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WalMart Gets Mixed Welcome from Small Towns

By Jim Kent
Chadron, Nebraska
29 December 2005                      [back to top]

American shoppers are on the lookout for bargains. Many find those bargain buys at one of the thousands of Wal Mart stores across the country. WalMart, the world's largest retailer, prides itself on offering the lowest prices on all its products. But many consumers not only refuse to patronize the mega-discount chain, they are actively campaigning against it.

Rapid City's Dahl Arts Center was packed recently for a showing of the documentary Poster from the documentary film "WAL-MART: The High Cost of Low Price" film "WAL-MART: The High Cost of Low Price." The documentary examines the company's alleged mistreatment of its employees, from race and sex discrimination to the squalid working conditions in the Asian factories that produce many of Walmart's goods.

But the filmmaker also included frequent images of abandoned small town stores and empty streets… highlighting the discount giant's impact on small businesses across America. And that was the primary concern of most of the 200 or so people in the audience. As one woman noted, "They're gonna bring a second one here in Rapid City,and we should try and do something about that, because family businesses, you see everywhere, are going down and I, yeah, I really dislike Wal Mart."

A man in the audience pointed out that Wal Mart has become the biggest corporation in the world. "It has phenomenal power, phenomenal reach...and, basically, is transforming our whole society. And we have very little control over what's going on. We need to wake up and take note or we're not gonna have what we have always had."

Someone else admitted, "I've always kind of had a hard time with Wal Mart's business practices, and I...I feel like it reflects a lot on us as a community if we would let them come here. I mean maybe people know, but if they know, they don't know how bad it is."

Opinions about "how bad it is" run the gamut from low wages and high-cost health insurance to the use of child labor in China. Cody Pesicka is a small business owner in Hot Springs, South Dakota. He's says he's concerned about all of these issues but, like many small town residents, his primary focus is on Wal Mart's impact on businesses in his community. "You can just kind of tell how corporate hurts a small business owner. People come in all the time and say, you know, we bought this at Wal Mart at such-and-such a price. And you kind of struggle to make a dollar on a product, compared to when they can go to Wal Mart and buy it."

One hour south of Hot Springs is the equally small town of Chadron, Nebraska. Patricia Giesler's family has owned a discount clothing store here for more than 80 years. Wal Mart "came into town" 6 years ago, and, she says, "a lot of people when they heard they were coming into Chadron decided to just go ahead and close their businesses, 'cause they knew it would be the eventual thing down the road. It has taken the smaller businesses that were fringe businesses to begin with and it's pretty much collapsed them and gone under."

Her family's business has managed to survive in spite of competition from Wal Mart, and what some might call an 'uneven playing field.' Patricia Giesler says she really resents the substantial tax breaks that local governments offer to encourage the discount chain to open a store in their community, welcoming the jobs it provides. "They were given a tax incentive of $500,000." She shakes her head in amazement. "Our store's been here 80 years and we've never been offered anything like that from our own community."

Gary Taylor, economics professor at South Dakota State University Calls to Wal Mart Corporation on the issue were not returned. But according to Gary Taylor, an economics professor at South Dakota State University, the discount chain's impact on any community is simply one of the stark realities of capitalism. "We're a capitalist society and generally, we look at, 'well, who can do things most efficiently at the lowest cost?' And currently, Wal Mart is doing a better job at that than other businesses. You know, Wal Mart still does employ people and generally they don't really pay that much less than what people were getting in the other jobs. There's a lot of other small businesses also don't provide health benefits and those are not really the highest paying jobs in town either."

Whether they like having a WalMart in town or not, most locals shop there, often because there's nowhere else to go for many items. Some, like Chadron resident Velinda Malone, see the corporation's arrival as a mixed blessing. "I believe they hurt some small businesses, [but] I've seen a lot more businesses coming to town because of Wal Mart."

In the end, Wal Mart's impact on small businesses across America may come down to what the individual consumer decides is more important - supporting community based businesses or saving money at mega-sales.

City cuts Wal-Mart $5M deal

jarrington
Montgomery Advertiser 
12/29/2005                                  [back to top]

To get a Wal-Mart SuperCenter built in Millbrook, city officials are willing to give the retail giant up to $5 million in sales tax rebates.

Mayor Al Kelley said Tuesday the city will hold a public hearing Jan. 9 to seek comment on a proposal to reimburse Wal-Mart up to 50 percent of its sales tax for up to five years to cover the cost of infrastructure improvements the retailer will make when it builds a store at the corner of Grandview Road and Alabama 14. The store is scheduled to be completed in 2007.

Kelley said the deal is best for the city because they do not have to borrow any money and he projects that the investment will be paid off in about three years.

He also expects the store to bring in $2.25 million for the city annually, which is a conservative estimate, he said.

"We are not having to pay up front for any of the infrastructure like Prattville is doing (for a new retail development)," he said. "We're not having to do that. (Wal-Mart) is doing it and they're paying for it, and we're just reimbursing them for infrastructure costs up to that amount of money."

Prattville is preparing to borrow as much as $48 million in part to fund infrastructure improvements for major retail developments in east Prattville. City officials have said the developments will bring in nearly $10 million annually.

In 2003, Wetumpka's Wal-Mart SuperCenter opened its doors on U.S. 231, next to the city's former Wal-Mart location. The only incentives offered were infrastructure improvements, and city records state that $238,000 was authorized for the improvements.

A Wal-Mart SuperCenter is in the works on Ann Street in Montgomery, though incentives for the retail giant are not part of the deal. Ken Groves, Montgomery's director of planning and development, said offering incentives to Wal-Mart is a mistake and that based on his experience, Millbrook didn't have to give up anything.

"People should not be giving Wal-Mart incentives. They know where they're going to make money," he said. "What communities ought to be doing is deciding what they're going to require of Wal-Mart to participate in their market and you can get better than just a plain blue and gray Wal-Mart store."

Kelley disagreed with Groves' comments.

"That's a different market. Our situation is just totally different because we're sandwiched right between Prattville, Montgomery and Wetumpka," he said.

Millbrook resident Jacqueline Griffin drives as far as Wetumpka when she needs to go to a Wal-Mart because it's nicer and less crowded than the store in Prattville, she said.

"My husband will never get me out of there," she joked about the new store coming to her city. "I think if they're going to improve that intersection and everything, it's worth it and it will bring more to Millbrook. Millbrook has been growing residentially, but the shopping hasn't been growing as much so I think it's worth it."

Though he did not provide specifics, Kelley said Millbrook Wal-Mart will be a new prototype store, with better lighting, an improved layout and more aesthetic appeal to shoppers. An additional 30,000 square feet of shopping space will be built with stores to accompany the Supercenter.

Part of the infrastructure improvements include adding an intersection to relieve traffic problems at Camp Grandview Road and Alabama 14.

"This bigger, newer store, we think and they think, is going to produce more sales than what your regular Wal-Mart will produce," he said.

PUBLIC HEARING

The Millbrook City Council will consider a resolution to authorize and approve a project agreement between Wal-Mart and the city during a meeting at 7 p.m. Jan. 9 in the council chambers at 3841 Grandview Road. Millbrook residents may address the City Council with concerns and comments about the agreement with Wal-Mart at the meeting.

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Work begins on south-side Wal-Mart Supercenter

Bob Petrie
The Sheboygan Press
12/24/2005                              [back to top]

The landscape is scruffy and snow-covered, but will soon sprout a new 212,000-square-foot Wal-Mart Supercenter on Sheboygan's far southwest side.

Crews have begun transforming 37 acres near Germaine Avenue and South Taylor Drive into the site for the store, grading the rolling ground into a flat surface, prepping the land for the footings that will eventually become the foundation for Sheboygan's first Supercenter.

Within five to six weeks, the steel and block walls of the Supercenter should begin rising, said Mick Michalak, of Corporate Construction Ltd., of Mad-ison, the superintendent for the project.

Completion of the store should be by August, Michalak said, and it will be another six to eight weeks until Wal-Mart can stock the Supercenter and open the building, putting a grand opening by next fall.

Over the past two weeks, workers have laid out the perimeter of the property and are ready to do the footings, despite the cold weather.

"Whatever Mother Nature brings, I guess," Michalak said Tuesday. "It all depends, it could be in the 30s or it could be below zero."

Sheboygan Mayor Juan Perez said the Supercenter is a big key to the city's economic future, bringing jobs and helping fuel development in the southwest business corridor.

"That area in itself is an area we've been working hard to build, and now with Wal-Mart coming in, I think our job will be a lot easier, because people are going to have a tendency to cluster around that whole area," Perez said.

DuWayne Schueler, assistant superintendent, said crews would be working fast to get the 4-foot-deep footings in place before the ground freezes for the winter.

"We can protect (them). We have blankets; we dig and pour the same day and cover it with blankets, it keeps the frost out," Schueler said.

The city and Wal-Mart are combining to pay for about $2.3 million in traffic improvements to serve the area surrounding the Supercenter over the next 10 years. The work will be done starting in the spring, during the construction of the Supercenter.

Wal-Mart is paying for extra turn lanes and signals at several intersections to handle additional traffic to be generated by its store, while the city agreed to pay $825,000 for new turn lanes and traffic signals at the intersection of Taylor Drive and Washington Avenue.

When the new Supercenter opens, Wal-Mart will close its current store in the Taylor Heights Shopping Center, and Perez said the retailer's real estate agent is advertising the Taylor Heights space for future tenants. The mayor said the agent is willing to subdivide the space and "do whatever is necessary."

Perez said he would like someone will fill the soon-to-be-empty Wal-Mart space, to keep it from being an "eyesore."

"I hope somebody moves in there pretty quick that will stir up some activity and some excitement and some traffic," he said.

Reach Bob Petrie at bpetrie@sheboygan-press.com and 453-5129.

Copyright © 2005 The Sheboygan Press

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Wal-Mart Plans to Appeal $172M Judgment

By DAVID KRAVETS
Associated Press 
Dec 23                           [back to top]

OAKLAND, Calif. (AP) -- Wal-Mart Stores Inc. plans to appeal a $172 million judgment awarded to thousands of employees who claimed they were illegally denied lunch breaks.

A jury on Thursday found the world's largest retailer violated a 2001 state law that requires employers to give 30-minute, unpaid lunch breaks to employees who work at least six hours.

The verdict came after nearly three days of deliberations and four months of testimony. In a statement, Wal-Mart said it would appeal.

The class-action lawsuit in Alameda County Superior Court is one of about 40 nationwide alleging workplace violations by Wal-Mart, and the first to go to trial.

"We absolutely disagree with their findings," company attorney Neal Manne said. Manne claimed the state law in question could only be enforced by California regulators, not by workers in a courtroom.

He conceded that Wal-Mart made mistakes in not always allowing for lunch breaks when the 2001 law took affect, but said the company is "100 percent" in compliance now.

The Bentonville, Ark.-based retailer was ordered to pay $57 million in general damages and $115 million in punitive damages to about 116,000 current and former California employees. The company earned $10 billion last year.

Attorney Fred Furth, who brought the case on behalf of the workers, said outside court that the jury "held Wal-Mart to account."

A California jury has awarded more than 172 (m) million dollars to thousands of Wal-Mart employees who claimed they were illegally denied their 30-minute lunch breaks.

The company claimed that workers did not demand penalty wages on a timely basis. Under the law, the company must pay workers a full hour's wages for every missed lunch.

Wal-Mart also said it paid some employees their penalty pay and, in 2003, most workers agreed to waive their meal periods as the law allows.

The company contended that the law does not allow for punitive damages because "the meal-period premiums in question are penalties, rather than wages," it said in the statement. "In short, California law prohibits penalties on top of penalties."

The class-action lawsuit was filed by several former Wal-Mart employees in the San Francisco Bay area in 2001, but it took four years of legal wrangling to get to trial. The workers claimed they were owed more than $66 million plus interest, and sought damages to punish the company for alleged wrongdoing.

The company settled a similar lawsuit in Colorado for $50 million.

A federal lawsuit pending in San Francisco accuses Wal-Mart of paying men more than women.

The verdict comes as the company wages an intense public-relations campaign to counter critics aiming to stop the retailer's expansion and make it boost workers' salaries and benefits.

Paul Blank, campaign director for WakeUpWalMart.com, an union-affiliated advocacy group that believes Wal-Mart's policies over wages, health benefits and other issues harm families and communities, said he was delighted by the verdict.

"It is a sad day when Wal-Mart provides these so-called low prices by exploiting their workers and even the law," Blank said.

The company added lower-cost health insurance this year after an internal memo surfaced that showed 46 percent of Wal-Mart employees' children were on Medicaid or uninsured.

© 2005 The Associated Press. All rights reserved. 

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Jury Awards $172M to Wal-Mart Employees

By DAVID KRAVETS                
The Washington Post Company                             [back to top]

OAKLAND, Calif. -- A California jury on Thursday awarded $172 million to thousands of employees at Wal-Mart Stores Inc. who claimed they were illegally denied lunch breaks.

The world's largest retailer was ordered to pay $57 million in general damages and $115 million in punitive damages to about 116,000 current and former California employees for violating a 2001 state law that requires employers to give 30-minute, unpaid lunch breaks to employees who work at least six hours.

The damages were originally tallied as $207 million after a court clerk misread the punitive damages as $150 million. The amount of punitive damages was later clarified.

The class-action lawsuit in Alameda County Superior Court is one of about 40 nationwide alleging workplace violations by Wal-Mart, and the first to go to trial. The Bentonville, Ark.-based retailer, which earned $10 billion last year, settled a similar lawsuit in Colorado for $50 million.

In the California lunch-break suit, Wal-Mart claimed that workers did not demand penalty wages on a timely basis. Under the law, the company must pay workers a full hour's wages for every missed lunch.

The company also said it paid some employees their penalty pay and, in 2003, most workers agreed to waive their meal periods as the law allows.

The lawsuit covers former and current employees in California from 2001 to 2005. The workers claimed they were owed more than $66 million plus interest, and sought damages to punish the company for alleged wrongdoing.

Attorney Fred Furth, who brought the case on behalf of the workers, said outside court that the jury "held Wal-Mart to account."

Wal-Mart attorney Neal Manne said the jury's verdict, reached after nearly three days of deliberations and four months of testimony, would likely be appealed.

He claimed the state law in question could only be enforced by California regulators, not by workers in a courtroom. He added that Wal-Mart did not believe the lunch law allowed for punitive damages.

"We absolutely disagree with their findings," Manne said of the jury's verdict. He conceded that Wal-Mart made mistakes in not always allowing for lunch breaks when the 2001 law took affect, but said the company is "100 percent" in compliance now.

The lawsuit was filed by several former Wal-Mart employees in the San Francisco Bay area in 2001, but it took four years of legal wrangling to get to trial.

The verdict comes as the company is waging an intense public-relations campaign to counter critics aiming to stop the retailer's expansion and make it boost workers' salaries and benefits.

Paul Blank, campaign director for WakeUpWalMart.com, an union-affiliated advocacy group that believes Wal-Mart's policies over wages, health benefits and other issues harm families and communities, said he was delighted by the verdict.

"It is a sad day when Wal-Mart provides these so-called low prices by exploiting their workers and even the law," Blank said.

The company added lower-cost health insurance this year after an internal memo surfaced that showed 46 percent of Wal-Mart employees' children were on Medicaid or uninsured.

A federal lawsuit pending in San Francisco accuses the company of paying men more than women.

© 2004 The Washington Post Company

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Wal-Mart Wins "Grinch of the Year" for Second Year in a Row

By Jobs with Justice
12-22-05                                [back to top]

With 52% of the 13,134 votes cast, Wal-Mart won the 5th annual online "Grinch of the Year" election sponsored by National Jobs with Justice. Nominated by Wake Up Wal-Mart, the company is criticized for leading the global race to the bottom; boosting profits for their executives on the backs of their employees through low wages, insufficient healthcare, and discrimination.

"Given the competition from Donald Rumsfeld and Verizon Wireless, Wal-Mart should be extremely satisfied to have won the 'Grinch of the Year' award," said Fred Azcarate, executive director of Jobs with Justice. "With no end in sight for their continued poor treatment of workers, the communities they live in, and the environment, we suspect that they'll go for a 3-peat next year."

Donald Rumsfeld, the U. S. Secretary of Defense, came in second place with 24% of the votes. Rumsfeld was nominated by the American Federation of Government Employees (AFGE) after he proposed to strip over 600,000 federal employees - men and women dedicated to serving their country - of their collective bargaining rights.

Verizon Wireless, nominated by the Communication Workers of America (CWA), came in third place with 16% of the vote. Verizon Wireless was, with the final 8% going to write-in candidates - President Bush receiving the bulk of the write-in votes.

The 'Grinch of the Year' awards began locally with Jobs with Justice Coalitions around the country highlighting the greedy grinch in their hometowns. That tradition has remained in many areas with Governor Mitch Daniels winning in Indiana after threatening to close 80% of the state's social service offices and Ron Lohr of Lohr Distribution winning in St Louis, MO for permanently replacing their striking beer delivery drivers. Their drivers were striking to protect health care for their families and a reasonable workload for a good wage.

Jobs with Justice is a national campaign for workers' rights. Around the country, local Jobs with Justice Coalitions unite labor, community, faith-based, and student organizations to build power for working people.

Visit our website at: http://www.unionvoice.org/ct/Qd1zzQE1JPgx/ to learn more about our campaign for workers' rights & economic justice.

LEARN MORE ABOUT WAL-MART

Jobs with Justice has been taking grassroots action across the country to change Wal-Mart in collaboration with WakeUpWalMart.com. Join the campaign today to receive specific action alerts in 2006 at: http://www.unionvoice.org/ct/Pp1zzQE1JPgw/

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A Little Man Takes on Wal-Mart

Krugman is paid to play his baseless leftist games.

Donald Luskin
December 22, 2005            [back to top]

Who was it that said that the measure of a man is what he worries about? President Bush is a big man who worries about big things like protecting America from global terrorism. New York Times columnist Paul Krugman — Bush’s most vicious media opponent and America’s looniest liberal pundit — is a little man who worries about little things, such as whether conservative pundits are being paid too much by lobbyists, and whether retail workers are being paid too little by Wal-Mart.

In his column Monday [subscription link via New York Times; free link via CREW], Krugman excoriates conservative think-tank scholars Peter Ferrara and Doug Bandow for taking money from indicted Republican lobbyist Jack Abramoff, allegedly in exchange for writing op-ed columns favorable to Abramoff’s clients. Yes, the immediate intuition is that these men’s ethics were compromised here. But, really, this is a little issue. Where’s the beef? Everyone — think-tankers, op-ed writers, etc. — gets paid by someone. And those who pay, naturally, choose to pay scholars and journalists who tend to already agree with them. It seems unlikely, then, that Ferrara or Bandow would have written anything different whether or not Abramoff paid them.

Krugman himself is no different than Bandow or Ferrara. They are scholars at think tanks, and Krugman is a scholar at Princeton’s Woodrow Wilson School of Public and International Affairs. And Krugman, too, gets paid by other people who rely on him to promote their viewpoints. First and foremost: that powerful liberal lobbying machine known as the New York Times. Since Krugman’s Times column began in 2000, has he ever — even once! — taken a position substantively different from that of the ultra-left-leaning Times editorial board, the folks who write his extracurricular checks?

Krugman has taken other extra-curricular paychecks over the years, and he has always promoted the points of view of whomever wrote those checks. He took Enron’s money as a consultant on its advisory board, and, while on the payroll, wrote a glowing column about Enron for Fortune. To be fair, he disclosed the connection then. At the time, Enron was riding high and Krugman was proud to take the corrupt company’s money. But he failed to mention the connection later — after the company failed and had to stop paying him — in dozens of New York Times columns lambasting the Bush administration for its past Enron connections. Most egregiously, he failed to mention his previous role as an Enron consultant in a Times column lambasting Enron’s consultants!

And when Krugman wrote a Times column justifying the anti-Semitic ravings of Malaysia’s premier Mahathir — the Times tagged that Krugman column “Anti-Semitism with a purpose” — he failed to mention that he had once been Mahathir’s guest at a Malaysian economics conference and had contributed to Malaysia's economic policies.

But where’s the beef? Krugman may well have written the same things even if he hadn’t taken Enron’s money or accepted Mahathir’s hospitality. Indeed, one suspects that Krugman would proudly recycle in his columns all the same talking points he finds on the Democratic National Committee’s website and all the ultra-leftist hateblogs, even if he had to dip into his own pocket and pay himself.

Consider Krugman’s column on Wal-Mart last week [subscription link via New York Times; free link via ReclaimDemocracy]. Krugman doesn’t find anything corrupt about the “union-supported group, Wake Up Wal-Mart” that has run television ads demonizing the non-union retail giant. Would Wake Up Wal-Mart have run those ads anyway, without union money? Probably not, but Krugman would likely have written the same column, in which he makes the absurd claim that Wal-Mart — by far America’s largest employer — destroys jobs. He even goes so far as to call Wal-Mart’s claims to the contrary “the worst economic argument of 2005.” Considering some of the loony economic arguments Krugman himself has made this year, that’s quite a claim.

Who’s paying Krugman to make such claims other than the New York Times? No one that I’m aware of, at least not directly. But unions supply a large fraction of the filthy lucre that fills the war chest of the Democratic party. So, naturally, Krugman will take up their cause — however absurd, and however hypocritical. Back in 1993, when Krugman used to write as an economist, not a political hack, he called Wal-Mart “the most significant American business success story of the late 20th century,” celebrating its application of “extensive computerization and a home-grown version of Japan’s ‘just in time’ inventory methods to revolutionize retailing.”

To back up his claims that Wal-Mart destroys jobs, Krugman cites the “sophisticated statistical analysis” in a paper by a University of California professor and two associates at the Public Policy Institute of California. But that paper only claims that Wal-Mart causes a drop in retail employment when it opens a store in a new community. Overall, it finds “there is some evidence that Wal-Mart stores increase total employment on the order of two percent.”

A study by Global Insight goes further, but Krugman doesn’t mention it. It says that Wal-Mart is “responsible for 210,000 net jobs, a level of total factor productivity (general economic efficiency of the economy) that is 0.75% higher by 2004 than it would have been” and that “real disposable income is 0.9% higher than it would have been in a world without Wal-Mart.” Why Krugman’s silence on this study? The unions wouldn’t be happy if he mentioned it.

Other liberal economists aren’t so concerned with flattering the Democratic party’s paymaster. Jason Furman, a scholar at New York University (yes, he too, has another patron — the leftist Center for Budget Policy and Priorities), recently wrote a paper on Wal-Mart. Krugman once wrote that Furman’s work at CBPP is “absolutely impeccable; there is nothing at all like it on the right, or anywhere else.” Surely Krugman would not say the same thing about Furman’s statement that “Wal-Mart is a progressive success story ... resulting in huge benefits for the American middle class and even proportionately larger benefits for moderate-income Americans.”

And speaking of getting paid by the unions, it’s probably not an entirely inexplicable omission that Krugman didn’t mention the recent Zogby poll that “found that 56 percent of American adults agreed with the statement — ‘Wal-Mart was bad for America.’” That’s possibly because Krugman didn’t want to deal with the fact that Zogby was paid by union-backed Wake Up Wal-Mart to do the poll (and John Zogby himself has been paid in the past to appear as an expert witness on behalf of plaintiffs suing Wal-Mart). The Pew Foundation, presumably not on the take from the unions, just found in a similar poll that 64 percent of Americans believe Wal-Mart is “Good … For the country.”

By the way, perhaps this is a good time to mention that I don’t get paid a penny for writing the Krugman Truth Squad column here at National Review Online. Not by NRO, not by Jack Abramoff, not by anybody. Why do I do it? Because, like President Bush, I’m worried about the big things. And one of the best ways I can help with the big things is by keeping the little things — like Paul Krugman — cut down to size.

— Donald Luskin is chief investment officer of Trend Macrolytics LLC, an independent economics and investment-research firm. He welcomes your visit to his blog and your comments at don@trendmacro.com.

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Chains nervous as Wal-Mart focuses on electronics

By Maria Halkias
The Dallas Morning News
Thursday, December 22, 2005               [back to top]

DALLAS _ When Wal-Mart wants to dominate a merchandise category, it usually gets its way. And the world's largest retailer is showing that it wants to be No. 1 in consumer electronics.

It has remodeled the electronics departments in about a third of its U.S. stores to accommodate big-screen plasma TVs, rows of digital cameras and satellite radio displays. It has bumped up its breadth of brands including Canon cameras, Toshiba notebooks and Sony camcorders. And it has started offering warranties on some products and service contracts with wireless phones.

"This year, they're going after the well-heeled consumer and the enthusiast," said Alan Wolf, senior editor at industry trade publication TWICE. "It's too early to tell because they haven't made a total transformation. It's a start _ and a scary proposition for electronics retailers."

By selling low-price televisions, DVD players and cameras, Wal-Mart Stores Inc. moved ahead of Circuit City Stores Inc. into the No. 2 spot in TWICE's 2003 sales rankings.

The discounter is still No. 2, with U.S. electronics sales last year of $12.11 billion (not including sales of $2.07 billion at its Sam's Club chain). Best Buy Co. is No. 1, with sales of $20.75 billion.

Wal-Mart management has said it views electronics as a way to entice customers from its grocery aisles to the other side of its stores. Although Best Buy still has a substantial lead, and electronics chains trump the discounter on selection, service, installation and warranties, no one is underestimating Wal-Mart.

When asked about Wal-Mart's potential in consumer electronics, analysts shrug and point to toys and groceries. The discounter reigns in both categories.

"Wal-Mart always wants more. In this category, it's No. 2, but Wal-Mart doesn't like being No. 2 when it thinks it can be No. 1," said Edward Weller, retail analyst at ThinkEquity Partners LLC. "It wasn't that long ago that people didn't think they would take the toy lead."

"Talk to the food guys a few years ago," CompUSA Chief Executive Larry Mondry said about Wal-Mart's fast rise to become nation's No. 1 grocer. Dallas-based CompUSA is the eighth-largest electronics retailer.

So far, electronics is Wal-Mart's best-selling category online, said Wal-Mart.com spokeswoman Amy Collela.

"We offer an expanded assortment of electronics to complement our stores on our Web site," she said.

Its top-selling item online this holiday season is its proprietary mobiBLU Cube. The 512-megabyte MP3 player sells for $99.72 and is the retailer's answer to Apple's wildly successful iPod. It comes with five free Wal-Mart music downloads.

Wal-Mart is now the leading major retailer of wireless phones. Rankings released in early December showed that it moved ahead of RadioShack Corp. in the category during the third quarter.

When Dell Inc. expanded into printers, cameras and flat-screen TVs a couple of years ago, TWICE's Wolf remembers Best Buy management calling Dell "dangerous." But it wasn't until Wal-Mart moved ahead of Circuit City that Best Buy started to respond to the competition with its "customer-centric" stores, he said.

Almost two years ago, Best Buy defined what these new and remodeled stores would look like and what items they would carry, based on neighborhood demographics. It opened several of these stores in California and acquired an upscale home theater company called Magnolia.

On Dec. 13, Wall Street battered Best Buy's stock price after the retailer said higher spending on new initiatives _ including its customer-centric stores _ and stiffer competition in Canada cut into third-quarter profits.

So far this holiday season, Circuit City's aggressive pursuit of market share has made the environment more competitive for Best Buy, Goldman Sachs analyst Matthew J. Fassler said in a report Dec. 14.

He downplayed the impact of Wal-Mart and Target Corp. on the consumer electronics specialty stores for now: "The threat from discount stores on near-term results has been overstated, but as flat-panel TVs commoditize, discounters will grow more relevant."

Wal-Mart advertised a big-screen TV for just under $1,000 and a $387 laptop computer the day after Thanksgiving. Both sold out, said Wal-Mart spokeswoman Gail Lavielle. "Those were our blitz products, but we're also selling out of some digital cameras and combo TV and DVD players," she said.

CompUSA's Mondry said stores that are selling technology have an advantage over Wal-Mart. "We all had $400 notebooks and huge lines the day after Thanksgiving, too, and so did Best Buy," he said.

Shoppers who want to integrate their big-screen HDTVs with their computers, install cables and cut holes in the wall "can't go to Wal-Mart," Mondry said. "Our sales associates know what else you can do with your new iPod and can show you what you need to run it through the car stereo or make it an alarm clock."

Best Buy said Dec. 13 that it added 2,500 Geek Squad agents during the quarter, bringing its total number of service staffers to more than 11,900.

Prudential Equity Research analyst Mark J. Rowen said in a report in mid-December that service revenue remains a significant driver at Best Buy.

"Geek Squad and home-theater installation revenues were up a strong double-digit percentage," he wrote.

Circuit City said Dec. 12 that it was expanding its service abilities by hiring PlumChoice Online PC Services to supply remote computer support. Technicians can access home or office computers remotely for complex repairs or to simply teach safe downloading of music.

"Our employees have gone through extensive training," said Amada Tate, spokeswoman for Circuit City. "Flat-panel, big-screen TV prices are down 30 percent from last year. That's driving a lot of interest, and more consumers are aware, but we deliver and offer installation and component and speaker hook-ups."

Warranties are also important to shoppers buying complex electronics, and Wal-Mart has started offering them. But a warranty is a product that needs to be sold, analysts said. Last year, warranties represented 3.8 percent of Circuit City's domestic sales.

Just before Thanksgiving, analyst Rowen published an in-depth report on Wal-Mart's potential threat to the consumer electronics chains this season and beyond.

Although Wal-Mart has improved its assortment of advanced-television technologies, he concluded that at least for holiday 2005, the electronics chains have better selections.

Wal-Mart's foray into selling warranties is alarming for the chains, he said. And ultimately, he said, Wal-Mart and such direct-to-consumer retailers as Dell pose threats _ especially in product categories that consumers view as commodities, such as DVD players and entry-level cameras.

At the Wal-Mart Supercenter in Garland, Texas, on Dec. 13, Jim Newsom of Rowlett, Texas, was looking at an 8-megapixel Olympus digital camera priced at $397.62.

"They're getting better, especially in digital, mobile phones and the MP3 players," he said of Wal-Mart. "I think online is a bigger threat for lots of these categories, but yeah, I'll consider Wal-Mart from now on."

He didn't know if the camera he was ready to buy was in stock and was waiting for someone to help him.

The electronics department has its own registers, and checkers were busy, with two lines formed. A few minutes later, Newsome had wandered into the automotive department.

"I'll go back when the lines go down," he said.

(c) 2005, The Dallas Morning News.

Copyright © 2006 MarketWatch, Inc. All rights reserved. 

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Wal-Mart withdraws application for Elk Grove Supercenter

Sacramento Business Journal
December 21, 2005                      [back to top]

Wal-Mart has withdrawn its application to build one of its massive Supercenters in Elk Grove, which had run into stiff opposition from the community.

The decision was made after Wal-Mart officials and local developer Angelo Tsakopoulos met with Elk Grove officials and residents.

Tsakopoulos owns the parcel at Sheldon and Power Inn roads where Wal-Mart was proposing to build one of its giant Supercenters, which sell groceries along with the usual merchandise carried by the big-box chain, the world's largest retailer.

"This is a prime example of community and business working together," said Elk Grove Mayor Dan Briggs in a news release. "I commend Angelo for listening to the concerns of the community and am pleased Wal-Mart will continue to explore other opportunities in the city."

Wal-Mart often faces community opposition to its stores. Frequent criticisms are that the giant retailer pays low wages and offers substandard benefits and that it drives smaller merchants, often local mom-and-pop stores, out of business because they can't compete with Wal-Mart's bulk buying power and aggressive pricing.

In Elk Grove, which already has one Wal-Mart, much of the criticism had to do with the proposed location, with nearby residents voicing concerns about the traffic that would be created by a store with nearly 250,000 square feet of retail space.

A Wal-Mart spokesman acknowledged the community's concerns and hinted that the retailer would look for another location in the city.

"After a number of meetings with local residents and community leaders, we have decided to withdraw the application, but we still recognize that there is a strong demand for a Wal-Mart Supercenter in Elk Grove and remain committed to serving those customers," said Kevin Loscotoff, community relations manager for Wal-Mart.

© 2005 American City Business Journals Inc.

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Waste Not, Wal-Mart

By Tim Beyers
TMF Mile High
12/21/2005                     [back to top]

Wal-Mart(NYSE: WMT) is in trouble again. Only this time, the allegations are all trash. In a filing with the Securities and Exchange Commission on Tuesday, the company disclosed that it is the subject of a criminal investigation into how it handles certain types of hazardous waste, including hair spray and charcoal.

At issue is how Wal-Mart used its own trucks to transport the materials, instead of vehicles certified to carry hazardous waste. In doing so, the company may have violated the Resource Conservation and Recovery Act. The U.S. Attorney's office in Los Angeles is leading the investigation.

Before you type that email bemoaning the Feds sticking it to Wal-Mart, consider that this marks the second time in less than 45 days that the company has been involved in a high-profile law enforcement action. The last one, in mid-November, featured the arrest of 120 workers on immigration violations.

And don't forget a long-standing class action suit that accuses it of discriminating against women employees in terms of salary and advancement.

Wal-Mart hasn't formally answered the latest charges. But a company spokesman gave a modest defense by telling Reuters that the government wasn't challenging the way it disposes of waste, only how it transports it.

Look, I'm not going to bash Wal-Mart. After all, the retailer has developed a superior business that has provided investors with generous returns over decades. But at some point, the flood of lawsuits will raise fundamental questions. Here are two: Just how far does Wal-Mart go to deliver rock-bottom prices? And are those practices legally sustainable? The anecdotal evidence suggests these lawsuits won't be a serious threat to Wal-Mart, but I suspect it will be some time before we know for sure.

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Short Wal-Mart? Not! It's a wavering thumbs up for the Wal-Mart movie. You-know-who has holiday photo cards, too. Ever dug through trash? You should try it sometime. Just ask Philip Durell, advisor forMotley Fool Inside Value; his investing approach is beating the market by more than 3% as of this writing. Get in on the action by taking a risk-free 30-day trial. Or sign up for a year and getStocks 2006, our analysts' best picks for the year ahead, free. Either way, all you have to lose is the prospect of better returns.

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Fool contributor Tim Beyers only takes out the trash. He refuses to dig through it. Tim didn't own shares in any of the companies mentioned in this story at the time of publication. You can find out what's in his portfolio by checking Tim's Fool profile. The Motley Fool has an ironclad disclosure policy.

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

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Wal-Mart's Waiting Game in Japan

By Ian Rowley
DECEMBER 21, 2005               [back to top]

The retailing titan has boosted its stake in the money-losing Seiyu supermarket group. What it needs now is a change in consumers' buying habits Japan has always been a tough slog for overseas retailers. Convoluted distribution, impenetrable supplier networks, the world's most demanding shoppers, and the lasting impact of a decade-long slump mean no easy pickings for shopkeepers -- foreign or otherwise. Just ask Carrefour: The world's second-largest retailer quit Japan in March, 2005, after accumulating losses of $264 million in four years.

For the world's No. 1 retailer, Wal-Mart Stores (WMT ), Japan has proven at least as troublesome. But it shows no signs of folding.

Three-and-a-half years ago, Wal-Mart bought into ailing Japanese retailer Seiyu and has since seen the Tokyo-based chain lose over $1 billion (see BW, 2/28/05, "Japan Isn't Buying the Wal-Mart Idea"). Nonetheless, the U.S. giant on Dec. 21 ponied up $565 million to improve the supermarket group's capital base and pay off bank loans. The move boosts Wal-Mart's stake in Seiyu -- which started as a 6.1% investment in May, 2002 -- to 53%, from 43%. Under the deal, Mizuho Corporate Bank also is investing $410 million in Seiyu.

WIDENING LOSSES. With greater control, Wal-Mart is shaking up Seiyu's management. Chief Executive Noriyuki Watanabe is being bumped up to chairman. He'll be replaced as CEO by Ed Kolodzieski, former chief operating officer of Wal-Mart International and a Seiyu board member since September, 2004.

"We're making this investment because we see a lot of long-term possibilities," Kolodzieski, 45, told reporters at a press conference. "My first priority is to learn from our customers and associates. Only then will I be in a position to improve conditions for our customers."

He'll also want to stem the red ink at Seiyu. It lost $105 million in 2004, and in October increased its 2005 loss projection to $115 million from $65 million -- a grim forecast that will mark its fourth consecutive annual shortfall. CSFB projects Seiyu's net loss will widen next year, though the investment bank expects Seiyu to finally turn a profit in 2007, as the economy improves and Wal-Mart's restructuring takes greater effect.

FRESH DILEMMA. Falling sales are also a problem. During the third quarter, Seiyu's same-store sales declined 1.4%, vs. the 0.4% dip the retailer had projected. "We need to see some black ink -- three years have already passed, and they've been very slow to improve," says CSFB analyst Yasuyuki Sasaki.

While welcoming the cash injection, Wal-Mart faces many hurdles before it can get Seiyu on track. One key factor that remains: fully understanding the nuances of the world's second-largest retail market and, in particular, Japanese consumers' love-hate relationship with discounting.

Raised on mom-and-pop shops and high-cost department stores, shoppers in Japan often perceive cheaper goods as substandard -- irrespective of their actual quality. "People like lower prices if they can get the same quality, but convincing Japanese consumers of the quality takes a lot of time," says David Marra, a consultant at A.T. Kearney in Tokyo.

NEIGHBORHOOD SUPPLIERS. That's not to say Seiyu has made no progress. Almost 80% of the workforce is now part-time, for instance, vs. less than 70% three years ago. The shift has helped trim millions of dollars from the wage bill. In 2004, for instance, wage costs fell 7.6%.

Yet finding savings elsewhere has proven more difficult. For example, fresh food -- an important part of the Japanese diet -- is tough to get, and sell, cheaply. One reason: Most farms and fisheries in Japan are small, local operations lacking the economies of scale that would allow them to deliver large quantities of produce at knockdown prices.

Wal-Mart execs are pinning their hopes on better inventory-tracking technology (see BW, 5/10/04, "Can Wal-Mart Woo Japan?"). The giant's info-tech systems have been a key factor in its success elsewhere, as they help stores keep on hand exactly the goods they need.

PAYOFF IN SIGHT? But cash-strapped Seiyu slowed the technology rollout earlier this year and now has the systems installed at just 250 of its 400 or so stores. With the new funds from Wal-Mart, the Japanese retailer expects to complete the process by 2007. The cash injection will also help pay for much-needed face-lifts at some older stores.

There are already some positive signs. Seiyu says stores that have used Wal-Mart's systems for more than a year are reporting sales increases that are several percentage points higher than the company average. Meanwhile, customer surveys are showing growing satisfaction, including in the important fresh-foods category.

"There has been quality work done in infrastructure investments, in distribution and systems," says Kolodzieski. "We're confident we'll see the dividends."

NOT ALONE. In the short term, though, Japan's rebounding economy could provide Seiyu with as big a boost as any technology changes. Recoveries aren't necessarily great news for discounters, since shoppers who feel wealthier might drift upmarket. Still, anything that makes Japan's consumers feel better about spending will likely help.

"No one in the industry is doing well at the moment -- it's not just Seiyu," says Michinori Shimizu, an analyst at Morgan Stanley in Tokyo. He says larger rivals such as Aeon and Ito-Yokado are experiencing similar problems, as they try to meet the needs of Japanese shoppers (see BW Online, 2/24/05, "Japan's Answer to Wal-Mart?"). "But next year," Shimizu adds, "because of a cyclical recovery, I think it will get better for everyone."

Rowley is a BusinessWeek contributing correspondent in Tokyo

Copyright 2000- 2005 by The McGraw-Hill Companies Inc. All rights reserved.

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Wal-Mart Supporters Form New Group to Counter Critics

By Randy Hall
CNSNews.com
December 21, 2005                      [back to top]

(CNSNews.com) - A group of community and religious leaders Tuesday announced the formation of Working Families for Wal-Mart, "an organization dedicated to talking about Wal-Mart's positive contributions" and responding to union-sponsored critics of the nation's largest retail chain.

One of Wal-Mart's most persistent critics immediately dismissed the new group's influence because its initial financial backing comes from Wal-Mart itself.

"Wal-Mart will create a projected 100,000 jobs this year, pays its associates competitive wages, offers health insurance for as little as $11 per month and donates nearly $200 million to charities annually -- 90 percent of it at the local level," said Bishop Ira Combs, Jr., a member of the new group's 16-member steering committee.

"Just like Sam Walton believed every consumer deserves the opportunity to benefit from discount shopping, every working family deserves to benefit from the savings and opportunity of a Wal-Mart in their community," Combs added.

"Wal-Mart saves the average American household more than $2,300 per year -- which would pay almost half the average tuition at a public four-year university," said Courtney Lynch, head of Lead Star, a company based in Fairfax, Va., that provides leadership training for women in business.

"Working families can use the money they save at Wal-Mart to buy more of what they need every day or to invest in a better and more secure future," noted Lynch, who also serves on the new group's steering committee.

Combs and Lynch pointed to a recent Pew Research Center poll that found "81 percent of those with a Wal-Mart nearby say it is a good place to shop."

The survey also found that "Wal-Mart's most faithful shoppers are ... those with annual incomes below $30,000" and seven in ten who make between $30,000 and $49,999 think Wal-Mart is good for their area.

Combs added: "I know Wal-Mart is good for working families because I know men and women in my congregation who work at Wal-Mart, shop at Wal-Mart and whose lives are touched by the compassion and commitment of this company every day.

"They support Wal-Mart because in so many ways, Wal-Mart supports them and indeed, the American people too," he noted.

Working Families for Wal-Mart has a website to provide an alternative source of information from that dispensed by such organizations as WakeUpWalMart.com, which is sponsored by the United Food and Commercial Workers International Union (UFCW), and WalMartWatch.com, which receives support from the UFCW and the Service Employees International Union.

As Cybercast News Service previously reported, this financial backing has led some supporters of the retail chain to claim that those groups are only interested in unionizing Wal-Mart workers.

However, Paul Blank, campaign director for WakeUpWalMart.com, told Cybercast News Service that he was unimpressed with Working Families for Wal-Mart because company spokeswoman Sarah Clark told the Associated Press that Wal-Mart is the largest financial backer of the new group.

"That's clearly not an independent organization," Blank said.

Lynch acknowledged that Wal-Mart is funding the group's effort, but she told Cybercast News Service that additional financial sources are expected.

"We're still in the very, very early stages" of the project, Lynch said, but "Working Families for Wal-Mart is going to accept funding from a variety of individuals and organizations that share the desire to talk about the positive contributions Wal-Mart makes.

"Growth is inevitable in this project," she added. "In any given week, 100 million consumers go in and out their doors to purchase things, so there are many, many people who have good stories to tell about Wal-Mart."

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UPDATE 1-Wal-Mart is target of criminal probe over waste

Tue Dec 20, 2005              [back to top]

NEW YORK, Dec 20 (Reuters) - Wal-Mart Stores Inc. (WMT.N: Quote, Profile, Research) on Tuesday said the U.S. Attorney's Office in Los Angeles has informed the retailer that it is the target of a criminal probe involving the transportation of material deemed "hazardous waste" in allegedly improper vehicles.

In a filing with the U.S. Securities and Exchange Commission, the world's biggest retailer said it is being investigated for violating the Resource Conservation and Recovery Act.

According to the Wal-Mart, the government is investigating whether it improperly used its own trucks to transport material deemed hazardous to centralized facilities, rather than using certified hazardous waste carriers to transport that material directly to designated disposal sites.

The company previously disclosed that it had received a grand jury subpoena in the matter, looking at, among other things, the transportation of material from California to Nevada.

Wal-Mart said in the filing it is cooperating fully with the authorities, but cannot predict any potential loss or range of losses from the probe.

© Reuters 2006

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The Motley Fool Take Wal-Mart's Been Kicked

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Is all the negative press that Wal-Mart Stores Inc. (NYSE: WMT) has been receiving lately creating a buying opportunity? Look at a five-year chart comparing its stock performance with Target's (NYSE: TGT) and Motley Fool Stock Advisor (www.fooladvisor.com) pick Costco's (Nasdaq: COST). Target has nearly doubled, Wal-Mart is nursing a loss, and Costco falls in between. So on a peer basis, the stock is definitely lagging. Still, the firm has been performing well. Sales for the completed fiscal year ended January 2001 were $181 billion. They rose to $285 billion for fiscal year 2005. Net income went from $6.2 billion to $10.3 billion. Analysts expect Wal-Mart to increase earnings 14 percent annually for the next five years. When you compare Wal-Mart with Target and Costco on a PEG ratio basis - which compares the stock's price (in terms of its price-earnings ratio) to its growth rate - Wal-Mart and Target both post 1.2, which looks like a bargain compared with 1.7 for Costco. With reasonable growth prospects still ahead, the stock is priced in line with at least one top-tier peer and well below another. Wal-Mart seems to have paid a price on Wall Street for all the bad publicity. In the future, the stock should be able to increase its stock price in line with its peers. If it does not, at some point the stock will become an overwhelmingly compelling value investment

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Wal-Mart Subject Of Criminal Probe

Yvonne Lee
All Headline News
December 20, 2005                 [back to top]

(AHN) - Federal prosecutors are investigating Wal-Mart for its handling of merchandise classified as hazardous waste, the company said Tuesday.

Wal-Mart Stores Inc. said in a regulatory filing that the criminal probe centers on the transport of hazardous materials from stores in California to a return center in Las Vegas, reports The Associated Press.

"The government did not challenge the manner in which we disposed of hazardous-waste material once it arrived in the return center, but rather the transport of the material to the return center," said Wal-Mart spokesperson Sarah Clark said.

Federal prosecutors accuse the company of possibly violating the Resource Conservation and Recovery Act. It mandates that hazardous waste be shipped straight to a disposal site via a certified hazardous waste carrier, according to Wal-Mart.

The world's largest retailer said it normally moves hazardous materials, which include damaged aerosol cans and paint, to return centers, then takes the materials to sites approved for hazardous waste disposal.

Clark said the Wal-Mart is cooperating with authorities.

"We are currently reviewing our transportation procedures, taking the necessary action to correct any regulatory problems," Clark said.

Copyright © All Headline News - All rights reserved.

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Wal-Mart's World to Swell in '06

DECEMBER 19, 2005             [back to top]

BENTONVILLE, Ark. -- The world's biggest retailer said last week it intends to only get bigger. Wal-Mart Stores, Inc. here on Friday confirmed that its plans for the coming year include 370 U.S. units, larger stores for Canada, and up to 230 new stores in other countries.

Just last week, Wal-Mart acquired 545 new stores, along with more than 50,000 new associates, in Japan and Brazil, capping a year of robust growth. On Thursday, the company's proposed deal to acquire a majority interest in The Seiyu Ltd., a leading Japanese chain with 405 stores, was given the nod by Seiyu shareholders. This followed an announcement Wednesday that Wal-Mart would acquire 140 Sonae stores in Brazil.

Friday, Wal-Mart said it would build expanded stores, offering fresh food and a wider selection, in Canada next year.

These developments all followed the September announcement that Wal-Mart had purchased a one-third interest in Central American Retail Holding Co. (CARHCO) with 363 supermarkets and other stores in Guatemala, Honduras, El Salvador, Nicaragua, and Costa Rica.

Wal-Mart's growth plan 2006 includes opening as many as 600 new stores and clubs in various spots on the globe. Wal-Mart currently operates more than 5,400 stores and clubs worldwide.

"For many companies, any one of these announcements would be major news for the year," admitted Mike Duke, vice chairman, Wal-Mart Stores, Inc. "We are so grateful for the loyalty of customers all over the world who shop with us and allow us to grow. Clearly, our savings matter to working families -- in any currency."

Wal-Mart Canada confirmed last week that the company would expand three Wal-Mart stores in Ontario in late 2006. When complete, the stores will dedicate additional space to enhanced product offerings in its customers' most popular departments: food, fashion, electronics and home products. Wal-Mart Canada operates 257 Wal-Mart discount stores and six Sam's Clubs.

As of Nov. 30, 2005, Wal-Mart operated 1,224 discount stores, 1,929 Supercenters, 558 Sam's Clubs, and 97 Neighborhood Markets in the United States, and 1,707 units in international markets as follows: Argentina (11), Brazil (155), Canada (263), China (51), Germany (88), South Korea (16), Mexico (768), Puerto Rico (54) and the United Kingdom (313).

© 2005 VNU eMedia Inc. All rights reserved.

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Wal-Mart vs. the world

Overseas expansion is critical to growth, but success beyond the U.S. will be difficult.

By Matthew Boyle
FORTUNE
December 19, 2005           [back to top]

NEW YORK (FORTUNE) - While its retail competitors are grappling with what has proved to be a sluggish holiday season in the United States, Wal-Mart has been busy overseas, snapping up the Brazilian operations of Portuguese retailer Sonae for $757 million, and confirming the long-rumored opening of two or three supercenters in Canada in 2006.

"Expanding into new countries will play a critical role in whether or not Wal-Mart meets its aggressive growth goals," says Retail Forward analyst Sandy Skrovan. But will Wal-Mart's recent moves put the squeeze on its overseas rivals, or will it get squeezed itself?

With sales growth slowing in its home country—quarterly same-store sales increases (excluding Sam's Clubs) have dipped from between 7%-9% in 2002 to 1%-3% this year—Wal-Mart has little choice but to look outside America for a boost. International operations currently account for only about a fifth of Wal-Mart's sales, but the company says it hopes to increase that proportion to a third eventually.

Big in Brazil By adding Sonae's 140 stores to the ones it acquired back in 2004 from struggling Ahold, Wal-Mart bolstered its position as the third-largest retailer in Brazil. It now operates nearly 300 stores in Latin America's biggest economy. Meanwhile in Canada, the beast of Bentonville already has about 260 discount stores, which do not sell food, and a handful of Sam's Clubs.

All told, Wal-Mart currently operates in 15 countries besides the US, but its record outside these shores is spotty. It has struggled in Japan, failed miserably in Germany, and lately has even had troubles in the United Kingdom, where management of its Asda subsidiary recently admitted to analysts that some of its stores were "unshoppable" on occasion. One exception: Its Mexican operations are thriving.

As it plots its latest expansion, Wal-Mart would do well to pore over new research from Bain & Co. The consultants there analyzed about 100 overseas expansion moves by retailers between 1989 and 2004 and found that less than one in three were successful. Expansions into Latin American countries had only a 40% success rate, Bain found, while forays into Canada were much more likely to do well (over 80% were successful).

An analysis of Wal-Mart's overseas opportunities by Retail Forward confirms those findings. Wal-Mart's move into Brazil, for example, is forecast to have low prospects for growth and high risk, making it a poor choice for expansion. Canada, like Australia and the United Kingdom, is viewed as a much less risky proposition, with better growth prospects.

Tough prospects That stands to reason, as the U.S. is much closer culturally to its northern neighbor than it is to Latin America, but Bain found other reasons why expansion plans fizzle. For example, retailers make things difficult for themselves when they enter a market with clear and established leaders. Both Brazil and Canada have such frontrunners in Companhia Brasileira de Distribuição and Carrefour (Brazil) and Loblaw and Sobeys (Canada).

And while both Brazil and Canada are large markets, are they healthy enough to justify the massive investment? Brazil's retail scene is not exactly robust, and brutal price wars have turned at least one Canadian province, Ontario, into a "bloodbath," according to one analyst.

Wal-Mart (Research) already gets a substantially lower return on assets in international markets (6%) than it does with its domestic operations (24%), according to a report issued last week by Merrill Lynch analyst Virginia Genereux. Even so, she writes, "Wal-Mart's international operations are on balance a positive in our view, because the contribution of revenue and earnings growth outweighs the slight dilution to consolidated returns." Indeed, the 140 Sonae outlets generate annual revenue of $1.4 billion.

Theories abound as to why expansion has bedeviled retailers in the past. In a recent edition of the McKinsey Quarterly, authors John Horn, Dan Lovallo and Patrick Viguerie write that companies entering new markets frequently fail to learn from history. A "myopic focus on the market entry decision," they argue, prevents management from analyzing a group of similar past cases, which can provide a valuable reality check. One common expansion error is the "brick wall effect," where executives assume that competitors won't adjust their prices, broaden their product offerings, or otherwise change strategy in response to the entry.

It's been said that Wal-Mart's widely admired logistical prowess only extends to countries that it can drive a truck to. Brazil provides a perfect opportunity for Wal-Mart to prove those doubters wrong. Given its stagnant stock—flat in 2004 and down 5% so far this year—and the bad publicity surrounding recent Wal-Mart bashing documentaries, it's clear that investors are desperate for some good news out of Bentonville. Boa sorte, as the Brazilians would say. Good luck.

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Wal-Mart: Merchant of Shame

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Take Action: Sign the women-friendly workplace consumer's pledge Host a screening of the Wal-Mart movie, "The High Cost of Low Price"

The National Organization for Women, its Board of Directors, and its members have received numerous complaints regarding workplace environment and employment practices at Wal-Mart stores, distribution centers, regional and corporate offices. We have considered the extensive public record on cases filed against Wal-Mart and found the allegations disturbing. They are sex discrimination in pay, promotion, and compensation, wage abuse, exclusion of contraceptive coverage in insurance plans, violations of child labor laws and the Americans with Disabilities Act, and discrimination on the basis of sexual orientation. Cases have also been filed regarding firing pro-union workers, eliminating jobs once workers joined unions, and discouraging workers from unionizing. In addition, Wal-Mart continues to refuse to dispense Preven, the "morning-after pill."

Consistent with the goals of NOW's Women Friendly Workplace Campaign, NOW names Wal-Mart a Merchant of Shame. Wal-Mart's dismal record contradicts the worker-friendly image it projects to the public. Join NOW in its campaign to demand changes in Wal-Mart's unfair practices. Hundreds of activists demonstrated outside a Wal-Mart store in the Twin Cities, Minn. area on Saturday, June 22, 2002. Photo by Lisa Bennett.

Chapters Take Action on Wal-Mart This Holiday Season (11/05) NOW Kicks Off Wal-Mart Holiday Shopping Campaign (11/05) Spotlight on Wal-Mart's Shameful Practices (09/05) Upcoming Movie to Expose Wal-Mart's Anti-Women, Anti-Worker Practices (June 2005) Wal-Mart Tries to Respond to Critics with Newspaper Ads (January 2005) Wal-Mart: Always Low Prices? or Always Discriminates? (Fall 2004) Activists Gather at Las Vegas Wal-Mart to Protest Workplace Abuses (7/04) Working Women Won't Have to Settle for Less: Wal-Mart to Face Country's Largest Civil Rights Class Action Suit (6/04) Wal-Mart Announces New Diversity Initiatives at Annual Board Meeting; NOW Skeptically Awaits Implementation of New Worker-Friendly Policies (6/04) Good News! Case Against Wal-Mart Gets a Green Light (4/04) Grocery Store Workers Caught Up in Wal-Mart's Race to the Bottom (11/03) Gender-Pay Activists Step Up the Pressure on Wal-Mart (6/03) NOW Brings "Merchant of Shame" Campaign Into Wal-Mart Stores Nationwide (6/03) Wal-Mart Execs' Testimony Could Help Sex Bias Suit (5/03) Angry Workers Up The Ante At Wal-Mart (4/03) NOW Protests Wal-Mart Workplace Abuses Statement of NOW President Kim Gandy (9/02) Wal-Mart: The Facts Always In Court; Always Wal-Mart: Legal Developments Feminists Celebrate Judge's Ruling to Grant Class-Action Status to Wal-Mart Discrimination Suit (9/02) NOW Declares Wal-Mart A Merchant of Shame (Fall 2002) News Release: NOW Blasts Wal-Mart Workplace Abuses, Names the Company a Merchant of Shame (6/02) Women-Friendly Workplace and Campus Campaign Summary

Copyright 1995-2005, All rights reserved. Permission granted for non-commercial use. National Organization for Women

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Wal-Mart Uses "Secret" Chinese Sweatshops to Produce Holiday Goods

NTDTV
Epoch Times International
Dec 17, 2005                                [back to top]

If you were thinking of heading to Wal-Mart this holiday season in search of some discount gifts, you might want to think again. Many of these goods were produced in "secret" sweatshop factories in China, by workers who suffer under appalling conditions.

According to the National Labor Committee and China Labor Watch, workers at factories like the one in Lungcheong, for instance, are forced to work 13 hours a day, 6 to 7 days a week, for as little as 18 to 33 cents an hour.

What is more, the Chinese government helps to keep these factories from the public eyes, and away from proper scrutiny.

Mr. Li Qiang of China Labor Watch told NTDTV of his group's efforts to publicize the situation at Lungcheong. "We are a small organization and we obviously have no way of investigating all of the factories, plus they are all secret, but we hope that they will change conditions not only in these two factories, but in all factories throughout China. They need to absolutely publicize what factories they work in. This is the only way to have a good beginning, to have a positive change."

Charles Karnaghan, executive director of the National Labor Committee, says that it is Wal-Mart's willingness to continue to roll back their production costs, always at the cost of the worker, that has created the especially appalling situation in these Chinese factories.

Mr. Karnaghan said, " At some point that model cannot go forward unless you begin to drag wages down across the developing world, and eliminate benefits and roll back respect for women's rights, and worker's rights, and human rights."

Wal-Mart claims that it has addressed these concerns by adopting methods of internal regulation and corporate standards that supposedly aim to combat these types of worker exploitation and abuse, but the NLC is convinced that these measures are largely ineffective.

Karnaghan continued, " It's trying to confute the American people with a corporation's code of conduct."

So, what can we do this holiday season to help brighten the lives of these desperate Chinese workers?

Li Qiang added, "Americans should put pressure on Wal-Mart to change the situation there, and to follow Chinese law in China."

Copyright 2000 - 2005 Epoch Times International

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Anti-Wal-Mart Activists See Local Threat in World Trade Talks

by Michelle Chen
NewStandard                    [back to top]

Dec 16 - For over a decade, the residents of Greenfield, Massachusetts have been snubbing the biggest names in retail, aiming to protect local businesses and neighborhoods from corporate "sprawl." Backed by tight zoning regulations, including size limits for retail stores, local activists have kept Wal-Mart at bay and managed to avoid the wave of mega-stores engulfing the rest of the country.

But on the other side of the planet, negotiators at the World Trade Organization (WTO) meeting in Hong Kong are discussing trade rules that could empower corporations to override policies like Greenfield's zoning laws. According to critics of so-called "big box" retailers, the expansion of a WTO accord called the General Agreement on Trade and Services (GATS) may make it easier for giant retailers to squelch local laws.

Under GATS, which was adopted by more than 140 WTO member nations, federal, local and state governments cannot limit the size and operations of foreign service-sector corporations. If a community enacts such measures, a foreign government can challenge these "barriers to trade" through a WTO dispute-resolution process. In signing onto the accord in 1994, the US Congress committed several major sectors, including telecommunications, financial services and retail stores, to GATS rules.

In the ongoing WTO negotiations, corporate lobbyists are pushing proposals to strengthen the provisions of GATS and further constrain the authority of governments to control the terms on which corporations can do business in their communities. According to a report by the advocacy group Public Citizen, enhancing GATS could gut the state and local land-use regulations that hundreds of communities across the country have used to block mass retailers from setting up shop in their neighborhoods.

"Zoning is one of the last bastions of local control," said Al Norman, one of the Greenfield activists who campaigned successfully against a Wal-Mart development plan in the early 1990s. He now runs Sprawl-Busters, a group that helps communities develop strategies to keep out big-box chains. "To me," he argued, "it's unconstitutional for a trade agreement to take away that statutory power."

Industry leaders publicly support GATS as a tool to crack open foreign markets, but they say it will not impact their expansion in the US.

"We certainly oppose retail restrictions, size restrictions here, domestically," said Paul Kelly, senior vice president of government affairs for the Retail Industry Leaders Association, which represents Wal-Mart, Home Depot and other chains. But in the US, companies will continue to sell their development plans "through good old-fashioned, shoe-leather lobbying," he told The NewStandard.

"We have no intention of working through [the] WTO to do any kind of backdoor preemption," he added.

Yet grassroots groups say that although GATS has not yet factored into domestic clashes with mega-stores, retail giants are not above capitalizing on international agreements to mow down community opposition. Even if US-based companies do not invoke GATS, they argue, the accord could still foster the US expansion of foreign-owned stores, like Sweden's IKEA and the Netherlands' Stop & Shop. At a 2002 US Department of Commerce conference, both these chains were listed among multinational corporations that were running up against local restrictions on the size and location of retail developments.

Stacy Mitchell, senior researcher with the Institute for Local Self Reliance, a community-development think tank, commented that since Wal-Mart's empire encompasses several thousand stores in 15 countries, she suspects they are "imagining that one of their subsidiaries in another country could be used to help… challenge a local land-use law in this country." For example, she said, Wal-Mart could enlist its Mexican sister-store, Wal-Mex, to battle a US GATS violation by proxy.

Norman said that even local governments that welcome chain stores would want their own officials, not the WTO, to have the final word. "Whether people want big boxes or don't want them," he said, "they certainly don't want some sort of international trade agreement to step in between them and their right to control land use."

Some officials have already expressed concern about the impacts of WTO agreements on domestic service industries, especially public services like water utilities. Earlier this year, the Montana and Utah legislatures passed resolutions urging federal authorities to protect state regulatory authority when negotiating trade policies.

But watchdog groups say that big-box retailers and other corporations that stand to gain from GATS are steering the US in the opposite direction. In 2002, for example, the Retail Industry Leaders Association and Wal-Mart issued complaints to the US Trade Representative about regulations in some countries that limited where and how large they could build stores. Similarly, an internal memorandum of the WTO's Working Party on Domestic Regulation targeted licensing requirements and "unreasonable environmental and safety standards" as impediments to trade.

"Instead of going back and fixing problems that have been exposed," said Sarah Johnson of Public Citizen's Global Trade Watch program, "trade negotiators are trying to put more things on the table."

Earlier this year, a WTO tribunal ruling intensified fears that GATS could subordinate domestic law to the free-trade regime. The government of Antigua charged that US state and federal bans on Internet-based gambling limited the market access of Antigua's gaming industry. The WTO ruled that the anti-gambling statutes violated GATS, though the laws ultimately survived through a loophole for regulations relating to "public morals."

Johnson told TNS the decision indicated that "the way that the GATS is being interpreted is kind of confirming worst nightmares."

The backdrop to the GATS controversy is growing evidence that, contrary to the claims of developers, unbridled mega-store expansion tends to undermine local economies. According to the University of California–Berkeley's Institute for Industrial Relations, compared to large retail businesses overall, Wal-Mart spent about 15 percent less per worker on wages and healthcare benefits. In suburbs and cities, Wal-Mart has generally displaced higher-paying jobs in comparable retail stores.

Nonetheless, with or without the help of the WTO, chain retailers keep finding room to grow. In Bennington, Vermont, for instance, Wal-Mart managed to muster enough local influence to stamp out a law banning retail developments larger than 75,000 square feet, which would have blocked Wal-Mart's expansion plans. The company launched a political advertising campaign, vastly outspending community organizers that supported the measure, and the policy was overturned in an April referendum.

When it comes to winning over planning authorities, Norman said that retailers are often successful because "local officials either are in the hands of the developers or don't know what their powers are to stop developers."

© 2005 The NewStandard.

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US House panel members urge FDIC delay Wal-Mart bid

Fri Dec 16, 2005          [back to top]

WASHINGTON, Dec 16 (Reuters) - A bipartisan group of lawmakers on the U.S. House Financial Services Committee on Friday asked the Federal Deposit Insurance Corp. to delay action on Wal-Mart's application to open a bank until the regulatory agency's board vacancy is filled.

"This application is clearly of sufficient importance to require that it be made by the members of the FDIC Board itself and only by a full Board without vacancies," wrote the group, which included Massachusetts Rep. Barney Frank, the panel's top Democrat, and Ohio Republican Rep. Paul Gillmor.

The 25 members also urged the FDIC to hold public hearings on Wal-Mart Stores Inc.'s <WMT.N> application, due to the significant public interest it has generated. Wal-Mart's application drew more than 1,000 comments, more than any other application subject to public commentary.

© Reuters 2005. All rights reserved.

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Is it a sin to shop at Wal-Mart?

By R. W. Dellinger
Friday, December 16, 2005            [back to top]

"Wal-Mart: The High Cost of Low Price" had its world premiere in New York Nov. 1 and L.A. opening two days later at the swanky Writers Guild Theater in Beverly Hills.

Since then, the 98-minute documentary, which was made on a shoestring budget of $1.8 million, has been shown at thousands of churches, synagogues, schools and other alternative outlets, including house parties. In fact, producer and director Robert Greenwald claims that with more than 3,000 screenings in 50 states, his film used the largest grassroots distribution in movie history.

Greenwald makes no pretense that his "Wal-Mart" is some kind of objective, balanced look at the world's biggest company.

"This is a movie about American families and American ideals, a movie about one corporation crushing the American dream for millions of ordinary people --- right or left, republican or democrat, red or blue," he has declared. "Wal-Mart is systematically destroying the fabric of our nation, pretending to be the great American workplace while at the same time showing thinly veiled contempt for working families, small business owners and the very people it employs."

In the film, lofty platitudes by Wal-Mart CEO Lee Scott and lavish company TV commercials of bubbly employees aren't just undercut but demolished by interviews with former workers, managers and executives who divulge alleged seedy business practices.

These include low base pay; coerced unpaid overtime; aggressive anti-union tactics; health-insurance packages that are so costly thousands of employees must turn to Medicaid; goods produced by foreign sweatshop labor; and the harm to local businesses and mom-and-pop stores when the company moves in.

Most of these corporate abuses have, of course, been dredged up before by both print and media journalists. But the detailed mixing of cold statistics with emotional ex-employee testimony --- although at times pretty disjointedly --- leaves a marked impression on many viewers.

But what makes the documentary most intriguing for Christians is the moral questions it raises. The Tidings recently addressed these issues with two Christian clergy: a minister/community leader who was instrumental in keeping a Wal-Mart supercenter out of Inglewood, and a local Jesuit theological ethicist.

The bottom line

The Rev. Altagracia Perez, senior pastor of Holy Faith Episcopal Church, is one of those interviewed in the "High Cost of Low Price" film --- interviewed, in fact, in her kitchen about organizing her congregation and working with the Coalition for a Better Inglewood.

"It was so grassroots," she told The Tidings, smiling. "We did it because we wanted to take a moral stand. We believed that our families should be able to survive in our country, being as wealthy and well off as we are. So for us, it was really a stand with poor families and with folks who need good jobs.

"There's no reason why Wal-Mart can't continue to offer a good price to customers and also pay their employees well. I mean, they make enough money where they can do that. And it might mean a little less profit. But it will mean that the people who make them great --- who are the workers on the ground --- are being compensated fairly for the riches that the company gets.

"The bottom line is not the dollar," she stressed. "The bottom line is the quality of life of the people who live in this community."

The battle lasted almost two years, Rev. Perez recalls, with the Arkansas-based company circumventing zoning ordinances, environmental impact reports, street closings --- "everything," including the city council. But in the end, an initiative passed to keep Wal-Mart from building one of its new supercenters, which includes a grocery warehouse, along with a Sam's Club.

(Just last week, Wal-Mart announced plans to build 50 of the supercenters throughout California.)

The thing that brought people out to vote against Wal-Mart was the company's reputation for being anti-union, she says, pointing out that supermarket union jobs are one of the last places in Inglewood where high school graduates can get a good job.

Rev. Perez is proud of her stand against Wal-Mart, although more recently she was part of a city delegation that presented the company with a community contract that, if agreed to, would bring a smaller version of the supercenter to her community. She stresses that jobs and benefits are life issues that more religious leaders need to pay careful attention to.

"I do think that right now the moral discussion in our society is way too narrow," she said. "We do want to respect life and the quality of life, but we have to do it on the meat-and-potatoes issues as well as the hot button issues. Families are not able to survive without more than one job because of the way the economy is going.

"So advocating for good jobs is an important moral stance to take as well. 'Cause we can want to support life, but what if people can't live because they can't afford to live. That's a contradiction."

'Social responsibilities'

When he was interviewed, Jesuit Father John Coleman had not seen "Wal-Mart: The High Cost of Low Price." But as the Casassa Professor of Social Justice at Loyola Marymount University, who holds the endowed chair in ethics for the school of liberal arts, he has some strong opinions on the business giant.

Like Rev. Perez, Father Coleman believes any company that claims the only bottom line that counts is profit is not a morally sound company. In addition to fiscal responsibilities to their owners to make money and customers to sell quality goods at competitive prices, he says all retail firms also have social responsibilities to the communities they operate in and the people who work for them.

From a Catholic point of view, according to Father Coleman, paying a living wage and allowing workers to engage in collective bargaining are core issues.

"Catholics hold for something equivalent to a living wage, so that people who work should have enough money to live a minimally decent life," he said. "You can't really do that working at Wal-Mart, especially when most of the employees can't afford the health plans they offer, either. So, basically, you have this anomaly that people have jobs that keep them in poverty."

Moreover, the church has strongly supported workers' right to organize for more than a century in papal encyclicals (e.g., Laborem Exercens by Pope John Paul II, 1981) to bishops' pastoral letters. As a result, Father Coleman points out that the company's often reported aggressive anti-union tactics run completely counter to Catholic social teachings.

Father Coleman is further troubled by Wal-Mart's practice of putting pressure on suppliers, especially in the textile industry, to decrease their own margin of profit to keep prices of socks, underwear and others items at rock-bottom prices.

"That means suppliers, too, have to pay lower wages," he noted. "So it's a race to the bottom on wages. And the company is so massive that you're at a competitive disadvantage if you can't sell to them.

"But if you do sell to them, you have to cost-cut an awful lot because they keep putting enormous pressure on you, which is how you get these Third World sweatshop conditions. So the whole process actually drives down labor standards around the world."

The social justice professor is also concerned with how the company drives smaller businesses and mom-an-pop stores out of business when it moves into a new area.

On the one hand, this can be chalked up to Wal-Mart's massive buying competitive advantages. But on the other hand, he observes, for the market place to work well classically in Adam Smith's terms, there must be true competition.

Finally, Father Coleman says there is a major hypocrisy about the company encouraging its low-paid employees to apply for Food Stamps and Medicaid, which "Wal-Mart: The High Cost of Low Price" documents. He points out that the government is subsidizing a business that's actually undermining the standard of living of members of the community.

When asked what Catholics trying to live a moral, ethical life should do about the super company, the priest didn't hesitate. "They can boycott it," he declared, "just as people have said they're going to try to buy coffee that supports fair labor practices. Why would you support it? Just because you can save a few dollars, a few cents?"

After a moment, he added, "Would I say from the pulpit, 'You can't go to Wal-Mart'? No. But I would say, 'Now, look. Given Catholic principles of a living wage and support of unions, and given Wal-Mart's history and size --- and how the company is unapologetic about what it does --- target them!"

The Tidings Corporation ©2004 

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A sour note for choir at Wal-Mart

BY CHRISTINE ARMARIO
December 16, 2005               [back to top]

A festive group of high school choir students from Central Islip singing at an Islandia shopping center discovered over the weekend that some people were not in the holiday spirit.

After entering a Wal-Mart store, the choir was quickly asked to leave before even starting to sing its first song.

The Central Islip High School concert choir had just finished a performance at the United Methodist Church off Veterans Memorial Highway, when the students proposed to go caroling in the shopping center across the street.

Their director, John Anthony, approved the move and the group of about 30 students found warm welcomes at the Stop & Shop grocery store and other shops in the center. That is, until they entered Wal-Mart.

Right away, a store manager approached the award-winning group, announcing that they did not have an appointment and that the sheer size of the group posed a fire hazard, Anthony said.

The teens then sang one song - "Guide Me," a classic Welsh tune - to the delight of the customers.

"Sing more!" Anthony said the shoppers were screaming. But Wal-Mart was adamant and even called police. The students left peacefully before police arrived and no arrests were made.

The choir's merriment quickly disintegrated, the director said. "The kids were just 'Bah humbug!'" he added.

Wal-Mart officials released a statement this week saying the choir's appearance was unscheduled and created a fire code violation. "For their safety and the safety of our customers, we asked them to move," the statement read.

Wal-Mart has offered the school an opportunity for the choir to return at a scheduled time. The store also made an undisclosed donation toward the choir's trip next summer to Austria, where they will be one of three student choirs from the United States to perform at a celebration of the 250th anniversary of Wolfgang Amadeus Mozart's birth.

Copyright 2005 Newsday Inc.

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Brazil's top retailer names CEO as Wal-Mart prowls

[back to top]

SAO PAULO, Brazil, Dec 16 (Reuters) - Companhia Brasileira de Distribuicao <CBD.N><PCAR4.SA>, Brazil's top retailer, named a new chief executive on Friday, just days after Wal-Mart Stores Inc. <WMT.N> aggressively expanded its reach in Latin America's biggest market.

CBD, as the company is widely known, said in a statement that Cassio Casseb would assume the post, which was vacated four months ago when Augusto Cruz stepped down.

Casseb, 50, is an engineer who has spent most of his career in the financial sector. He has held several high-profile posts, including serving as president of government-run Banco do Brasil <BBAS3.SA>, a job he quit in November of last year because of accusations he failed to declare a U.S. bank account to Brazilian tax authorities.

He has denied the charges.

Casseb takes the helm at CBD as it faces fierce competition from France's Carrefour <CARR.PA> and Wal-Mart, which has been swiftly increasing its presence in Brazil in the last two years.

Wal-Mart, the world's biggest retailer, paid $757 million earlier this week for the Brazilian operations of Portuguese conglomerate Sonae SGPS SA <SON.LS>, moving it closer to the No. 2 ranking among retailers behind CBD and Carrefour, respectively.

The deal gave Wal-Mart a total of 295 outlets in 17 of Brazil's 26 states. Combined, Wal-Mart and Sonae rang up 10.4 billion reais ($4.46 billion) in sales in 2004, while Carrefour had 12.1 billion reais in revenue and CBD raked in 15.4 billion reais, according to the Brazilian Supermarkets' Association.

Founded in 1948 in Sao Paulo by the Abilio Diniz family as a corner bakery, CBD is now a 558-store chain better known in Brazil by the name of its flagship supermarket, Pao de Acucar.

Since May, the chain has been jointly owned by the Diniz family and the French retail group Casino Guichard-Perrachon & Cie. <CASP.PA>, which paid more than $520 million in cash for a 50 percent stake in a new holding company that controls CBD.

CBD plans to invest some 2.5 billion reais in the next four years, when it plans to open 160 new stores.

© Reuters 2005. All rights reserved.

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Wal-Mart wins Japan Seiyu's approval for rescue

Reuters
Thu Dec 15, 2005                [back to top]

TOKYO, Dec 15  - U.S. retailer Wal-Mart <WMT.N> on Thursday won approval from Seiyu Ltd.'s <8268.T> shareholders for a $1 billion rescue package for the struggling Japanese retailer, which will make it a Wal-Mart unit this month.

Ed Kolodzieski, Seiyu's newly installed chief executive sent from the U.S. retail giant, said the fresh fund injection is an expression of confidence in Seiyu and the Japanese market.

"The company makes this investment because it sees a lot of long-term, bright possibility," he told a news conference.

"Seiyu today is better positioned than it has been in the past ... We are confident in the future we'll get to see the dividends of the work that has taken place in the past."

Kolodzieski, 45, said his first priority was to learn and understand the needs of Japanese customers.

Under the deal, Wal-Mart will inject 67.5 billion yen ($574.3 million) to take a controlling 53.56 percent voting stake in Seiyu, up from 42.28 percent, allowing the world's biggest retailer to step further into the crowded Japanese market.

Mizuho Financial Group Inc. <8411.T>, Japan's second biggest banking group by assets, will also inject 47.5 billion yen through the purchase of preferred shares.

Seiyu, Japan's fourth-biggest retailer with 400 stores, last month nearly doubled its net loss forecast for the year to December to 13.5 billion yen, citing slower-than-expected improvement in its profit margin.

Restructuring, high costs and frequent changes in sales policy following reforms led by Wal-Mart have added to its problems.

It would be Seiyu's fourth straight year in the red.

Analysts see red ink for Seiyu again next year due to expected asset impairment charges. ($1=117.53 Yen)

© Reuters 2005. All rights reserved.

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Wal-Mart in global expansion push

BBC NEWS
Published: 2005/12/15  [back to top]

US retail giant Wal-Mart has embarked on a global expansion and acquisition spree, with a Japanese takeover and a doubling of its presence in Brazil. Shareholders in Japan's fifth biggest retail group Seiyu have approved a $1bn rescue deal from Wal-Mart.

Under the agreement, Wal-Mart will raise its stake in Seiyu - which in turn will become a Wal-Mart subsidiary.

Wal-Mart also doubled its outlets in Brazil by buying 140 stores from Portugal's Sonae for $757m (£427m).

Expansion plan

The stores, a mixture of hypermarkets, supermarkets and wholesale outlets, are scattered across southern Brazil.

We will continue to be opportunistic and look at both organic growth and mergers and acquisitions opportunities around the world Craig Herket, Wal-Mart

The deal means Wal-Mart now has 295 shops in Brazil, making it the country's third largest retail chain.

Last year Wal-Mart bought a 118-store supermarket chain called Bompreco for $300m from the Dutch retailer Ahold.

It also owns stores in Mexico, Argentina and Puerto Rico.

"We will continue to be opportunistic and look at both organic growth and mergers and acquisitions opportunities around the world," said Craig Herket, president of Wal-Mart Americas.

Looking East

Meanwhile, Wal-Mart's takeover of Seiyu will give it a foothold in the difficult Japanese market.

Under the rescue deal Wal-Mart will take a 53% stake in Seiyu in return for a 67.5bn yen ($585m; £328m) investment, while Japan's Mizuho Financial Group will invest 47.5bn yen.

Changes to sales policies, high costs and restructuring have hit Seiyu hard recently, and 2005-6 is expected to be the group's fourth straight year in the red.

Former Wal-Mart international vice president and chief operating officer Ed Kolodzieski will take over the running of the new Japanese unit.

"The company makes this investment because it sees a lot of long-term, bright possibility," he told a news conference.

"From our perspective, there is an incredible opportunity. There's clearly a lot of consumption in this country."

© BBC MMV

 [back to top]

Former Wal-Mart Exec Takes Helm at Seiyu

By HIROKO TABUCHI
Associated Press
December 15, 2005                   [back to top]

TOKYO -- A former Wal-Mart executive on Thursday took the helm at Japanese retailer Seiyu Ltd., which will become a subsidiary of the U.S. chain later this month as the world's largest retailer tries to grab a bigger share of Japan's lucrative but finicky retail market.

Seiyu shareholders approved the appointment of Ed Kolodzieski, Wal-Mart International's former senior vice president and chief operating officer, as Seiyu's new chief executive, the two companies said Thursday at a Tokyo news conference.

Tokyo-based Seiyu also said it would become a Wal-Mart subsidiary on Dec. 21, when the retail giant finishes acquiring 53.34 percent of Seiyu's shares through an investment of 67.5 billion yen ($585 million), announced last month.

The U.S. retailer's move was "an expression of Wal-Mart's confidence in Seiyu and the Japanese market," said Kolodzieski, a Seiyu board member since 2004. He replaces Noriyuki Watanabe, who remains Seiyu's chairman.

"I am joining a great company that has excellent associates and some unique and irreplaceable real estate," Kolodzieski said.

Since arriving in Japan in 2002, Wal-Mart Stores Inc. has been gradually raising its stake in Seiyu, the nation's fifth-largest chain with more than 400 supermarkets and department stores.

But Seiyu has since lost money, struggling to win over shoppers renowned for being both fickle and picky.

Last month, the retailer cut its profit forecast for the year through December, saying it expected a net loss of 13.5 billion yen ($117.4 million).

Kolodzieski said his main challenge is "to provide great merchandize at fabulous prices," at Seiyu stores, signaling his intention to tackle one problem Wal-Mart faces in Japan: It has not yet been able to offer the extremely low prices with which Wal-Mart built its brand in the United States.

Wal-Mart has also learned that it must adapt to Japanese tastes.

"The key to success is to understand the needs of customers here," Kolodzieski said, adding that he had already inspected Seiyu stores across the country to study the Japanese market.

The new chief executive officer, flanked by Watanabe and Wal-Mart Stores' Vice Chairman Michael Duke, did not give more details of a new strategy for the ailing retailer. But he said Wal-Mart will concentrate on existing Seiyu stores for now, rather than pursing further mergers.

Copyright 2005 Newsday Inc.

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WAL-MART'S PUBLIC IMAGE CAMPAIGN

MacNeil/Lehrer Productions
December 14 , 2005                       [back to top]

Wal-Mart, the world's largest retailer, rolled out a campaign to combat negative publicity and restore confidence in the chain's heavily criticized business practices.

SPOKESMAN: We've incorporated a wind turbine into our power needs --

PAUL SOLMAN: In Aurora, Colorado, a propeller helps power a highly publicized, brand-new, eco-friendly Wal-Mart, --

PAUL SOLMAN: This is like foam or something.

PAUL SOLMAN: -- which also recycles.

SPOKESMAN: We're using tires that have been recycled as the sidewalk itself.

PAUL SOLMAN: Plus signs powered entirely by solar cells; the store heated with the help of re-used frying oil; low-energy lights that shoppers trigger on and off when they walk by. It might seem to be evidence of a new, kinder, gentler Wal-Mart. Spokesperson Mona Williams says that's because the company is listening to its critics.

MONA WLLIAMS: We've talked to environmentalists, we've talked to NGOs; we've talked to people in neighborhoods. We've really reached out to say: What should we be doing differently? What can we do to be a better citizen? What can we do to be a better company, and we've listened to those folks, and that's why, I think, you're seeing a lot of the changes that you're seeing right now.

PAUL SOLMAN: Wal-Mart's better citizenship was on public display during Hurricane Katrina, when it was widely seen to have served local communities better than FEMA did.

SPOKESMAN: Socks, underwear, T-shirts, toothpaste, mouthwash, everything individually separated by pattern.

PAUL SOLMAN: Wal-Mart's come out for raising the minimum wage, underwrites PBS's Tavis Smiley Show and National Public Radio. Why all of this now? Well, years of criticism, the need to expand to more urban climbs and an uneasy Wall Street may explain the morphing of Wal-Mart. Its expansion plans, for instance, have run into more and more resistance of late. Its stock has drooped some 30 percent the past five years after soaring 700 percent in the previous five.

WORKER: Give me a W-A-L -

PAUL SOLMAN: And despite the usual gung-ho hosanna that ushered in the Aurora store, Wal-Mart's finding that, these days, it's not even easy being green.

SPOKESMAN: The majority of the back wall of this store is a product called solar wall.

PAUL SOLMAN: The Sierra Club said of Aurora: "One store out of thousands does not make for an environmental champion." Others dubbed the store part of the new Wal-Mart "charm offensive."

SPOKESPERSON: One, two, three.

SPOKESMAN: There we go.

GROUP: Yea! (Applause)

PAUL SOLMAN: And the same week this store debuted for the media and public, so did a national anti-Wal-Mart campaign, spearheaded by a film, "The High Cost of Low Prices."

SPOKESMAN: This movie represents an amazing grassroots effort to try and steer the national dialogue.

PAUL SOLMAN: The film has played at more than 7,000 neighborhood venues like this one and makes vivid the by-now familiar litany of charges: Wal-Mart destroys mom and pop shops and the main streets they anchor; it exploits workers, foreign and domestic, abuses illegal aliens.

And how did this Colorado audience, not far from Aurora, feel about Wal-Mart, post- screening?

CAROLE CORE: I hope the mainstream pick it up and the average American sees it and finally gets a clue and opens their eyes that just because they're getting cheap deals on toilet paper doesn't mean that it's helping our economy.

PAUL SOLMAN: The hottest charge of late is that Wal-Mart hurts the economy by fobbing off its poor employees onto Medicaid, rather than provide healthcare itself.

An internal memo, leaked to the New York Times, has fueled the fire. In it, Wal-Mart admits that: "Critics are correct. Wal-Mart has a significant percentage of associates and their children on public assistance," and says that Wal-Mart might attract a healthier, more productive work force by, among other things, trying to dissuade unhealthy people from coming to work at Wal-Mart.

Now in fact, the memo also included suggestions like in-store health clinics and a healthier employee diet, but overall it hardly put Wal-Mart's best face forward.

As a result, the memo, like the film, has become a key weapon in the "Wake-Up Wal-Mart" campaign.

SPOKESPERSON: This is an internal memo that was released to the New York Times and to me illustrates their lack of values and morality.

PAUL SOLMAN: In fact, says Wake-Up Wal-Mart's Paul Blank:

PAUL BLANK: If we allow the Wal-Mart business model to continue, then what's going to happen is other corporations are going to follow it. They're basically becoming a bulldozer paving the way to the bottom.

PAUL SOLMAN: Wal-Mart's response, of course, is that its model provides rock-bottom prices to less affluent and genuinely appreciative Americans.

GLENDA SCOTT: I love Wal-Mart. I mean I could open my purse, I have a receipt for every day. I'm in Wal-Mart every day.

SARAH WOODMAN: I'm for Wal-Mart, all for Wal-Mart. Wal-Mart's great.

PAUL SOLMAN: Why?

SARAH WOODMAN: Because it's cheaper prices.

PAUL SOLMAN: Backing up such statements is a new pro-Wal-Mart film, not bankrolled by the company, which features a town, consumers and employees who've all supposedly benefited from Wal-Mart, like Sharon Reese.

SHARON REESE: The first time I went to the dentist, actually got my teeth cleaned. I've never done that before, you know what I mean, and to actually be able to go to a doctor when I'm sick, right then, you know, and I don't have to wait six hours to be seen.

PAUL SOLMAN: Mona Williams has data to support this anecdote.

MONA WILLIAMS: We did our own surveys and found that before coming to work at Wal-Mart, 7 percent of our associates were on Medicaid or some other form of public assistance. After two years of employment with Wal-Mart, that number had dropped to 3 percent. So that's more than 50,000 people that we've pulled off the public assistance rolls.

PAUL SOLMAN: And Wal-Mart's health insurance numbers seem comparable to the retail sector in general. On the other hand, given all the negative publicity about Wal-Mart, and with its hope for future growth concentrated in the North, on the coasts, in the more urban, more liberal blue states, says union activist Paul Blank --

PAUL BLANK: If you look at the core issues, that make the blue states blue: Health care, economic security, no discrimination, those are the issues that this campaign is about and those are the issues that Wal-Mart is on the wrong side of, and that's why Wal-Mart is going to have a problem expanding.

PAUL SOLMAN: Pro, con, pro, con. The debate over Wal-Mart continues, even in its own stores. A woman giving out Doritos samples was a Wal-Mart skeptic.

OLDER LADY: I hope that Wal-Mart doesn't ace out all of the other wonderful grocery stores we have.

PAUL SOLMAN: But an elf promoting Keebler Crackers didn't understand why Wal-Mart was under attack.

PAUL SOLMAN: You don't get it?

PAUL SOLMAN: Wal-Mart itself, however, says the times are changing.

MONA WILLIAMS: We are light years ahead of where we were even two or three years ago. I think we have spent the last couple of years making sure that we have weeded out the so-called "bad apples," managers who would let cost pressures push them to do the wrong thing.

PAUL SOLMAN: But in that case, why is Wal-Mart still such a target? Perhaps because its size and success symbolize what worries so many these days: The inexorable, often inhuman march of the market system in the age of globalization.

"Is Wal-Mart villain or symbol?" we asked the maker of the anti-Wal-Mart film, Robert Greenwald.

ROBERT GREENWALD: I would say Wal-Mart is both. I would say Wal-Mart is the poster child for a series of corporations and they're the leader of the pack in many ways given their size and given their practices in terms of multinational corporations and the problems that they're creating.

PAUL SOLMAN: But what if Wal-Mart really is changing? Consider its response to Hurricane Katrina: Replenishing its own devastated stores, giving out water and other supplies free to the communities in which the Wal-Mart stores were based.

Katrina marked a turning point for CEO Lee Scott, according to Mona Williams, who says the boss asked his top executives:

MONA WILLIAMS: What if we were that good in every aspect of our business and also reaching out with social responsibility, what kind of company could we be? Could that take us to the next level?

PAUL SOLMAN: The next level of corporate responsibility that is. The fear of critics of course is that it's all for show. And that's why folks like Wake-Up Wal-Mart are still out in force -- to compel Wal-Mart to change for good -- even it's begun to change already.

Copyright ©2005 MacNeil/Lehrer Productions. All Rights Reserved.

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Wal-Mart Buys Brazil Stores for Expansion

By ALAN CLENDENNING
AP Business                           [back to top]

SAO PAULO, Brazil — Wal-Mart Stores Inc. boosted its presence in Latin America on Wednesday, buying 140 Brazilian hypermarkets, supermarkets and wholesale outlets from a Portuguese conglomerate.

The 635 million euros ($764 million) purchase from Sonae SGPS SA fits into Wal-Mart's strategy of rapid overseas growth, and executives with world's largest retailer said they want to expand more in Latin America and elsewhere outside the United States.

Herket and other Wal-Mart executives declined to identify other countries that Wal-Mart may target in Latin America, but said growth could come through construction of new stores or acquisitions of other retailers.

Wal-Mart also owns stores in Argentina, Mexico and Puerto Rico. The company in September bought a 33 percent stake in Costa Rica-based Central American Retail Holding Co., which owns 363 stores in Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua.

Wal-Mart's international sales and profitability has grown faster than in the United States. In the most recent quarter ending Oct. 31, the international segment accounted for 20 percent of Wal-Mart group sales, up 12 percent from a year before.

The company's quarterly operating income from international operations grew 14 percent year-on-year, more than double the 6 percent rate for the Wal-Mart Stores division that runs its flagship U.S. operations.

With the Brazil purchase, Wal-Mart strengthens its spot as the No. 3 retailer in Latin America's most populous country, and essentially bumps No. 4 Sonae off the chart.

Wal-Mart Brasil president Vicente Trius said the company isn't concerned about pushing its position higher. But analysts predicted the retailer will eventually surpass the market leader, Brazil's Companhia Brasileira de Distribuicao SA, or at least the second largest player, France's Carrefour SA.

"I don't think Wal-Mart's appetite will stop here; the company's focus is to be the top player or second in markets where they operate," said Alexandre Garcia, a retail analyst with the Agora Senior brokerage in Rio de Janeiro.

Wal-Mart last year purchased a Brazilian supermarket chain from Dutch retailer Royal Ahold NV for $300 million (250 million euros), giving Wal-Mart 120 stores in northeastern Brazil.

The deal with Sonae was slightly more expensive than the $700 million that analysts expected.

It gives Wal-Mart stores under four different names across Brazil's more populous south, and the company has no plans to change the names. Wal-Mart also gets four distribution centers, seven restaurants, three gas stations and a meat packing plant.

Wal-Mart will now have 295 stores in 17 of Brazil's 26 states, and plans to open another 15 Brazilian stores next year.

Patricia Edwards, a portfolio manager at Wentworth, Hauser & Violich in Seattle, Washington, said it makes sense for Wal-Mart to buy rather than build.

"It is really difficult for Wal-Mart to go into a new country and just build from the ground up," said Edwards, whose company manages $6.4 billion (5.32 billion euros) in assets and holds about 64,000 Wal-Mart shares. "They're doing it in China. But if you look at anywhere else they have gone into, they have always partnered with a local company of some sort."

Sonae, which earlier sold some of its Brazilian stores to Carrefour, said it was getting out of the retail business in Brazil in part because of high interest rates that have stifled growth and consumption in South America's largest economy.

But Herket said Wal-Mart executives aren't concerned about Brazil's benchmark Selic rate, which stands at 18.5 percent and has been kept high for years in a bid to control inflation and promote slow, sustainable growth.

"We feel very good about the stability of the economic environment in Brazil," he said.

Even if Brazil unexpectedly reverts to its past history of boom and bust economic cycles, "We've learned to operate in markets that have their peaks and valleys," Herket said. "If it were to happen, we would be able to manage it."

Wal-Mart shares were up 19 cents to close at $49.51 on the New York Stock Exchange. Sonae shares fell 1.3 percent on the Lisbon Stock Exchange.

Copyright 2005, The Associated Press.

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The Wal-Mart Question

December 14, 2005                         [back to top]

Liberal media watchdog group Fairness & Accuracy In Reporting (FAIR) has released a piece suggesting that the money Wal-Mart spends to advertise in news outlets may be buying more than ads. Peter Hart and Janine Jackson write:

Just how tough has media scrutiny of Wal-Mart really been? “You’ve heard the firestorm of criticism about the company, about wages, benefits, union-busting, about locking employees in, about making them work overtime without paying them for it,” ABC’s Charlie Gibson said in introducing a Good Morning America interview with CEO Lee Scott (1/13/05). But how much have most people really heard about these issues? The answer, Hart and Jackson suggest, is not enough, in part because of the Wal-Mart's advertising. As regular CBS News and CBSNews.com consumers know, Wal-Mart is a major CBS News advertiser – click on a video on the Web site, for example, and there's a good chance that you'll see a Wal-Mart ad. I asked Michael Sims, CBSNews.com's director of News and Operations, if the advertising impacts the site's editorial policy.

"Absolutely not," said Sims. "I would invite you to search for Wal-Mart on our site. You'll see a number of stories that are negative." Sims adds that when CBSNews.com runs a negative story about the company, Wal-Mart has the option to keep their ad from running on that page – but the company typically doesn't exercise that option.

One would never expect a news director to say that advertising impacts editorial, of course. But Sims is right that CBSNews.com has run a number of negative stories about Wal-Mart. Last week, the site ran an Associate Press story in which critics claimed that Jesus wouldn't shop at Wal-Mart. In October, the site ran another AP story about a Wal-Mart heiress who returned her University of Southern California diploma over allegations that she paid her roommate $20,000 to do her homework. A March AP story posted on the site noted that Wal-Mart has agreed to pay $11 million to settle allegations it contracted cleaners that relied on illegal immigrants to clean its stores. And then there's "Wal-Mart Shuts Unionizing Store" and "Wal-Mart Settles Child Labor Cases," also from this year.

Other outlets, most notably the Los Angeles Times, which won a Pulitzer Prize for its 2003 Wal-Mart series, have run a number of negative stories about the company as well, despite the fact that Wal-Mart advertises with many of them. Kevin Ohannessian of Fast Company argues that "Wal-Mart is among the most negatively-covered big businesses out there."

There have been positive notes struck as well, of course. In January, for example, Charles Osgood interviewed Ben Stein on CBS' "Sunday Morning." Stein complained that the company gets too much bad press, declared his love for the company, and said "The truth is that Wal-Mart is a major blessing for most Americans who shop there and for the people who work there…When a Wal-Mart opens in a town…it's as if everyone in the town got a raise." More recently, the company got a lot of good press for its donations in the aftermath of Hurricane Katrina. From the Wall Street Journal: "After Hurricane Katrina, Wal-Mart gave away truckloads of products to victims -- distributing them more quickly and efficiently than any government agency…"

But I came across far more negative stories than positive stories when I searched Wal-Mart coverage. It's impossible to draw any definitive conclusions from this, of course, but it does suggest that Wal-Mart isn't buying much good press with its advertising dollars. FAIR focuses on a few stories it considers Wal-Mart "cheerleading," but even if one agrees with their analysis, there's no question that the sample is far from representative. The flip side of all this, of course, is that while it isn't hard to find negative stories about the company, the question one can never answer is how many more negative stories have been avoided because of Wal-Mart's ad spending.

It's been said about many companies that they've tried to buy good press with advertising. There's nothing inherently illegal about this, of course, but the press, which of course traffics in credibility, desperately wants to avoid the perception that it can be bought. No network executive, producer or editor worth his or her salt is ever going to send around a memo or email demanding more positive coverage for an advertiser; reporters would likely rebel against such a stark violation of the sanctity of the editorial process, and if the memo ever got out it would be disastrous from a public relations perspective.

As long as media outlets accept advertising, however, they will always be open to charges that they can be influenced. There will likely never be a smoking gun, but news is a business, and for all the vaunted separation of the news and editorial sides, it doesn't seem beyond the realm of possibility that somewhere along the line financial considerations could impact editorial product. It's impossible to discuss all this without sounding a bit conspiratorial, of course, but once might imagine a situation in which someone makes clear to a producer or editor how important an advertiser is to a media company. That producer or editor, consciously or otherwise, might then turn around and discourage – or simply fail to order – an investigative foray into, for example, that advertiser's labor practices. (And anyone who finds this scenario plausible could point to the fact that the most thorough examination of Wal-Mart on television appeared not on a network but on viewer-supported PBS.)

Generally, however, I have to think that, by virtue of their background, many national media reporters are prone to a negative view of Wal-Mart. Most live in cities, have relatively comfortable, well-paying jobs, and are less likely than most Americans to set foot in retailers like Wal-Mart. They're thus more open than someone who actually shops at Wal-Mart to the notion that the chain is a behemoth whose presence is destructive. Local media, of course, plays by different rules. For the simplest of economic reasons, the coverage in local media outlets tends to follow the prevailing opinion of the community, and so if a community wants a Wal-Mart or feels that it's integral to the economy, one shouldn't expect a three part investigative piece on the company's ills. That said, most of the local press I've come across about the company takes a fairly neutral tone.

There's also a challenge to covering Wal-Mart from a purely journalistic perspective. Criticism of the company – a typical complaint concerns the "corrosive effects that Wal-Mart wreaks upon the communities in which it operates and the men and women it employs" – hasn't really changed much over the years. It's difficult for reporters to cover stories that remain largely static, even if those stories are big ones. When there is a hook like the closing of a store for unionizing or child labor settlement, stories do get written. But as for the larger notion that "Wal-Mart is bad for America" – which is, of course, a debatable one – it's difficult for reporters to know where to start. (Unless, of course, they can tie it to a poll.)

I know I've covered a lot of ground here, without coming to much of a conclusion. I don't have a simple answer to the questions raised above. But in light of Wal-Mart's strong advertising presence within CBS News, I think it's important that we at least start asking questions. We'll keep examining the issues I've raised here. In the meantime, if you want to continue the debate, email us or post your thoughts below.

Posted by Brian Montopoli at 12:22 PM : December 14, 2005 Read more posts in CBS News Issues E-mail this story Printable version

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Comments

It is truly amusing to see CBS news trying to present itself as a critical evaluator of.....CBS news.

All chuckling over that aside, let's be honest here. No retail chain pays sales clerks terribly well. Good or bad, it's just the nature of the business, much like lower wages are the nature of the fast food business. And as fars as righteous indigation over the use and/or abuse of low wage workers and illegal aliens, one could just as easily focus one's rath on the countless upper class households where illegal aliens are employed as cheap domestic laborers.

The truth is that there's no conclusive evidence that Wal Mart is any more culpable in these areas than are any number of other major retailers, private citizens, restaraunteurs, etc. Sporadic incidents have been seized upon by liberal, anti-capitalist groups (as they so frequently tend to do) and recast in a context that implies some sort of widespread epidemic of horrible behavior.

I happen to have a relative who is an employee of Wal Mart, who started at the bottom level, and who has experienced none of the purported attrocities that one would think the company commits on an hourly basis based on many reports.

This is all about quasi-socialists trying to tear down the biggest gorilla in the free enterprise world out of spite, and nothing more.

Posted by jmyoungiii at 6:27 PM : December 16, 2005 + comment complaint

Wal-Mart cares about education policy because the Walton family is heavily invested in private coprorations who seek to replace public schools. Wal-Mart is also the second largest corporate funding nsource of the Republican Party and a large contributor to the think-tank foundations, such as the Cato Institute. To accurately measure Wal-Mart's effect on the trade deficit, imports by suppliers must be added to direct purchases. Who benefits more from our convoluted immigration policies than Wal-Mart? I am not sure that what is best for Wal-Mart is best for the country. I think their influence is understated and needs to be closely examined.

Posted by sanfelz at 1:50 PM : December 16, 2005 + comment complaint

Re: Trade Deficit; Fair points. I think that it's also worth noting that the trade deficit rose nearly 12% in September vs. last year. This is easily explainable, and has nothing to do with Wal-Mart. When crude oil (an import) is relatively expensive, our trade deficit goes up. When oil is relatively cheap, the deficit shrinks. So, regardless of the influence Wal-Mart has on the absolute trade deficit, it has very little influence on the change in the total deficit year to year. According to a Bloomberg published 7/1/05, Wal-Mart accounts for about 1/10th of the U.S. trade deficit with China, and China accounts for about 25% of the total trade deficit. Wal-Mart's contribution to the trade deficit is less then 3%. That's a huge number compared to almost all other companies, but considering Wal-Mart is the single largest retailer in America, this fact isn't all that surprising. I'm not entirely sure how (or why) Wal-Mart, as a company, would care about education policy. As for trade and environmental policy, there are plenty of individuals and institutions that believe (and have always believed) in similar positions to the ones Wal-Mart advocates. That's not to say that they're either right or wrong, only that they can't exactly be called extreme, and it's not particularly shocking that a for-profit company would advocate them.

Posted by JPMVision at 12:42 PM : December 16, 2005 + comment complaint

Thanks for the corrections on "budget deficit" when I should have noted as US trade deficit. As reported widely on 12-14-05, the US tarde deficit rose 4.4% in Oct. vs.LY. First 10 months of 2005 trade deficit is $598.3B vs $617.6B for all of 2004. And yes, Wal-Mart has a great influence on those numbers. More importantly though, Wal-Mart greatly influences federal policies. No-Child-Left-Behind directly reflect the views and funding of the Walton family. Trade policies and environmental policies directly reflect the wishes of Wal-Mart. Republican commentator Linda Chavez sounds like a Wal-Mart spokesperson. MSNBC did a in-depth report on Wal-Mart's busines but not its political influence. Long overdue.

Posted by sanfelz at 8:48 AM : December 16, 2005 + comment complaint

sanfelz writes: "Today's business news includes data on a record-high budget deficit. I have read elsewhere that the biggest single factor in this deficit is Wal-Mart's purchasing practices."

You're mixing up economic terms here. Wal-Mart's purchasing practices have no effect on the budget deficit. They have an impact on the trade deficit. As for being the biggest single factor in this deficit, I've heard the same said about Apple iPods. Either way, the difference is an important one. A perpetual annual budget deficit is obviously a bad thing, when there is no specific identifiable reason for it (i.e. natural disaster, constructing necessary infrastructure, etc.) A trade deficit (or negative balance of trade), on the other hand, can be a very good thing depending on what's causing it. Japan in the 90's and Germany today both have trade surpluses, but in neither scenario is this a "good" thing. Generally, when other countries see better investment opportunities in America than at home, they will invest in America. This, by definition, will create a trade deficit for America, and it is also very good. When trade deficits are caused by monetary deflation, on the other hand, that is obviously a bad thing (just to give one example. Some deficits are bad, and others are good. Reasonable people can disagree over what the current numbers mean, but it's important not to fall into the trap of thinking that a negative balance of trade is automatically a negative for the economy.

Posted by JPMVision at 4:42 PM : December 15, 2005 + comment complaint

you're right, geoffrey1986 -- good catch. My mistake.

Posted by bmontopoli at 2:05 PM : December 15, 2005 + comment complaint

Charles Osgood didn't interview Ben Stein. Stein recorded his own "opinion" piece. Osgood only introduced the segment.

Posted by geoffrey1986 at 10:22 AM : December 15, 2005 + comment complaint

In regard to "needing a hook" to cover the affect of Walmart on a local community:

There are plenty of human interest stories available. They can be pegged to any issues that affects a community. What happens to a town when there is suddenly no local hardware store?

Posted by annabanana-1 at 9:36 AM : December 15, 2005 + comment complaint

States should pass a minimum wage increase. Also, strict mandatory overtime wages (despite the President's objections). Wal-Mart would solve its problems with Employees if these Labor Laws were improved.

Posted by Antillo99 at 8:24 AM : December 15, 2005 + comment complaint

As a leader in business, Wal-Mart has also shown the way to Home Depot and other retailers to direct full-time employees to Medicaid because their wage scale cannot support a family. If your state has a Wal-Mart in it, there are Wal-Mart employees getting benefits from the state. Whether they were on Medicaid previously is information I cannot find. But the number of Wal-Mart employees needing state help is easy to find. I thought conservatives, liberals, Republicans, Democrats would find this deplorable.

Posted by sanfelz at 6:08 PM : December 14, 2005 + comment complaint

As one who RSS's HuffPo, I sense the "War On Wal-Mart" as an attempt by the union part of the Democratic base to find a flagpole issue for upcoming elections.

Some of the claims of the anti's appear to be inaccurate or misleading, but I suppose CBS pointing those out, even in the midst of a balanced investigative report, will bring on the heel-nippers. Oh well, Merry Christmas.

Oh, and I think the previous poster meant "balance of payments deficit." Providing a job for someone who was probably already Medicaid-eligible hardly seems evil.

Economics may be the "dismal science," but it isn't a simple science. I think it might be helpful to have more Democrats to shake up our current national situation, but I don't see this Wal-Mart thing as a good issue to win centrist voters.

Posted by Wintermute1 at 4:09 PM : December 14, 2005 + comment complaint

Today's business news includes data on a record-high budget deficit. I have read elsewhere that the biggest single factor in this deficit is Wal-Mart's purchasing practices. More troubling to me is that Wal-Mart full-time employees often have to use Medicaid services because the employees cannot afford to purchase health insurance. Ben Stein seems to be taking a rosy view. We are all subsidizing the employees of the largest retailer. I think media laziness trumps media corruption.

Posted by sanfelz at 2:59 PM : December 14, 2005 + comment complaint

Great, exhaustive reading. In an ironic manner, I believe that the anti-Wal-Mart bias clearly seen in the urban press balances out the local news cheerlelading.

The discussion about editorial content being influnced by an advertiser reminds me of an interview I did several years ago with a Contributing Editor at a major glossy. I was then-Editor at a consumer magazine and this contributing editor had written a biography of a major computer CEO (Did I cover all my bases?). He was convinced that his magazine didn't run an except of his book -- which may or may not have sold many more copies and drummed up interest -- because the CEO, let's call him Reeve Knobbs, who'se company was an advertiser in said glossy, let's call it "Barchester Towers," had somehow gotten to his editor.

Although this glossy doesn't want for advertising and there was never any concrete proof of shenanigans or secret meetings, the author's book, which was only marginally succesful, ended up being excerpted by a smaller glossy that is now out of business.

Posted by RonMwanga at 1:27 PM : December 14, 2005 + comment complaint

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Wal-Mart bringing superstores to Canada

CBC News
Wed, 14 Dec 2005            [back to top]

Wal-Mart is eyeing plans to bring up to three massive superstores to Ontario, according to a published report.

A Wal-Mart Canada spokesperson said that the company plans to open up to three superstores by early 2007. The company is seeking municipal approval for superstore sites in the east end of Toronto and London, the Globe and Mail reported Wednesday. The location of a potential third store was not specified.

Wal-Mart already carries some groceries at most of its outlets, but superstores are seen as a threat to Canada's existing grocery chains. In addition to the merchandise and dry groceries carried in regular Wal-Mart, the new superstores will also sell fresh produce, meat and bakery goods.

Wal-Mart superstores are almost twice as large as a regular Wal-Mart outlet. The Canadian superstores will be about 190,000 square feet, the Globe reported.

Copyright ©2005 Canadian Broadcasting Corporation - All Rights Reserved

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Fla. Wal-Mart Axes Manager Over Bias Issue

By MITCH STACY
Associated Press
Dec 14, 2005                         [back to top]

A Wal-Mart manager who called sheriff's deputies about a black businessman mistakenly suspected of trying to pass a bad check was fired for using "poor judgment," the store chain said Tuesday.

Wal-Mart said manager Mark Cornett violated company procedures when he called the law on Reginald Pitts, who had presented a $13,600 check to pay for holiday gift cards for his company's employees.

Pitts, 34, a human resources manager for GAF Materials Corp., said he suspects he was treated that way because he is black.

Wal-Mart spokeswoman Sarah Clark said Cornett tried to verify Pitts' check, but could not do so because a privacy block on GAF's account. However, she said Cornett should have returned the check to Pitts instead of calling sheriff's deputies.

Cornett was fired because of "poor judgment and poor customer service," she said.

Clark denied there was any racial profiling.

Wal-Mart apologized to Pitts for the Nov. 23 incident in suburban Brandon. But GAF decided to buy its employees gift cards from Target instead.

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Supermarkets brace for next Wal-Mart move

Discounter to launch supercentres in Canada that add fresh food to the mix

By MARINA STRAUSS
Globeandmail.com
Wednesday, December 14, 2005               [back to top]

Discounter Wal-Mart Canada Corp. will launch two or three massive superstores in the next year or so by bulking up on groceries and other items in a move that promises to transform the retailing landscape -- and squeeze supermarkets' businesses.

The advent of the Wal-Mart supercentre has been widely anticipated -- and feared -- in retailing circles for years as the world's largest merchant rapidly expanded its presence in Canada since arriving in 1994.

U.S. supermarkets have been devastated by the impact of parent Wal-Mart Stores Inc.'s supercentres, which combine full supermarkets with general merchandise. In Canada, grocers will feel the pinch, although they are better positioned to handle an onslaught because they already run discount divisions, industry observers say.

"This is a big deal for the supermarket industry as Wal-Mart appears to now be ready to fire a shot at the supermarket leaders," said Rick Pennycooke, president of retail development consultancy Lakeshore Group.

Mortgage Rates Compare national rates by lender: See Chart "Wal-Mart doesn't do things in a half-baked way . . . They're not going to do a one-off. It will impact everybody."

Industry insiders agreed. "They're a very strong company and they're doing very well with their supercentres in the U.S.," said Louise Wendling, who heads Costco Wholesale Canada Ltd.

"Whatever moves they're going to make, it's going to affect the market share of all players."

Wal-Mart spokesman Andrew Pelletier confirmed in an interview that it will roll out its first two or three supercentre-like stores in Ontario in late 2006 or early 2007.

The chain has yet to decide on future expansion, or whether to name them supercentres, as they are called elsewhere, he said.

While Wal-Mart already carries groceries at most of its 256 stores, the supercentres will also sell fresh produce and meats, delicatessen and bakery products, he said.

As well, it will add more apparel, electronics and home decor items to supercentres because consumers want more of this merchandise.

"We see this as an evolutionary approach," Mr. Pelletier said yesterday.

"It is very much a work in progress. It will be similar to supercentres in the U.S. We are just referring to them as expanded Wal-Mart stores" for now.

U.S. supercentres are almost twice as big as regular Wal-Mart stores. In Canada, the selling space will range to almost 190,000 square feet, while standard Wal-Marts are closer to 120,000 square feet, Mr. Pelletier said.

The company's key developer, First Pro Shopping Centres, has applied for municipal approvals for a superstore in east-end Toronto and in London, Ont. The latter store would be an expansion of an existing site.

Retailers have been bracing for the arrival of Wal-Mart's supercentres for years.

Loblaw Cos. Ltd., Canada's leading grocery chain, has been preparing by expanding its own superstores, which combine general merchandise and supermarket products.

The No. 2 and No. 3 grocers, Sobeys Inc. and Metro Inc., will feel the pain of the Wal-Mart supercentre the most, Mr. Pennycooke, the consultant, predicted. Loblaw may fare a little better.

Nevertheless, Loblaw has run into snags in developing new systems for its expansion. Its stock price has tumbled this year as profit slumped because of unexpected glitches and delays in its retooling. Shoppers have noticed the problems: Many haven't been able to find in-demand products on the store shelves.

Wal-Mart had originally planned to put one of its Sam's Club warehouse club stores on the Toronto site now slated for a supercentre, a city official said.

Indeed, Wal-Mart has been stalled in its expansion of Sam's Club, having opened only six of them since launching the first ones in the fall of 2003.

Industry watchers have considered that Sam's Club, which carries fresh foods, was the first step to Wal-Mart rolling out supercentres, giving the company the groundwork to move into a full selection of groceries.

"Everyone knows the Sam's Club program is halted," one source said. "They can't get the new ones working."

Some sources have suggested that Wal-Mart may convert its six existing Sam's Club stores to supercentres, although they would need to be reconfigured substantially.

Nevertheless, Mr. Pelletier insisted that Wal-Mart is committed to Sam's Club, and targeting them more to small-business customers looking to buy in bulk.

He denied that Wal-Mart plans to turn Sam's Club stores into supercentres.

Monique Dubord, vice-president of leasing at developer First Capital Realty Inc., said it's no big surprise that Wal-Mart is mapping out supercentres for Canada.

"Certainly it's not unexpected that Wal-Mart would be rolling out the food at some point," said Ms. Dubord, whose company specializes in supermarket-anchored shopping centres.

Wal-Mart has been adding more food to its namesake stores over the past few years, but they don't carry fresh produce or meat, or bakery goods.

And while Wal-Mart had no specific expansion plans for supercentres, retail insiders note that Wal-Mart's newest outlets call for a 45,000-square-foot expansion area -- presumably for a future supercentre.

In the United States, Wal-Mart has more than 1,700 supercentres at an average size of almost 190,000 square feet -- and is rapidly expanding the chain.

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Wal-Mart's Asda Plans Improved Food Offering to Take on Tesco

Bloomberg
Dec. 13                       [back to top]

Asda, Wal-Mart Stores Inc.'s U.K. supermarket business, plans to improve its fresh food offer and cut prices to win back customers from market leader Tesco Plc.

``Asda is currently operationally failing,'' Chief Executive Officer Andy Bond said today at a press conference in London. ``We need to close the price gap with Tesco Plc and become more innovative in our food offering.''

The Leeds, England-based company, which has missed all its quarterly profit and sales goals so far this year, has been slower than Tesco and J Sainsbury Plc to broaden its food ranges and introduce financial services such as life insurance. Bond, who become CEO in March, said today Asda's management has become bureaucratic and complacent.

Asda's share of the $202 billion U.K. grocery market fell to 16.6 percent in the three months ended Nov. 6 from 16.7 percent a year earlier, according to Taylor Nelson Sofres Plc. Bond cut 1,400 jobs in June and said he planned to use the savings to reduce store prices and win back market share.

Shares of Bentonville, Arkansas-based Wal-Mart have slid 7.8 percent this year, more than the 1.9 percent drop by Tesco, which has the largest share of the U.K. grocery market at 30.2 percent.

Tesco, located in Cheshunt, England, introduced its Tesco's Finest range to attract a broader range of customers in 1998, four years before Asda started selling its Extra Special goods. Tesco was six years ahead of Asda in introducing personal- finance products such as insurance and added an Internet grocery service two years earlier than Asda.

``The competition has caught up in terms of price,'' Bond said.

Achilles Heel

Bond said Asda will become more innovative in chilled ready-meals. ``Our Achilles heel has been sourcing and quality, especially on the meat and vegetables side,'' he said.

Asda will roll out more smaller sized stores, especially the Asda Living concept and it plans next year to trial one 8,000 square-foot discount store selling a broader range of own- label products. So far 10 new stores are planned for 2006.

Asda had sales of 14.4 billion pounds ($25 billion) in 2003, the most recent annual figure available. Tesco's were 31 billion pounds in the year that ended in February. Asda accounts for about 50 percent of Wal-Mart's international sales and 10 percent of the total, which was $285.2 billion in 2004.

Asda is searching for sites smaller than 10,000 square feet (940 square meters) so it can expand into parts of the country where it doesn't operate now. Tesco has been quicker at buying up convenience stores retailers in city centers to take advantage of time-short Britons who visit the outlets after work. Most of Asda's supermarkets are currently in out-of-town locations.

Tesco has 1,878 U.K. outlets ranging from supermarkets to convenience stores, compared with Asda's 274. Government curbs on developing so-called greenfield sites limit U.K. grocers' options for expansion.

Christmas is ``going to be good, not great,'' Bond said.

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Wal-Mart: Another hungry corporate monster

By Sarah Kubik
CAMPAIGN DIARY
Date Dec/13/2005                       [back to top]

Last week, the Sierra Student Coalition had their first public appearance as a recognized organization. We showed Robert Greenwald’s documentary, “Wal-Mart: The High Cost of Low Price.” It was an awesome turnout with positive feedback.

The documentary truly showed the inconsiderate minds behind the corporate rule and how brainwashed we are as consumers. I found it humorous when the movie mentioned how Wal-Mart "gives back" to the community. The company set up a “Critical Need” fund for their employees so that they can support coworkers in case of a catastrophe. In one year, the entire staff of underpaid hourly workers raised $5 million. Wal-Mart gave $6,000. However, they did give $3.2 million in political contributions in 2004.

After Sept. 11, the Walton family, who owns Wal-Mart, felt that extra security was needed, so they built an underground bunker fortified with barbed wire. I guess one should consider security when your family ranks among the top five wealthiest people in the world. Do they think they will ever build a Wal-Mart in Baghdad?

They sell the business plan to rural and urban communities to “help” their economy. The cities' governments give them thousands of dollars to open up shop. Nationwide, Wal-Mart has received subsides well over $1 billion. Why doesn't the government give that same monetary support to small businesses?

The company has a record of setting up in big cities to attract the large customer base, then moving just outside the city within a year to avoid paying the taxes on sales revenue. The company then gives small businesses in the community the opportunity to rebuild, but remember that the company essentially took them out of business to begin with.

Please Detroit — do not let them in. It is all a hoax. It will only add to the fire that has destroyed the city over the years.

There is 26,699,678 square feet of empty Wal-Mart box stores in the U.S. That’s enough to build 29, 666 classrooms. Detroit, you already know what happens to abandoned buildings. The city doesn’t need another inhumane company to use it, and then leave.

Wal-Mart won’t let their employees unionize. In fact, they spend millions to prevent their employees from organizing by using tactics such as cameras, flying corporate officials in and 24-hour anti-union hotlines — all just to make sure its employees don't have rights.

You won’t believe what Wal-Mart employees in Germany receive because they have national laws that protect workers. All Wal-Mart employees are unionized, they are paid a living wage, get 36 days of vacation a year, and most importantly they are covered by national health care. When will America's wall come down?

Wal-Mart encourages their low-wage employees to use state assistance for medical benefits, food stamps and subsidized housing. This cost taxpayers nearly $1.6 billion each year.

So as the story goes, they have a great business plan. This is the American Dream, folks, and we are living it at the expense of underpaid workers, wasted tax dollars and destruction of land.

The movie didn’t mention that one of the Walton granddaughters paid her roommate $20,000 to get her through college. She had to give the degree back and the roommate had to drop out. Thanks Waltons, you’re a true American family!

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Leaders of Faith Mark Holiday Season by Bashing
Wal-Mart

By Randy Hall
CNSNews.com
December 12, 2005                    [back to top]

(CNSNews.com) - Sixty-five religious leaders have joined union activists in asserting that the nation's largest retail chain should "change for the better" this holiday season, a move one union watchdog called a "cynical ploy" intended to "tarnish Wal-Mart's name in time for Christmas."

Leaders of faith representing over 1.3 million Americans have joined a group sponsored by the United Food and Commercial Workers union in a nationwide initiative to call on America's largest employer and its CEO, Leo Scott, to "change for the better" this holiday season, according to Paul Blank, campaign director for WakeUpWalMart.com.

As part of this effort, the leaders from a variety of religions signed a joint letter to Scott that stated: "The holiday season is a time to honor and remember the virtues of hope, love, joy, sharing, sacrifice and faith.

"During this holy season, we must ask ourselves - at what moral price do we accept the sins of exploitation and greed? Sins, it is sad to say, which are exemplified by one of America's largest and richest corporations, Wal-Mart."

The letter then accused the company of taking part in such "immoral business practices" as exploiting its workers and suppliers by paying employees poverty-level wages, breaking child labor laws and providing poor health care coverage for workers and their families.

"It is hard to imagine why Wal-Mart would consciously choose to make 1.3 million workers suffer in the name of 'low prices,' a suffering we can no longer let stand," the religious leaders added.

The group then invoked the Christmas season by stating that "Jesus would not embrace Wal-Mart's values of greed and profits at any cost, particularly when children suffer as a result of those misguided values.

"Those of us who are Jewish, Muslim or Buddhist also have scriptures that remind us that God is just and God's servants must practice justice in all of our words and deeds," the letter continued.

"As we prepare to celebrate our own holiday traditions, we also ask ourselves: Is it right to shop at Wal-Mart? Would our God want us to support Wal-Mart's values and actions with our dollars?

"It is within your power to become a truly responsible, ethical and righteous company," the letter concluded. "In the end, there is no better present Wal-Mart could give to its workers, their families and America than to change for the better this holiday season."

In addition, WakeUpWalMart.com is airing a 30-second TV advertisement in six southern states to highlight the corporation's moral failures and raise the question "Should People of Faith Shop at Wal-Mart?" this holiday season.

"It is our sincere hope Wal-Mart will choose the higher road and become a moral example that all people of faith can embrace proudly," Blank said.

The corporation reacted swiftly to the charges.

"Surely, many Americans are deeply offended that union leadership would use religion as just another tactic in the negative attack campaign they're waging against a company that donates more money to good works than any other company in America," Wal-Mart spokesman Dan Fogleman told Cybercast News Service.

"With all the news reports of manufacturers laying off tens of thousands of skilled union workers, we hoped the union leadership would show more compassion for its members than spending its member dues attacking a company that creates 100,000 jobs a year," Fogleman added.

Regarding the letter, Fogleman said that the religious leaders involved "have unfortunately been misled. We know they clearly seek the truth and are in search of the real facts."

According to Fogleman, those facts include Wal-Mart's "$200 million in charitable giving this year, and we save the average American family $2,300 per household." In addition, he noted that the company is "making positive change with new health care programs where we've signed up more than 70,000 associates and 30,000 of their family members.

"Wal-Mart will continue to do those things we believe are right for our customers, our associates and our communities: helping people put food on their table and clothes on their backs, providing good benefits and career opportunities and being a good citizen in the towns where we serve," he added.

Blank was unimpressed with the company's response.

"Rather than address the genuine moral concerns raised by 65 leaders of faith," Blank said in a press release, the corporation "chose to ignore their concerns, insult them, question their sincerity and cite manufacturing job losses the company has helped to create.

"We can only hope that someday soon, Lee Scott will finally -- finally -- do what is right for his workers, their families and America," Blank added.

However, Joseph de Feo, editor of Foundation Watch and Organization Trends for the Capital Research Center, told Cybercast News Service he considers the WakeUpWalMart.com effort "a cynical ploy" on the part of the United Food and Commercial Workers to "tarnish Wal-Mart's name in time for Christmas in an effort to pressure Wal-Mart into unionization.

"It's hard to say who comes out of it looking worse: the unions who will stop at nothing or the religious figures who seem to think that Jesus would have been a member of Teamsters Local 303," de Feo added.

Catholic League President Bill Donohue told Cybercast News Service that he considered the leaders who signed the letter to Wal-Mart "the enemy of the poor" because "Wal-Mart has provided over a million people with jobs, all of whom have voluntarily accepted these wages and the conditions of employment.

"Wal-Mart employs people of all races, religions and ethnic groups," Donohue added. "I'm not sure that any of the 65 religious leaders has ever created a single job for anyone in their entire lives."

Donohue noted that he'd "had a problem with Wal-Mart last month," when the company received criticism for replacing the word "Christmas" with "holiday" in all its internal and external promotions. "I did call for a boycott because I felt they didn't handle things right with regard to Christians.

"However, I've also credited them publicly for doing the right thing" by issuing an apology for insulting Christians and revising their policies and website. Donohue complimented the company for "making the right decisions and putting that behind them."

Regarding the current situation, Donohue stated that "what this is about is the union-driven, left-wing, all-out front on Wal-Mart, which is being used as the prototypical capitalist corporation."

Donohue was just as outspoken in recommending how people of faith should respond to the WakeUpWalMart.com campaign. "I hope that all Christians patronize Wal-Mart this season and reject out of hand the left-wing agenda, which is basically anti-capitalism using Wal-Mart as a whipping boy this Christmas season," he said.

Copyright 1998-2006 Cybercast News Service

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Wal-Mart planning $12 million Hartford supercenter

Pete Millard
The Business Journal of Milwaukee
December 12, 2005                                 [back to top]

Wal-Mart is planning to build a $12 million supercenter in Hartford on Highway 60.

The Bentonville, Ark.-based retailer has received preliminary approval from the Hartford plan commission for a 184,000-square-foot building, which would be near the city's downtown, said Justin Drew, a Hartford city planner.

Wal-Mart has hired McClure Engineering Associates Inc., Rockford, Ill., to develop a traffic plan to ease congestion on Highway 60 after the building is completed. The Wisconsin Department of Transportation recommended that Wal-Mart build a roundabout near its main entrance or pay for traffic lights. The company has decided to build an intersection with traffic lights, said Drew.

The city of Hartford is also finalizing plans to annex the 25-acre site from the town of Hartford before construction can begin.

Hartford city officials expect the annexation proceedings to be completed before the end of March. Construction of the new supercenter will begin in the summer of 2006.

The Hartford Wal-Mart supercenter will include a grocery store and general merchandise department under one roof. The supercenter also includes a vision center, automobile tire and lubrication center and one-hour photo processing shop.

Wal-Mart currently operates 42 supercenters in Wisconsin, including stores in New Berlin, Pewaukee, West Bend and Milwaukee. In addition to the supercenters, Wal-Mart operates 35 discount stores, 11 Sam's Clubs and two distribution centers in Wisconsin.

© 2005 American City Business Journals Inc.

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Children protest outside Wal-Mart Sweatshop labor allegations cited

By Stephanie V. Siek
Globe Staff
December 12, 2005           [back to top]

FRAMINGHAM -- A group of children protesting Wal-Mart's alleged use of sweatshop labor was asked to leave the store property yesterday after trying to present a store manager with a letter detailing its concerns.

''Don't make me ask the police to make them leave," said a Wal-Mart employee, identified by her nametag as Donna, as the group stood outside the store entrance.

The children and their escorts refused to leave until she or an assistant manager who was with her agreed to take the letter and send it to the company's chief executive officer, H. Lee Scott Jr. The employee went inside; a Framingham police car pulled up later.

An officer directed the protesters to leave the Wal-Mart property. They complied peacefully.

Wal-Mart employees declined the letter, but gave the group a telephone number and an address.

Sara Goldstein of Cambridge, 10, who had helped write the letter, said she never considered walking away without making an effort to give it to management.

''We weren't here to offer it to them, we were here to give it to them," she said.

The group was made up primarily of members of the Boston Workmen's Circle fifth-grade Jewish Sunday school class, with their parents and older and younger children. The principal, Mitchell Silver, said they had been learning about sweatshops and labor-rights issues as part of their lessons on the history of Jewish people in the United States.

About 150 people had gathered at the corner of the store's access road and Route 9. Some of the children held handmade posterboard signs that were bigger than they were. They chanted slogans, including, ''Come on Wal-Mart, don't delay, do what's right this holiday."

''This is the biggest and richest company in the world, and they're using sweatshops," said Owen Weitzman, a 10-year-old from Newton, as he held a sign reading, ''Stop Sweatshops . . . Give workers living wages. Don't hide under Bushes" and depicting a smiley face with fangs. ''I hope over a more longer period of time that sweatshops don't exist."

Lucian Cascino, a 10-year-old from Jamaica Plain, said that the children could have mailed the letter, but pairing it with a protest helped to ''make our point more important."

''It's not that we don't like Wal-Mart. We don't like what they do," he said. ''Basically, we're just here to get the message out: Stop shopping at Wal-Mart until they stop using sweatshop labor."

Bill Wertz, a company spokesman, said that it is not Wal-Mart's policy to sell products made in sweatshops. Wertz said the store is ''a target of a major campaign by union-based organizations to tarnish our reputation."

''We have a very active program in place to inspect factories and try to make sure that our standards are maintained. If poor workplace conditions exist, it is without our knowledge or approval," said Wertz. ''Wal-Mart has no factories of its own, but we do require our suppliers to follow a very strict code or set of standards."

Stephanie V. Siek can be reached via e-mail at ssiek@globe.com .

© Copyright 2005 The New York Times Company

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Wal-Mart CEO Scott gives another PR speech, but cannot make secret management memo disappear

By union-network.org
12-11-05                                [back to top]

Wal-Mart's CEO Lee H. Scott continues his efforts to paint Wal-Mart as a big benefactor for American consumers, and his own workers. But he fails to convince. The top secret memo written by his vice president Susan Chambers and unveiled by The New York Times just does not go away. In this memo, the company's greed and moral corruption very concretely laid in the open.

Yesterday, Scott was in Kansas where he spoke to students at Wichita State University, and other listeners. He tried to convince his listeners that Wal-Mart is good for the consumers and that it cannot raise its low wages without raising prices - or cutting shareholder profits, which they would not accept, he very honestly added.

What Scott did not say was that a consumer poll commissioned by WakeUpWalMart.com earlier this week shows that the world's largest retailer is not successful in its propaganda campaign. The number of US consumers who believe that Wal-Mart is more negative than positive is already larger than those who are favourable, and the critical population is steadily growing.

Secret memo admits and supports greedy and discriminating employer behaviour

Ms Chambers' secret memo is surely one of the factors behind this trend, as is the UFCW WakeUpWalMart.com campaign itself. In her memo to her management colleagues, she admitted that Wal-Mart's health care is in trouble:

"...our critics are correct in some of their observations. Specifically, our coverage is expensive for low-income families, and Wal-Mart has a significant percentage of associates and their children on public assistance."

The Wal-Mart vice president also suggests that the company should not hire people who could be unhealthy or obese. So much about a company that has made believe that it provides jobs for hundreds of thousands Americans, who would otherwise be disadvantaged at the labour market.

Wal-Mart's new health care initiative is the old product in a new package

In Wichita, Mr Scott actually touched on the health insurance problem, advertising a new initiative that the company has launched last Monday. This is the old product in a new package, says WakeUpWalMart.com in its first comment. It would increase health insurance coverage among Wal-Mart's workers by a meagre 2 per cent per year, which means that they would have to wait until year 2017 before the company would have reached the national average when it comes to healthcare coverage by large employers.

In the memo, Wal-Mart revealed that 46 percent of the children of Wal-Mart employees are either uninsured or on taxpayer funded public health care programs. No wonder Wal-Mart so vehemently opposes legislators’ efforts to expose the truth about the true cost of the Wal-Mart economy. It is inexcusable and unconscionable for a company, with 10 billion dollars in profits, to know that one out of every two of their employees’ children has no health care, or is forced to rely on our public safety net, and that the employer does nothing about it.

It is obvious that Wal-Mart continues to be something of an Emperor Without Clothes, such as the real emperor who rode naked through his town in the old children's storybook. The massive investments in public relations do not really work, and why should they work if the story itself is not right. Not even Wal-Mart with its enormous resources can turn black into white, so no wonder that consumer confidence is eroding and the patience within important parts of the global investor community is growing thin.

Wal-Mart tilts German playing field in its favour through social dumping at home

But it is not only consumers, investors and Wal-Mart workers who have a reason to be concerned over Wal-Mart's behaviour, and the concept of walmartization that the retail giant is spreading. Also serious retailers are increasingly at risk. Look at Germany, where Wal-Mart finances its aggressive price wars through social dumping at home in the United States.

When Mr Scott says that better conditions for the workers would mean higher prices and cuts in shareholder returns, he forgets to mention that it would make it more difficult for the company to fight against its competitors with unfair weapons. Wal-Mart is now contributing to the downward pressure on collective agreement provisions in Germany, already put in play by the commerce employers, to an extent that basic values of social peace and stability are being endangered. At the end of the day, neither European retailing, nor the societies as a whole, will benefit from Wal-Mart's social dumping approaches.

Brutal repression when workers try to defend their rights

This is a company which not only denies its workers the wages and employment conditions that their colleagues who work for organised employers earn. As we have seen earlier this year in Jonquière, Canada, all attempts by the Wal-Mart workers to ask for their rights are brutally crushed. Here, numerous families were coldly thrown out into unemployment and bereaved of their means to make a living just because they wanted UNI Commerce affiliate UFCW to negotiate a normal Canadian collective agreement for them.

It is indeed time for Wal-Mart to wake up and change. Like the consumer poll shows, public relation campaigns - however ambitious they are - will not do the job. There has to be a real change. The global union movement through UNI keeps a door open for the company, as was illustrated by the offer made at the Chicago World Congress to meet and to see how a way forward could be found. The offer is still valid, and at the end of the day, cooperating with the unions both globally and at home is the only way.

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Advocacy group hits Wal-Mart on practices

By Nathan Hurst,
Globe
12/11/05                    [back to top]

Wal-Mart may be enjoying the fruits of another gift-giving season, but it's been no holiday for the company as one political action group takes aim at the discount giant by criticizing many of its labor practices.

WakeUpWalMart.com charges that the nation's largest employer pays its workers low wages and offers poor healthcare coverage, and demands Wal-Mart change its policies.

That will require a massive effort from consumers, said Paul Blank, campaign coordinator for the Washington, D.C.-based advocacy group. Since the group formed in April, it has enlisted support from over 140,000 consumers.

It has also meant a major media blitz of rebuttals from Wal-Mart, starting with walmartfacts.com, a website that counters many of WakeUpWalMart.com's claims, and extolls how the company has improved the lives of its workers.

Sarah Clark, a spokeswoman for Wal-Mart, said that leafleting and protesting outside store locations during so-called Black Friday, the start of the holiday shopping season, by members of WakeUpWalMart.com was nothing more than a publicity stunt.

"Our company provides solid, competitive wages for the retail industry," Clark said. "Union leadership is wasting thousands of dollars on ads against us, while we have created 100,000 jobs this year alone."

WakeUpWalMart.com's biggest focus is pushing the company to provide a living wage and affordable healthcare benefits for its nearly 1.6 million employees worldwide, Blank said.

He said that with such a large number of employees, it only makes sense for his organization to go after Wal-Mart and its labor practices exclusively, instead of trying to pin down other big box retailers.

Clark, however, asserts that her company has led the way in creating a positive work environment in the retail sector by providing decent wages and expanded healthcare benefits. One of the company's largest expansions in affordable healthcare coverage for employees is set to go in effect beginning next month, according to the company.

And while a recent Zogby poll shows 38 percent of Americans now hold an unfavorable view of Wal-Mart (compared with only 13 percent for rival Target), she said her company is expecting a better-than-ever Christmas season.

Nathan Hurst can be reached at nhurst@globe.com

Religious Organization Boycotts Wal-Mart

Andrea Moore
All Headline News
December 10, 2005                  [back to top]

New York, New York (AHN) - According to union-backed critics of Wal-Mart Stores, WakeUpWalMart.com has unveiled a religious-themed campaign asking shoppers whether God wants them to buy things from the retail giant. Wal-Mart workers are not allowed to join or organize unions.

The group is funded by the United Food and Commercial Workers union which released a letter signed by 65 clergy and religious members and launched a TV ad. The group says Wal-Mart harms families and communities due to their policies including wages and health benefits.

The 30-second ad, which starts with a picture of a Bible, begins Friday in Alabama, Arkansas, Georgia, Kentucky Oklahoma and Texas.

The letter from religious leaders says Jesus would not embrace Wal-Mart's values of greed and profits at any cost.

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Lowry repeated misleading Wal-Mart health care defense

mediamatters.org                   [back to top]

In an effort to refute claims made in the documentary, Wal-Mart: The High Cost of Low Price, argued that Wal-Mart is not "a welfare queen," repeating the misleading claim that "only about 5 percent of Wal-Mart employees are on Medicaid, the same proportion as other retailers." Lowry did not note that an internal Wal-Mart memo acknowledges that 27 percent of children of Wal-Mart employees are enrolled in Medicaid or the State Children's Health Insurance Program (SCHIP). According to researchers at the University of California-Berkeley's Center for Labor Research and Education, that figure is significantly greater than the percentage for all large retailers, as is the total percentage of children of Wal-Mart employees who either are on Medicaid or SCHIP or are uninsured.

From Lowry's December 6 column:

Although The High Cost attacks Wal-Mart as a welfare queen, only about 5 percent of Wal-Mart employees are on Medicaid, the same proportion as other retailers. [New York University visiting scholar Jason] Furman points out [in a report titled, Wal-Mart: A Progressive Success Story]that a Wal-Mart worker who has to decide whether to buy the company's family insurance policy at a cost of $1,800 annually or take Medicaid coverage instead is wise to go on Medicaid. "The beneficiary of choosing Medicaid is the worker," Furman writes, "not Wal-Mart."

Like Washington Post columnist Sebastian Mallaby and New York Times columnist John Tierney, who have offered similar misleading defenses of Wal-Mart, Lowry based his column largely on Furman's paper. (Mallaby and Tierney apparently relied on a preliminary version of Furman's paper dated November 14; Furman released a revised version dated November 28.) In his paper on Wal-Mart, Furman did state that "[i]n total, ... 5 percent of Wal-Mart employees are on Medicaid, which is similar to the percentage for other large retailers and is comparable to the national average of 4 percent." Furman's source for this comparison was an internal memo written by M. Susan Chambers, Wal-Mart's executive vice president for benefits. The New York Times reported on the memo in an October 26 article.

But in his column, Lowry omitted a different figure that Furman included in the revised, November 28, version of his paper: Citing the Chambers memo, Furman noted that 27 percent of the children of Wal-Mart employees are enrolled in Medicaid or SCHIP.* According to the memo, the national average for all employers is 22 percent. Chambers's memo further stated that "[i]n total, 46 percent of [Wal-Mart] Associates' children are either on Medicaid [or SCHIP] or are uninsured" -- a fact not noted by either Furman or Lowry.

In a supporting exhibit, Chambers's memo claimed that 36 percent of all retail employees' children are on Medicaid or SCHIP -- a figure that exceeds Wal-Mart's 27 percent. Citing the memo, Furman repeated these figures.

However, as Media Matters for America has noted, an October 26 paper by researchers at UC-Berkeley's Center for Labor Research and Education presents a very different conclusion. Using data from the 2005 Current Population Survey, the UC-Berkeley researchers "analyzed the difference between Wal-Mart's reported numbers and those for large retailers in general (defined as those with 1,000 or more workers)." They found that "22% of children of employees of large retailers are enrolled in Medicaid/SCHIP, compared to 27% reported by Wal-Mart for their employees' children." In contrast to Wal-Mart's claim, the UC-Berkeley researchers reported that only 22.7 percent of children of all retail employees are enrolled in Medicaid or SCHIP. Additionally, they noted, "While 46% of the children of Wal-Mart workers are either uninsured or on Medicaid/SCHIP, the comparable figure for children of all large retail workers is 29%."

* A previous Media Matters item referring to Mallaby's November 28 column and Tierney's November 29 column (subscription required) stated: "Furman, Mallaby, and Tierney all failed to reveal that in that same paragraph of the Chambers memo [noting that 5 percent of Wal-Mart employees are enrolled in Medicaid], Chambers acknowledged that children of Wal-Mart employees receive Medicaid or SCHIP at a significantly higher rate than the national employer average." Mallaby and Tierney's columns apparently cited the November 14 preliminary version of Furman's paper, which did not include data on the percentage of Wal-Mart employees' children enrolled in Medicaid or SCHIP. The November 28 version of Furman's paper does provide this data.

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A U.S. view: Wal-Mart and U.S. capitalism

by Keith Gottschalk
December 9, 2005                [back to top]

In my little town I grew up believing God keeps his eye on us all And he used to lean upon me As I pledged allegiance to the wall Lord I recall My little town (Simon and Garfunkel, 1975)

My little town is about to be eaten by a new Wal-Mart.

This isn't big news anywhere other than in Chardon (population around 5,600), nestled in the snowbound heights east of Cleveland.

To the people of the town I grew up in, it's been a long time coming. My mother, who still lives there, and her neighbours, fought Wal-Mart, playing David to the corporate Goliath for several years, winning several skirmishes, but losing in the end.

I thought about this as I watched the new documentary Wal-Mart, The High Cost of Low Price which is making the rounds of the U.S. and Canada.

I knew I was in for a rough time when the first vignette in the film told the tale of when Wal-Mart came to Middlefield, Ohio.

Middlefield, a quaint Amish community where time sometimes seems to have stopped, is 10 miles from Chardon. The segment, highlighting the desperate struggle of a longtime mom and pop hardware store to keep afloat, broke my heart.

The family store didn't make it. And now the beast moves to the other side of Geauga County to spread its particular brand of ruthless consumerism to the town that will always be home to me.

I was there a few months ago, and saw the behemoth rising from an open field on the edge of town, by a road that will soon be overwhelmed with traffic needing major improvements the taxpayers will no doubt be stuck paying for.

I knew what was about to happen. But the tableau that will play out is, of course, more than an American phenomenon.

I wish the filmmakers had included in the main film their segment about Jonquière, Quebec, where Wal-Mart closed down a successful store for the unpardonable sin of unionizing, instead of in the bonus DVD segment.

A recent Radio Canada exposé on the French language program Zone Libre recounted that Wal-Mart security spied on union organizers and followed their movements with video cameras, a harassment tactic covered in the American documentary as well.

As reported by the CCN/Matthews Service, the Zone Libre program also revealed that 10-14 year-old children were working in two garment factories in Bangladesh making clothes for Wal-Mart of Canada.

According to Catherine Vaillancourt-Laflamme of the Quebec Coalition Against Sweatshops, Wal-Mart has reacted to the exposé by announcing it is running from the situation rather than helping to eliminate the future use of child labour at the factories and ensuring that children currently working there have other alternatives.

“Cutting and running is the absolute worst possible response to reports of child labour or other workers' rights abuses,” Vaillancourt-Laflamme said.

It's just a taste of what it's like to work for Wal-Mart at home and abroad, an experience also covered by author Barbara Ehrenreich in her book Nickle and Dimed: On (Not) Getting By in America a few years ago. The degradation of the world's natural resources by the Wal-Mart system is also covered in some detail, in the documentary.

Exploitation of cheap overseas labour makes the cheap goods sold at Wal-Mart stores in the U.S. and Canada possible. But, of course, the damage continuum travels from Bangladesh through Main Street.

In the U.S. documentary, former Wal-Mart managers tell how they used to go to the Main Street business district of the towns in which they were opening a new store and make bets on how long it would take for this or that family-owned business to go down.

So I decided to take a nostalgic trip down Chardon's very own Main Street to take a long last look before it dies. You can too — right here.

Some of these quaint New England style stores and storefronts have been there since I was a six-year-old buying a Mad Magazine at Lehman's Pharmacy. I wonder how some of these may look vacant and boarded up. They cannot hope to compete with the behemoth on the edge of town.

Thankfully, it's not all doom and gloom in the documentary: Wal-Mart has been turned away in towns scattered across the United States. In Germany, Wal-Mart, opposed by strong national laws that don't exist in the United States, had to make their peace with the unions. In Quebec, the news is not altogether bleak either — the store in St-Hyacinthe stands unionized, an affront to the Wal-Mart way.

But for most communities, the damage has been done, or in the case of my little town, about to be done.

There are two additional things that need to be mentioned here.

First, is that any demonizing of Wal-Mart shoppers misses the mark and is unfair. My mum, who fought the Wal-Mart, must now regretfully look forward to shopping there. On a pension and with medical bills piling up, she's no different from many people struggling to make ends meet in the neo-con “new economy.”

For them, the $20-40 difference in a week's groceries for a family of four can be the make-or-break for their family budgets. They have no choice but to go where they can stretch their dollar the farthest.

So, second point, let's understand the real enemy here. And no, it's not even Wal-Mart, per se. After all, what did they do? Within American style capitalism, they merely took that system to its logical extension. The company simply went all the way — cheapest labour, cheapest costs, cheapest merchandise, all marketed ruthlessly without the slightest consideration of the people or communities that would be adversely affected.

In short, Wal-Mart is the logical conclusion of American style capitalism triumphant.

And in all discussions concerning Wal-Mart, that's where the arguments stop short. We won't go there. But we must. If we're going to even consider building a new humane world for ourselves and our children, we have to examine the way our system does business — not just Wal-Mart, the poster child for the “at-all-costs” movement, but the entire bloated, powerful corporate system that makes citizens serfs and even Prime Ministers' knees bend.

Our common humanity is not served by allowing this rapacious system that demeans honest labour and the public commons to such a degree that even our sustainability on this small spinning planet becomes an open question.

Many of our élite thinkers view questioning of capitalism/worldwide free markets as a closed issue. But around the world and up our street we see that this discussion cannot be closed. Simply because we are told that our free-trade world economy is the triumph of human ingenuity doesn't mean, in the long run, it won't ruin us. We can do even better than a system that holds the world's population and its resources hostage as “human capital” for the benefit of a shrinking pool of the mega-rich.

In Bangladesh, Jonquière or little Chardon, Ohio, the endgame is the same.

Keith Gottschalk has written for daily publications in the Midwest U.S. and was formerly a radio talk show host in Illinois. He frequents babble as the Américain Égalitaire

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Wal-Mart Critics: Where Would Jesus Shop?

By MARCUS KABEL
AP Business 
Dec 9, 12:13 AM EST                  [back to top]

W.W.J.S. (AP) -- Where would Jesus shop? According to union-backed critics of Wal-Mart Stores Inc., not at the world's largest retailer. WakeUpWalMart.com on Thursday unveiled a religious-themed campaign Thursday asking shoppers whether God wants them to buy things from the Bentonville, Ark.-based company.

The group, funded by the United Food and Commercial Workers union, launched a TV ad and released a letter signed by 65 clergy members and religious figures. The group says Wal-Mart's policy over wages, health benefits and other issues harm families and communities.

Wal-Mart accused the group of using union dues to exploit religion and said it would give nearly $200 million in cash contributions to charities this year.

The 30-second TV spot, starting Friday in Alabama, Arkansas, Georgia, Kentucky, Oklahoma and Texas, is part of the latest seasonal-themed campaign against Wal-Mart. The TV ad starts with a picture of a Bible-like tome and an off-screen narrator who says, "Our faith teaches us 'Do unto others as you would have them do unto you.'

"If these are our values, then ask yourself: should people of faith shop at Wal-Mart this holiday season?"

Wal-Mart Chief Executive Lee Scott responded within hours with his own letter laying out what he called Wal-Mart's positive contributions - saving working families money, providing jobs and supporting charities.

"For that reason, we will not be deterred from our mission, despite misleading statements from paid critics whose motives are less than pure," Scott wrote.

"Wal-Mart will continue to do those things that we believe are right for our customers, associates and communities: helping people put food on the table and clothes on their backs; providing good benefits, providing career opportunity, and being a good citizen in the towns we serve," Scott added.

The letter from clergy members urged Wal-Mart to change its business practices.

"Jesus would not embrace Wal-Mart's values of greed and profits at any cost, particularly when children suffer as a result of those misguided values," the letter said.

WakeUpWalMart said it recruited the clergy members, including Rev. Jesse Jackson, from a variety of faiths through its activists, who asked if they would be interested in signing the letter.

The group also plans candlelight vigils at selected Wal-Mart's in 19 states.

On the Net:

WakeUpWalMart: http://www.wakeupwalmart.com

Wal-Mart Stores Inc.: http://www.wal-martfacts.com

© 2005 The Associated Press. All rights reserved.

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Wal-Mart Runs Ads After Publishers Complain

By MARCUS KABEL
AP Business 
Dec 8, 2:08 PM EST                     [back to top]

SPRINGFIELD, Mo. (AP) -- Wal-Mart Stores Inc. placed full-page advertisements in 336 Midwestern newspapers after publishers nationally complained they are ignored by the world's largest retailer. The move comes at a time when the company is trying to address accusations it treats workers poorly and drives local shops out of businesses.

The ads, which ran in smaller papers in Missouri and Oklahoma between Nov. 30 and Dec. 6, were a test for a possible change in newspaper advertising policy at Wal-Mart, which publishers say has ignored their dailies and weeklies for years.

"I think it is a good first step. They are such a big economic force in our communities and were not participating in those papers," said Mike Buffington, past president of the National Newspaper Association and editor and co-publisher of the Jackson (Ga.) Herald.

Consideration of an advertising shift comes as the retailer repositions itself on several fronts - particularly community relations. The retailer regularly faces criticism, lawsuits and organized attacks from labor union-backed campaign groups, making it more difficult to open new stores and grow.

Retail and grocery store ads together account for anywhere from 60 percent to 80 percent of revenues for community newspapers, said Brian Steffens, the executive director of the National Newspaper Association.

Grocery stores purchase the bulk of those that advertising, with local grocers often placing full-page ads several times a week. Wal-Mart has grown in recent years to be the nation's largest seller of groceries with the expansion of its supercenter store format, but it generally has not taken out weekly ads to showcase its grocery prices in local newspapers.

"If one local grocery store goes out, a community newspaper loses at a minimum one or two full-page ads or inserts a week," Steffens said.

Wal-Mart said it would look first at whether the new local ads increased sales and traffic at 218 stores in those newspapers' territories. "If there is a significant return, we would consider incorporating the local papers into our overall ad strategy," Wal-Mart spokeswoman Mona Williams said.

Williams said Wal-Mart had traditionally not advertised locally because it had strong customer traffic anyway. Its practice of "every day low prices" also means it does not need to advertise sales and individual items like many other retailers do.

Community relations may also play a role in deciding whether to change the advertising practice, Williams said.

"The question is also whether to advertise to support the local newspaper and generate good will from that. These are probably good, non-traditional reasons to advertise locally and considerations we will also factor in once we have the market test results," she said.

The NNA says it worked out the ad test in talks with Wal-Mart executives after Buffington wrote an open letter in January that accused Wal-Mart Chief Executive Lee Scott of ignoring the association's 2,500 members.

"Wal-Mart built its foundation of stores in many of our rural and suburban communities, the places where I, and many of my fellow publishers, operate newspapers," Buffington wrote in the letter posted on the NNA's Web site, http://www.nna.org

"Yet community newspapers across the nation are all but invisible to Wal-Mart - unless the company is looking for some free PR in our pages. Wal-Mart has a fairly standard policy of doing little to no local newspaper advertising," he wrote.

The letter came after Wal-Mart at the start of the year placed full-page ads in major metropolitan dailies defending itself against criticism, then had a public relations firm approach local papers, hoping to place news stories on Wal-Mart's views.

In the spring, the NNA surveyed its members on their relations with Wal-Mart.

Of those that responded, 81 percent said they had a Wal-Mart store in their circulation area. And, of those, 62 percent said Wal-Mart had a negative impact on the community, 25 percent said neutral and 13 percent said it was a positive effect.

The results were similar when asked how Wal-Mart affected the newspapers, with 67 percent saying negative and 4 percent answering positive.

Nearly 60 percent said Wal-Mart never advertised in their papers, but about 80 percent said Wal-Mart sometimes or often asked for publicity, such as pictures in the paper of Wal-Mart presenting a charity check. The NNA did not list its methodology for poll.

Neither the NNA nor Wal-Mart were willing to discuss how much the ads cost.

As a rule, ads printed in the paper make more money for the publisher than inserts, which Wal-Mart has tended to use in the past on the few occasions it did advertise. Inserts require more labor to put into a paper and are usually printed elsewhere, rather than on the newspaper's own presses, so the paper cannot charge for its printing costs.

Wal-Mart last December ran a brief newspaper ad campaign in an effort to boost lackluster pre-Christmas sales. Those advertisements featured toys and electronics on which the retailer cut prices a week into the holiday shopping season.

© 2005 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed. Learn more about our Privacy Policy.

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Wal-Mart to locate in Jiujiang

Asia Pusle
Updated: 2005-12-06 11:41              [back to top]

Fanhua Property has decided to build a logistics base covering an area of 2.33 hectares in Jiujiang City, located in east China's Jiangxi Province. Industry insiders are of the opinion that US retail giant Wal-Mart will possibly become the operator of this project.

Wal-Mart is turning to leasing for its projects in China. Four companies including Wanda Group and Fanhua Property are Wal-Mart's long-term cooperative partners in the country.

Industry insiders also noted that senior officials from Wal-Mart have conducted surveys in Jiujiang and Jingdezhen cities in Jiangxi since the first half of this year. Once the logistics base is built by Fanhua Property, Wal-Mart will possibly lease the buildings for its operation in Jiujiang

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Wal-Mart Movie: A Wavering Thumbs-Up

By S.J. Caplan
12/05/2005                    [back to top]

Instead of the typical family battles over light meat versus dark or predictions on who would win the football games, our Thanksgiving pre-dinner conversation revolved around the new Wal-Mart (NYSE:WMT) documentary.

Wal-Mart: The High Cost of Low Price is the feature-length documentary produced by Brave New Films, whose other works include Outfoxed: Rupert Murdoch's War on Journalism and Uncovered: The War on Iraq. This latest documentary purports to "uncover a retail giant's assault on families and American values." Okey-dokey. I guess we know where this one's heading.

The film opened officially in selected theaters on Nov. 4, and it went nationwide the week of Nov. 13 through a network of free screenings. Anyone can participate in this ongoing non-traditional release strategy by signing up at online at Walmartmovie.com and ponying up $12.95 to purchase a film copy. If you don't want to part with your cash, you'll be able to scroll through a listing of screenings throughout the world (!) and see whether any neighbors or organizations in your locale are hosting an event.

The movie itself is humorless but eye-opening. Letting affected individuals tell their personal stories, it reels off a litany of alleged bad behavior by Wal-Mart. The criticisms range from the oft-recited complaint of new Wal-Marts pushing out local small businesses to charges of discrimination, union busting, exorbitant health insurance costs, and encouragement of employees to turn to the government for financial assistance. Even the most ardent Wal-Mart supporter may be surprised to learn that the company considers 28-hour work weeks to constitute full employment, even though that equates to an approximately $13,000 annual salary.

In my opinion, as long as the film disseminates accurate information, then that alone is valuable. But before you unload on me, I'll admit that this is where things get tricky. I think the film's weakness lies in its inability to assess the credibility of the former employees and other affected parties who may have their own biased axes to grind. In addition, although the producers invited Wal-Mart's CEO, H. Lee Scott, to be interviewed, his refusal almost leaves an impression of the company as a hapless target.

Nevertheless, the facts and statistics cited in the film are bold and unnerving. Do your own homework to see where you think the truth lies. For their part, the film's producers document their citation of statistics in a page of their website that they titled "facts." The site also includes links to Wal-Mart's response, including an alleged script sent to every store manager to respond to the film. Then, do even more reading by going to Wal-Mart's own "Good Works" site, walmartfoundation.org, and see how the company presents itself.

Here are some of the topics I tried to toss around with my family during Thanksgiving: Should there be any constraints on a corporation's effort to maximize shareholder value if that corporation operates within the law? Does that answer change if the corporation receives significant governmental subsidies? Is it fair to view a corporation as a provider of a social safety net? Should we mind if a corporation applies strong leverage over its supply chain if it can ultimately deliver inexpensive items to benefit the consumer? Is the death of Main Street an unfortunate but inevitable effect of successful giant retailers?

My family was mildly interested in discussing these questions. Their comments ranged from those of city dwellers offering that they never shopped there anyway to Great Grandma Frieda declaring that everyone should note the many employment opportunities that the company provides. No serious discussion of the issues ensued. Ultimately, I think they just wanted to sit down for dinner.

So what is the answer to the so-called "problem of Wal-Mart"? Producer/director Robert Greenwald says that "the film cannot and should not answer that. The film shines a light on the problem, connects the dots, makes what is abstract personal, and tells a story. The film is not the solution; that comes from the good people around the country who use the power of democracy to exercise their opinions, views, and activism in numerous ways. Wal-Mart is a big corporate problem. It will not be fixed by one film or one action, but the film will be a step toward the vital debate, discussion, and actions we need to begin to get the problem front and center."

I'm not a Wal-Mart shareholder -- not because of ethical considerations but simply because I've just never allocated a significant portion of my portfolio to retail stocks. I don't shop there more than once or twice a year, either, because our local store tends to be a mess and the parking lot overcrowded. So this movie will not really change my investing or shopping patterns, but it does challenge me to reflect on the issues it raised. For that reason, I deem the movie a success: It piqued my interest and made me more interested in the debate.

But will it really engage others who are not already predisposed to viewing it? With its limited distribution and left-wing branding, it can be easy to dismiss without being seen. Judging from Wal-Mart's strong November same-store sales figure -- up 4.3%, topping the overall 3.7% gain for retailers -- the film has had little immediate impact on its core consumers so far. Whether it will spark increased public outcry or shareholder activism in the future remains to be seen.

Fool contributor S.J. Caplan still has to put away all the dishes from her Thanksgiving festivities. She does not own any companies mentioned in this article. Feel free to contact her to suggest other ways to antagonize guests at next year's dinner.

The Motley Fool is dedicated to Educating, Amusing, and Enriching all visitors to their website at http://www.fool.com/index.htm?ref=Yo.

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What To Do About Wal-Mart

Stacy Mitchell
December 05, 2005               [back to top]

Stacy Mitchell is a senior researcher with the New Rules Project , a program of the Institute for Local Self-Reliance. She has advised dozens of communities on policies and strategies to counter corporate retail expansion and build a sustainable, high-road local economy.

As the company's misdeeds pile up in the public consciousness, it can be tempting to define the problem of Wal-Mart as one of a bad apple—a rogue company gone awry in an otherwise sound economic system.

Wal-Mart has indeed attained a scale that puts it in a category all its own, and there's no question that it is leading a race to the bottom. But others are running that race too. Target's wages are as poor and its health benefits as out of reach. Home Depot and Lowe's have crushed thousands of independent hardware stores. Best Buy has its main sourcing office Shanghai, where it relies on the same dismal factories.

It would be more accurate to view Wal-Mart not as a bad apple, but as the crowning achievement of an economic and political system that has greatly enlarged the power of global corporations and trampled core American values—namely small business, community, local democracy and work.

Rather than campaigning to convince one company to change its ways, we would do better to focus our energies on changing the underlying policies that created this monster—and will continue to create others. This is an opportunity to build a broad political movement aimed at reasserting those core American value. Here's how:

1. Bring Back Trust-Busting

There was a time not long ago when Americans believed concentrated market power was not only a threat to consumers, but also to democracy, and that a truly competitive economy was one in which there were many competitors.

This robust notion of antitrust has given way, within the courts and enforcement agencies, to a view of antitrust that largely discounts the dangers of concentrated market power and instead focuses narrowly on the benefits of economies of scale. The view that now dominates antitrust jurisprudence essentially holds that anything that may yield efficiencies and thus the possibility of lower prices in the short term is acceptable—regardless of how great the concentration of power or the long-term consequences.

Two years ago, when Wal-Mart priced much of its toy department at or below cost to destroy Toys R Us, it provided a large-scale demonstration of a tactic that many small businesses contend the company has been employing in a more localized fashion for years. Predatory pricing benefits consumers through lower prices in the short term, but ultimately reduces competition.

Another concern is the power global retailers have over suppliers. Borders and Barnes & Noble are now bigger than the top 10 publishers combined. Home Depot and Lowe's, which were barely a blip on the radar 20 years ago, now command half of all sales of hardware and building supplies. As gatekeepers, they have extraordinary power to exact favorable terms from manufacturers—which may not be extended to smaller competing retailers—and to lock out some producers entirely.

We need to step up investigation and enforcement of predatory pricing violations and the illegal exercise of buyer power. Unfortunately, the Bush administration appears headed in the other direction. Its Antitrust Modernization Commission is weighing the repeal of the Robinson-Patman Act, a key law for checking the power of giant retailers.

Perhaps it is also time to think about imposing a cap on the market share that any one company is allowed to attain. Wal-Mart now has 30 percent of the market for groceries and basic household goods in some major metros, such as Dallas-Fort Worth, and an even greater share in many small towns.

2. Expand Community Control Over Development

Cities already have the authority to set limits and impose standards on retail development. Some are now leading the way by requiring retail projects to pass an economic impact analysis to gain approval, and restricting the size and location of new stores, which is crucial to preventing companies like Wal-Mart from overwhelming local economies.

But there are major hurdles. One is the lingering belief among many local officials that these big stores are good for local economies. Papers that came out of a recent Wal-Mart-funded conference and a number of earlier studies have reached a range of conclusions about Wal-Mart's effect on local economies, spanning from significant negative impacts to modest benefits.

But what's striking is the vast gap between the findings of even the most favorable studies and the economic Shangri-La that this company and other big-box retailers have been peddling to local officials.

Even for those communities shrewd enough not to buy the job-and-tax myths, there still remains the fear of being hit with an unfounded, but expensive, lawsuit brought by the world's biggest corporation or an extremely well-funded ballot initiative that grassroots groups lack the resources to effectively counter. (Wal-Mart, Home Depot, Lowe's and others have all been involved in zoning-related ballot initiatives, sometimes spending upward of $100 per voter.)

Some cities have land use policies that have not been updated for years and afford insufficient protections—much to the surprise of residents who suddenly find one of these giants on their doorstep. Earlier this year, Wal-Mart CEO Lee Scott directed executives to speed up construction of new stores in anticipation of more cities revising their rules on retail development.

States could bolster local democracy against corporate power by passing laws that automatically make large retail projects a conditional use—subject to added scrutiny, including an independent economic impact analysis and a public hearing and a vote by the city council. States should also look into adopting protections for cities that face intimidation lawsuits brought against valid land use policies, and they should outlaw corporate spending on ballot initiatives.

3. Support Small Business Creation

We've lost tens of thousands of independent businesses over the last decade and, with them, an important part of the fabric of American life. Small businesses contribute significantly to the vitality of local economies. They nurture social capital, disperse wealth and vest decision-making in local communities rather than corporate headquarters. They are the means by which generations of families have pulled themselves into the middle class.

But small businesses have long been on the losing end of government policy. Local and state governments have spent billions subsidizing the construction of big-box stores. Nearly half the states have corporate income tax policies that give significant advantages to national chains. Local zoning boards routinely bend and break the rules to accommodate big retailers, while telling small businesses that it's their own problem if they cannot "compete."

What might our economy look like if we reversed these policies? What might happen if we redirected all those corporate subsidies to small business development? We could set up business incubators, training programs and revolving loan funds. What if we stopped creating tax increment financing zones to support Wal-Mart and instead established Independent Business Investment Zones, as some in Austin, Texas, are calling for? What if our land use and transportation policies no longer fueled big-box sprawl but fostered small businesses embedded in neighborhoods and town centers, so we could once again walk to the store?

4. Value Work

In a country that supposedly values work, it's a disgrace that so many people put in a full 40 hours or more every week and still cannot make ends meet, especially when the remedies are so clear: a legitimate minimum wage, universal health care and protection for the right to organize and have a voice on the job.

It's heartbreaking to read the testimony that has come out of the various lawsuits charging Wal-Mart, Home Depot and other chains of deleting hours from employees' timecards. This is dramatic evidence that, here in the land of the free, thousands of people feel they cannot stand up for the basic right to be paid for their work without facing retaliation or job loss.

This fear is the direct consequence of policies that have made it harder for workers to form unions and dramatically tipped the balance of power in the workplace. It's high time we tipped it back.

Wal-Mart is a powerful rallying point, but we should not lose sight of the big picture—if for no other reason than it will make it all that much harder to tackle Wal-Mart itself. To the extent that liberals in New York and other cities continue to flirt with Target while shunning Wal-Mart, we are vulnerable to letting the other side portray this as just another volley in the culture wars—our problem with Wal-Mart seemingly based on nothing more than its lack of style and association with southern states and country music.

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Bicycle Defect Case Begins Against Wal-Mart, Dynacraft

12-05-05 01:04 PM EST               [back to top]

SAN RAFAEL, Calif. (AP)--A group of boys who were injured while riding bicycles they claim were defective are suing retail giant Wal-Mart Stores Inc. ( WMT) and the company that imported the bicycles from China.

The suit claims Wal-Mart and San Rafael, Calif.-based Dynacraft BSC Inc. conspired to hide defects in a key bicycle part even after injuries were reported.

The trial began Monday in Marin County Superior Court.

The suit centers on the so-called quick-release devices attached to the bicycles' front wheels, which are designed to allow the wheels to be easily removed for maintenance.

The nine boys, ages 7 to 13, claim they smashed their faces onto pavement after the part malfunctioned and the front wheels came loose while they were riding.

The suit also names insurance administrator Carl Warren & Co., which investigated complaints for the importer, for allegedly conspiring to cover up the defects.

"Consumers in America deserve to be able to rely on the safety of products they buy for their children," said Mark Webb, a San Francisco lawyer representing the plaintiffs.

Wal-Mart said the bicycles in question - mostly Next Ultra Shock and Next Shock Zone mountain bikes - are safe as long as they are "properly used," and that the bikes' quick-release component has never been the subject of a recall or safety citation.

"Our view of the facts is substantially different from the plaintiffs'," said Wal-Mart spokesman Marty Heires.

Fletcher Alford, an attorney representing Dynacraft as well as Carl Warren & Co., said the claims are without merit. He declined to comment further.

The U.S. Consumer Product Safety Commission is investigating the allegations, said agency spokesman Scott Wolfson.

Copyright (C) 2005 Dow Jones & Company, Inc. All Rights

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Wal-Mart: The Whole Story

The Washington Post Company
Saturday, December 3, 2005               [back to top]

No doubt Wal-Mart has contributed to low prices for consumers, as Sebastian Mallaby noted in his Nov. 28 column, "Progressive Wal-Mart. Really." But that is only part of the story.

For all the reductions in prices that Wal-Mart generates for consumers, the company's business practices, such as leaving more than half of its employees not covered by its health insurance plan, also contribute to real reductions in the purchasing power of its employees. And when many companies follow Wal-Mart's lead, as they must, millions of Americans are left with declining real wages and rising debt -- exactly what is happening in today's economy. If Henry Ford wanted his workers to be rich enough to buy his cars, Wal-Mart is leading us to an economy in which its employees are barely able to shop at Wal-Mart. No one should welcome this.

Wal-Mart could distribute more of its billions of dollars in profits to its workers without even raising prices. Or Wal-Mart could raise prices marginally but, in so doing, help hundreds of thousands of Americans move from being debtors to savers. Either way, America would be better off. But these results will occur only if Congress raises the minimum wage, which Wal-Mart now opportunistically supports, and gives workers an effective right to join a union, which Wal-Mart clearly does not.

-- Christian E. Weller

Washington

The writer is a senior economist at the Center for American Progress .

I'd like to pay less for my Washington Post. I suggest that The Post reduce subscription rates by cutting salaries for your staff, especially writers and columnists. A 50 percent reduction ought to help a lot. While you are at it, make them pay for a big chunk of their health insurance, maybe 80 percent, instead of whatever they are paying now. By the way, none of this will apply to management or the shareholders.

Sebastian Mallaby can offset the reduction in his take-home pay by shopping at Wal-Mart.

Oh, did I mention his newspaper will cost less?

-- Bob Bailey

Silver Spring

Sebastian Mallaby's column referred in passing to a New York University academic who "advised John 'Benedict Arnold' Kerry in the 2004 campaign." It doesn't matter to me if the target is John Kerry, George Bush or the Easter Bunny. A gratuitous and insulting statement, made completely out of context and with no explanation by the writer, in a paper committed to elevating the public dialogue, adds up to a loss of credibility.

-- Barak Rosenbloom

Seattle

Wal-Mart's low prices drive down not only its own workers' wages and benefits but also the wages and benefits offered to other companies' workers.

Even if we assume that Wal-Mart provides lower costs for the average consumer, those lower costs don't come without a price -- lower wages and fewer benefits for the workers who produce the goods Wal-Mart sells, and eliminating the jobs of others. So isn't it all a bit like borrowing from Peter to pay Paul?

Many of those who are helped out by Wal-Mart's prices are workers whose jobs went to China, workers who lost their health insurance because their employer couldn't keep up with the Wal-Marts of the world or workers who can no longer make ends meet on the wages offered them (e.g., farmworkers in Southern California).

Where does Sebastian Mallaby think the company's savings come from, anyway? Wal-Mart's business model draws blood.

-- Nicholas J. Levintow

Silver Spring

© 2005 The Washington Post Company

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Who's afraid of Wal-Mart?

Surajeet Das Gupta 
New Delhi Business Standard
December 3, 2005                                             [back to top]

Big Bazaar is empowering its vendors, Shoppers' Stop is getting into hypermarkets, Subhiksha is going it sans frills as they all gear up to the potential challenge of Wal-Mart.

7:00 pm, Lucky General Store, Mayur Vihar, Delhi. Three delivery boys are packing grocery bags with orders from the neighbourhood condominiums. A loaf of bread and two packets of soup for Mrs Verma on the third floor; urad dal and a packet of salt for Shanti bai who cooks on the seventh floor; six bottles of soda for Sharmaji who’s having a party; a chocolate pastry for Neha whose mother is working late again...

6:00 pm, Sahara Mall, Gurgaon. There’s a serpentine queue of cars waiting to park, so people can get inside to Big Bazaar, where offers and discounts and promotions have something for everyone. Buy a kilo of rice, get another kilo free; get three packs of juice for the price of two; pay Rs 100 for a T-shirt, get the second T-shirt free. There’s pandemonium and chaos. At the payment counters, the queues resemble those outside...

Wal-Mart, anyone? The threat of the giant retailer moving into India and destroying the domestic retail biz (worth Rs 350 billion and growing at 30 per cent annually) has been sounded often enough, but no one seems overly bothered yet. At least on the face of it.

The neighbourhood kirana shop owner is too far removed from the logistics of what is clearly big business, and he isn’t worrying for now. But the big, young boys of India’s juvenile retail industry are certainly looking out for Wal-Mart and its like, and even taking a leaf out of its retail model, even though Kishore Biyani accuses it of being “too much of a mechanical model”.

Biyani should know. The head of Pantaloon Retail and the undisputed king of retail in India has read every book written on the legendary Sam Walton. Like him, he’s big on volumes, operates on wafer-thin margins, and is all set to offer a tough fight when Wal-Mart does finally move in.

Buoyed by its success in China, Wal-Mart is now hot on India, the world’s fourth-largest retail market. Any wonder that,when its international CEO John Menzer came lobbying for foreign direct investment in retail in India, he first knocked at Prime Minister Manmohan Singh’s door.

For now that door is still closed, but the government is keen to open up the sector in phases, and the first phase might be any time soon. When that happens, not just Wal-Mart but other chains like Carrefour, Tesco and Home Depot will in all probability make a beeline for India’s cash-and-carry.

Till then, it’s easy to underestimate the Wal-Mart juggernaut. The world’s largest company has 3,000 stores across the US, UK, China, Japan and Mexico, and one new store opens every day on average. Its sales, at $285 billion, almost equal the size of the whole of the retail market in India.

And it uses that scale to leverage its muscle power with its vendors and keep competitors at bay.

In comparison, the country’s largest player, Pantaloon Retail will probably do sales of Rs 2,000 crore this year, spread over 2.5 million sq ft of store space across 23 cities — far, far ahead of its rivals in India, but chicken-feed when compared with Wal-Mart. The question then: how will Biyani fend off Wal-Mart and Co when they come looking for a bite of India’s booming retail trade?

“We have a window of opportunity and the first-mover advantage for the next two-three years,” Biyani contests. “The battle with Wal-Mart is not about money, or low prices, but for the mind space of customers.” He’s certainly pulling out all stops to ensure that advantage stays with him.

“Our strength is that we understand the Indian customer better than Wal-Mart, that they will probably repeat the same mistakes that we made earlier.” He’s just a little bit cocky, but then Biyani has learnt some of his moves from Wal-Mart itself.

He’s operating on building scale, creating a strong vendor and sourcing network, and improving efficiencies in inventory and stock turns. In an aggressive bid to command the market, he is on a massive expansion spree — 10 million sq ft of store space by 2008 and sales of Rs 8,000 crore in that year. Big Bazaar, his flagship store, will increase from the current 23 to 55 cities.

To that end, he has already tied up for 8.5 million sq ft of additional space, insulating himself against Wal-Mart, which will have to pay higher rent for similar space. To guard himself against possible property lease hikes, Biyani has set up two real estate funds with a corpus of Rs 1,800 crore to develop retail malls across the country.

“Wherever we went as anchor stores,” he rationalises, “the rental of the mall went up but we did not benefit from the upside, though the property owner did. Now, through developing malls, we will grab that advantage.”

For this massive expansion, Biyani needs to infuse Rs 1,200 crore into the system. To fund at least the first phase of this expansion, a rights issue of Rs 225 crore is on the anvil — enough, he says, to see him through the next two years.

Conscious of Wal-Mart’s (or Carrefour’s) legendary sourcing prowess across the globe — buy in huge volumes, sometimes the entire production of a plant, at low cost and pass the benefit on to the customers — Biyani is reformulating his strategy.

For one, he will create 30-40 anchor vendors, each of whom will have to build scale with turnovers of over Rs 100 crore. To support them, Biyani has floated a consumer fund to raise Rs 1,800 crore to invest as equity in each of these companies.

He is also pushing smaller vendors (he has over 1,200) to reach economical turnover sizes by expanding their capacities so that they can generate turnovers of Rs 5-6 crore with a growth of 40 per cent annually. And he has already tied up with some large vendors (for instance, Pepsi) to supply him with agricultural produce.

Unlike global majors, he believes in a partnership vendor model where economies of scale will drive efficiencies and keep costs down. Most global giants, on the other hand, squeeze vendor margins by using volume orders as bait.

Biyani-watchers say the other advantage is his flexibility to adapt and change unlike, say, Wal-Mart which has a standardised international format. Argues Bala Deshpande, director, ICICI Ventures (which had earlier invested in Pantaloon): “His model is flexible. His is not a standardised product format like the global companies.”

Biyani will acknowledge the superiority of Wal-Mart where inventory management is concerned. He’d like to have all his vendors online, just as Wal-Mart does, and is investing Rs 100 crore over the next three years on IT infrastructure.

This will help the company narrow the gap on stock turns. And like his global challengers, he’s likely to leverage international sourcing for products in home and furniture due to the unavailability of appropriate vendors in the country (unlike in foods and clothing, where India has world-class suppliers).

He’s looking to China and some South-east Asian countries for selective product sourcing, but it remains to be seen whether he can match Wal-Mart’s ability to squeeze prices. Then there’s Wal-Mart’s legendary capacity to command margins at 10 per cent more than those Indian retailers get from FMCG companies. Biyani isn’t pessimistic, though, smiling mysteriously to say he still has a few more aces up his sleeve.

While Big Bazaar commands much of the market in north, west and east India, in the south, Chennai-based Subhiksha (turnover Rs 330 crore) has debunked the big store format. Its mantra: small stores, low investment, large scale of operations.

Luxuries like air-conditioning are abjured, and average store sizes never exceed 1,500 sq ft. If that sounds like your neighbourhood kirana, think again — Subhiksha is on a three-fold expansion drive and is aiming to have at least 450 stores over the next six-nine months that include newer areas like Andhra Pradesh, Gujarat, Karnataka, Pune-Mumbai and Delhi.

Subhiksha’s managing director S Subramanian is counting on a combination of scale, no-frills and small retail size with a dependence on one category of goods to take the edge off the global challenge, should Wal-Mart come up in the neighbourhood some time soon.

His advantage, he says, is the store focus on foods and grocery (which constitute 85 per cent of his sales) where convenience is key. If the international Wal-Mart format is anything to go by, it will expect you to drive 15-20 km out of the city on indifferent, traffic-dense roads to pick up your daily needs.

Contrast that with Subhiksha’s neighbourhood appeal, and you know why Subramanian is confident of what he’s pulling off. “Indian consumers are happy with the convenience of the kirana shop,” he says. “What we bring in is low prices. Food and grocery buying is not ambience-driven.” And he’s guaranteeing prices 9.5 per cent cheaper than the MRP on average, something the big boys with their large infrastructure costs can hardly replicate.

Nor is Subhiksha convinced of the price squeezing capabilities of these global giants. “Indian food companies like ITC or Dabur get no global volumes from Wal-Mart,” he says; “they’re not likely to succumb to pressure from them.”

He points out that for Wal-Mart or Carrefour, groceries and food form only part of their turnover (between 25-50 per cent), with most of the lower pricing offered on home products, clothing and kitchenware that are globally sourced. Since food items have to be locally sourced, the global companies might not, in effect, have any advantage over local retail.

Even so, Subhiksha is tweaking its model to align itself to global discount models (for global companies like Tesco that have a large grocery and food volume, 45 per cent of their turnover is from private labels).

That is what Subramanian is now undertaking, tying up with vendors to create products ranging from toilet cleaners to noodles. He expects private labeling to constitute up to 25 per cent of his turnover within 12 months of its launch. The reason is simple: margins on private labels are three times higher than those that FMCG companies offer.

Mumbai-based Piramyd Retail has a different take on the Wal-Mart challenge based on customer behaviour that shows a preference for buying from the neighbourhood.

While customers buy up to 60 per cent of their grocery and food from hypermarkets, the rest is bought from the local kirana store. To ensure it has fingers in both pies, Pyramid is working on a two-store format: True Mart department store (6,000 sq ft), and True Mart Daily convenience store right next to your home (1,500-2,000 sq ft) complete with home-delivery.

“We are not positioning ourselves as a discount store,” says Krish Iyer, managing director, Piramyd, “but someone who provides customer convenience in service for which, unlike Wal-Mart, you don’t have to travel to the outskirts of the city.”

If the Indian retail market isn’t going to be a cakewalk for Wal-Mart and its ilk, it could be because the home-grown giants have their own strategies in place. The Tata Group’s Trent (turnover Rs 245 crore), for instance, has its popular Westside stores chiefly for clothes and home accessories, and has now made an entry into hypermarkets with Star India Bazaar.

The RPG Group has the Food World supermarket, Music World, Spencer’s and Health and Globe as part of its national footprints. And the Rs 530 crore, Raheja-promoted Shoppers’ Stop lifestyle store is getting into hypermarkets too. “Our costs of setting up a new store are 30 per cent lower than those of the global giants,” says managing director B S Nagesh, “because they bring in their international designers, equipment and even the racks.”

There’s another disadvantage Wal-Mart will face in India — its strict adherence to child labour laws to which its vendors must comply. “The only way they can finish us is through predatory pricing for the next few years. But their advantage in buying cheap will be neutralised by their high cost of investment. Also, while it is possible to have large spaces in global markets because there are many varieties available there, this might not be the case in India. So while you can have 5,000 sq ft for meats in the US, you cannot have more than 500 sq ft in India as we don’t have that variety.”

More importantly, in the lifestyle space, international stores work on mark-ups of as high as 3-5 times, compared to 1-1.5 times in India. So even if global lifestyle retailers reduce their mark-ups in India, it will still be difficult for them to come down to Indian levels.

Shoppers’ Stop is hoping to increase its share of turnover from private labels from 20 per cent to 25 per cent. It is also pushing the button on its loyalty programmes — already, 60 per cent of its sales are from repeat buyers against the Indian average of 30 per cent.

The group is also moving into the hypermarket space, building on the strategy of its competitor with 1,00,000 sq ft instead of the Indian averagesize of 40,000 sq ft. But more than that, Nagesh predicts Wal-Mart and Co will have the same bottlenecks that their Indian counterparts suffer — “bad roads, slow movement of trucks”.

Eventually, too, there’s the question of money. “Will our shareholders allow us to invest Rs 100 crore in supply chain management, or would they prefer us to open more stores?” asks Nagesh.

For their global competitors, such small stakes are hardly worthy of debate: “They can put in that kind of money without batting an eyelid,” says Nagesh.

When Wal-Mart, Carrefour or any of the others will be allowed in and with what equity holding is still unclear. But despite the Left’s resistance, foreign investment in retail will not remain shut for much longer.

When that happens, India’s home grown industry will have to fight back. Some will survive, some will sell, others will close down. Let’s hope Wal-Mart won’t be among them

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City council in Detroit suburb votes to bar 24-hour operation for Wal-Mart

[back to top]

LIVONIA, Mich. (AP) - The city council in the Detroit suburb of Livonia voted unanimously to bar a planned Wal-Mart from being open 24 hours a day.

Developers of the proposed 18,950-square-metre store said they were disappointed at the vote Wednesday night to limit store hours to 6 a.m. to midnight.

"We've worked for years to produce a plan that is satisfactory to the citizens ... officials and staff," developer Robert Schostak said. "We're back to square one. It's not done yet."

More than 80 residents attended the meeting, and some applauded when the council voted.

© The Canadian Press, 2005

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Wal-Mart Subpoenaed by Federal Grand Jury

From Bloomberg News
Los Angeles Times
December 3, 2005                  [back to top]

Wal-Mart Stores Inc. has received a subpoena from a U.S. grand jury in Los Angeles probing the company's handling of hazardous waste, according to a filing with the Securities and Exchange Commission.

Wal-Mart said the California Department of Toxic Substances Control requested similar information about two distribution facilities.

Authorities in Nevada also are looking into the matter, the retailer said.

In addition Wal-Mart said district attorneys in Orange and Solano counties claimed that the company improperly disposed of pesticides in separate incidents. Wal-Mart is negotiating a resolution of both matters, it said.

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Wal-Mart's bid to obtain limited banking powers worries lenders

Tamarind Phinisee
San Antonio Business Journal
December 2, 2005                             [back to top]

Banking and consumer groups say commercial entities that seek to venture into the lending business pose a threat to the financial-services industry.

The red flag on that concern went up again when retail giant Wal-Mart filed an application in July in Utah and with the Federal Deposit Insurance Corp. (FDIC) to establish a limited purpose bank known as an industrial loan company (ILC).

Now opponents of Wal-Mart's move are waiting to see whether regulators will approve Wal-Mart's ILC application.

This isn't the first time Wal-Mart has looked at obtaining banking powers.

Three years ago, in 2002, it tried unsuccessfully to purchase an ILC in California. The year before that, it failed to get approval from the Office of Thrift Supervision to partner with the Canadian Toronto-Dominion bank.

Wal-Mart officials say they are only interested in saving the millions of dollars in debit, credit and electronic-funds transfer fees the company pays annually to banks to handle those services.

"I think all we're trying to do is save money on transaction fees by operating our own ILC. This is something that a number of companies do, including Target," says Wal-Mart spokesman Marty Heires. "We just want to do what others before us have been allowed to do and only do that on a very narrow basis."

The money saved by Wal-Mart operating its own ILC, Heires says, could be passed on to customers in the form of lower prices. Furthermore, he says the company has no plans at this time to establish lending branches and that the ILC's only customer will be Wal-Mart.

Right now Wal-Mart has bank branches -- operated by third-party lenders -- in 1,100 of its stores and agreements for 300 more.

Concerns raised Jimmy Allen, executive vice president of Broadway National Bank's retail banking division, says what most financial institutions are afraid of is the new territory that Wal-Mart would be able to venture into.

"If I had that charter and the ability to collapse the banks into it, I would," Allen says.

Allen says if Wal-Mart did go into banking, it likely would offer the same types of services that other financial institutions offer: traditional checking and savings products, mortgage loans, etc.

The key difference would be in pricing, he says, referring to Wal-Mart's motto: "Low prices everyday."

"But, I'm not sure that the general consumer is there yet, at least as it relates to their banking and investment products," he says.

Steve Scurlock, executive vice president for the Austin-based Independent Bankers Association of Texas, says giving Wal-Mart banking powers would be a "recipe for disaster."

"It distorts the marketplace, creates additional risk in the system and has the potential to negatively impact the availability of financial services to consumers in various markets," Scurlock says.

Travis Plunkett, legislative director for Consumer Federation of America, agrees.

"The principal of it is, it is almost always never a good idea to allow ... the nation's largest retail company to set up in banking even if they say it is not to get involved in banking," Plunkett says.

Intents and appearances Industrial loan companies, Scurlock says, began as a vehicle for commercial financial firms like Merrill Lynch, American Express and Morgan Stanley to engage in limited banking activities.

Over the years, the ILC charter has expanded to other industry sectors, such as retail. ILC's are insured through the FDIC.

"The troublesome area for us is the commercial ownership aspect and the ability (for ILCs) to branch across state lines," Scurlock says.

Today, ILCs are chartered and operate in several states, which include Utah, California, Colorado, Nevada, Hawaii, Indiana and Minnesota, although some 17 states allow ILCs to branch into their territories.

ILCs are regulated by the states in which they are chartered and the FDIC.

Ed Mierzwinski, consumer program director for the New York-based Public Interest Research Group, says the FDIC's limited regulatory authority over ILCs is not enough to ensure that the practices of a parent company "are not risking the deposit insurance system and not placing the taxpayers at risk."

David Barr, spokesman for the FDIC, disagrees. He says the agency has the ability to examine the operations of the parent company that are directly linked to the ILC.

"We feel that we have adequate supervisory tools to oversee ILCs and their parent companies under the current regulatory process," Barr says.

The FDIC expects to make a decision on Wal-Mart's application in about 200 to 300 days, or by early to mid-2006.

© 2005 American City Business Journals Inc.

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Wal-Mart Denies Spying On Union Sympathizers In Quebec

12-02-05 04:28          [back to top]

MONTREAL (AP)--Wal-Mart Canada on Friday denied it hired private security guards to spy on employees who supported a drive to unionize workers at one of its stores in Quebec.

Radio-Canada, CBC's French-language service, was to air a documentary later Friday in which security guards say they had been hired around the time Wal-Mart decided to close the store in Jonquiere, about 250 kilometers north of Quebec City.

Wal-Mart Stores Inc. (WMT), the world's largest retailer, cited financial reasons for the closing. Union activists had claimed the Arkansas-based company was shutting them down because they nearly won the first-ever union contract from the retailer.

The closure announcement provoked angry demonstrations and bomb threats were called in against the two Canadian Wal-Mart stores in Quebec.

Wal-Mart closed the store in April, not long after the 200 workers received union accreditation, but before they could sign a collective agreement.

According to excerpts from the TV documentary, union leaders and workers sympathetic to the drive were targeted by undercover security guards. Spying on union leaders or sympathizers is illegal under the Quebec Labor Code.

One former guard said he patrolled the store in civilian clothes, watching employees. Another said the store's surveillance cameras were used to follow certain employees.

The guards said their tasks didn't correspond to the normal duties of security.

Wal-Mart Canada President and CEO Mario Pilozzi denied the allegations.

"No, we wouldn't tolerate the situation you mentioned," Pilozzi told Radio- Canada. "No idea about what you're talking about."

Andrew Pelletier, a spokesman for Wal-Mart Canada headquarters in Mississauga, just outside of Toronto, also denied the allegations.

"There was absolutely no spying done; we would not support that," he told The Associated Press, adding private security guards were hired to protect its customers and employees. "Prior to the closure of that store, there was a volatile situation with the union and we wanted to make sure that safety and security were respected."

Copyright (C) 2005 Dow Jones & Company, Inc. All Rights Reserved

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Wal-Mart Gets Subpoena In Calif On Hazardous Waste

By Tony Cooke,
Dow Jones Newswires
12-02-05 05:54 PM EST              [back to top]

WASHINGTON -(Dow Jones)- Wal-Mart Stores Inc. (WMT) on Friday disclosed that it has received a grand jury subpoena for documents related to the company's handling of merchandise containing hazardous materials.

The company said in a filing with the Securities and Exchange Commission that it received the subpoena from the U.S. Attorney's Office in Los Angeles on Nov. 8.

The grand jury is "seeking documents and information relating to the Company's receipt, transportation, handling, identification, recycling, treatment, storage and disposal of certain merchandise that constitutes hazardous materials or hazardous waste."

Wal-Mart said it also has received administrative document requests from the California Department of Toxic Substances Control requesting similar documents and information regarding two distribution facilities.

Local California authorities and the state of Nevada also have initiated investigations into the company's handling of hazardous materials, Wal-Mart said.

Wal-Mart said it is cooperating fully with the inquiries.

-By Tony Cooke, Dow Jones Newswires

Copyright (C) 2005 Dow Jones & Company, Inc. All Rights Reserved.

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Majority Says Wal-Mart Bad for America: Poll

by Emily Kaiser
Reuters
Friday, December 2, 2005                   [back to top]

CHICAGO - Some 56 percent of U.S. consumers think Wal-Mart Stores Inc. is bad for America, according to a Zogby International poll released on Thursday by one of the retailer's most vocal critics.

The national poll -- commissioned by WakeUpWalMart.com, a union-funded group that has been pressuring Wal-Mart to raise employee wages and benefits -- surveyed 1,012 randomly chosen adults on their attitudes toward the world biggest retailer.

Respondents were asked to choose which of two statements more closely fit their personal opinions.

The majority, or 56 percent, picked: "I believe that Wal-Mart is bad for America. It may provide low prices, but these prices come with a high moral and economic cost for consumers." Thirty-nine percent agreed that "Wal-Mart is good for America. It provides low prices and saves consumers money every day."

Wal-Mart questioned the timing of the poll, which was conducted from November 15 to 18 -- a week when many of the retailer's critics organized events to highlight their concerns about the company, and screened a widely publicized documentary that cast Wal-Mart in a negative light.

"This poll is another way for them (WakeUpWalMart) to reach out for something to try to validate their efforts because they don't have anything else to hang their hat on," Wal-Mart spokeswoman Sarah Clark said.

The poll was released on the same day that Wal-Mart reported a 4.3 percent increase in November sales at its U.S. stores open at least a year -- a key retail measure known as same-store sales. Wal-Mart has about 3,700 U.S. stores and 2,400 international locations, and is expected to generate more than $300 billion in revenues in the current fiscal year.

Wal-Mart, the largest U.S. private-sector employer, faces intense pressure at home from unions, environmental groups and others who say the company pays poverty-level wages, offers poor health-care benefits and gobbles up green space with its massive big-box stores.

At the same time, Wal-Mart is defending a record-large class-action lawsuit that charges it with discriminating against women in pay and promotions.

Wal-Mart denies those claims, and points out that it often receives thousands of applications for a few hundred jobs when it opens new stores.

Wal-Mart, which hired a team of public relations experts to help polish its image, said critics' efforts to discredit the company have had little success, judging from the more than 100 million U.S. customers who shop its stores every week.

But WakeUpWalMart lauded the poll as evidence that consumers are increasingly aware of the concerns the group has worked to spotlight.

"Despite two high-priced image make-overs, Wal-Mart's public image is in a tailspin," Paul Blank, campaign director for WakeUpWalMart, said in a statement.

The Zogby poll also questioned consumers on whether they thought that Wal-Mart was becoming too powerful an economic force in America. Some 33 percent were very concerned, while 20 percent said they were not at all concerned.

Thirty-three percent strongly agreed that Wal-Mart was a retail monopoly that threatened the future health of the U.S. economy, but 35 percent did not agree at all.

© 2005 Reuters Ltd

 [back to top]

Wal-Mart hired security guards to spy on Quebec employees

CBC investigation
Fri, 02 Dec 2005              [back to top]

CBC News Employees at a Quebec Wal-Mart store that closed after a successful union drive were spied upon by undercover security guards, according to an investigation by Radio-Canada.

Wal-Mart had taken out full-page ads in several Quebec newspapers early in 2005 telling its employees they were the "cornerstone" of the company. (CP photo) Guards told journalists at CBC's French-language service that Wal-Mart had hired them to spy on employees at the store in Jonquière, 200 kilometres north of Quebec City, early in 2005. It corresponded to the time the world's largest retailer announced the store would close for financial reasons.

FROM FEB. 14, 2005: Wal-Mart to close unionized Quebec store

A documentary on the subject was broadcast Dec. 2 on the program Zone Libre. In it, the guards say their surveillance targeted union leaders and workers sympathetic to the drive.

One former guard said he patrolled the store in civilian clothes, watching employees. Another agent said the store's surveillance cameras were used to follow certain workers.

Wal-Mart Canada president and CEO Mario Pilozzi denied the allegations.

"No, we wouldn't tolerate the situation you mentioned," Pilozzi told Radio-Canada. "No idea about what you're talking about."

Spying on union leaders or sympathizers is illegal under the Quebec Labour Code.

In August 2004, the United Food And Commercial Workers succeeded in a drive to unionize the store's 200 workers. But a contract was never signed. The store closed in April.

A second Wal-Mart in Saint-Hyacinthe, Quebec, won union certification in January 2005.

In February, Wal-Mart was chastised by the Quebec Labour Relations Board for attempting to intimidate workers who wanted to form a union at a third Quebec store in Sainte-Foy, just outside Quebec City.

Wal-Mart has 235 stores in Canada, employing more than 60,000 people.

Copyright ©2005 Canadian Broadcasting Corporation - All Rights Reserved

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Union workers at Que. Wal-Mart outlet to appeal decision to throw out lawsuit

Canadian Press
Friday December 2, 2005                [back to top]

MONTREAL (CP) - Unionized workers at a Wal-Mart store in Jonquiere, Que., that closed in April will appeal a Superior Court decision that threw out their class-action lawsuit seeking damages for wrongful dismissal.

The workers say Superior Court Judge Marc Beaudoin erred when he ruled in early November that the dispute with the retail giant was the exclusive jurisdiction of Quebec's labour board.

According to the workers' lawyer, Gilles Gareau, the conflict stems from a "violation of fundamental rights" protected by Quebec's charter of rights and freedoms.

The Jonquiere store was the first Wal-Mart outlet in North America to organize a successful union drive. Wal-Mart closed the store, citing financial reasons, before a collective agreement with the union could be reached.

The 182 workers are seeking $20,000 in damages.

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Wal-Mart apologizes for bad check accusation

The Associated Press                   [back to top]

TAMPA (AP) — Wal-Mart apologized to a black man who was falsely accused of trying to pass a bad check when he went to buy thousands of dollars' worth of holiday gift cards for employees of his manufacturing company. "I keep going over and over the incident in my mind. I cannot come up with any possible reason why I was treated like this except that I am black," said Reginald Pitts.

Employees of a Wal-Mart Supercenter called sheriff's deputies last week to arrest Pitts after he handed over a $13,600 check to pay for 520 gift cards for employees at roofing supplier GAF Materials Corp., where Pitts is a human resources manager.

Wal-Mart spokeswoman Sharon Weber said Friday that the company does not tolerate discrimination. "We probably could have handled it better, but I won't know until we complete the investigation," Weber said.

Pitts said that when he went to the store last week to pick up the preprinted cards, store managers stalled for about two hours while he waited. He had handed over his business card, his driver's license and phone numbers to GAF's bank. His accounting supervisor assured them over the phone that GAF was good for the check.

Later, two Hillsborough County sheriff's deputies appeared. One grabbed Pitts by the arm. He objected to the rough handling and asked if he was being arrested.

"We need to talk with you about this forged check that you brought in here," Pitts quoted one as deputy saying. The deputy said later Wal-Mart had called and reported that Pitts had committed a felony.

A short time later deputies, determined there were no grounds for a criminal charge.

Pitts' company decided to buy its gift cards from Target.

Copyright 2005 The Associated Press. All rights reserved. 

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Wal-Mart, Critics Spar Over Co. Stature

By MARCUS KABEL
AP Business Writer                   [back to top]

BERRYVILLE, Ark. (AP) -- Nancy McShane abruptly quit shopping at Wal-Mart in March after her turkey-farming relatives complained about undue price pressure from the world's largest retailer. But James Butler says the convenience and low prices outweigh any complaints.

Depending on who you ask, Americans are either sticking with Wal-Mart because of its prices and policies or turning against it amid allegations by unions and others that the company is bad for workers, the environment and communities.

The discount retailer and its critics pushed competing data to buttress both sides of the argument. According to a poll released Thursday by Wake Up Wal-Mart, an anti-Wal-Mart group launched this year by the United Food and Commercial Workers union, more Americans have an unfavorable view of Wal-Mart today than at the start of the year.

The poll showed that a majority, 58 percent, viewed Wal-Mart favorably, but the figure was down from 76 percent in January. Wake Up Wal-Mart said that was proof that its message against the company's low-price business model is hitting its intended target - the average Wal-Mart shopper.

"It would be hard for anyone to believe that a poll paid for by the UFCW was more accurate than the fact that our estimated November store sales were up 4.3 percent and that 10 million people shopped at our stores during the first six hours of sales last Friday," Wal-Mart spokeswoman Sarah Clark said.

But Paul Blank, campaign director at Wake Up Wal-Mart, said, "What this polling indicates is that Wal-Mart's reputation is in a tailspin." He said changes in behavior would follow if consumer's opinions about Wal-Mart continue to fall.

Wal-Mart said the survey was questionable and argued that November sales and an onslaught of holiday shoppers the day after Thanksgiving showed it remained popular.

Figures released Thursday showed that sales at Wal-Mart stores open at least a year rose 3.8 percent in November when compared to November 2004 - close to analysts' expectations of 4 percent. Same-store sales are considered the best indicator of a retailer's health.

Latest News Advocacy Groups Try to Influence Shoppers Target, Wal-Mart Dec. Sales to Meet Views

Retailers Face Quiet Time for Holidays

Retail analyst Don Gher said Wal-Mart's monthly sales growth did not suggest that shoppers were staying away amid a slew of attacks by groups alleging that Wal-Mart's low prices come at the cost of poor treatment for its workers, suppliers and communities.

"At this point the sales numbers wouldn't seem to indicate a backlash," said Gher of Coldstream Capital Management in Bellevue, Wash. The company has Wal-Mart stock as part of the roughly $900 million in assets it manages.

McShane, a Springfield, Mo., housewife, once spent $600 to $700 a month at Wal-Mart - relying on the world's largest retailer for everything from groceries to oil changes.

"We cut off Wal-Mart cold turkey. Now I'm preaching it to other people," McShane said.

Butler, a chicken plant worker from Alpena, said complaints that Wal-Mart is bad for America won't stop him from shopping there.

"It doesn't change my mind. It's just a convenience. And anywhere else costs more," Butler said outside the Berryville Wal-Mart Supercenter where he had just purchased batteries.

The Wake Up Wal-Mart figures came from two national telephone surveys of about 1,000 adults in January and November. The January 15-20 poll by Lake, Snell & Perry had a margin of error of 3.1 percentage points, and the November poll by Zogby had a margin of error of 3.2 percentage points.

The number of people who said they viewed Wal-Mart very favorably or somewhat favorably fell 18 percentage points to 58 percent while the number who answered that their view was very or somewhat unfavorable increased by the same amount to 38 percent.

The group said attitudes were starting to change shopping practices. Asked how often they plan to shop at Wal-Mart in the next month, the number who said they would not go at all rose 8 percentage points to 28 percent. The largest group, those who planned to shop there once or twice, fell 7 points to 32 percent.

Clark said Wal-Mart does its own internal tracking of consumer sentiment, but declined to release that data. She said the questions were not the same as Wake Up Wal-Mart's poll so they wouldn't be comparable.

© 2005 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed. Learn more about our Privacy Policy.

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Wal-Mart is labelled 'bad for US'

Story from BBC NEWS
Published: 2005/12/01 21:57:51 GMT               [back to top]

Retail giant Wal-Mart is "bad for America", according to a poll carried out on behalf of a group campaigning against the store. The poll, conducted by Zogby for a union-led group called WakeUpWalMart, asked 1,012 people across the US about their attitudes to Wal-Mart.

Of the respondents, 59% said they agreed with the statement that "Wal-Mart is bad for America".

Wal-Mart retorted that its opponents were clutching at straws.

"This poll is another way for them to reach out for something to try to validate their efforts, because they don't have anything else to hang their hat on," a spokeswoman told Reuters.

Despite the clear majority on its "good or bad" question, the survey found other views were more mixed.

A third of respondents said that they were "very concerned" that the firm could be too powerful an economic force in the US, against 20% who said they were not concerned.

And while 33% said it was a retail monopoly, 35% said that it was not.

Stormy weather

The poll came as Wal-Mart, which has 3,700 US outlets and another 2,400 around the world, reported a rise in same-store sales of 4.3% in November.

The massive chain has run into publicity problems in recent months, including a huge class-action lawsuit which accuses it of discriminating against women over pay and promotions.

THE BIG WAL-MART QUESTION Zogby asked respondents which of these two statements, if any, they agreed with: "I believe that Wal-Mart is bad for America. It may provide low prices, but these prices come with a high moral and economic cost for consumers." Or: "Wal-Mart is good for America. It provides low prices and saves consumers money every day."

It also faces criticism from groups such as WakeUpWalMart that it is damaging the environment - and that its famously low prices derive from rock-bottom wages and benefits.

Although Wal-Mart denies this kind of accusation, it has nonetheless recently declared its intention to become more environmentally friendly.

In a speech to analysts, chief executive Lee Scott said it hoped to cut energy use by 30% and improve the fuel efficiency of its delivery fleet.

Mr Scott also called for a rise in the minimum wage - stuck for almost a decade at $5.15 - although he said Wal-Mart itself did not need to raise pay, which averages $9.37 an hour.

"We can see first-hand at Wal-Mart how many of our customers are struggling to get by," he said.

© BBC MMV

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City Council Votes to Bar 24-Hour Wal-Mart

City Council in Detroit Suburb Votes to Bar 24-Hour Operation for Wal-Mart

The Associated Press           [back to top]

LIVONIA, Mich. - The city council in this Detroit suburb voted unanimously to bar a planned Wal-Mart from being open 24 hours a day.

Developers of the proposed 204,000-square-foot store said they were disappointed at the vote Wednesday night to limit store hours to 6 a.m. to midnight.

"We've worked for years to produce a plan that is satisfactory to the citizens ... officials and staff," developer Robert Schostak said. "We're back to square one. It's not done yet."

More than 80 residents attended the meeting, and some applauded when the council voted.

Wal-Mart Stores Inc. real estate official David Ewing declined to say what the Bentonville, Ark.-based retailer would do now.

"Everything is under review at the moment," he said.

Opponents of the store said its size and proximity to a 127,000-square-foot Target store would bring congestion and crime.

"We're happy, very pleased," said Michelle Larson, spokeswoman for the group fighting a 24-hour operation.

On the Net:

Wal-Mart Stores Inc.: http://www.walmart.com

Copyright 2005 The Associated Press. All rights reserved.

Copyright © 2005 ABC News Internet Ventures

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Americans split over Wal-Mart Polls

conducted by anti-Wal-Mart group, show most have favorable view

MSNBC.com
The Associated Press
Dec. 1, 2005                      [back to top]

BERRYVILLE, Ark. - Nancy McShane abruptly quit shopping at Wal-Mart in March after her turkey-farming relatives complained about undue price pressure from the world’s largest retailer. But James Butler says the convenience and low prices outweigh any complaints.

Depending on who you ask, Americans are either sticking with Wal-Mart because of its prices and policies or turning against it amid allegations by unions and others that the company is bad for workers, the environment and communities.

The discount retailer and its critics pushed competing data to buttress both sides of the argument. According to a poll released Thursday by Wake Up Wal-Mart, an anti-Wal-Mart group launched this year by the United Food and Commercial Workers union, more Americans have an unfavorable view of Wal-Mart today than at the start of the year.

The poll showed that a majority, 58 percent, viewed Wal-Mart favorably, but the figure was down from 76 percent in January. Wake Up Wal-Mart said that was proof that its message against the company’s low-price business model is hitting its intended target — the average Wal-Mart shopper.

“It would be hard for anyone to believe that a poll paid for by the UFCW was more accurate than the fact that our estimated November store sales were up 4.3 percent and that 10 million people shopped at our stores during the first six hours of sales last Friday,” Wal-Mart spokeswoman Sarah Clark said.

But Paul Blank, campaign director at Wake Up Wal-Mart, said, “What this polling indicates is that Wal-Mart’s reputation is in a tailspin.” He said changes in behavior would follow if consumer’s opinions about Wal-Mart continue to fall.

Wal-Mart said the survey was questionable and argued that November sales and an onslaught of holiday shoppers the day after Thanksgiving showed it remained popular.

Figures released Thursday showed that sales at Wal-Mart stores open at least a year rose 3.8 percent in November when compared to November 2004 — close to analysts’ expectations of 4 percent. Same-store sales are considered the best indicator of a retailer’s health.

Retail analyst Don Gher said Wal-Mart’s monthly sales growth did not suggest that shoppers were staying away amid a slew of attacks by groups alleging that Wal-Mart’s low prices come at the cost of poor treatment for its workers, suppliers and communities.

“At this point the sales numbers wouldn’t seem to indicate a backlash,” said Gher of Coldstream Capital Management in Bellevue, Wash. The company has Wal-Mart stock as part of the roughly $900 million in assets it manages.

McShane, a Springfield, Mo., housewife, once spent $600 to $700 a month at Wal-Mart — relying on the world’s largest retailer for everything from groceries to oil changes.

“We cut off Wal-Mart cold turkey. Now I’m preaching it to other people,” McShane said.

Butler, a chicken plant worker from Alpena, said complaints that Wal-Mart is bad for America won’t stop him from shopping there.

“It doesn’t change my mind. It’s just a convenience. And anywhere else costs more,” Butler said outside the Berryville Wal-Mart Supercenter where he had just purchased batteries.

The Wake Up Wal-Mart figures came from two national telephone surveys of about 1,000 adults in January and November. The January 15-20 poll by Lake, Snell & Perry had a margin of error of 3.1 percentage points, and the November poll by Zogby had a margin of error of 3.2 percentage points.

The number of people who said they viewed Wal-Mart very favorably or somewhat favorably fell 18 percentage points to 58 percent while the number who answered that their view was very or somewhat unfavorable increased by the same amount to 38 percent.

The group said attitudes were starting to change shopping practices. Asked how often they plan to shop at Wal-Mart in the next month, the number who said they would not go at all rose 8 percentage points to 28 percent. The largest group, those who planned to shop there once or twice, fell 7 points to 32 percent.

Clark said Wal-Mart does its own internal tracking of consumer sentiment, but declined to release that data. She said the questions were not the same as Wake Up Wal-Mart’s poll so they wouldn’t be comparable.

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

© 2005 MSNBC.com

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This Season, Close Your Wallet to Wal-Mart

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I pledge not to shop at Wal-Mart. And I promise to tell all my friends, "Close your wallet to Wal-Mart this holiday season!"

Wal-Mart engages in some of the worst labor practices in the country: paying its employees substandard wages, forcing unpaid overtime on its workers and refusing to provide affordable health insurance. Sure, it's cheap to shop at Wal-Mart, but at what cost? Wal-Mart brings you its rock bottom prices by underpaying employees and forcing its suppliers to do the same. And when big box Wal-Mart comes to town, local merchants who treat their employees better can't compete and are forced out of business.

Take the pledge and tell Wal-Mart that until it changes its ways, you will take your holiday shopping to other stores and will urge your friends and family to do the same.

Enter your name and e-mail address at right to add your name to the petition which appears below.

Signatures: 5,472 Goal: 50,000 signatures Deadline: December 31, 2005

First name: Last name: E-mail address:

Privacy Policy: WorkingForChange/Working Assets does not sell, trade or release your e-mail address to others. We may send you information in the future about Working Assets by e-mail or by post.

Dear H. Lee Scott Jr.,

This holiday season, I pledge not to shop at Wal-Mart and to ask my friends and families not to buy me gifts from Wal-Mart until the chain: Pays its workers a living wage Provides affordable health insurance to its employees Stops discriminating against women Stops attacking employees who want to be represented by a union Ceases forcing unpaid overtime on its employees Stops pressuring suppliers to lower their labor costs.

Signed,

(your name here)

[This petition will be delivered to Wal-Mart CEO H. Lee Scott Jr.]

http://www.workingforchange.com/activism/petition.cfm?itemid=19943&ms=wfct51

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Is Wal-Mart Really Going Green?

By Liza Featherstone,
Grist Magazine
Posted November 30, 2005.              [back to top]

It was easy for Wal-Mart's critics to laugh this past spring when CEO Lee Scott proudly announced that he drove a Lexus hybrid. For Scott to expect praise for his consumer choices given the abysmal record of his massive company -- which has repeatedly violated the Clean Water Act while contributing to sprawl, air pollution, and a host of other serious problems -- seemed to insult public intelligence. It also seemed a strange maneuver for a man heading a company known for shunning environmental concerns. Indeed, in Robert Greenwald's new film, Wal-Mart: The High Cost of Low Price, one veteran activist says she has never encountered a company as unresponsive as Wal-Mart.

But since then, Scott's green inclinations seem to have grown. In late October, he unveiled plans to hold Wal-Mart's suppliers to higher environmental standards and to begin selling clothing made from organic cotton. Just four days later, in a speech to employees, he outlined his goals for being a "good steward" to the environment. Scott plans to increase fuel efficiency in the company's truck fleet -- one of the largest in the world -- by 25 percent over the next three years, and to double fuel efficiency over the next decade from 6.5 to 13 miles per gallon. He promised to cut energy use at new stores by 30 percent and reduce greenhouse-gas emissions at the more than 5,000 existing stores, warehouse clubs, and distribution centers by 20 percent over the next eight years. He also said the company would offer cheaper health insurance to its employees, and called upon the government to raise the minimum wage.

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Wal-Mart loses 'philosophical argument' with Apple CEO Steve Jobs, gains top-selling iPod

Tuesday, November 29, 2005                  [back to top]

"Wal-Mart Stores Inc. said its sales on Saturday were slightly weaker than those posted during the post-Thanksgiving 'Black Friday' kickoff to the holiday season," James Covert reports for Dow Jones. "Sales on Saturday were 'OK,' but saw 'a slight drop in the slope' from Friday's levels, Wal-Mart Senior Vice President and Treasurer Jay Fitzsimmons told investors Tuesday at a conference hosted by J.P. Morgan & Co. that was made available by Webcast. But the day-over-day decline partly reflected the fact that last year's Black Friday was disappointing, Fitzsimmons said. Sales for this year's post-Thanksgiving weekend overall were better than in 2004, he said."

"He noted that Apple Computer Inc.'s iPod digital music players were among the items conspicuously absent from Wal-Mart's shelves last year. The reason was that Wal-Mart was in a 'philosophical argument' with Apple Chief Executive Steve Jobs over whether the iPod player should play music from more varied sources, Fitzsimmons said," Covert reports. "'He won, we lost. Now we have Nanos in the stores,' Fitzsimmons said, referring to the latest, smallest version of the iPod."

MacDailyNews Take: The "philosophical argument" goes like this: iPods can't play music from our Windows-only-Mac-users-be-damned Wal-Mart online music store, so we're not going to sell iPods. We'll sell other brands. Result? Wal-Mart didn't sell much of anything. Virtually nobody bought the also-ran players and since virtually everybody with a portable music player owned an iPod, nobody bought from Wal-Mart's - or any other outfits' - ghettoized online music stores. So, rather than continuing to leave money on the table on both hardware and content, Wal-Mart revised their "philosophy" (back to the familiar "make money hand over fist" mantra) and decided they'd damn well better carry Apple iPods even if their own online music store doesn't sell iPod-compatible music files. Apple's iTunes Music Store, of course, sells iPod-compatible music and serves both Mac and Windows users, which is why it dominates the market so effectively

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Chapters Take Action on Wal-Mart This Holiday Season

National Organization for Women
November 28, 2005                               [back to top]

Sarasota-Manatee (FL) NOW held a protest at their local Wal-Mart store. On the day after Thanksgiving the holiday shopping season shifted into high gear, and NOW activists were there to help consumers make educated decisions about where to buy their gifts. NOW's ongoing campaign to highlight Wal-Mart's treatment of women and workers becomes even more crucial in the busy shopping weeks ahead.

On Nov. 25, NOW kicked off a holiday season of protest and education around Wal-Mart. More than 50 chapters throughout the country have plans to hold Wal-Mart actions over the holiday season. Several chapters held viewings of the film "The High Cost of Low Price," which exposes Wal-Mart's hurtful and underhanded business practices. Pennsylvania's Adams County NOW hosted 120 people at a showing, and Albany, N.Y. NOW screened the film to more than 200 people. You can find a screening near you or purchase the film online.

Activists protest at a Wal-Mart store in Western Massachusetts. Many other chapters have planned protests at local Wal-Mart stores to educate consumers this holiday season. NOW activists braved the cold to protest outside Wal-Mart stores in Illinois, Massachusetts and Utah, among other places.

Still others have gotten involved in local legislative efforts to stop the development of Wal-Mart stores in their local community. In coalition with labor organizations and other community groups, Central Ohio NOW presented a resolution to the city council to stop big box stores from taking over the community.

Actions are also planned in Arkansas, California, Maryland, Michigan, Ohio, Tennessee, Utah and Washington, and many more states have plans in the works!

NOW chapters throughout the country are encouraged to continue showing "The High Cost of Low Price" and organize demonstrations at local Wal-Mart stores. We have produced a toolkit for NOW chapters and activists that can be found on the Chapters Only section of the NOW Web site.

Send updates and photos from your local screenings and actions to Lisa Weiner-Mahfuz at lesbian.rights@now.org.

Copyright 1995-2005, All rights reserved. Permission granted for non-commercial use. National Organization for Women

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PUSHING THE PARTY LINE AT WAL-MART

By Labor Desk
November 28, 2005                    [back to top]

The Labor Desk provides information, news releases, and announcements obtained from communication and public relations offices.

Store Managers Given Scripted Response to Documentary

Robert Greenwald's documentary "Wal-Mart: The High Cost of Low Price," has the company scrambling to make sure all employees know the “right response” to the film. A two-page "script" has been given to store managers with instructions to read it to workers, along with a warning that critics are out to get them. The documentary focuses on Wal-Mart's negative impact on workers, communities and small businesses.

The documentary has received generally positive reviews from film critics since its premiere as part of “Higher Expectations Week,” a series of anti-Wal-Mart activities held across the country November 13-19. The film opened nationwide just in time for the official start of the holiday shopping season.

Greenwald told the Los Angeles Times that he was surprised Wal-Mart would go to the trouble, especially after previously releasing a 10-page media kit attacking the film.

In an interview with the newspaper, Greenwald said, "The fact that they would call a meeting to tell their employees how to respond struck me as somewhere between brainwashing and foolishness. People see a movie and decide what they're going to think."

Source: Teamsters

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CAPITALISM KILLS: Wal-Mart and Amerada Hess

By Thomas Riggins
11-28-05, 8:54 am                       [back to top]

The free enterprise system, AKA the free market, AKA capitalism, is an economic system, as we all know, that is dedicated to maximizing profits at any cost. Neither ethics, morality, honor, the environment, nor human life itself will be spared by this system and its quest to put profits before people (and everything else). Here are some more case studies of the system at work. The previous three case studies in this series can be found here.

CASE 4. One of the duties of the Labor Department is to protect children from exploitation by American corporations. We know from history that the business class will ruthlessly seize upon children to exploit every last cent they can out of them in order to increase their corporate wealth. The Bushites represent the business class to exclusion of almost every other segment of society. So you can expect these ultra-right Republicans, with the President in the forefront hypocritically masking his greed behind the pieties of a "born again" Christian, to see to it that no child is left behind unexploited.

A perfect example is revealed in the New York Times for 11-1-05: "Labor Dept. Is Rebuked Over Pact With Wal-Mart: Agreement Addressed Child Labor Rules," by Steven Greenhouse.

Wal-Mart is famous for violating labor laws. The article quotes Representative George Miller (Dem Calif.) who says, "The Bush Labor Department chose to do an unprecedented favor for Wal-Mart, despite the fact it is well known for violating labor laws. The sweetheart deal put Wal-Mart employees at risk, undermined government effectiveness, and further undermined public confidence that the government is acting on its behalf."

So, what is all this about? The Labor Department found 85 violations of the child labor law (for children 17 and younger) in Wal-Mart stores in Arkansas, New Hampshire and Connecticut. Wal-Mart, among other things, was having the children work with dangerous machinery such as cardboard balers and chain saws.

Wal-Mart had to settle with the Feds -- not the Feds of old, who were not so hot themselves, but the new Bush Feds. It seems that there is a big Republican donor at Wal-Mart and the donor's interests, not those of the children, are what the Labor Department wants to protect. Here is what they did. 1. Wal-Mart paid a cosmetic fine of $135,540 (peanuts for this multibillion dollar corporate criminal). 2. The Labor Department agreed to give the company 15 days advance notice before they inspect again! It is not likely they will find future violations. 3. Even if Wal-Mart is too stupid to clean up its act in the 15 days before the "inspection" and they get caught violating the law, there will be no citations or fines if they clean up their act in the next 10 days. 4. It gets better! This settlement agreement was largely written by Wal-Mart's own lawyers and the Labor Department left its "own legal division out of the settlement process." Sweet! And finally, 5. The Labor Department agreed to "to let Wal-Mart jointly develop news releases" with it about the violations and the settlement.

The foxes are indeed watching the hen house.

CASE 5. This is from the "Metro Briefing" in the New York Times of 11-23-05 ("Oil Company Settles Gouging Complaint") Acting under the maxim that it is an ill wind that blows nobody any good, certain oil companies seemingly could not resist breaking the law in order to price gouge and make extra profits from the human tragedy of Hurricane Katrina. They wouldn't be capitalist corporations if they didn't follow their own version of 'seize the day.'

So what did they do? This story is only about one state, New Jersey (but don't think this behavior was not more widespread). New Jersey accused Amerada Hess of gouging "drivers with higher gas prices" due to the storm. Hess and others (Motiva/Shell, Sunoco, and independent sellers) were charged with having "artificially inflated prices and increased prices more than once every 24 hours, the state limit." It is evidently okay to do this once every 24 hours but not more than once. Anyway – it’s stealing.

The result? Hess, which of course admitted no wrongdoing, agreed to pay the state $372,391 for its court costs. Some of this will go to the poor. Hess also agreed to obey the law in the future -- big of them. The capitalist state is appeased. Why doesn't Hess have to turn over all the money it gouged to a fund to help the poor? No, it gets to keep its ill-gotten profits. You only end up on Riker's Island for petty-theft it seems (Hess is NYC-based). Cases against the other culprits are still pending. If the Hess settlement is any indication, we can affirm that crime (corporate crime, that is) pays.

--Thomas Riggins is the book review editor of Political Affairs and can be reached at pabooks@politicalaffairs.net.

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Use of force at issue in Wal-Mart case

A grand jury will decide if the retail giant was justified in acting against shoplifting suspect

By ROBERT CROWE
Houston Chronicle
Nov. 27, 2005, 4:44AM                       [back to top]

The father of a shoplifting suspect who died while struggling with Wal-Mart employees wasn't shocked when officials ruled the death a homicide.

Now, H.C. Driver and other family members are hoping that the people responsible for Stacy Clay Driver's death will be brought to justice.

"Something like that isn't supposed to happen, especially in this country," the father said. "I have believed up to now in the justice system, and I hope it continues to work."

Also, the Driver family has filed a lawsuit seeking unspecified damages against Wal-Mart.

Stacy Driver suffocated Aug. 7 while struggling with Wal-Mart employees who suspected him of shoplifting from an Atascocita store.

The Harris County Medical Examiner's Office ruled Driver's death was caused primarily by asphyxia because of neck and chest compression. A secondary cause was hyperthermia with methamphetamine toxicity.

A Harris County prosecutor is expected to present to a grand jury the findings of a sheriff's office investigation into Driver's death.

The Driver family's lawyer, Jim Lindeman, hopes that — if an indictment is handed down — a criminal jury would be sympathetic even though Driver had illegal drugs in his system and prior records of shoplifting and assault.

District Attorney Chuck Rosenthal said a homicide ruling doesn't necessarily mean a crime has been committed. He said the grand jury will have to determine whether deadly force was justifiable.

Wal-Mart has declined to discuss its policy on use of force or whether the employees involved in Driver's death have been disciplined.

"This was an unfortunate event. ... It was very difficult on the Driver family and also on our associates," said Wal-Mart spokesman Marty Heires. "We don't normally discuss our policies ... but (Wal-Mart employees) receive appropriate training."

Driver's death is among at least 30 similar deaths of unarmed shoplifting suspects across the country during the past 15 years. The suspects were either shot and killed, or they suffocated in struggles with "loss-prevention" employees or security guards, according to a Houston Chronicle analysis of a major news database.

At least two were at Wal-Mart stores, which use employees trained to look for shoplifters and other thieves. Other stores where deaths occurred include two national drugstore chains and Dillard's. In many cases in which homicide was ruled as the cause of death, charges weren't filed or eventually were dropped.

A parking lot struggle In the Houston case, Driver, 30, of Cleveland, was accused of fleeing the store at 6626 East FM 1960 in Atascocita with a stolen gift card worth $94. Witnesses said Wal-Mart employees chased him into the store parking lot and wrestled him to the ground before pinning and handcuffing the shirtless man face-down with hands behind his back. During a struggle that lasted up to 30 minutes, according to some witnesses, Driver begged employees to let him up and call an ambulance, said witness Charles Portz, a Houston lawyer.

"A shoplifter is a thief, no question, but the penalty for that is not the death penalty," said John H. Christman, a retail-security expert.

Driver's widow, Wendy, 27, said Stacy Driver was obtaining his pilot's license and also embarking on a career as a master carpenter. They have a 5-month-old son, Ashton.

"They took my baby's daddy away from me," she said. "They had no right to do that."

Meanwhile, H.C. Driver has joined some security experts in calling for a revision of use-of-force laws and better training for security guards and "loss-prevention" employees, whose use-of-force training is determined by retail chains.

The father says the country's largest retailer should be required to demonstrate that its loss-prevention employees meet some minimum training standard, especially when millions of Americans enter its stores regularly.

The Chronicle has obtained a portion of Wal-Mart's "Shoplifting Apprehension" policy. It states loss-prevention employees can use "reasonable force," but safety must always be foremost on the employee's mind.

"If the situation becomes violent or is deemed potentially dangerous, you should allow the shoplifter to leave the premise," the policy states.

When asked to verify the contents of the Wal-Mart policy, Heires declined, citing the pending investigation.

Christman said retail loss-prevention employees are not licensed law enforcement officers, so they should not be able to use a degree of force that could cause serious injury or death.

After three shoplifting suspects in the Detroit area were killed in similar incidents in 2001, the Michigan Legislature passed laws increasing minimum training standards for security guards and requiring concealed-weapon permits for armed guards. The law also prohibits felons from working as security guards.

"Our position in Michigan was that security guards were to observe and report, and that's it," said lobbyist Phil Hoffman, a former Michigan state senator who sponsored the 2001 legislation. "We wanted security guards to leave t