field.

"Organic agriculture is just another method of agriculture — not better, not worse," he said. "This is like any other merchandising scheme we have, which is providing customers what they want. For those customers looking for an organic alternative in things like Rice Krispies, we now have an alternative for them."

Organic agriculture arose in the 1970's as a reaction to large-scale farms that confined animals and the increased use of pesticides and chemical fertilizers on crops. Many advocates of organic produce consider conventional agriculture to be harmful to the environment and to human health.

But Wal-Mart and some large food manufacturers are careful not to position their organic versions as superior to the original. "We have no intent to send a message that the standard Rice Krispies are somehow not great brands," Mr. Mackay of Kellogg said.

Organic Rice Krispies are made with cane juice instead of high-fructose corn syrup and without the artificial preservative BHT.

Mr. Hartman, the Seattle consultant, said organic now means different things to different people. "It's a multifaceted symbol representing everything from quality to health to ideology, and everything in between," he said. "It's something that lets people feel even better about their choices."

With processed products like organic Rice Krispies and organic macaroni and cheese soon to appear on store shelves, the organic movement seems to be fitting itself more into the wide variety of food available to Americans.

"People want you to offer them organic and natural," said David Driscoll, a food analyst at Citigroup. "But sometimes, they just want to eat a Pop-Tart."

Copyright 2006 The New York Times Company

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N.J. Senate panel OKs health-care measure

Large employers would have to give to FamilyCare fund

BY SUSAN K. LIVIO
Star-Ledger
Friday, May 12, 2006              [back to top]

Despite predictions businesses would eliminate jobs or close, a Senate panel yesterday approved a bill requiring large employers to contribute to the cost of providing health coverage for uninsured workers.

Employers with more than 1,000 full-time and part-time workers logging a minimum of 13 hours a week would contribute $1.65 per hour per employee, according to the legislation. The money would go into a fund controlled by the state Department of Human Services to expand FamilyCare, a popular health insurance program it offers to working poor families.

Many workers already have found their way into FamilyCare because their wages are low enough to qualify for the program, and their employers don't offer coverage they can afford or any coverage at all, the bill's sponsors said. There are 174,000 people enrolled, according to February data from the state.

A recent analysis by the liberal think-tank New Jersey Policy Perspective found 51 businesses with 100 or more workers enrolled in FamilyCare, which is supported by state and federal funding. Wal- Mart/Sam's Club, Home Depot and Pathmark topped the list.

"FamilyCare was always designed to be a safety net for working families in this state," said bill co-sponsor Sen. Joseph Vitale (D- Middlesex). "It was never designed to be safety net for the more successful companies in New Jersey."

The Senate Labor Committee approved the measure 3-1 at a packed hearing in Trenton following two hours of testimony dominated by business leaders who accused the state of blaming them for the 1.3 million uninsured people living in the state. Union leaders and advocacy groups for the poor praised the measure.

With two-thirds of people in the state covered by work-provided health insurance, "Employers are doing the right thing," said Christine Stearns, a vice-president for the New Jersey Business and In dustry Association. "Why doesn't everyone provide health insurance? Cost -- the cost has exploded in re cent years."

If the state really wants to reduce the number of uninsured people, "Lower the cost of insurance so more employers can afford it," said Laurie Ehlbeck, the state director of the National Federation of Independent Business.

Committee Chairman Sen. Stephen Sweeney (D-Gloucester), who also co-sponsored the bill, said the latest version reflects many of these business community's concerns. The bill, for instance, limited the definition of an employee to ex clude independent contractors, high school students or college stu dents working part-time.

It also reduced how much money per worker employers are expected to pay into the fund, from $4.17 to $1.65 in the first calendar year, and $2.50 and $3.30 in the second and third years, respectively. The bill requires government entities, as well as private industry, to cooperate.

"We have listened to a lot of people. We've made many changes. But at the end of the day ... we don't feel its fair for the taxpayers of New Jersey to provide health care coverage for working families," Sweeney said. "We think it's the employers' responsibility."

W. Stephen Cannon, representing the national Retail Industry Leaders Association, said his organization is challenging similar measures in Maryland and on Long Island, and may do so here if New Jersey enacts the measure.

The bill now heads to the Senate Budget and Appropriations Committee, Vitale said.

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Wal-Mart Tries to Enlist Image Help

By MICHAEL BARBARO
Published: May 12, 2006                [back to top]

Wal-Mart, having helped start an advocacy group that trumpets its contributions to America, is now helping that organization recruit Wal-Mart's suppliers to join the public relations offensive — a move that some vendors say puts improper pressure on them. The campaign to encourage suppliers to join the advocacy group, called Working Families for Wal-Mart, challenges Wal-Mart's longstanding policy of keeping suppliers at arm's length and shows how eager the company is to fend off a well-organized union-backed campaign critical of its wages and benefits. Though Wal-Mart provides the advocacy group with significant financial help, the five-month-old Working Families for Wal-Mart describes itself as autonomous, boasting 100,000 members around the country and a 16-member national steering committee that includes a musician, a filmmaker and a minister. But at least half of the steering committee's members have business ties to Wal-Mart or Working Families for Wal-Mart. Among them are the group's chairman, Andrew Young, who served as both ambassador to the United Nations and as mayor of Atlanta. His firm has a contract with the group. In addition, Wal-Mart has helped with the recruitment of its suppliers by Working Families for Wal-Mart, even distributing a letter to thousands of suppliers, ostensibly from the group, that began "Wal-Mart is under attack and Wal-Mart and Sam's Club suppliers have the power to do something about it and help protect their businesses." Wal-Mart denies that its support for the advocacy group constitutes unfair pressure on its suppliers to join the cause. The letter was provided to The New York Times by WakeUpWalmart.com, a group backed by unions that have previously tried to organize Wal-Mart workers in the United States. The group said the letter was sent to them anonymously. As a result of the close relationship between the company and the Working Families for Wal-Mart, some current and former suppliers say, the advocacy group's membership drive amounts to Wal-Mart's leaning on its suppliers to help burnish the company's image — a request many said would be hard to turn down, given the company's importance to their business. "The smaller vendors will feel some level of pressure to do this," said Willie Pietersen, the former president of Tropicana, a longtime Wal-Mart supplier, and now a business professor at Columbia University. "The question is, If you say no, are you out of the game?" Another executive, who sits on the board of several Wal-Mart suppliers, said that given Wal-Mart's size, a company faces "implicit pressure to join" the group if asked. The executive spoke only after receiving anonymity, saying he was not authorized to speak publicly about Wal-Mart. Wal-Mart said it has put no pressure on suppliers to join the advocacy group, and has made clear that membership is voluntary. Robert McAdams, a Wal-Mart spokesman who exhorted suppliers to join Working Families for Wal-Mart during the annual company meeting for suppliers in January, said he explained that "there is no tie between joining Working Families for Wal-Mart and a supplier's ability to do business" with Wal-Mart. Wal-Mart buyers, he added in an interview, never see the list of suppliers who join the advocacy group. Mr. McAdams said suppliers, tired of watching the company come under attack, are eager to tell stories about the retailer's positive impact on their businesses and communities. The group "is a vehicle that our friends and allies can join," he said. Ron Johnson, who runs the Wal-Mart office of the Walt Disney Company's consumer product division, learned about the group at the annual company meeting and immediately signed a card left on his chair. "I feel gratitude toward Wal-Mart," Mr. Johnson said. "They have definitely been good to me and my family." Mr. Johnson, who lives in Bentonville, Ark., where Wal-Mart has its headquarters, said he felt no pressure to join the group nor has any Wal-Mart executive spoken to him about Working Families for Wal-Mart. "I can see how somebody from the outside might see this as strong-arming," he said. "But it did not feel that way from my side of the desk."Working Families for Wal-Mart was created in December as part of a broad response to a well-financed campaign waged against the company by two large unions. The United Food and Commercial Workers Union has financed WakeUpWalmart.com, while the Service Employees International Union has created a group called Wal-Mart Watch. Both groups, which have former political operatives on staff, have attacked Wal-Mart's business practices, its treatment of workers and its impact on communities. In response, Wal-Mart has hired Edelman, a major public relations firm, which has created a public relations war room at the company headquarters and reached out to bloggers who support the company. The members recruited by the Working Families group have, among other things, spoken in favor of Wal-Mart at zoning meetings and testified before a federal agency reviewing Wal-Mart's application to open a bank. Catherine Smith, a member of the Working Families for Wal-Mart national steering committee, said the group might have started with a mandate from Wal-Mart but "it has grown its own legs and it's happening organically." Ms. Smith, a vice president at Diversity Best Practices, a work force development firm in Washington that counts Wal-Mart as a member, said she joined Working Families for Wal-Mart after observing the company's commitment to diversifying its management. "The improvement is dramatic," she said. Wal-Mart will not disclose how much money it has provided to Working Families for Wal-Mart. Asked if the group received financing from a source other than Wal-Mart, a member of the group's national steering committee, Martha Montoya, said, "No, not that I know of." Wal-Mart has allowed Working Families for Wal-Mart to recruit suppliers twice — at the annual company meeting, held in Kansas City, Mo., and at a small gathering in Irving, Tex. The Working Families for Wal-Mart representative who made the Texas presentation in late April is Terry Nelson, the former political director of the 2004 Bush presidential campaign, whose firm, Crosslink Strategy, consults for both Wal-Mart and Working Families for Wal-Mart. In a recruitment letter that Wal-Mart helped send to thousands of suppliers, Mr. Nelson wrote that "Working Families for Wal-Mart is recruiting a standing army of supporters from all aspects of Wal-Mart's business." Suppliers, he added "are strong and credible voices in this national debate

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Why there are no Indian Wal-Marts

India's retail sector is booming. But local politics have forced big foreign companies to watch from the sidelines.

By John Elliott,
FORTUNE
May 11, 2006              [back to top]

(FORTUNE Magazine) - Walk into the Big Bazaar store in Inderlok, a lower-middle-class neighborhood in Delhi, and you can see the business opportunity as clearly as you can see the merchandise. Electronic equipment is displayed alongside women's panties, bags of rice are spilling out of packing cases, tennis balls are piled next to handbags.

"It's a typical bazaar feeling," says store manager Nitin Anand. "A little bit of clutter attracts customers."

Indeed, the store, one of 90 owned by Pantaloon, India's largest retail group, pulls in up to 8,000 customers a day with its two-for-one offers, its air conditioning, and its wide array of merchandise.

Inderlok is at the heart of India's growing middle class, which makes up a third of the country's 1.1 billion population. And that's exactly where international retailers like Wal-Mart (Research), Tesco (Research), and Carrefour want to be.

But those companies' stores, ubiquitous in other countries, are nowhere to be found in India, thanks to restrictions on foreign investment. Even the promise of lower prices and more efficient supply chains isn't enough to offset the political power of India's 12 million shopkeepers, who account for 97 percent of the country's $258 billion in annual retail sales. Or the muscle of large Indian companies that have recently realized the potential of moving into retail and are urging the government to slow down reforms that would open the sector to foreign competition.

"Make it difficult - then the foreigners will have to pay more," says Kishore Biyani, founder, chairman, and managing director of Pantaloon. "Why should we make it easy for them?"

Biyani, who plans to expand the floor space of his $450 million retail empire fivefold over the next three years, is believed by his peers to be bulking up to boost the price he can ask from a foreign joint venture partner - possibly Wal-Mart.

Biyani denies that, and Wal-Mart spokeswoman Beth Keck wouldn't comment beyond saying the U.S. giant is open to all investment structures and has been talking to potential partners, "though we would prefer a controlling interest."

But there's no denying that retailers such as Pantaloon and RPG Enterprises are rapidly expanding their operations - and that Reliance, the Indian conglomerate, plans to spend up to $2.5 billion over the next two years to open 1,500 supermarkets and hypermarkets - in advance of an anticipated Western retail onslaught.

Opponents of foreign investment focus on the risk of heavy job losses in the industry, which employs more than 25 million people. Mohan Guruswamy, head of the Centre for Policy Alternatives, a Delhi think tank, estimates that eight million people would lose their jobs if Wal-Mart or similar stores took just 20 percent of the retail trade, unleashing a "pipeline of cheap Chinese goods" that would also hurt Indian manufacturers.

Others, like Sanjiv Goenka, vice chairman of RPG Enterprises, which owns the Spencers stores, talk about unfair competition. "With their deep pockets," Goenka says, "retailers with a multinational presence may resort to predatory and therefore unfair pricing."

But Arvind Singhal, chairman of Technopak, a Delhi retail consultancy, argues that India is an underserved market and that there is plenty of room for foreign companies as well as for big Indian players and small shops.

"Almost every major city will have one or more Indian-owned large stores within 24 months," he says, "and that won't displace existing outlets because of growth in traditional retail, so no one loses."

Singhal estimates that $15 billion will be invested in the sector over the next five years, boosting annual sales in modern stores from $8 billion to $50 billion.

How much of that investment will come from foreign companies like Wal-Mart and how much of those sales will wind up in foreign pockets is anyone's guess. Prime Minister Manmohan Singh is in favor of allowing foreign investment because of the positive impact he believes it will have on development, especially in agriculture.

But policy changes planned just before Singh visited the U.S. last July had to be shelved, partly because India's two Communist parties have taken up the twin issues of job losses and small shopkeepers' losing their livelihoods. Officials in Singh's government, which depends on those parties for its parliamentary majority, say they hope the Communists will allow the Prime Minister to take some initiatives after regional elections in two of their strongholds in May.

But Prakash Karat, leader of the main Communist Party, says that he has no intention of relaxing his position and does not expect government reforms in this area "in the foreseeable future." Administration officials also acknowledge that moves could be delayed by the business lobby.

Commerce Minister Kamal Nath says he is looking for an "incremental model that creates new jobs and does not replace or displace employment in small neighborhood shops." Foreign companies, he adds, would also be expected "to invest in the back-end processing and packaging" of farm produce.

Nath might initially limit companies such as Wal-Mart to India's six biggest cities and allow them to open only one store a year in each city, with not less than 100,000 square feet, so they can't be located in inner-city neighborhoods, where real estate is expensive. At least half the retail space would have to be allocated to food to stimulate the development of upstream agriculture. And the percentage of foreign equity would be limited at first, as it has been in insurance, banks, and telecoms, probably to 26 or 49 percent.

The only opening in the retail sector so far has been to allow 51 percent foreign stakes in single-brand consumer stores, such as those selling only Nokia (Research), Reebok, or Cartier products. But the concession, introduced in January as a politically significant start, hasn't gained much traction.

"It's a good first step forward, but we don't have any need to use it," says Subhinder Singh, managing director of Reebok India, which has 225 stand-alone franchised stores where it sells Indian-manufactured and imported goods.

Wal-Mart, Tesco, and Carrefour would not discuss their India investment strategies, though Wal-Mart acknowledges it is conducting feasibility studies and all have been talking to possible partners. Tesco is believed to be closest to Bharti Enterprises, India's largest private-sector telecom operator, which is diversifying into agribusiness and wants a retail joint venture when the policy allows it.

Wal-Mart already buys Indian goods worth more than $1.5 billion a year, ranging from bath towels to jewelry, and has asked for permission to open a liaison office. Tesco also sources in India and has an IT center in Bangalore.

Both companies are rumored to be considering opening wholesale operations, which are allowed under the current law and which have been pioneered in India by Germany's Metro. But it looks as if they are waiting to be able to retail what Wal-Mart's Keck calls a "wide assortment of general merchandise and food."

With retail sales increasing by an average of 10 percent a year, spending on luxury goods rising nearly twice as fast, and two-thirds of India's population under 35, consumer demand is clearly growing. Whether that demand is met over the next few years by Reliance, Pantaloon, and other homegrown retailers or by the Wal-Marts of the world depends on how successful India's Communist parties and its leading capitalists are in delaying the inevitable opening of the doors to foreign investment.

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Wal-mart’s bargaining power: an interview with Robert Greenwald

Conn Corrigan
11 - 5 - 2006             [back to top]

Dismissed as propaganda by its critics, the "Wal-Mart" documentary has nonetheless captivated audiences with its devastating expose of the mega US retailer. Conn Corrigan talks to the film's director Robert Greenwald.

In an episode of the satirical cartoon South Park, a new Wal-Mart comes to town. Initially, everyone is delighted with this new arrival, but soon all the local stores go bust and the town centre becomes deserted. South Park's residents then decide to boycott Wal-Mart, but they find themselves uncontrollably drawn to the store, unable to stop themselves from shopping there. Eventually they realise that "the Wal-Mart" is more than just a supermarket; it has a life of its own, sinisterly luring in customers with its irresistibly low prices. The Wal-Mart must be destroyed, but when a group of residents run around the supermarket to accomplish this mission, the store magically lowers its prices to distract them. "This screwdriver set is only $9.98," says one. "I can't make it boys. You're going to have to go on without me. This bargain is too great for me!"

In his latest documentary Wal-Mart: the high cost of low price, director Robert Greenwald doesn't explicitly state, as one South Park resident does, that Wal-Mart is "like some mystical evil force." But his portrayal of the awesome degree of power Wal-Mart wields is nevertheless devastating. The opening scene shows a packed shareholders' meeting applauding Wal-Mart CEO, Lee Scott, for minutes on end. Such is their zeal, they could be mistaken for a cult following. Scott tells them, "I promise you this: we're going to stay the course. And this company is going to continue to grow."

It is this conviction in Wal-Mart's own sense of purpose, and its desire for growth – at any cost – that Greenwald seeks to expose. However, this documentary is more than an exposé of bad business practices. It also explores, though interviews with grassroots campaigners and union workers, how the world's largest retailer and the largest private employer in the US, can be confronted.

Indeed, the story behind the film and the impact it has subsequently had is itself a lesson in how a powerful corporation can be successfully challenged, just as Wal-Mart's response to the film is a demonstration of corporate might. Much of the film's strength lies in its innovative distribution channels, building on methods previously employed with Greenwald's films Uncovered: the War on Iraq and Outfoxed: Rupert Murdoch's War on Journalism.

"The intent was always that grassroots distribution would be the primary way we would reach people in the US," Greenwald tells me. "This film is very much married to the groups involved in the organisation. Now, after Uncovered and Outfoxed, the organisers and the activists have seen what a great tool private screenings can be. In politics, it's not always easy to get people into a room. I love reading, but you're never going to fill a room of political activists reading. Put something on TV and it's so much easier."

Although he had been making films for many years, the conversion to documentary maker and political activist came late in Greenwald's career. "I was affected a lot by 9/11," he says. "In the US, it was amazing how quick the mood of the country went from this pain to a desire for revenge. It felt like only I, my family, and a few other people didn't want to go out and kill somebody."

When friends of Greenwald's were working on the 2002 documentary Unprecedented: the 2000 presidential elections (of which he ended up being the executive producer), he saw first-hand the effectiveness of political filmmaking. He also saw how advances in digital technology had made documentary making so much easier and cheaper. If he had made Uncovered in the traditional narrative fashion, he explains, it would have taken years. Instead, he decided to make it as a documentary.

After he had completed Uncovered and Outfoxed, he explains, it became obvious to him that there was a sense within the US people felt that centres of power – such as the government and sections of the media – weren't adequately monitored. "I've had a lot of responses to different movies: people like them, or they don't. But at the end of these films, people actually came up and thanked me. In the US, people had an intuition that they weren't getting the full story. Here they saw it put together."

Greenwald's critics would argue, however, that the US public isn't getting "the full story" when it comes to his polemic against Wal-Mart. His film is unashamedly anti-Wal-Mart right from the word go. After the initial shareholders' meeting, the film introduces the Hunter family, from Middlefield, Ohio. Jon Hunter, the family patriarch, set up the H&H hardware store in 1962. Three generations of Hunters have worked there. The Hunters are far removed from people you might expect in a film such as this. You wouldn't find them at anti-globalization rallies, and they are more likely to enjoy an afternoon's shooting deer than perusing the latest Chomsky book.

Indeed, much of the film's subjects are like the Hunters, in that they fall into the "ordinary-decent-hard-working-American" type; a proud employee is shown setting the US flag up outside Hunter's store, before the camera pans to a shot of a Ronald Reagan calendar hanging on the store wall. This is all done to the soundtrack of folksy guitar music, but the music stops abruptly and emboldened letters appear across the screen: "WAL-MART DESCENDS ON MIDDLEFIELD!" The shot jumps to bulldozers on a construction site for the town's new Wal-Mart. Subtlety isn't one of this film's virtues.

Later, there's a notice hanging on the Hunter's store: "Inventory Closeout Sale. After 43 years, H&H Hardware is closing down." The connection Greenwald wants his audience to make – that Wal-Mart put the Hunter family out of business – is obvious.

It's also false. The film doesn't explain that H&H Hardware closed down three months before Middlefield's Wal-Mart opened, largely due to bad business decisions made by the store's owner. In an interview with the Cleveland Plain Dealer, Jon Hunter said that he told the film's producers not to connect H&H's closing to Wal-Mart's opening. A new hardware store opened on the premises in October 2005 and is reported to be doing well.

Is Greenwald guilty of bias, something that he blasted Fox News for in his previous film? In his defence, he argues that his "bigger picture" criticisms of Wal-Mart – and there are many – stand up to scrutiny. Wouldn't it have lent his film some credibility if Wal-Mart were given the opportunity of making its case? "I did approach Wal-Mart for their side of the story," says Greenwald, "Not because you need to do it, but because I thought it would make for a better film. They turned me down several times. And what's the first thing they attack me for when the film comes out? It's one sided."

CEO Lee Scott, who has appeared on a number of programmes responding to Greenwald's accusations, was himself repeatedly asked for an interview. Greenwald rejects the idea that he should have made this point in the film. "I don't accept the notion that you have to do that," he insists. "It wouldn't have lent the film any more credibility. Wal-Mart spends $3 million everyday propagandizing. When you go to cover a crime scene, you don't give all the points of view. Wal-Mart is committing crimes – I don't feel any obligation to give them a platform on my little film."

He has a point – one day's worth of PR for Wal-Mart is more than the total budget for the film, which cost $1.8 million to make, much of it financed by Greenwald himself. (And despite the film's success, because of its distribution channels, Greenwald hasn't personally made any money from it.) Neither did Greenwald feel any obligation to give Fox News a chance to respond to allegations in Outfoxed. His response was the same – Wal-Mart has plenty of other avenues to defend itself.

As a result of the film and other campaigns including Wal-Mart Watch, Wal-Mart has launched a massive PR campaign defending itself against various allegations and trying to promote the company image. As part of this, Wal-Mart has assembled "a war room" team of PR specialists, who have extensive experience of running political campaigns.

"They've attacked me pretty viciously, almost all of it wrong," says Greenwald. "They've put thousands of dollars into trying to discredit me, but it comes with the job. You take these things on."

Through its awesome financial clout – it's the biggest retailer in the world, and China's eighth largest trading partner – Wal-Mart has also been able to hurt Greenwald financially. Just before the film's release in the US, a major funder pulled out, Greenwald says, because of Wal-Mart's influence, which meant that he had to borrow over $100,000 to keep the project going. More recently in Germany, a distribution deal with a company fell through because of pressure from Wal-Mart, according to Greenwald.

He remains undeterred, however. This is nothing, he says, compared to the risks that Wal-Mart employees took on by participating in his film. "The fear of backers and distributors is unconscionable when you put in next to the people at Wal-Mart who came forward and talked. They aren't of great means financially and if they are willing to put themselves on the line, then the least we can do is support them."

When South Park's Stan Marsh asks his father how come Wal-Mart is able to sell everything so cheaply, he replies, "It's simple economics, son. I don't understand it at all. But God I love it." But as Greenwald demonstrates, Wal-Mart's low prices have also a lot to do with its cost-cutting measures, which are often unethical, and sometimes illegal.

However, Greenwald's message isn't anti-capitalist – a number of his subjects stress that they believe in capitalism – rather it's a warning of what can happen when power is unchecked and when "American values" are compromised. "This film focuses on greed, which Americans don't support, and on breaking the rules, because Wal-Mart doesn't play by the rules."

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Tri Counties Bank Opens New Branch

Nachrichten/Aktienkurs
11.05.2006                               [back to top]

Inside Antelope Wal-Mart Supercenter on May 17, 2006 Tri Counties Bank, a subsidiary of TriCo Bancshares (Nasdaq:TCBK), will open its 11th branch in the Sacramento area inside the new Wal-Mart (Nachrichten/Aktienkurs) Supercenter in Antelope.

The grand opening in Antelope marks Tri Counties Bank's third branch inside a Wal-Mart Supercenter, following the very successful openings of branches inside Wal-Mart Supercenters in Roseville and Yuba City. The Antelope branch is the fourth of eight new Tri Counties Bank branches planned to open in 2006.

The new branch provides shoppers with access to their bank 7-days a week, combined with the convenience of one-stop shopping. "We attribute our success to our unique blend of service and convenience and Wal-Mart's ability to attract a large number of shoppers in the communities they serve," said Andrew Mastorakis, executive vice president of Retail Banking for Tri Counties Bank. "We continue to partner with retailers that make us accessible to shoppers who value service and convenience, and one-stop shopping and banking."

The bank will celebrate its grand opening in conjunction with Wal-Mart, offering festivities throughout the day and culminating in a ribbon cutting ceremony on Wednesday, May 17, 2006 at 5:30 p.m. The branch will be open longer hours than any bank in Antelope; Monday through Saturday from 9 a.m. to 8 p.m. and Sundays from 11 a.m. to 5 p.m. The branch is also open on most holidays.

"Wal-Mart is pleased to include Tri Counties Bank among the more than 300 independent financial institutions who operate over 1150 branches in our stores across the country," said Kent Reeves, Wal-Mart vice president, New Business Development. "The newest Tri Counties Bank branch in Antelope is a great addition to the one-stop convenience that our customers appreciate in all our Supercenters."

In addition to 7-days a week banking and expanded hours, the new Tri Counties Bank in Antelope will offer an exclusive charter package for new customers, which includes FREE checking and free checks for life, exclusive rates on savings and investment products, as well as premium pricing for equity lines of credit.

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Missouri Bill Would Bar Wal-Mart From Opening Bank Branches

Dow Jones Newswires
05-11-06                              [back to top]

JEFFERSON CITY, Missouri (AP)--Missouri state lawmakers have passed legislation ensuring that Wal-Mart (WMT) cannot open bank branches in the state.

The legislations's passage comes as Wal-Mart Stores Inc. is under intense scrutiny over its application to run an industrial bank in Utah.

Wal-Mart officials repeatedly have said they do not plan to open branch banks or get into consumer lending.

Instead, the company says it is looking to Utah to charter a bank to handle the 140 million credit, debit and electronic check payments that Wal-Mart processes every year, potentially saving millions in fees it now pays to process those transactions.

A bill that previously passed the state Senate would have barred industrial loan companies and banks from operating in Missouri.

Industrial loan companies, also called industrial banks, are a special type of bank permitted in a few U.S. states that allow nonfinancial companies to take deposits, make loans and engage in other banking business without being regulated like traditional banks by the Federal Reserve.

Critics believe that Wal-Mart is really aiming to get into general banking services and argued this would be bad for local economies

The final version, which passed the Senate 33-0 Wednesday, bars industrial loan companies from having any deposit or loan office or bank branches in Missouri. The House passed the bill 157-0 on Monday.

The Missouri bill must still be signed by the governor.

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June 1,2,3 - Wal-Mart Shareholders Convention - A Weekend of Resisting Walmart in the Ozarks! Wednesday,

www.againstthewal.net
May 10 2006

Every summer, Wal-Mart Shareholders from all over the world come to Fayetteville, Arkansas to celebrate their plunderous fortunes. For the past 2 years, they have been met by people in the streets — people who object to Wal-Mart's long standing anti-worker, anti-women, anti-community and anti-environmental policies and practices. Come to Fayetteville this summer and join us for the 3rd Annual March Against Walmart. Help us confront the worlds largest corporation on its own turf!

We highly reccomend that people try and arrive on Thursday, June 1st as we will be facillitating important discussions about the shareholders convention. Folks are welcome to contact info@againstthewal.net for more info and to inquire about travel info and housing arrangments. Housing and food will be provided. Please feel free to come to town earlier to help finalize preparations and to enjoy spring in the beautiful Ozark hillcountry. Also, please visit our freshly updated website, www.againstthewal.net.

Weekend Of Resistance To Walmart

Thursday, June 1st- All day meetup at the All People's Unite Infoshop in Fayetteville. Workshops, Strategy Sessions, Puppet Making, Hangin' on the porch.

Friday, June 2nd- March Against Walmart- Time-TBA, Meet at the Fayetteville High School

Saturday, June 3rd- Bikes Not Sprawl!!- Noon, Meet at the Fayetteville Town Square with your bicycle for a ride to the 6th street Walmart.

Thanks and we'll see you in the streets.

FOR WORKING FAMILIES, FOR COMMUNITIES, FOR WOMEN, FOR THE ENVIRONMENT!

The AGAINST * THE * WAL Coalition

Wal-Mart critics jump on inaccurate bank testimony

By Kristin Roberts                [back to top]

WASHINGTON, May 10 (Reuters) - Critics of Wal-Mart's bid to open a bank pounced on Wednesday on news that the world's largest retailer gave inaccurate testimony to U.S. regulators, saying it could signal more problems with the application.

Banks, consumer and labor groups as well as some lawmakers urged the Federal Deposit Insurance Corp. (FDIC), the agency reviewing Wal-Mart's bank application, to delay its review or require the company to start the process all over again.

"If this surfaced, what else could surface?" asked Camden Fine, president and chief executive officer of the Independent Community Bankers of America, a trade group.

According to leases obtained by Reuters and reported on Tuesday, Wal-Mart Stores Inc. <WMT.N> wrongly described a provision of some leases signed by banks in its stores.

The inaccuracy involves testimony Wal-Mart gave to support its statement that it has no plans to replace community banks now in its stores with bank branches of its own. Specifically, Wal-Mart told the FDIC that leases were renewed at the discretion of the banks alone.

But documents seen by Reuters include a provision that requires both the bank and Wal-Mart to agree to renew.

Wal-Mart told Reuters it was an oversight and that it had believed the testimony it gave to the FDIC to be true. It also said financial institutions whose leases include the mutual renewal provision can have their agreement changed to let the bank alone decide on renewal.

The FDIC said it had no comment.

But some critics of Wal-Mart's banking plans and lawmakers said the discrepancy should concern regulators.

"This is all the more reason why Wal-Mart should show us their lease agreements, so we will know what the truth is," said U.S. Rep. Barney Frank of Massachusetts, the top Democrat on the House Financial Services Committee.

LONG-TERM STRATEGY

Wal-Mart has applied to open a type of bank known as an industrial loan company, or ILC, to process electronic payments from its stores -- transmitting payment requests from shoppers to credit card issuers and then transferring payments back to Wal-Mart.

Bringing this function in house is expected to generate $10 million in revenue by the third year of operation. While that is only a small fraction of Wal-Mart's total revenue, it reduces what the retailer says is the inefficiency of paying a third party to pass information between its stores and customers' banks.

Wal-Mart has repeatedly said it would not offer banking services to the general public and that it has no long-term plans to enter full-service banking.

Still, its bid has generated an unprecedented level of opposition to a bank application, leading to a record number of public comments and the first formal public FDIC hearings on such an application.

The opposition has ranged widely, from criticism of Wal-Mart's corporate character to concerns that Wal-Mart is so large that a problem in the company could bleed into its bank and disrupt the U.S. payments system.

Others have a problem with industrial banks altogether, and say a Wal-Mart bank would violate the historic separation in the United States of banking and commerce. Wal-Mart, however, is not alone in seeking an industrial bank.

Rival Target Corp. <TGT.N> has one as do other corporate heavyweights such as General Electric <GE.N>.

Another retailer, Home Depot Inc. <HD.N>, has announced plans to buy EnerBank USA, a provider of loans for home improvement projects. That has raised some eyebrows on Capitol hill as well, sources said.

© Reuters 2006. All rights reserved.

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Wal-Mart can cancel banks' store leases

By Marcus Kabel,
AP Business 
May 10, 2006                    [back to top]

Wal-Mart Stores Inc. acknowledged Wednesday that it can cancel leases with some banks in its stores more easily than it indicated in testimony given to federal regulators as it sought permission to set up an in-house payment center.

The acknowledgment came in response to questions from a reporter for The Associated Press who viewed the lease terms for at least one community bank with a contract with Wal-Mart.

Wal-Mart said Wednesday that, under some of its contracts, it and its tenant banks can cancel long-term leases after five years. Wal-Mart had told the Federal Deposit Insurance Corp. last month that banks alone could decide whether to stretch their five-year leases to 15-year pacts.

The contract also limits Wal-Mart's costs if it breaks the lease at any point, capping damages at the equivalent of one year's rent. Wal-Mart declined to say how much a typical rent runs, but a spokesman said the lease provides protection for banks against early termination by allowing a tenant bank to go to court to challenge such a move.

The issue is important because longer-term leases are part of Wal-Mart's defense against community bankers and others who oppose the world's largest retailer's bid to run its own bank.

Wal-Mart acknowledged Wednesday that some leases give both sides the option to end a lease -- but said the majority of contracts it holds reserve that right to the tenant banks. It said it was in the process of changing all remaining leases to put opt-out decisions solely in the tenant banks' hands.

"Our intent is to eliminate those exceptions," Wal-Mart spokesman Marty Heires said.

Jane J. Thompson, Wal-Mart's head of financial services, told the FDIC the company wants an in-house bank solely to process millions of credit and debit card and electronic check payments in its nearly 4,000 U.S. stores.

Wal-Mart has declined to put a dollar amount on the savings, but has said that by handling its own payment processing, the company would save the fraction of a penny per transaction it currently pays two large banks for the service -- adding up to millions of dollars a year.

Thompson said Wal-Mart would leave branch banking services to the banks that have long-term leases for space in 1,400 stores.

"We are fully, actively and very visibly committed to our in-store bank-leasing strategy through long-term contracts with unaffiliated third party depository institutions," Thompson said then. "These leases can only be terminated by the bank tenant."

Heires said Thompson's testimony was "meant to be a general characterization of the leases" that applied to the majority of cases. He said the contracts protect tenant banks from an early termination of the lease by allowing them to go to court to challenge such a move.

Union-funded campaign group WakeUpWalMart.com accused the retailer of lying to the FDIC and the public.

"Wal-Mart's inaccurate testimony raises serious questions about what else the company isn't telling the FDIC," WakeUpWalMart.com campaign director Paul Blank said.

The Independent Community Bankers of America, which testified before the FDIC against a Wal-Mart bank, said inaccurate testimony put Wal-Mart's overall credibility in question.

"If Wal-Mart's management isn't capable of being accurate in its statements to the FDIC, it shouldn't be allowed to run a bank. Does the FDIC really want to place millions of depositors and ultimately all taxpayers at risk over future 'inaccurate' statements?" ICBA president and CEO Camden R. Fine said in a statement.

Wal-Mart is seeking FDIC approval to open a special type of bank in Utah called an industrial bank. A range of opponents, from local banks to farmers to unions, testified for three days last month that Wal-Mart was really aiming to get into general banking services and argued this would be bad for local economies.

FDIC spokesman David Barr declined comment because the application is pending.

Rep. Stephanie Tubbs Jones, D-Ohio, who testified at the FDIC hearings as the head of a group of lawmakers opposed to a Wal-Mart bank, said she never believed Wal-Mart would leave the power to decide a lease length solely in the tenant's hands.

"It was a representation that was made to curry favor with the FDIC," Tubbs Jones told The Associated Press.

Tubbs Jones said the disclosure could bolster an idea raised in the hearings by FDIC Chief Operating Officer John Bovenzi that the agency could put restrictions on any approval for a Wal-Mart bank that would bar the retailer from expanding into general banking.

© Copyright 2006 The New York Times Company

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Frenchman Fights Wal-Mart for Smiley-Face Rights

by Jack Speer
NPR                         [back to top]

Morning Edition, May 10, 2006 · Wal-Mart wants to trademark the yellow smiley face image for use in the United States retail sector. The retail giant uses the smiley face on uniforms and promotional signs. A Frenchman who claims the logo is his invention is opposing the trademark application.

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Wal-Mart crime magnet, foes say

BY FRANK LOMBARDI
DAILY NEWS                         [back to top]

Foes of Wal-Mart turned up the heat yesterday in their campaign to keep the giant retailer out of the city by charging that its stores are "a magnet for crime." They cited a nationwide study analyzing police crime reports during 2004 involving 551 randomly selected Wal-Mart stores in 434 cities in 30 states.

The surveyed stores generated 148,331 calls for police service, or an average of 269 police incidents per store. And 2,909 of those calls were for violent or serious crimes, the report said.

"Once again, we have evidence that Wal-Mart is not a good citizen in the communities where it exists," said Public Advocate Betsy Gotbaum at a City Hall press conference with Rep. Anthony Weiner (D-Brooklyn, Queens) and Stuart Appelbaum, president of the Retail, Wholesale and Department Store Union. "This is why we have to keep them out of New York City."

Appelbaum said the survey demonstrates that Wal-Mart stints on security measures and parking lot patrols.

"Wal-Mart must invest in adequate security and public safety measures, and stop being a magnet for crime in our communities," he said.

Based on the survey, the report estimates that Wal-Mart's national chain of more than 3,857 stores generated 1 million police responses in 2004, at a cost of $77 million to taxpayers.

The survey conducted by WakeUpWalMart.com is the latest salvo fired in a propaganda war between the retail chain and an alliance of unions, community organizations, business associations, elected officials and other groups.

Responding to the press conference, Wal-Mart representative Mia Masten said, "Another week, another protest - organized by a union that is struggling to survive and supported by elected officials who claim they care about the city's working class."

Weiner stressed that Wal-Mart is determined to make inroads in urban areas, including New York City.

Last year, a developer dropped Wal-Mart from a planned shopping mall in Rego Park, Queens, because of strong opposition from City Council officials. And Wal-Mart's pursuit of two possible sites on Staten Island appears to be in limbo.

"No sales or leases have occurred," according to City Councilman Michael McMahon (D-S.I.), who was not involved in the City Hall press conference.

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Wall-to-wall Wal-Mart?

Love them or hate them, Wal-Mart stores have become the quintessential example of the costs and benefits of globalization

By Kenneth Rogoff
TaipeiTimes
Wednesday, May 10, 2006              [back to top]

Advertising Do you want to know which video clip will soon be scaring the daylights out of policymakers throughout the world? In a scenario that looks uncannily like the spread of a global pandemic, the economist Thomas Holmes has prepared a dynamic map simulation showing the spread of Wal-Mart stores throughout the US. Starting at the epicenter in Bentonville, Arkansas, where Sam Walton opened his first store in 1962, giant boxy Wal-Mart stores have now multiplied to the point where the average American lives less than 7km from an outlet. Interestingly, the video shows how the stores spread out like petals of a flower, ever thickening and expanding. Rather than jumping out to the coasts -- 80 percent of all Americans live within 80km of the Pacific or Atlantic oceans -- Wal-Marts have spread organically through an ever-expanding supply chain. Even though each new store takes away business from Wal-Mart stores established nearby, ever-improving supply efficiencies help maintain the chain's overall growth.

Love them or hate them, what is undeniable is that Wal-Mart is the quintessential example of the costs and benefits of modern globalization. Consumers pay significantly less than at traditional outlets. For example, economists estimate that the food section of Wal-Mart charges 25 percent less than a typical large supermarket chain. The differences in price for many other consumer goods is even larger.

Consider the following stunning fact: Together with a few sister "big-box" stores (Target, Best Buy and Home Depot), Wal-Mart accounts for roughly 50 percent of the US' much vaunted productivity growth edge over Europe during the last decade. Fifty percent! Similar advances in wholesaling supply chains account for another 25 percent. The notion that the US has gotten better at everything while other rich countries have stood still is thus wildly misleading. The US productivity miracle and the emergence of Wal-Mart-style retailing are virtually synonymous.

I have nothing against big-box stores. They are an enormous boon to low-income consumers, partly compensating for the tepid wage growth that many of them have suffered during the past two decades. And I don't agree with friends of mine who turn their noses down at Wal-Mart stores, and claim never to have visited one. As a consumer, I think big-box stores are great. They have certainly been great for America's trading partners; Wal-Mart alone accounts for over 10 percent of all US imports from China.

But I do have some reservations about the Wal-Mart model as a blueprint for global growth. First, there is the matter of its effect on low-wage workers and smaller-scale retailers. While completely legal, studies suggest that Wal-Mart's labor policies exploit regulatory loopholes that, for example, allow it to sidestep the burden of healthcare costs for many workers (Wal-Mart provides healthcare coverage to less than half its workers). And the entry of big-box stores into a community crushes long-established retailers, often traumatically transforming their character.

Yes, to some extent, such is the price of progress. But the loss of aesthetics and community is not easily captured in simple income and price statistics. Big-box stores are not exactly attractive -- hence their name. If they continue their explosive growth over the next 20 years, will Americans someday come to regard their proliferation as a spectacular example of the failure to adopt region-wide blueprints for balanced growth?

Indeed, many Europeans, and others, will view Holmes' video simulation of Wal-Mart's spread as a horror film. The French may have invented the hypermart -- the forerunner of the big-box store -- but they never intended to let their growth go unchecked. The big question for Europeans is whether they can find ways to exploit some of the efficiency gains embodied by the Wal-Mart model without being overrun by it.

For the US, there is the additional question of what to do when the big-box store phenomenon has run its course. If so much of the US productivity edge really amounts to letting Wal-Mart and its big-box cousins run amok, what will happen after this source of growth tapers off? The US economy has many other strengths, including its superior financial system and leading position in high-tech capital goods, but the fact remains that the US' advantage in these areas has so far not been nearly as striking as the Wal-Mart phenomenon. It is curious how many people seem to think that the US will grow faster than Europe and Japan over the next 10 years simply because it has done so for the past 10 years.

Wal-Mart and its ilk are a central feature of the modern era of globalization. They are not quite the pandemic that their explosive growth pattern resembles, but nor is their emergence completely benign. Those who would aim to emulate US productivity trends must come to grips with how they feel about big-box stores sprouting across their countryside, driving down wages and plowing under smaller-scale retailers. The US, in turn, must think about where the proper balance lies between aesthetics, community and low prices.

Kenneth Rogoff is professor of economics and public policy at Harvard University, and was formerly chief economist at the IMF.

Copyright © 1999-2006 The Taipei Times. All rights reserved.

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Wal-Mart testimony inaccurate on bank leases

By Kristin Roberts
Reuters                           [back to top]

WASHINGTON - Wal-Mart gave inaccurate testimony to U.S. regulators considering its application to open a bank, wrongly describing a provision of some leases signed by banks in its stores, according to leases obtained by Reuters.

The inaccuracy involves testimony Wal-Mart Stores Inc. <WMT.N> gave to support its statement that it has no plans to replace community banks now in its stores with bank branches of its own.

The company last month told the Federal Deposit Insurance Corp., the agency reviewing Wal-Mart's application to start limited bank operations, that it has no plans to enter full-service banking, and it pointed to the leases signed by banks in its stores as evidence of its long-term plan to support independent banks.

Specifically, Wal-Mart told the FDIC that leases signed by banks were renewed at the discretion of the banks alone.

But documents seen by Reuters include a provision that requires both the bank and Wal-Mart to agree to renew.

According to industry sources, that provision is included in a handful, not all, of the leases signed by Wal-Mart's bank tenants.

RETAILER CITES 'OVERSIGHT'

Wal-Mart told Reuters it was an oversight and that the testimony it gave to the FDIC it had believed to be true.

The retailer's lawyers are still reviewing the leases to identify how many include the provision that requires mutual renewal of the lease agreement. But a spokesman for the company, which is the world's largest retailer, said it will be a very small percentage of the company's 1,150 active leases.

Wal-Mart also said financial institutions whose leases include the mutual renewal provision can have their agreement changed to let the bank alone decide on renewal.

"It was an oversight," said Marty Heires, Wal-Mart spokesman.

Wal-Mart has applied to open a type of bank known as an industrial loan company or ILC to process electronic payments from its stores -- transmitting payment requests from shoppers to credit card issuers and then transferring payments back to Wal-Mart.

As a result, a Wal-Mart bank would be a conduit for such payments.

Bringing this function in house is expected to generate $10 million in revenue by the third year of operation. While that amount is only a small fraction of Wal-Mart's total revenue, it reduces what Wal-Mart says is the inefficiency of paying a third party to pass information between its stores and customers' banks.

While the company has repeatedly said it would not offer banking services to the general public, critics of the Wal-Mart plan say they do not believe that the retailer has no intention to enter full-service banking in the future.

The Federal Deposit Insurance Corp., the agency considering Wal-Mart's bank application, is reviewing lease agreements, according to sources.

© Reuters 2006. All rights reserved.

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Asda Wal-Mart backtracks on workers’ rights

Decision News Media
09/05/2006                            [back to top]

The UK’s second largest retailer is today facing the possibility of mass strikes at leading depots, after failing to honour agreements with the GMB workers union to improve employee conditions.

Following months of turmoil involving more than 20 hours of talks between the two sides and a hefty court fine for Asda, negotiations have once again broken down between management and the GMB. Union leader Paul Kenny said serious doubts were cast on Asda’s intentions to honour an agreement drawn up during a House of Commons meeting on 11 April.

Further probing into the arrangement of the truce revealed Asda bosses did not intend to sway on employee bargaining rights, union access, bonuses and onsite safety, claims the union.

GMB members have now voted to begin a strike ballot process in 20 UK distribution centres, which will be overseen by the Electoral Reforms Balloting Service.

“GMB members in the depots want to secure collective bargaining at the distribution depots, the reinstatement of the 2005 bonus, and safe and healthy work rates. Asda Wal-Mart is not prepared to accept that pay and condition agreements need to be fair and fairly arrived at,” explained GMB national officer Jude Brimble.

“The unanimous vote by the shop stewards to reinstate the strike ballot demonstrates that the members will not settle for less.”

However, Asda management has refuted the claim they have reneged on earlier agreements, saying the GMB is intent on a “1970s bargaining dispute.”

Asda's Caroline Massingham, known as the people director, said: "At the heart of this is our commitment to ask our colleagues what type of union agreement they want. Ultimately, it's got to be their decision and we'll stand by that."

The turmoil comes as the American-owned supermarket chain faces a serious challenge to its number two spot in the retail league from Sainsbury’s.

Recent TNS figures show Asda has held onto its position by a whisker, but looks certain to pass the mantle to Sainsbury’s over the next quarter.

Internal issues over working conditions, coupled with the bad press such disputes bring, may damage the company’s reputation and affect its market place.

Last year Asda's treatment of workers was widely condemned by unions and charities claiming the firm had drawn up a “chip away strategy” to reduce costs and increase productivity.

The latest union decision to ballot on a universal walk-out follows months of animosity between Asda and its workers, which lead to supermarket being fined £850,000 at a court in Newcastle in February.

The employment tribunal found the chain guilty of promising 340 distribution staff a 10 per cent pay rise to give up the collective bargaining right negotiated by their union – an act which is illegal under 1992 labour relations law.

The court ordered Asda to pay £2,500 to each employee at the County Durham depot.

© 2000/2006 – Decision News Media SAS – All Rights Reserved.

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Business, unions watching court battle over Md.’s Wal-Mart law

By Elana Schor               [back to top]

Lawmakers and lobbyists are keeping a close watch on the Maryland courts, where the partisan fight over employer-provided health insurance is primed to explode in the coming weeks as a business trade group tries to strike down a state law forcing Wal-Mart to spend more money on healthcare.

The Retail Industry Leaders Association (RILA), which represents Wal-Mart, Home Depot and other corporate giants, filed a lawsuit in February against a Maryland law that would require any employer of more than 10,000 workers to spend at least 8 percent of its payroll on health benefits or pay a fine to the state. While Wal-Mart is the only company affected by the Maryland law, the bargain-price behemoth chose to band together with its competitors and sue through RILA rather than on its own.

Paul Kelly, the RILA senior vice president who appeared before a House subcommittee last week to blast the Maryland law, attributed the decision of Wal-Mart’s business foes to back its court battle to a fear of similar “fair share” healthcare bills under consideration in 30 states.

RILA’s members “understand how bad these laws are, and they unanimously approved us moving forward,” Kelly said. “They understand it wasn’t an issue of one company. We can make a very strong statement that the whole industry rejects these principles.”

With the Senate preparing to take up its long-awaited bill on small-business health plans and the House taking its first look at fair-share mandates, retailers are moving to the forefront of the healthcare lobbying debate previously dominated by pharmaceutical companies, hospitals and other health-specific groups. Though legislative movement so far has stayed at the state level, Wal-Mart has not ruled out asking Congress to intercede on its behalf in the RILA case.

“In order for this Congress to act, there would have to be a loss … a ruling that says the Maryland law is valid,” said Kate Sullivan Hare, Wal-Mart’s director of health policy. “Then Congress might start getting involved.”

Wal-Mart and RILA argue that state fair-share laws violate the federal ERISA statute, which bars state preemption of federal employer-benefits rules. Yet, when Wal-Mart — whose lobbying expenses topped $2 million last year — initially approached Congress about reinforcing ERISA preemption limits in the wake of the Maryland law, Hare said aides urged a wait-and-see approach.

“I’d certainly never close the door on any sort of [congressional] response,” including new legislation to counter the Maryland law, said House Education and the Workforce Committee spokesman Steve Forde. The court battle has “caused great interest here in Congress,” Forde added.

The most intense interest in the Maryland case has come not from Congress but K Street. Business lobbyists are flocking to Wal-Mart’s side, playing up partisan tensions by pointing to the labor unions that are funding grassroots efforts such as Wake Up Wal-Mart and Wal-Mart Watch.

“This bill was really about the AFL-CIO and [Service Employees International Union, or SEIU] not being able to unionize Wal-Mart employees and trying to figure out what they were politically vulnerable on,” said one lobbyist tracking the Maryland lawsuit. SEIU and the United Food and Commercial Workers split from the AFL-CIO last year to form the Change to Win Coalition, but labor’s disparate halves are working together to take on Wal-Mart.

Wal-Mart Watch, which lobbied heavily on the state level to ensure an override of a veto by Maryland Gov. Robert Ehrlich (R) of the fair-share law, points out that suing through RILA allows Wal-Mart to avoid legal scrutiny of its internal data.

“It’s clear that Wal-Mart is forcing RILA to carry its dirty water around the Hill,” said Wal-Mart Watch spokesman Nu Wexler. “By enlisting a trade association to do its legal maneuvering, Wal-Mart is clearly trying to shield itself from legal discovery and the continuing public-relations fallout over its inadequate employee healthcare plans.”

At the heart of the fair-share fight is the mounting burden of state Medicaid expenses on the federal deficit. Wal-Mart employees and their families top the Medicaid rolls in the home states of at least 12 House Education and the Workforce members.

“One of the issues of concern for everybody here is this cost-shifting” among individuals, businesses and government-sponsored health-insurance programs, said Bruce Josten, executive vice president of the U.S. Chamber of Commerce. About 15 million of the nation’s estimated 46 million uninsured are eligible for Medicaid but unregistered, Josten said. “These people should be enrolled in those types of systems.”

The Chamber and the National Federation of Independent Business (NFIB) have filed briefs in support of Wal-Mart and RILA, underscoring the deep lobbying bench active on the Maryland case. Karen Harned, executive director of the NFIB’s legal center, said businesses of all sizes fear that they could be next in state and federal lawmakers’ sights if the Maryland law is allowed to stand.

“They are going down into our people, going down into employers that are true small businesses,” Harned said. In fact, Maryland recently followed its Wal-Mart-focused law with another healthcare-mandates bill that would cover a larger swath of employers.

While lobbyists continue to await congressional Republican action against the Maryland law, widespread support among Democrats leaves the door open for a federalization of fair-share healthcare after the November midterms.

“What tends to happen is states watch the federal level and the federal level watches the state level,” said Merrill Matthews, director and chief lobbyist at the Council for Affordable Health Insurance. “Especially if [Democrats] take back the House, you might see an explosion of Wal-Mart-type legislation.”

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The man who set out his stall against Wal-Mart

EVA LANGLANDS
SCOTSMAN.COM
Mon 8 May 2006            [back to top] 

WALK into your local Asda and you could be forgiven for thinking that it's a haven of good news. Low prices and goods abound. Milk, trainers, DVDs, red roses; you can get them all while blissfully avoiding the crowded high street, then leave patting your back pocket with money-saving glee.

Asda has 37 stores in Scotland, and employs some 24,000 people, many of them part-timers who fit in around their children's school hours, or semi-retirees with a desire to remain in the workforce.

The first impression is fairly positive, but a searing new film, due to open this month, threatens to do for Asda's parent company, Wal-Mart, what Super Size Me did to McDonald's. The film, an anti-globalisation feature documentary made by a passionate left-wing political activist, claims that your local Asda store is part of a monolithic corporation beating a destructive path across the United States, the UK and, indeed, the world.

Wal-Mart: the High Cost of the Low Price says the world's largest retailer, with $315 billion in annual revenues, and the owner of Asda in the UK, is having a negative effect on the lives of millions of people. For example, it shows: a single mother struggling to provide healthcare for her two small children out of her Wal-Mart wages; a man fired for unionising; a family business in Missouri closing after Wal-Mart open its doors down the road.

It has been described as a horror film with greed and globalisation at its heart. And according to Robert Greenwald, the film's director and producer, Scottish consumers could have a leading role in the next chapter of this gruesome tale, as Asda, the UK's number three grocer, accounted for about 10 per cent of Wal-Mart's $285.2 billion international sales in 2005.

"Wal-Mart didn't buy Asda to be a neutral holding company. That's not its personality," says Greenwald, a political activist and award-winning film-maker.

"It buys corporations around the world to implement its policies. People in Scotland are going to see Wal-Mart try its best to implement more and more of its aggressive, expansionist policies and economic structure."

Is this outspoken New York director - whose campaigning documentaries include Outfoxed: Rupert Murdoch's War on Journalism, and Uncovered: The Whole Truth About The Iraq War - right? As evidence, his film shows London stallholders battling to save the 105-year-old Queen's Market, Upton Park in London, earmarked for demolition to make way for a 46,000 square foot Asda superstore.

And in February, Asda was forced to pay £850,000 in compensation to employees after an employment tribunal ruled the supermarket unlawfully offered employees a financial inducement to give up their union rights.

Greenwald is not surprised; union busting, he warns, is Wal-Mart's middle name: "Asda will try to do the same in the UK as Wal-Mart has done in the United States.

"They will do everything they can to destroy the trade unions and will not stop harassing those who dare speak out."

Asda has recently been embroiled in the final stages of a long-running dispute with the GMB union over pay and conditions for Asda workers. Both parties have recently agreed an action plan to work together to form a National Joint Council and are working on the details of this arrangement.

The lowest basic rate of pay in Asda, which applies to almost one in five workers, is £5.10 per hour - only 5p per hour above the national adult minimum wage. In 2005 the company paid a bonus to fewer than three out of ten of the staff - compared with more than nine out of ten staff the previous year. The retailer has been accused of channelling the estimated £12 million so saved into the already healthy profits of parent company Wal-Mart.

In Scotland politicians have joined the crusade against Wal-Mart. The Labour MSP Pauline McNeill backed the GMB's fight and publicly condemned the company's anti-union practices. Campaigners say every Asda store in Scotland is tarnished by the Wal-Mart mentality.

"Everything changed after Wal-Mart took over Asda in 1999," says Ian King, the GMB senior organiser in Asda in Scotland.

"There has been a creeping Americanisation of our stores and distribution centres. Asda has made serious attempts to destroy trade unions. Wal-Mart is infamous for abusing employee rights in the United States. Asda is following suit here. Its tactics are becoming increasingly aggressive."

Now people are asking if the documentary will do the same to Asda as Super Size Me did to McDonald's. Jam-packed with personal stories and statistics, the feature-length film gives plenty of food for thought.

Are the corporations are worried? Asda certainly isn't. On the eve of the film's release, the management are remaining calm.

"A lot of the content [of the film] is flawed," says a spokesman for Asda, echoing Wal-Mart's reaction following the film's American release in November. "Many of the case studies used to depict Wal-Mart as the 'root of all evil' are simply factually wrong. The film verges on propaganda. It has been funded by groups politically opposed to Wal-Mart and, unlike a news report, doesn't even attempt to offer a balanced view."

But Asda's tone may change: Wal-Mart's certainly did. At first, corporation officials claimed they would "pretty much ignore it [the film] because, to all but a handful of anti-Wal-Mart activists, it simply will be irrelevant".

Yet they soon saw that the film had rapidly galvanised a powerful and active anti-Wal-Mart movement across the United States. To date, more than 80 campaign organisations have signed up in support of the film, with two major lobby groups heading the fight. Hillary Rodham Clinton, who sat for six years on the board of Wal-Mart in Arkansas, no longer wants anything to do with it. Her re-election campaign returned a $5,000 contribution from Wal-Mart, citing "serious differences with current company practices". Now, it seems, the corporation is sitting up and listening.

In response to all this Wal-Mart has, since the film's release, initiated major changes for its 38,000-plus US stores. This month the giant discount retailer announced a plan to support small businesses near its new urban stores, including its rivals.

It also made a whopping U-turn on its much-disputed health care policy, announcing expanded coverage for employees.

Greenwald, however, remains cynical. The 62-year-old says he will only believe in Wal-Mart's reformation when he sees it: "Every day they make a new announcement saying they are changing. But so far it's just words. They're mainly issuing press releases and not doing anything of substance.

"Over time, I hope they realise it takes more than a press release and a few extra dollars to win people over.

"But I'm pleased they're responding to pressure from the film and groups worldwide. They know they've got to clean up their act."

Scotland's consumers may think twice about shopping in Asda if they see the film, says King. He says it's time consumers know more about Asda and its American big brother.

He describes the film as deeply motivating: "Consumers with a social conscience will leave the cinema with an entirely different view of Asda and Wal-Mart than they had before.

"This film is an accurate portrayal. It's going to completely change people's attitudes. People will realise that putting a cheap Asda dinner on the table has a high cost. Asda is driving down prices, but it's the ordinary eight-to-five workers that are paying for it. Asda is squeezing them so tightly, they are struggling to survive."

The underlying issue here is not simply Wal-Mart or Asda, but globalisation, as Greenwald admits. If the Walton family, who founded Wal-Mart, hadn't been such successful entrepreneurs, someone else would have filled their shoes long ago.

It's the corporate Wal-Mart mentality - global domination at any cost - which poses the biggest challenge to society over the coming decades, he says: "If it wasn't Wal-Mart, it would be another corporation. It's important we remember that." Another supermarket, Tesco, has also come under fire in recent months. The UK's biggest supermarket, accounting for 29 per cent of our shopping spend, has been accused of squeezing small shops out of the market and employing "bully-boy" tactics to force down suppliers' prices.

Inverness has now been dubbed a "Tesco Town" thanks to the retail giant which now takes for 51p of every pound spent on food shopping in the city that is the hub of the Highlands. With three Tescos already in and around the town and a fourth in the pipeline, Inverness's once bustling town centre is fast becoming one big "closing down" sign.

This month The Office of Fair Trading, the competition watchdog, will decide whether to refer the country's grocery market to the Competition Commission. Campaigners hope such a move will strengthen controls over the UK's big four supermarkets - Tesco, Asda, Sainsbury's and Morrisons - which together hold almost three-quarters of the grocery market. But is legislation the answer? Greenwald nods, but insists his grass-roots buddies and consumers are also key players.

"You need legislation, grass-roots activists, unions and consumers to fight these giants. Wal-Mart has huge abusive practices in many areas. Protecting people is difficult," says Greenwald.

"The good news is you guys in the UK have warning. You also have a stronger trade union movement than Americans have. I hope those two elements combined will help people."

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Scott's Wal-Mart In Trademark Clash Over Smiley Face

Parmy Olson,
05.08.06                       [back to top] 

London - Yellow peril: You might have noticed that H. Lee Scott Jr. is not smiling in our picture of him (left). Yet the Wal-Mart Stores chief executive would very much like the iconic image of the yellow smiley face to be a trademark for his vast U.S. stores.

That could prove tricky, though. One Franklin Loufrani of France says he is the original 1968 creator of the emblem and has been marketing it since the early 1970s. (And you thought that Forrest Gump and a mud-covered t-shirt had something to do with its inception.)

Loufrani's London-based company SmileyWorld owns the rights to the logo in over 80 countries, with the exception of the United States. But Wal-Mart wants the U.S. Patent and Trademark Office to grant it sole rights to the image in the U.S. retail sector.

It's "ironic", a Wal-Mart spokesman conceded in a media report, that the dispute is about a smiley face, but he said the image was still "very closely identified with our company." Indeed the cheerily bright logo have been on the dark blue smocks of Wal-Mart employees, shopping bags and promotional signs around the chain's outlets since 1996. Wal-Mart also has had a longstanding relationship with SmileyWorld as a seller of its products, including clothes and stickers.

Interestingly, SmileyWorld's chief executive says the firm was now not only trying to protect itself, it also doesn't want to be associated with Wal-Mart. It's a "very cheap mass-market store," Nicholas Loufrani told Forbes.com. "In the past three or four years I've changed my strategy and we don't want to be associated with mass-market accounts. Our main objective is to be able to sell our products in the American market without any confusion with Wal-Mart."

Loufrani says his father came up with the idea for the icon when, as a journalist, he was inspired to print pictures of a black and white smiling face next to positive stories, ("because French people are never happy," Loufrani explains) to try and draw people's attention.

A plethora of others besides Franklin Loufrani have laid claim to inventing the cheerful image, including a Massachusetts artist named Harvey Ball who said he designed the logo in 1963 as a way to perk up his staff. The yellow face has since developed in the public consciousness from those "Have a happy day" bumper stickers and buttons of the 1970s, to the acid house dance music culture of the 1980s, to the handy instant messenger emoticons of today. Only time will tell if one day it goes on to conjure the vast aisles of Wal-Mart.

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Walk-in health clinics catch eye of Wal-Mart

By Kim Dixon
Mon May 8, 2006                         [back to top] 

CHICAGO (Reuters) - America Online founder Steve Case is putting his entrepreneurial might behind a concept also embraced by Wal-Mart Stores <WMT.N> -- in store health clinics shoppers can use for ailments like sore throats, cholesterol screening and routine physicals.

Case's Revolution LLC is investing "tens of millions of dollars" in RediClinic, making him the largest investor of the walk-in medical clinic company, which already operates out of Wal-Mart and other retail outlets.

Houston-based RediClinic operates 11 clinics in Texas, Arkansas and Oklahoma staffed by nurse practitioners.

"It's a concept in its early stages now, like AOL was 20 years ago when most people didn't have PCs, but I think there should be thousands of these clinics," akin to Starbucks coffee chains, Case told Reuters in an interview.

RediClinic also just signed on to partner with Walgreen Co. <WAG.N>, the biggest U.S. drugstore chain, to be announced shortly. RediClinic plans to expand to more than 70 clinics within a year and to 500 clinics within three years.

Healthcare spending comprises about 16 percent of the U.S. economy, and costs are expected to skyrocket further, according to the non-partisan, Washington, D.C.-based National Coalition on Health Care. Americans are looking for less expensive alternatives.

Case is the architect of AOL's merger with Time Warner Inc. <TWX.N>. The 2002 merger eventually wiped out more than $200 billion in shareholder value and gave media consolidation a bad name.

This time, Case is turning to healthcare and is using Revolution and its $500 million in assets for start-up ventures in health, resorts, spas and media.

The idea of locating a health clinic within a retailer got a boost when Wal-Mart, facing political pressure to offer medical benefits for its 1.3 million U.S. employees, in February said it would expand its 11 pilot in-store clinics to 50 this year.

"A meaningful percentage" of the 75 new clinics to be open within 12 months will be within Wal-Mart, according to RediClinic chief executive Web Golinkin.

"Obviously Wal-Mart is a very strategic relationship," Case said, though he said the company does not want to be tied to one retail partner.

Wal-Mart, the largest U.S. private sector employer, now operates 11 clinics, run by RediClinic or rivals Quick Quality Care, MedPoint Express and Solantic.

The Bentonville, Arkansas behemoth has become a focal point for criticism from unions and others over corporate responsibility for healthcare.

According to the union-backed Wal-Mart Watch, the retailer is the No. 1 employer on state Medicaid rolls in 16 states, because their workers either don't qualify for or can't afford the health plans the retail giant offers.

Wal-Mart vice president Amee Chande acknowledges Wal-Mart did not enter the business to generate cash flow.

"Our business relationship with the clinic is just a landlord-tenant relationship... our interest is really more about enhancing the customer experience and helping affordability," Chande said.

On when and whether Wal-Mart will move beyond the 50 clinics, Chande would only say: "You and everyone wants to know that. We'll be watching it very closely."

There are bigger players than RediClinic. MinuteClinic already runs 82 clinics in retail space including CVS Corp. <CVS.N> drug stores and is seeking to expand to up to 200 by the end of the year, according to a spokesman.

"We think convenience care will be a multi-billion market within five to 10 years," Case said. "The question is who does the best job of executing it."

LOWER PRICES, INSURANCE

The business model -- 7-day-a-week medical care for easy-to-treat illnesses for $50 or less -- is a sensible alternative to emergency room visits, where many patients wind up when they can't get a doctor's appointment immediately, Case said.

All prices for services are posted. A typical trip to the emergency room costs nearly $400, according to the insurer BlueCross Blue Shield. RediClinic charges a set $45 for many so-called 'get well' services including treatments ranging from sinus infections to irritable bowel syndrome.

RediClinic's parent company Interfit has been in retail, including 3,800 Wal-Mart stores, for several years already, offering services like flu shots and glucose screening, CEO Golinkin said.

He is now negotiating with health insurers, who like the idea of cheaper care. The clinics were first launched as a cash-only business as, "We don't want to have to build an expensive infrastructure that would cause us to raise our cash prices."

© Reuters 2006. All rights reserved.

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PC Parts and Wal-Mart? No Match

By Evan Schuman,
eWEEK
May 8, 2006                     [back to top] 

When Wal-Mart moves into any new area, it spreads fear into the hearts of retailers, who see any move by the $312 billion store chain as inherently dangerous. But Wal-Mart's recent effort to move more aggressively into the computer business is unlikely to merit panic. It will still cause a lot of it, but it won't be merited.

Wal-Mart's computer move is initially playing itself out in two customized ways: selling computer parts, so that customers can purchase CPUs, monitors and keyboards and create their own desktop; and selling assembled computers that do not have any operating systems.

The second move would have been more compelling if it were positioned as an altruistic humanistic position. Maybe an ad campaign that says something like, "Because of our immense respect for our customers, we could no longer bear to inflict a Microsoft OS on them. If they do it to themselves, we'll sleep better. We prefer to torment our customers in other ways."

Alas, the OS-less PCs are positioned for flexibility and cost-effectiveness. The risk to Wal-Mart is that some customers may not realize that they are buying PCs that won't work without additional purchases.

Copyright (c) 2006 Ziff Davis Media Inc. All Rights Reserved.

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Key House Democrat asks Wal-Mart for bank leases 

By Kristin Roberts
Mon May 8, 2006               [back to top] 

CHICAGO, May 8 (Reuters) - The top Democrat on the U.S. House Financial Services Committee has asked Wal-Mart for leases signed by banks in its stores to gauge the retailer's stated commitment to not launch its own bank branches.

Rep. Barney Frank of Massachusetts, in a letter obtained by Reuters, asks Wal-Mart Stores Inc. <WMT.N> to provide lease agreements, including clauses and provisions that relate to the duration of the bank leases with its stores.

That follows conflicting testimony offered last month to federal regulators, who are considering an application by the world's largest retailer to open a limited-purpose bank, about the terms of lease agreements with bank tenants in Wal-Mart's retail stores.

At a public hearing on the application, Wal-Mart said it has no plans to open its own bank branches, adding it is committed to keeping independent community banks in its stores.

The retailer cited as evidence the leases signed by bank tenants which it described as long-term agreements that could only be terminated by the bank tenants.

But critics have said that was inaccurate.

Former U.S. Rep. Tom Bliley, who appeared at one of the public hearings representing the Sound Banking Coalition, which opposes Wal-Mart's application, said the retail giant has the ability to break its leases with banks by paying what he called a small fee.

He also said the five-year leases are renewed with the consent of both Wal-Mart and the bank tenant, not the bank alone.

Frank, who has urged the regulatory agency reviewing Wal-Mart's bid to move cautiously, said those differences must be clarified.

"Whether Mr. Bliley's description of the lease terms is accurate, or whether the terms he described are typical or atypical of the leases, can be determined only by an examination of the leases themselves," Frank says in the letter to Wal-Mart Financial Services President Jane Thompson.

Wal-Mart has applied to open a type of bank known as an industrial loan company or ILC to process electronic payments from its stores -- transmitting payment requests from shoppers to credit card issuers and then transferring payments back to Wal-Mart.

As a result, a Wal-Mart bank would be a conduit for such payments.

Bringing this function in-house is expected to generate $10 million in revenue by the third year of operation. While that amount is only a small fraction of Wal-Mart's total revenue, it reduces what Wal-Mart says is the inefficiency of paying a third party to pass information between its stores and customers' banks.

While the company has repeatedly said it would not offer banking services to the general public, critics of the Wal-Mart plan say they do not believe that retailer has no intention to enter full-service banking in the future.

The Federal Deposit Insurance Corp., the agency considering Wal-Mart's application, is also reviewing lease agreements, according to sources.

© Reuters 2006. All rights reserved.

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Wall-to-Wall Wal-Mart?

By Kenneth Rogoff
Saturday, May 06, 2006            [back to top] 

Do you want to know which video clip will soon be scaring the daylights out of policymakers throughout the world? In a scenario that looks uncannily like the spread of a global pandemic, the economist Thomas Holmes has prepared a dynamic map simulation showing the spread of Wal-Mart stores throughout the United States. Starting at the epicenter in Bentonville, Arkansas, where Sam Walton opened his first store in 1962, giant boxy Wal-Mart stores have now multiplied to the point where the average American lives less than seven kilometers from an outlet.

Interestingly, the video shows how the stores spread out like pedals of a flower, ever thickening and expanding. Rather than jumping out to the coasts 80 percent of all Americans live within 80 kilometers of the Pacific or Atlantic oceans–Wal-Marts have spread organically through an ever-expanding supply chain. Even though each new store takes away business from Wal-Mart stores established nearby, ever-improving supply efficiencies help maintain the chain’s overall growth.

Love them or hate them, what is undeniable is that Wal-Mart is the quintessential example of the costs and benefits of modern globalization. Consumers pay significantly less than at traditional outlets. For example, economists estimate that the food section of Wal-Mart charges 25 percent less than a typical large supermarket chain. The differences in price for many other consumer goods is even larger.

Consider the following stunning fact: together with a few sister “big box” stores (Target, Best Buy, and Home Depot), Wal-Mart accounts for roughly 50 percent of America’s much vaunted productivity growth edge over Europe during the last decade. Fifty percent! Similar advances in wholesaling supply chains account for another 25 percent! The notion that Americans have gotten better at everything while other rich countries have stood still is thus wildly misleading. The US productivity miracle and the emergence of Wal-Mart-style retailing are virtually synonymous.

I have nothing against big box stores. They are an enormous boon to low-income consumers, partly compensating for the tepid wage growth that many of them have suffered during the past two decades. And I don’t agree with friends of mine who turn their noses down at Wal-Mart stores, and claim never to have visited one. As a consumer, I think big-box stores are great. They have certainly been great for America’s trading partners; Wal-Mart alone accounts for over 10 percent of all US imports from China.

But I do have some reservations about the Wal-Mart model as a blueprint for global growth. First, there is the matter of its effect on low-wage workers and smaller-scale retailers. While completely legal, studies suggest that Wal-Mart’s labor policies exploit regulatory loopholes that, for example, allow it to sidestep the burden of healthcare costs for many workers (Wal-Mart provides healthcare coverage to less than half its workers). And the entry of big-box stores into a community crushes long-established retailers, often traumatically transforming their character.

Yes, to some extent, such is the price of progress. But the loss of aesthetics and community is not easily captured in simple income and price statistics. Big-box stores are not exactly attractive – hence their name. If they continue their explosive growth over the next 20 years, will Americans someday come to regard their proliferation as a spectacular example of the failure to adopt region-wide blueprints for balanced growth?

Indeed, many Europeans, and others, will view Holmes’s video simulation of Wal-Mart’s spread as a horror film. The French may have invented the hyper mart – the forerunner of the big-box store – but they never intended to let their growth go unchecked. The big question for Europeans is whether they can find ways to exploit some of the efficiency gains embodied by the Wal-Mart model without being overrun by it.

For Americans, there is the additional question of what to do when the big-box store phenomenon has run its course. If so much of the US productivity edge really amounts to letting Wal-Mart and its big-box cousins run amok, what will happen after this source of growth tapers off? The US economy has many other strengths, including its superior financial system and leading position in high-tech capital goods, but the fact remains that America’s advantage in these areas has so far not been nearly as striking as the Wal-Mart phenomenon. It is curious how many people seem to think that the US will grow faster than Europe and Japan over the next ten years simply because it has done so for the past ten years.

Wal-Mart and its ilk are a central feature of the modern era of globalization. They are not quite the pandemic that their explosive growth pattern resembles, but nor is their emergence completely benign. Those who would aim to emulate US productivity trends must come to grips with how they feel about big-box stores sprouting across their countryside’s, driving down wages and plowing under smaller-scale retailers. Americans, in turn, must think about where the proper balance lies between aesthetics, community, and low prices.

Kenneth Rogoff is Professor of Economics and Public Policy at Harvard University, and was formerly chief economist at the IMF.

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HERCULES City to consider taking land from Wal-Mart

Prime bay property could be seized by eminent domain

Patrick Hoge
SF Chronicle 
Friday, May 5, 2006              [back to top] 

The Hercules City Council will consider whether to use eminent domain to wrest a 17-acre property from Wal-Mart Stores Inc. after the nation's largest retailer rejected a city offer to buy the site with views of San Pablo Bay, city officials said Thursday.

The council asked that a "resolution of necessity'' be brought to it for discussion, City Manager Mike Sakamoto said. The matter has been put on the council's May 23 agenda. Efforts to reach council members about Thursday's announcement were unsuccessful.

Wal-Mart bought the property overlooking central Hercules in November after another developer received city approvals for a neighborhood shopping center.

Early this year, city planners recommended denying Wal-Mart's proposal for a big-box store on its property, saying the plan was not in keeping with what had been approved for the location, which commands a view of one of the Bay Area's most vaunted New Urbanist communities, with pedestrian-oriented streets and large open-space set-asides, as well as sweeping views of the bay.

In February, the company withdrew its application before it went to the city Planning Commission. In response, the City Council voted to make an offer for the land for an undisclosed amount of money.

On March 31, however, Wal-Mart submitted a new application that it said substantially conforms to city requirements. The same day the company submitted its revised proposal, Councilwoman Charleen Raines was hardly welcoming, although she said she had not read it.

"What the council has said is that we want to buy the property,'' she said, describing the tussle with Wal-Mart as a "David and Goliath'' struggle. "At this point, we're concerned about moving ahead on this property. It's been hanging over us for a long time.''

Wal-Mart's new proposal, which is still hotly opposed by some residents, calls for a general retail and grocery store, as well as a pedestrian plaza, two outdoor dining areas and other small shops and general merchandise stores, including a pharmacy.

"We're disappointed that the city is really playing politics with the future of Hercules rather than looking at the big picture,'' company spokesman Kevin Loscotoff said.

"Many residents of the city who we've talked to are frustrated and anxious for this much-needed retail project to move forward.''

©2006 San Francisco Chronicle

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Hundreds Turn Out to Oppose Lima Wal-Mart

Mike Doria
13WHAM (NY)
May 5, 2006                [back to top] 

(Lima, N.Y.) -- Nearly one-fifth of Lima's total population--about 700 people--piled into a church on Daulton Road for a special meeting Thursday to discuss a proposed Wal-Mart. The proposed site is along Route 15A. The town would have to vote rezone the land to make way for the store.

A majority of the people in attendance rose when asked to stand if opposed to the store.

Those opposed said Lima is too rural for a big-box type store and fear a Wal-Mart would be out of character.

Resident John Wadach said, "Lima is a beautiful place, I wouldn't live anywhere else. But when I drive down Route 15A, I don't want to think I'm on Route 15 in Henrietta, Route 20 in Geneseo, or on Ridge Road. When I come to Lima, I want to know I'm in Lima.”

On top of that, there are fears a Wal-Mart superstore will bring too much traffic, run smaller businesses out of service, and lure other unwanted businesses to the area.

The people in favor say Wal-Mart will bring jobs and tax revenue to the town.

Wal-Mart believes residents want a store, citing a company study showing residents spend $13 million a year at Wal-Mart stores.

The company is holding an open house Monday, May 15, from 5:00 p.m. to 9:00 p.m. at the Lima Country Club, 2681 Plank Road.

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Wal-Mart may check out new ad plans

Trade magazine says the world's biggest retailer is reviewing its $578 million in ad agency spending.

CNNMoney.com
May 4, 2006                   [back to top] 

NEW YORK  - Wal-Mart, after reshuffling its marketing leadership and giving its omnipresent Smiley logo the heave-ho, has begun a review of its $578 million creative and media business in the U.S., according to Advertising Age.

Chief Marketing Officer John Fleming recently left Target Corp. (up $0.07 to $53.59, Research) to join Wal-Mart (up $0.29 to $46.98, Research), giving rise to speculation about potential changes at the world's biggest retailer, the report said. Fleming has expanded the staff, bringing in additions like Julie Roehm, former marketing executive for Chrysler Group, and dropped Smiley, the 11-year-old price-cutting logo, from its television advertising.

"The aspect that's most important to us is we want to make sure that we're working with partners who can help us with fully integrated communications across all of the media we use," said a spokeswoman for Wal-Mart, based in Bentonville, Ark. "We want to make sure we are best equipped [to have] messaging that is consistent across all media."

Longtime advertising incumbents GSD&M of Omnicom Group in Austin, Texas, and Bernstein-Rein of Kansas City, Mo., have been informed of the review

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Jury finds Wal-Mart was not negligent in hiring sex offender who molested girl

By Bo Rosser
Court TV                 [back to top] 

COLUMBIA, S.C. — A jury found in favor of the retail giant Wal-Mart Tuesday in a negligence suit filed by the mother of a 10-year-old girl who was molested by an employee in one of the company's Super Center stores.

"What [Bobby] Randall did was indecent and we wish that it had never happened," Wal-Mart's attorney Steve Morrison said. "In the end, Wal-Mart did not do anything negligent." (VIDEO)

The plaintiff in the case, Maria Hollins, chose not to comment after the verdict, but her attorney David Massey said he was shocked by the outcome.

"I was convinced that we had proven negligence and recklessness in the hiring and retention of Randall," Massey said. "I do not see any set of facts that the jury could have found for Wal-Mart. The jury, in essence, let the little girl down."

The plaintiff claims the store was grossly negligent in its hiring practices involving convicted sex offender Bobby Randall, who was caught on store surveillance tape touching her daughter in the electronics aisle on Sept. 25, 2000. Attorneys for Hollins faulted Wal-Mart for not performing a criminal background check on Randall. If they had, according to Massey, the store managers would have learned he was a convicted sex offender.

In the 90-second encounter, Randall touched the girl twice then followed her to the adjacent aisle where the victim's sister found her and led her out of the camera's view. Randall, although not a convicted felon at the time of his hiring in 1997, had been convicted for misdemeanor indecent exposure three times, according to court documents. He was later convicted of performing a lewd act on a minor for the Wal-Mart incident and was sentenced to 10 years in prison, where he died in 2002 at the age of 46.

During the five-day trial, the victim testified via videotaped deposition to having nightmares and thoughts of suicide related to the incident. Massey suggested an award of $1.7 to $5 million be given to the victim's mother and put in a trust fund for the child.

After approximately nine hours of deliberations over two days, the jury sided with Wal-Mart's defense team, who argued the company was under no legal obligation to investigate Randall's criminal past and insisted that, while the hiring process the retailer followed when employing Randall was not perfect, it was "reasonable." Two of Randall's former managers testified for the defense that the convicted sex offender was a strong worker and that they were surprised upon hearing of his legal troubles.

Despite winning the case today, the Bentonville, Ark.-based retailer adopted the practice of performing criminal background checks on potential employees in 2004, following a judge's order that Wal-Mart provide a list of employees so that it could be cross-referenced against South Carolina's sex offender database. A company spokesman said earlier in the trial that there were a number of factors that prompted the change in policy.

The win for the $300 billion company may have done more than just save it a $5 million payout. The retailer is facing similar suits in six states, according to Massey, who is suing the retailer for an incident in Orangeburg, S.C. The verdict may discourage some plaintiffs' plans for multimillion dollar awards or settlements.

Wal-Mart employs 1.34 million people nationwide in 3,864 stores and expects to open a new store in Columbia once rezoning approval is granted.

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Wal-Mart to Sell Build-Your-Own Computers

By Emily Kaiser
and Reuters
May 3, 2006                [back to top] 

CHICAGO (Reuters) - Wal-Mart Stores Inc. will start selling build-your-own-computer components in more than one-third of its U.S. discount stores this month as it looks for ways to tempt shoppers to buy more than just low-margin food.

Wal-Mart currently offers only prepackaged bundles of personal computers and accessories in most of its stores. With the build-your-own-computer counters, shoppers can choose between several different components.

Such components include central processing units—the brain of the computer that powers its basic functions—as well as monitors, keyboards and mice that customers can combine to create customized packages they can load in a shopping cart and take home right away.

The retailer began testing build-your-own computer counters in about 20 locations last year, and is now introducing them in 1,200 of its 3,200 U.S. discount stores, spokeswoman Jolanda Stewart told Reuters.

It expects to offer the merchandise in some 1,400 stores by the end of the year, and possibly more in 2007.

Wal-Mart's entry into a category can raise alarms because the retailer's persistent price-cutting pressures competitors' profit margins. It has been blamed for bankruptcies in sectors ranging from groceries and toys.

But analysts said it was unlikely that Wal-Mart would pose much of a threat to the likes of Dell Inc., which mastered the made-to-order computer model and offers a much wider selection. They also noted that Dell makes most of its money selling computers to businesses rather than individuals.

Wal-Mart, the world's biggest retailer, is the No. 1 seller of products ranging from dog food to diamonds, but it has not managed to gain as much market share in computers. Wal-Mart made a big splash last November when it sold laptop computers for $398 on the day after Thanksgiving, however.

Forrester Research analyst Ted Schadler, who follows the consumer technology sector, said Wal-Mart has the potential to become a key destination for computer shoppers.

"People buy on price," he said. "If Wal-Mart is competitive on price—which of course it will be—it's easy for Wal-Mart to be a destination."

Wal-Mart has been adding more upscale merchandise such as flat-panel televisions and fashionable clothing in the hope of getting customers to buy more than just food and commodity items, which carry low profit margins.

Copyright Reuters 2006. All rights reserved. 

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Alabama Medicaid Chief: Use Consumer Clout to Bring Health Care Coverage

WSFA12 (AL)
May 3, 2006               [back to top] 

BIRMINGHAM, Ala. -- Alabama Medicaid Commissioner Carol Herrmann-Steckel says consumers can improve health care for workers by not doing business with companies that don't provide worker health coverage. She made the remarks at a forum yesterday and noted that representatives from the business sector did not attend the event, held at the Birmingham Museum of Art.

Herrmann-Steckel urged consumers not to patronize stores such as Wal-Mart that generate profits but do not provide adequate health insurance for their workers.

Almost 46 million people in the U.S. are uninsured, which is about 15% of the population. Alabama's numbers are better, 11-13%, largely because the state does such a good job covering children of the working poor.

A study prepared for the Robert Wood Johnson Foundation shows that Alabamians without health coverage are:

- Nearly four times more likely not to see a doctor when they need one compared to their neighbors with insurance.

- Are nearly three times more likely to be without a personal doctor or health care provider than insured Alabama residents.

- Far more likely to miss important cancer screenings: 51% of Alabama women age 40-64 have received a mammogram within the last two years, compared with only 21% of their uninsured counterparts.

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Wal-Mart Stores, Inc. Announces First Private Equity Fund Investment Recipient, Simeus Foods International, Inc.

PR Newswire                  [back to top] 

BENTONVILLE, Ark., May 3 /PRNewswire-FirstCall/ -- Wal-Mart Stores, Inc. today announced the first beneficiary of its private equity fund investment Simeus Foods International Inc. (SFI), the largest black-owned food processing company in the United States. SFI has been awarded $5 million in support of its commitment to quality products and services. In combination with funds from co-investors, a total of $20-$25 million will be distributed to the company. The allocated grant is from a private equity fund managed by co-investor, Erasmus Advisors, a leading private equity advisory firm. Wal- Mart established the fund in October 2005 to drive women- and minority-owned business growth.

"Through this private equity fund we are able to invest in businesses, such as Simeus Foods International Inc., that have the talent and capacity to help drive supplier diversity," said Esther Silver-Parker, vice president of diversity relations, Wal-Mart Stores, Inc. "This and future minority-owned business investments extend our company's long-standing supplier diversity efforts and will serve as an invaluable resource to talented minority and women entrepreneurs seeking to expand their businesses."

SFI, founded in 1996, is a privately owned manufacturer of a wide variety of high-quality frozen food products for the restaurant industry, including ready-to-cook meats, appetizers, soups and sauces. Ranking as the 24th largest black-owned company in the United States according to Black Enterprise, SFI employs more than 400 workers and has processing plant locations in Texas and North Carolina.

SFI founder and CEO, Dumas M. Simeus, is an executive with global experience including expertise in general management, corporate finance and inspirational leadership. Simeus transformed his business from an in-house supplier, to a competitive business with a diversified pool of customers including, Quizno's, Burger King, Denny's, Hardee's, TGI Friday's, Olive Garden, Red Lobster and ARAMARK.

"Simeus Foods is proud to have Wal-Mart as an investor in our company through Erasmus Advisors. We are energized by the prospect of partnering with Wal-Mart on growth opportunities and appreciate the company's commitment to develop relationships with minority-owned companies such as ours," stated Dumas Simeus. "We intend to demonstrate through our performance that this type of investment is a sound business strategy and guiding principle."

According to the National Association of Investment Companies, although minorities account for 30 percent of the U.S. population, less than 2 percent of all venture and private equity funds are invested in minority companies. As part of Wal-Mart's continuing commitment to increasing supplier diversity throughout the retail sector, this fund will assist by supporting women and minority candidates who either operate companies or are in the process of acquiring companies that distribute or have the capacity to distribute products and services to major retailers and clientele. With an allocation life of five years, the fund will invest in a total of five to nine companies over its existence.

"Acquiring capital is a driving concern for fast-growing minority businesses," says Harriet R. Michel, president of the National Minority Supplier Development Council. "Outstanding companies like Simeus Foods can especially benefit from private equity funds targeted to minority firms. Wal- Mart's commitment of capital signals its intent to help diverse suppliers build capacity to better serve global customers."

Wal-Mart Stores, Inc. operates Wal-Mart Stores, Supercenters, Neighborhood Markets and SAM'S CLUB locations in the United States. The company operates in Argentina, Brazil, Canada, China, Costa Rica, El Salvador, Germany, Guatemala, Honduras, Japan, Mexico, Nicaragua, Puerto Rico, South Korea and the United Kingdom. The company's securities are listed on the New York and Pacific stock exchanges under the symbol WMT.

Simeus Foods International, Inc. (SFI) is a privately owned company and manufacturer of frozen food products for the restaurant industry. Based in Mansfield, Texas, SFI is the largest Black-owned food processing company is the U.S. and largest black-owned business in the state of Texas.

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Wal-Mart: Rapping On India's Door

By Manjeet Kripalani
BusinessWeek Online      [back to top]     

When U.S. President George W. Bush visited India this March, a pack of American executives descended on New Delhi at the same time to take advantage of the political goodwill generated by his trip. One of the companies was Wal-Mart Stores Inc. (WMT ) The world's No. 1 retailer has long sought entry into India's 1 billion-strong consumer market, but restrictions on foreign retail chains have kept it at bay.

Wal-Mart has been sourcing goods from India since 2001. But in a sign of its bigger ambitions, Wal-Mart last December applied for permission to open a liaison office in New Delhi, to be staffed by Lance Rettig, a senior executive from international operations. Rettig's mission? Wal-Mart calls it "market research," but local retailers say it's to lobby the government to let in foreign retailers. "We are at the feasibility and market study stage," says Wal-Mart's director of international corporate affairs, Beth Keck.

Foreign retailers can only operate in India as wholesalers, and local shopkeepers want to keep it that way. Kishore Biyani, founder of Pantaloon Retail (India) Ltd., the country's top chain with some $450 million in annual revenue, has been pressing New Delhi to keep Wal-Mart out. "We are trying to close the back door and the front door," he says. If Wal-Mart does break in, Biyani won't be its only local rival. Petrochemical giant Reliance is planning an initial investment of $750 million to set up 1,000 hypermarkets. The longer it takes Wal-Mart to get clearance from Indian authorities, the better prepared its local competitors will be.

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Illegal immigrants in Wal-Mart lawsuit allowed to stay in country

May 1, 2006                 [back to top] 

TRENTON, N.J. (AP) _ Three undocumented immigrants who are suing Wal-Mart over allegations the company violated labor laws will be allowed to stay in the country for another year as their case proceeds.

Gilberto Garcia, an Englewood Cliffs attorney who is part of the legal team representing the immigrants, who worked for cleaning contractors as janitors at Wal-Mart, said he was told Monday by the federal Department of Homeland Security about the extension allowing Eunice Moguel, Victor Zavala Jr. and Victor Zavala Sr. to stay in the country.

"It would be a shame if they had to return to Mexico," said Garcia. "So this is extremely important for us."

The three Mexican immigrants are part of group of more than 200 janitors who allege that Wal-Mart violated the Fair Labor Standards Act by using contractors who made the janitors work extended hours without paying them overtime or giving them days off.

Nine of the plaintiffs, including the three allowed to stay in the country, worked in New Jersey. Three others have returned to Mexico, and the remaining three are also pushing to be allowed to stay in the country, said Garcia.

The janitors include immigrants from Mexico and Eastern Europe, many of whom were arrested during a series of raids in 2003 by federal authorities targeting Wal-Mart stores in 21 states.

Garcia said that during an upcoming court hearing, lawyers representing the immigrants will ask for more time in which to find additional plaintiffs in Mexico to take part in the case.

Copyright 2006 Newsday Inc.

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On Maine coast, some try to keep Wal-Mart at bay

By Brian MacQuarrie
The Boston Globe
May 1, 2006                        [back to top] 

WALDOBORO, Maine -- The sea-scented streets of downtown Waldoboro look more like a theme-park rendition of old-time New England than a battleground. There's a general store behind an awning, a small pharmacy beneath a neon sign, and a generations-old lumberyard down the way. But these family businesses are not tourist-tailored relics in mid-coast Maine. They're rallying symbols for a passionate movement that is fighting to preserve the community fabric and the state's traditional ambience, and keep Wal-Mart out of one of New England's most distinctive regions.

It is an escalating fight that has scored recent victories for big-box foes in three towns between Bath and Rockland, and activists are battling to add five more communities to their goal of a ''box-free" coastal zone. Damariscotta, Newcastle, and Nobleboro have voted since March to ban or place a moratorium on new retail stores greater than 35,000 square feet. Thomaston, Edgecomb, and Waldoboro have votes scheduled on size caps within the next several weeks. Opposition to big-box retailers such as Wal-Mart, whose supercenters typically are 186,000 square feet -- and sell everything from food to clothes to tools to prescription drugs -- also is stirring in Warren and Wiscasset.

''The very thing I loved about this place was being threatened," said Jenny Mayher, a Harvard-educated, stay-at-home mother who moved to Maine within the last several years and helped organize a grass-roots drive to preempt Wal-Mart's plans to build in the picturesque village of Damariscotta. ''It would have forced local businesses to either close or scale back."

''We didn't want to sit around and worry about it," said Eleanor Kinney, a co-organizer, who like Mayher is a recent transplant and stay-at-home mother with a degree from Yale. ''We wanted to get engaged."

To Mayher and others in the ''Our Town" movement that they helped spread along the coast, the battle against Wal-Mart is nothing less than an Armageddon-like fight to preserve the villages and small businesses that make mid-coast Maine so appealing to tourists, transplants, and lifelong residents.

''This is just a rare thing," said Mayher, referring to the nearby shops in downtown Damariscotta, which was the first battleground for the movement. ''You don't just see tourists buying T-shirts. You see daily commerce happening." Mayher and Kinney continue to act as advisers, they said, in the ''Our Town" movement in Waldoboro and some other affected communities that are strung along the peninsula-punctuated coast.

Despite the size cap in Damariscotta, Wal-Mart's interest in the town has not been extinguished. Wal-Mart spokesman Christopher Buchanan said in an e-mail last week that the company has not abandoned its hopes to build in the community.

''We continue to weigh our options," Buchanan said.

To Wal-Mart officials and many residents who struggle to make a living here, big-box expansion is seen as an economic boon that combines cheaper goods with hundreds of new jobs. Already, Wal-Mart has built 22 stores in Maine since arriving Down East in the early 1990s, including stores in Brunswick, Rockland, and Augusta that fringe the mid-coast region.

To Wal-Mart's opponents, who contend the stores destroy local businesses and offer only jobs with low pay and poor benefits, 22 stores is more than enough. But to its supporters, hometown convenience is preferable to driving 25 miles to another Wal-Mart at $3 a gallon for fuel. And any job is better than none, they say.

''All we have around here is an overpriced hardware store" and a grocery, said Mike Simmons, 35, of Waldoboro, standing near a 1968 Volkswagen convertible that he is restoring at a Route 1 auto shop. ''The way I look at it is you need competition. It makes everybody grow."

His comments were echoed by Brian Bowman, 40, a state Department of Transportation supervisor who said the town of 4,900 people must find ways to keep young people from leaving. A Wal-Mart, Bowman said, will help business expand instead of siphoning away customers and money.

''Shoppers would say, 'Let's stop to get gas. Let's stop to get something to eat,' " Bowman said. His wife, Judie, nodded and added: ''My feeling is that Waldoboro would grow."

Wal-Mart officials denied that the corporation has any pending plans to build in Waldoboro, but veterans of the battle in Damariscotta are concerned that Waldoboro's large tracts of undeveloped land make an appetizing target. But no matter where the company builds, Buchanan said, Wal-Mart is committed to working out differences with local residents, rather than planning secretly, as Mayher and Kinney contend.

''If a community has sincere concerns about the development of our store, we need to pay attention to that and be as flexible as we can," Buchanan said. ''If there is another agenda in play -- arbitrary laws and regulations that are simply designed to keep us from introducing supercenters in a market -- then we will strongly oppose this on behalf of local customers who deserve the option of everyday low prices.

''No one is forcing consumers to shop at Wal-Mart, but some governments are trying to prevent them from doing so."

In Damariscotta, Mayher said, the size-cap movement was hatched on the basis of persistent rumors that Wal-Mart had acquired an option to buy property for a supercenter. Those rumors gained momentum when a Portland lawyer began attending meetings of the town's land-use committee, but would not divulge the identity of her client. Finally, after some progress toward a 35,000-square-foot cap, Wal-Mart acknowledged in November that the corporation had acquired the option. It was also disclosed last year that the attorney was hired by Wal-Mart.

On March 21, the cap was approved by a lopsided tally of 747 to 456, in which about 70 percent of Damariscotta voters participated. Waldoboro is scheduled to vote on a 35,000-square-foot cap on June 13.

The Rev. Robert Jewett, an Episcopal priest who is part of the Our Town movement in Waldoboro, characterized his activism in spiritual terms.

''As soon as it became apparent that big-box development was going to threaten the entire mid-coast area, we wanted to do our part to protect the people of Waldoboro," said Jewett, whose wife sells upscale kitchenware in a store beside their 19th-century farmhouse.

''I honestly felt called" to fight against ''the economic injustices that the big-box system imposes on common people," Jewett said.

But nearby, at the auto shop, Simmons was asked what would happen to Waldoboro's jobs if Wal-Mart moved into town.

Simmons, his work clothes streaked with oil, answered with a slight smile. ''What's so good about the jobs around here?" he asked.

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