May 31, 2004

WM has 27% of Toy Market

Independent toy stores not the hardest hit--yet. The Washington Times reprints a UPI story:

Howard L. Davidowitz, chairman of national retail consultant Davidowitz & Associates, estimated Wal-Mart now controls 27 percent of the toy market, the Washington Post reported Monday.

Most of that market share has been taken from big toy stores, but increasingly independent toy stores are losing market share to Wal-Mart, too.

Posted by Kevin at 1:49 PM

Vast Left-Wing Conspiracy?

In the New York Post, Robert Ward calls the war on WM a vast left-wing conspiracy. He points out that Ben and Jerry caused sprawl long ago:

What of the claim that Wal-Mart will destroy the quaint business districts of Vermont's small cities? In fact, Vermont's downtowns - like others all across America - were losing economic activity to suburban and rural roads long before Wal-Mart came along.

Ben Cohen and Jerry Greenfield opened their first ice-cream store in downtown Burlington in 1978. Then, in the mid '80s, the two icons of socially responsible business made a strategic decision based on customer convenience and other business needs: They moved to a verdant spot outside town.

Yet no one complained that they were creating suburban sprawl. If it was OK for Ben & Jerry's to choose a location outside the city, why can't Wal-Mart make the same decision now?

Posted by Kevin at 1:46 PM

Against Scripture to Shop at WM

On Mises Blog, William L. Anderson responds to WM-critics who contend shopping at WM is a sin:

Wal-Mart is not engaged in a grand conspiracy to push down wages in any given market, and twisted logic cannot prove otherwise....

In places like Southern California, where there are numerous employment opportunities, to say that workers are "forced" to work at Wal-Mart for "slave wages" is ridiculous. As noted before, the fact that workers there would be willing to accept higher pay is not evidence that they are enslaved. That they would prefer more to less simply means that they are normal, purposeful human beings.

(Link is to the full article, which I cannot access from the blog).

Posted by Kevin at 1:41 PM

May 30, 2004

WM Barbie

You have to see it to believe it:


Posted by Kevin at 9:31 AM

WM Charms

Ebay has an amazing assortment of Wal-Mart related items, including this charm:


Posted by Kevin at 9:27 AM

May 29, 2004

Saturday Roundup

The Star-Banner recounts Wal-Mart's successful and not so successful attempts to enter urban areas.

The company has championed a series of voter initiatives in hopes of overturning local ordinances that block its expansion. In the San Francisco Bay area county of Contra Costa, Wal-Mart spent more than a half-million dollars to gather enough signatures to put a county ban on big-box stores before voters. They ultimately defeated the ban.

A Wal-Mart lawsuit was enough to prompt officials in nearby Alameda County to repeal a similar ban. And, most notably, voters in the Los Angeles suburb of Inglewood in April rejected a Wal-Mart ballot initiative that would have bypassed local government and allowed a Wal-Mart-anchored shopping center to be built.

MSNBC reprints the St. Paul Business Journal's notice that a Supercenter is finally opening up in the metro twin-cities area, and discusses the spread of supercenters:
Zoning and development approvals quietly slipped through the city planning process in Woodbury this spring. The project thus far has avoided the same scrutiny from the local grocery unions that helped derail Wal-Mart's first attempt to open a grocery store in the Twin Cities market in 1997, when it pulled back on plans to open Supercenters in Apple Valley and Brooklyn Park.

At 206,919 square feet, the Woodbury Wal-Mart will be one of the largest stores of any kind in the Twin Cities. The center will include a 55,720-square-foot grocery, a drive-thru pharmacy, an outdoor garden center, an automobile service center and a gas station.

The Centre Daily gives space to one Dennis M. Banks, who supports WM:
I thought I would write in to set the record straight.

I know about Wal-Mart because I've worked full time for them for more than eight years. At our store, there are 240 employees and 80 percent work full time. I don't receive food stamps or need assistance for my family's medical expenses. I make a good living working for Wal-Mart.

I also receive raises each year, based on my performance. How many companies in State College give a 4 percent or 5 percent raise each year? We have 401(k) accounts, to which the company and I both contribute. We also have a company profit-sharing program for retirement to which the company is the sole contributor. Associates can buy Wal-Mart stock and the company adds 15 percent to the amount.

We also receive bonus checks yearly based on our store's profits. I have Geisinger health care, for which I pay a third of the premium. I'm told this is less than Geisinger employees pay.

I receive three weeks paid vacation a year and time that can be used as personal or sick leave.

Here is a copy of the article Mr. Banks was rebutting.

Posted by Kevin at 8:38 AM

May 28, 2004

A Little Bit of Everything

This article contains a little bit of everything about WM--from CEO to protestors to activists to European expansion.

Posted by Kevin at 11:18 AM

Kenneth Stone has the Facts

Yes, he said, Wal-Mart pays lower wages than unionized grocery stores, but in general its wages and benefits are in line with those of most retailers.

"Retailing's just a low-paid profession," he said. "That's all there is to it."

Yes, he said, Wal-Mart puts a lot of pressure on local businesses, but it also saves consumers money on a host of everyday staples.

Yes, he said, his research shows that Wal-Mart draws business away from existing stores, especially in such market segments as grocery, apparel and hardware. But other segments, such as restaurants, taverns and consumer services, tend to benefit from the customer traffic Wal-Mart attracts.

Stone said a typical Wal-Mart supercenter will bring in $70 million a year in sales. Overall, his research shows, counties tend to see a gain in net sales for the first few years after a supercenter arrives, followed by a drop-off after Wal-Mart builds more stores in the region.

"It's pretty much a zero-sum game when you come right down to it," he said. "If a store does 70 million in an area that's not growing very rapidly, it doesn't come out of thin air. It comes a little bit out of this merchant's cash register, a little bit out of that merchant's cash register."

When an economist can draw a crowd of 100 regular folks wherever he goes, you can tell he's hit on a hot topic. Here's Ken Stone's webpage, with links to a wide array of his publications.

Posted by Kevin at 11:00 AM

WM to Move Remains

When Hawaii granted WM the right to build, it didn't realize people were buried on the site. WM has agreed to move the remains to another location, and the courts have given them the go-ahead:

The ruling in State Circuit Court allows the movement of 42 sets of remains to another area of the Keeaumoku Street site where a Wal-Mart store and a Sam's Club are being built.

The Honolulu Star-Bulletin said Thursday Paulette Kaleikini went to court to block the movement of the bones; however, Judge Virginia Marks ruled Kaleikini hadn't proved state officials had violated the public trust in granting Wal-Mart permission to move the remains.

The burial sites of ancient Hawaiians are considered sacred by present-day natives, and the discovery of graves frequently delays or blocks construction projects.

Posted by Kevin at 10:54 AM

WM is Top Grocer in Birmingham

Move over Bruno's, WM is at your tail:

Wal-Mart now commands 31.3 percent of the $1.7 billion Magic City market, picking up 4.5 percent during the quarter. Bruno's controls 25 percent, down 2.6 percent from the first quarter.

Jacksonville, Fla.-based Winn-Dixie Stores Inc. also is slipping locally, down 1.8 percent to a 17.3 percent share.

Lakeland, Fla.-based Publix Super Markets Inc., which now operates nine stores in Birmingham, has taken fourth place from Piggly Wiggly with 6.7 percent of the area's grocery business.

Bruno's has been dropping market share real fast:

Bruno's lost 6.3 percent of the market in 2003, while Wal-Mart added 9.2 percent.

Posted by Kevin at 10:51 AM

May 27, 2004

WM = Dictatorship

From the Wal-Mart's War on Workers website:

Found here.

Again, why would Wal-Mart managers and hourly workers want to deal with people who think they're working for a dictatorship?

Posted by Kevin at 10:04 AM

WM in Chicago: 1 Down, 1 to Go

Wal-Mart gets into Chicago:

Chicago's city council Wednesday approved Wal-Mart Stores Inc.'s plan to build its first outlet in the third-largest U.S. city following an impassioned debate about whether the world's largest retailer will usher in prosperity or misery.

But a second rezoning proposal that would allow a second Wal-Mart store in another impoverished Chicago neighborhood fell one vote short of approval, and the plan was referred back to a council committee.

50% +1 of the aldermen are needed to approve a resolution. The first had 32 positive votes, the second only 25.

Posted by Kevin at 9:18 AM

Just barely defending theoretical anti-WM activists

Kevin responded in the comments to a previous post where I defended the legitimacy (not the correctness) of anti-WM activists in response to a post of his.

This isn't a very good debate, because Kevin and I completely agree in every practical way: that the activists are wrong, and likely do not actually represent the interests of the residents of Vermont, but only those who value small-town Vermontiness over economic well-being.

But we do have some low-level theoretical disagreement. Kevin feels that the activism is patronizing and that, at base, those wanting to get governments to ban Wal-Mart feel that citizens of Vermont are dumb. (Again, I do in fact believe this to be the case: If it were actually measured, I think most Vermonters to be strongly in favor of having a Wal-Mart to shop at, and that the NTHP and most activists basically want to treat them as props and characters in a theme-park vision of Vermont.)

However, I can also imagine actual towns in Vermont where close to all residents would prefer to preserve their current way of life. (That is, small towns, small shops, other intangibles; I've been calling this stuff "Vermontiness"; maybe there's a Ben & Jerry's flavor that connotes this.) In such cases, I can see community and local activism to ban Wal-Mart as legitimate and conducted in good faith. (Wrong, nonetheless, but legitimate.)

Kevin feels that in such a community, the community standards should be enforced without government. Social mechanisms such as shame, guilt, honor, etc. should be used. He argues that in a community where most individuals do in fact prefer Vermontiness to Wal-Mart, each individual's commitment plus the aforementioned social mechanisms will ensure that the Wal-Mart would not be able to stay in business because no-one work or shop there. In a small community, of course, these social mechanisms can be effective at enforcing the community standards.

Now, if such a community existed, Wal-Mart would never open there, because they would see that they would go out of business, so there'd be no point in banning them. But activists may (and do) believe they live in such a community, while Wal-Mart believes (probably correctly, since they have money on the line) the community is actually full of people who would much prefer to work/shop at a Wal-Mart.

In such a situation, activists would be using local government as the mechanism for enforcing community behavior. I think it's wrong, but in this situation, it would be a good-faith effort to prevent: paving over a field; construction of an ugly building; having to stand outside in the cold in protesting in front of the Wal-Mart to inform and shame the shoppers; maybe some local merchants getting scared and leaving, maybe resulting in temporary inconvenience until they come back after the Wal-Mart shuts down; an eyesore left behind after the Wal-Mart went out of business.

Anyway, my point is pretty weak: I just want to say that it is not necessarily the case that anti-WM activists (and the NTHP) thinks people don't know what's good for them, and that it is possible to conceive a good-faith, non-patronizing, rights-respecting, preservationist, anti-WM activism. In the real world, that's not what we have.

Posted by gkanapathy at 1:00 AM

May 26, 2004

Anti-WM Smiley


Found here.

Posted by Kevin at 1:34 PM

May 25, 2004

European Expansion

Sterling Wright sends in this must-read article from Progressive Grocer:

Shares in French supermarket groups rose today after Wal-Mart, the world's biggest retailer, announced it wanted to open stores in every European country and would reach this goal through acquisitions and internal growth....

Those rises followed a Financial Times report that Wal-Mart c.e.o. H. Lee Scott was interested in opening Wal-Marts across Europe, and that the retailer's international growth would come from a combination of strategic acquisitions and greenfield expansion....

Right now Scott is in the Belgian capital, where he is scheduled to meet European officials, including competition commissioner Mario Monti, according to the Financial Times....

According to one investment banker, "There is no doubt [Wal-Mart wants] Carrefour. It makes the most sense for them. They can't do anything big in the U.K., and Carrefour gives you not only France, but southern Europe and emerging markets. Both in size and format, Carrefour works better for them than Casino."

This would be an enormous move...

Posted by Kevin at 5:47 PM

Subsidies Redux

Jeffrey Tucker at Mises Blog reads the background research supporting the $1 billion subsidy figure I discussed here:

In any case, a close look at the study shows that the supposed subsidies are mostly about many forms of tax breaks, which are not subsidies at all but refraining-from-stealing policies. Also involved here are reduced land prices (why not consider this a form of privatization?) and infrastructure development... The real cost is all the political capital Wal-Mart must expend in exchange for being tolerated.
Jeffrey provides all the relevant links, and more information. See also the intelligent and dissenting comments.

They make it clear that WM does not operate in a free-market environment.

Posted by Kevin at 12:35 PM

Anti-WM Paradox

Don Boudreaux notes that anti-WM activists have divergent, pardoxical goals:

The real paradox is the "progressive" wish for abundant, high-paying jobs, combined with a simultaneous knee-jerk allegiance to �community� efforts to chill economic change � in this case, �to keep out the retailer.�

What, after all, is the point of organizing Wal-Mart employees into a labor union if other �activists� succeed in keeping Wal-Mart out?

Regardless of your view on unions and activism, it is a fine question.

Posted by Kevin at 9:40 AM

May 24, 2004

Defending the Activists

In "WM Endangers Vermont", Kevin talks about the attitudes and arguments of anti-WM activists, and that it comes down to either "people are powerless" and "people are dumb". Furthermore, Kevin suggests that the "people are powerless" argument isn't a real argument anyway, and that it boils down to "people are dumb, and we must save them from their dumbness".

Now, I am far more in agreement with Kevin than with these anti-WM activists, but I think that Kevin is not giving the "people are powerless" argument a fair hearing. He argues that even if people were powerless to prevent the entry of Wal-Mart into a locality, they could nonetheless choose not to shop there, and the WM would have to close down, and that they therefore do have power.

But in fact, this could be presented as a case of the Tragedy of the Commons and the inability to co-ordinate actions. It could be asserted that every single person in the community prefers to have the prettier shops, "unique sense of place" and all that Vermontiness, even if it means they pay higher prices and have lower-paying jobs. Once the Wal-Mart was there though, it would to each individual's rational advantage to shop there---after all, the prices are lower, and a single person withholding his or her purchases won't drive out the Wal-Mart and bring back the Vermontiness. The activists see themselves as providing co-ordination for the individuals so that they can co-operate in a positive-sum game and get rid of the Wal-Mart (or prevent it from showing up) and bring back the Vermontiness that everyone (every single individual!) likes better than the greater purchasing power.

So I don't think that the argument that the "people are powerless" is completely bogus, although it might be more accurately phrased as "people are disorganized".

I think it would be better to argue against anti-WM activists on other grounds: whether every single individual does prefer more Vermontiness to greater purchasing power; what to do when only some people benefit from Vermontiness, while others would benefit from lower prices and more jobs; whether people, even in the aggregate, actually do prefer Vermontiness to more purchasing power; whether Wal-Mart actually, and necessarily, destroys Vermontiness; whether a relatively small group of activists accurately represents the interests of the community.

Posted by gkanapathy at 1:43 PM

WM Endangers Vermont

The ENTIRE state of Vermont has been labeled "endangered" by the National Trust for Historic Preservation because WM plans to open 7 supercenters in the state. Before reading further, just think about it for a minute, because with this report, we have evidence of a clear divide in values at the margin, and must choose between status-quo economy and status-quo local culture.

Here's a news release, and an CNN/Money article. From the former:

During the 1990s Wal-Mart located three of its four Vermont stores in existing buildings and kept them relatively modest in size. Now, however, the world�s largest company is planning to saturate the state � which has only 600,000 residents � with seven new mammoth mega-stores, each with a minimum of 150,000 square feet. Theses potential new stores may be located in St. Albans, Morrisville, Newport/Derby, St. Johnsbury, Bennington, Rutland, and Middlebury. Wal-Mart�s plans are sure to attract an influx of other big-box retailers. The likely result: degradation of the Green Mountain State�s unique sense of place, economic disinvestment in historic downtowns, loss of locally-owned businesses, and an erosion of the sense of community that seems an inevitable by-product of big-box sprawl.
What I find amazing about the article is the necessary assumption of these activists that people are either powerless or dumb. Instead, I think it's clear that activists want to increase their own power over their opponents--not the power of people whose values differ from theirs.

On the one hand, WM is alleged to enter communities with promises of jobs and economic freedom (and otherwise really doesn't talk with activists), but actually destroys local economies, ecologies, and cultures. People shop there because its cheap, but they are actually hurting themselves.

On the other hand, to counter these ill effects, activists insist that Vermont communities (i.e. local government officials) should have far greater power over the placement and design of big-box stores--to turn mammoth into mom and pop--and should be able to block them if not deemed necessary.

The case seems airtight. Activists frame the debate as, "there's a problem coming--WM--and we're here to fight for you against it." They're very convincing, but to me there are two ways to look at this.

1) Without effective political coercion, WM will destroy people's higest values. (People are powerless)

2) The majority of people are dumb, and need to be protected from themselves. (People are dumb).

Activists usually argue in terms of 1, but sometimes resort to 2. I cannot accept the caretaker view of government, nor do I think people are powerless.

But lack of power in the people cannot be the activists real argument. If WM were hurtful to localities, and people were committed to communities but powerless to stop entry--not dumb--then any new supercenter would close down in short order, as people refused to shop there. The flourishing of harmful supercenters requires that people be dumb, not powerless.

Hence, that people lack power is not valid a reason to give local governments greater power.

Modeling or labelling people as either powerless is just a ploy to shift explicit power to government. Labelling people as dumb does not make their judgements about social change any less important.

But what if a WM supercenter doesn't really destroy communities, as the activists allege? (They don't actually name any devastated regions). What kinds of effects will greater local government powers have?

Greater government powers will preserve the status quo ecology and geography--what activists value--at the expense of the economy--what non-activists value.

There are tradeoffs here, and differing opinions between activists and non-activists about the values of the tradeoffs at the relevant margins.

Posted by Kevin at 12:38 PM

Conversions or New Sites

Excellent article in the Chicago Tribune (rr), with interesting data points. First about potential shifts in store size to meet urban regulations:

Anticipating space constraints and potential zoning problems as it expands, Wal-Mart opened a 99,000-square-foot prototype "Supercenter" earlier this year in Tampa, to see how a smaller format would fare. A Wal-Mart Supercenter sells food and general merchandise.
Next about historical and future growth patterns:
So far, Wal-Mart's chief strategy for developing Supercenters has been to convert its existing discount stores, which sell only general merchandise. A 2003 report by William Blair & Co., a Chicago investment firm, shows that conversions accounted for 70 percent of the 827 Supercenters opened from 1995 to 2001.
There is also a multi-level store in LA:

Wal-Mart has been willing to build multilevel stores, but it prefers to stick with single-level versions.

"It makes more sense to begin this way than to shoehorn ourselves into an area where property is more costly," spokesman John Bisio said.

Peter Kanellos, Wal-Mart's California spokesman, said the company opened its first and only three-level store a year ago in the Baldwin Hills section of Los Angeles. The store includes "cartveyors"--basically elevators for carts.

Nationally, Wal-Mart also is testing store formats of 40,000 square feet or smaller in other communities. But Wall Street isn't impressed by the idea.

"They're too small to really move the needle, and they won't have the same returns as Supercenters," Dreher said

Posted by Kevin at 10:16 AM

Subsidizing WM

The New York Times Barnaby Fedder gives us another anti-WM soundbite--a minimum of $1 billion in government largesse has been given to the company (over an unspecified time period). Disgusting.

However, WM seems to be fighting back more than its opponents would like. It directly responds to charges that it takes too much from government:

In the last 10 years, she said, Wal-Mart has collected more than $52 billion in sales taxes, paid $4 billion in local property taxes, and paid $192 million in income and unemployment taxes to local governments.

"It looks like offering tax incentives to Wal-Mart is a jackpot investment for local governments," she said.

That's an incorrect comparison. The question is whether, absent WM, the government tax revenue would have been the same--but without the subsidy. Sloppy thinking on all sides on this one.

WM also gives a new twist to the charges that it spends too little in wages:

Wal-Mart said its wages were "usually greater than those paid to other nonunion retail workers and virtually identical to those of unionized grocery workers."
To my knowledge WM has never claimed that it pays its workers wages "virtually identical" to those of unionized grocers.

Posted by Kevin at 10:09 AM

May 21, 2004

Andy Kaufman's Back: National Wal-Mart Tour? [Humor]: *Updated Yet Again*

Coming to a Wal-Mart near you very soon, Andy Kaufman Returns?

Yes, believe it or not, Andy Kaufman (here, *here*, *here* -- [via snopes here], here, here, here and, here) is not only reportedly back, but it appears that he is blogging in style with his very own blog and, within only a few hours of his announced return on Monday (May 17, 2004), even quickly posted up a FAQ blog post as well.

In fact within one particular blog post *on Thursday (May 20, 2004)* [opps; see below], Andy has announced his National Starbucks and Wal-Mart Tour:

My friends keep telling me, "Andy - why don't you go on Letterman, man? Or Barbara Walters? Let everyone know you're back."

What I did broke the trust of a lot of people in this country, not to mention many close friends and family members. I will never again be able to gain back that trust. Not even after public appearances or even DNA testing. Some will always have their doubts. I don't care about those people anymore.

I care about my fans, the ones who understood my rare form of comedy meets performance art spectacle. That's why I'm going to give back to you guys only, and tour the country appearing unexpectedly at local Starbucks and Wal-Marts.

I've been working on a lot of new characters these last twenty years, which I may be disguised as:
- aging comedy legend who still thinks everyone recognizes him
- hippie turned yuppie guy in suit, now with bad coke habit
- aging fat and bald guy who thinks he is god's gift to women
- black turtleneck wearing pseudo-intellectual anti-war nerd-chic guy
- and more.

The tour begins TODAY! Be sure to tell your friends and alert the local media when you spot me!

Hmmm. That would possibly be one explanation for the great volume of traffic heading up to the Hospital Hill area in Berlin, Vermont today (Friday, May 21st).

Someone with a cell phone must have spotted Andy Kaufman at the Wal-Mart store (which is located up there, within the Berlin Mall) and put out the word to everyone they knew.

Hey, was that one of those giant CNN trucks I saw flying up the hill in order to do a live broadcast as well?

Who knows?

Anyway, if you have really returned to us Andy, welcome back. You've been greatly missed.

*Notes*: Made several, mostly minor, edits for the purposes of clarification and readability only; in addition, I have also included a few extra links as well.

Ugh!: The *opps* in reference to the day and date, within the third paragraph, is due to my incorrectly having originally indicated "today" -- as in Friday - for when the National Starbucks and Wal-Mart Tour blog post was posted on the Andy Kaufman Returns blog.

That blog post was in fact posted on on Thursday (May 20, 2004).

However in my closing comments, after the quoted blog post text, Friday is correctly mentioned though -- as that was indeed the day great volumes of traffic was sighted going up to Hospital Hill in Berlin, where the local Wal-Mart store is located.

Did you notice how there has been no blog posts to the Andy Kaufman Returns blog either on Friday or since.

Vermont is, after all, probably about the best place for Andy Kaufman to have started making his national (re-)appearances in Wal-mart. It makes sense.

;-> [wink & grin]

Hey, by the way, does anyone know what the 12-Step self-help support group for people who can't stop talking (or, in this case, blogging) is called?

Last updated on Saturday, May 22, 2004 at 9:02 PM [EDT].

Posted by Morgan at 4:19 PM

May 20, 2004

Hole-y deal: Wal-Mart to start selling Krispy Kreme doughnuts Tuesday: *Updated*

Krispy Kreme donut (or doughnut) lovers in and around Austin, Texas will be pleased to learn that when they shop at a Wal-Mart store near them, that [article here]:

Krispy Kreme doughnuts will begin arriving in 10 Austin area Wal-Mart stores Tuesday.

Earlier this month, Austin-based Glazing Saddles Ltd., the Central Texas franchisee for Krispy Kreme doughnuts, announced a partnership with retail giant Wal-Mart Stores Inc. Stores in the Austin area that will sell the doughnuts are in Austin, Georgetown, Round Rock, Cedar Park, Bastrop and San Marcos.


Glazing Saddles already has a distribution deal with three Super Target stores in San Antonio and two in Austin.


Via Austin Business Journal (read article, here), via Google News Alert for Wal-Mart.


*Note*: Am not sure, but the date of the above original article appears to be Monday, May 17, 2004 (as indicated within the URL for the article anyway), however this is available on their online edition under Latest News today (Thursday, May 20th). So I do not know if the Tuesday in question was this week's (i.e., May 18th) or is next week (May 25th). Am only mentioning this because I do not want to end up inadvertently frustrating any passionate Krispy Kreme doughnut lovers in Texas.

Not that I have this great thing for donuts really, because the fact is I do nut -- opps, I mean that I do not (was not trying to be cute actually either, as it was just an honest typo, at first anyway) -- have a big thing for them, seriously.

What I am big on though, is posting follow-ups to previous blog posts of mine on a given subject whenever I think they either warrant it or may just be interesting in some odd fashion.

This post is a follow-up on the earlier blog post of mine to ALP dated Thursday, May 13, 2004 entitled: WM Donut Wars Anyone?

Which of course brings me to wonder if, given the information presented in today's Austin Business Journal, Wal-Mart may not have fired the first shot after all, in what just last week looked to me like the beginnings of a donut war.

Rather it makes me wonder that since Wal-Mart had previously had a deal with Krispy Kreme and, then, later did a deal with Dunkin Donuts as well; maybe it was a corporate version of Tit for Tat because Austin-based Glazing Saddles Ltd. -- the Central Texas franchisee for Krispy Kreme doughnuts, [...] already has a distribution deal with three Super Target stores in San Antonio and two in Austin. -- hmmm?

Could it be that Wal-Mart was, at least in part, putting Krispy Kreme in its place or is it just an overall corporate plan that has nothing to do with ego's and the darker side within the politics of the business world, etc.??

Who knows?

It was just a thought.

*Another Update*: fyi:

Links to information and articles about Tit for Tat: here, here and here.

*Note*: Included a paragraph to provide additional information, see *Update* after upper article excerpts; also made several, mostly minor, edits for the purposes of clarification and readability only: last updated on Thursday, May 20, 2004 at 5:08 PM [EDT].

Posted by Morgan at 3:32 PM

Michelle Malkin @ WM

In Human Events Michelle Malkin writes that English is under assault, and uses Wal-Mart as one of her examples:

At my local Wal-Mart, nationwide employer of workers of dubious immigration status, I listened as a checkout lady from Africa blabbed endlessly in her native language to two visitors hanging out by her station. She didn't bother greeting me or looking at me. When I asked for a bag of items that she had forgotten to put in my cart, she ignored me. "Pardon me, can I have my bag?" I asked. "WAH?!" she finally said with a snarl, offended that I had interrupted her conversation.

Whatever happened to "Thank you, please come again"?

I find this odd, simply because most of the African immigrants I know are no more or less cheerful or English-speaking than the average Latin American or Asian immigrant, although less likely to have learned English than continental European immigrants. (They grew up wealthier).

In this particular case, Ms. Malkin should have complained to the store manager about the individual in question instead of to her readers about immigrants in general.

Posted by Kevin at 9:38 AM

May 19, 2004

RFID Update

An anonymous commentor has linked to an excellent review of the success Wal-Mart has had rolling out RFID in its distribution center and on a few large items in stores.

Wal-Mart is currently focusing on case and pallet tagging. However, in the initial test, there are three products in which the case is also consumer packaging. On the outer packaging of two HP printers and one scanner, an EPCglobal sticker next to the RFID tag notifies customers of its existence.

To strengthen customer notification during the initial roll-out in North Texas, Wal-Mart will be placing supplemental signage on the shelf and/or aisle where the tagged cases could reside. Information pamphlets are also available on shelf-mounted tear pads. These provide information on Wal-Mart's EPC implementation and explain that customers may choose to keep the tags or discard them after purchasing the product.

Future Bringing More Suppliers, More Products

Moving forward from this point, Wal-Mart expects the number of suppliers tagging cases and pallets to expand every few weeks. Accordingly, consumers may soon see additional products displaying the EPCglobal symbol.

It is expected that many of these will be electronic products or other large items such as bicycles or lawnmowers. In all instances, the cases will have tags only on the outermost packaging.

This is worded ambiguously. Does WM plan to have RFID tags on inner packaging? On the items themselves?

Posted by Kevin at 4:41 PM

Editorial Roundup

The Times Herald applauds a judge's ruling letting the Marine City Wal-Mart go forward:

The arguments Mariners First raises aren't particularly compelling. In her May 16 Times Herald column, the Rev. Rosalie Skwiers said Wal-Mart would increase retail space by 35%. "Where are the studies to show us this 35% increase, all at one time, will not adversely affect our city?" she asked.

That also begs this question: Where are the studies that prove this retail development will harm Marine City?

On the other hand, the Chattanoogan gives ample space to a group called the Coalition for Responsible Progress that thinks Wal-Mart has destroyed too much green space:
The Brainerd Wal-Mart has been foisted upon us through a series of sweet deals, ignoring the wishes of our citizens as outlined in the Brainerd Town Plan and Imagine Eastgate that was adopted by the City Council in 1998.
The Demopolis Times, referencing this National Review article by Jay Nordlinger, characterizes the War on Wal-Mart as silly, while forecasting the only way to take it down:
If Wal-Mart seems unstoppable, there is one force that will be its undoing, and it's not angry protests. Eventually, some retailer will be more nimble and cunning than even Wal-Mart, and it will get -- as all businesses in America do -- its own capitalist comeuppance.
Finally,the Omaha World-Herald relates the moral struggle some have shopping at Wal-Mart:
For some Americans, like Allgood, shopping at Wal-Mart involves internal struggle. For others, no struggle at all - they love it.

While we've carried on this love-hate relationship with Wal-Mart for years, a recent onslaught of bad publicity has threatened the image of the world's largest retailer even more. News stories and lawsuits allege low wages, unequal pay and the use of illegal immigrant workers.

Posted by Kevin at 10:10 AM

May 17, 2004

Columbia Political Review

The editor of the Columbia Political Review sends notice that the latest issue has an intruiging article on the politics of WM--Fearing Walmart--by Telis Demos:

So like most things that divide Americans geographically, shopping at Wal-Mart is an increasingly political matter. During the primaries, Democrats targeted the store in their critique of Republican economic policies, claiming that in the �Wal-Martizing� economy of the Bush years the only jobs that are surviving are low-wage, no-benefits, non-unionized service jobs. Taking the Democrats� lead, newspapers and magazines have turned their attention to chronicling the destructive economics of the super-retailer. By collecting tales of woe from store employees who are paid little and treated poorly, or from product suppliers who are squeezed out of business by Wal-Mart�s extreme demands, they have built the case that Wal-Mart stores are, as Democratic presidential nominee John Kerry put it, a symbol of �what�s wrong with America��outsourcing jobs to foreign sweatshops, paying minimum wage salaries without health care, refusing unionization, closing mom-and-pops in small towns, and subcontracting to affiliates that hire illegal immigrant workers.
I think the whole thing is worth reading--for the politics, not the economics.

In fact, I'm troubled by the economics of the article, not because it presents both sides of the debate, but that it judges the quality and truth of the arguments on the basis of political potency. Even though it rightfully declares, "most people don�t really consider the economics of Wal-Mart when forming an opinion of it," two sentences later it declares, "It could make for a potent political critique of our modern low-road, race-to-the-bottom economic culture." My problem is that no such culture exists--real wages keep rising.

It asks, "Which picture is true? Is Wal-Mart an employer of the otherwise unemployable and a provider of cheap goods to everyone else? Or is it an economic steamroller that�s bringing down the standard of living by putting every other option out of business?" But then cites the incendiary and shamefully venemous report put out by George Miller's staff and various other sources all with their own agendas. (Dispassionate social science they ain't).

The economic issue behind WM is fundamental. The US has consistently benefited from letting industries fail, move, and improve themselves out of existence. WM is just another data point in the pattern.

But don't let my carping stop you from this excellent summary of the issues.

Also, astonishingly, ALP is noted...

Disclosure: I'm CC '99

Posted by Kevin at 9:11 PM

Overnight RVing at WM

Nationwide, a common practice is to park one's RV overnight in the parking lots of WM. It's safe--with the floodlights always on, and its free (since many RVers are exceptional good customers).

This has caught the ire of campground owners, one of which wants to use local zoning laws to eliminate the competition.

Ian Robertson, a planning consultant with Inukshuk Planning and development, helped draft the city's zoning bylaws in 1997.

"Right now the law says you can't camp on private property," he says.

Robertson says the zoning bylaws are clearly written and easy to understand.

I don't think that RVing=camping under the city code, but one must applaud the ingenuity of Mr. Robertson in claiming that zoning codes are "clear", which is almost never the case.

The park owners are threatening to sue the local governnent unless overnight parking is prevented. However, the local government says it has no authority to regulate overnight parking on private property:

Park owners say it's time for city council to move on the issue.

"We've got another big new store coming and you know it is going to be pretty hard for them to put up signs saying "No overnight Parking" when their direct competition allows it," says Morris Kostiuk, owner of the Pioneer RV park in Whitehorse.

"So the pressure will be on them to allow it and pretty soon we're going to have them parked all over everybody's property just so they can get their business and that's the issue. It is strictly a city issue."

Kostiuk is urging the City to review the B.C. court case then meet with Wal-Mart officials to arrange a ban on the practice.

He says Whitehorse area RV parks will lose business if they don't.

As this is a nationwide practice for WM, this is not strictly a city issue at all. After much debate, an association of local governments declined to pass an ordinance banning overnight parking. In fact, the local government pushing the issue seems to want to use the issue as leverage over Wal-Mart in other areas:
The Yukon government has helped fend off an attempt to ban overnight RV parking at the Wal-Mart store in Whitehorse.

Territorial officials convinced delegates to the weekend meeting of the Association of Yukon Communities in Haines Junction not to pass a motion to stop the practice....

Magnuson suggests Whitehorse overstepped its bounds by asking for specific legislative changes.

He says the territorial government first has to be convinced that overnight parking at the Wal-Mart is a problem.

Magnuson says the government would then decide how to fix it. After his comments, the issue was put to a vote and defeated.

Posted by Kevin at 2:02 PM

Meth at WM

The sport of busting people for buying the ingredients to manufacture meth continues unabashed. One wonders how frequently this happens in the US:

Items on one shopping list sent five people from the checkout of an eastern Kentucky Wal-Mart to a jail cell...

Hazard policeman Isaac Whitaker, "One young man purchased some generic medication containing pseudoephedrine. The other young man purchased clear tubing and lithium batteries."

The suspects have been charged with complicity to manufacture methamphetamine and drug paraphernalia.

Posted by Kevin at 9:36 AM

May 14, 2004

Visiting a Neighborhood Market

A lot of people have never been to a Wal-Mart. But It seems to me that very few people have even seen a Neighborhood Market. That's probably because there aren't all that many of these stores around. Yet.

In Overland Park, KS, less than two miles up the road from a regular Wal-Mart is a Wal-Mart Neighborhood Market. (And less than two miles up from that one is yet another. I didn't drive any further to see if there was another, but the Wal-Mart-o-graph of the area indicates not.

I was on my way to the Super Target to pick up some snacks when I remembered these were nearby, so I decided to take a look. I've written a little about these stores before on the old blog, and I wanted to go back and confirm my impressions and find out a bit more.

From the outside, the stores are quite attractive, very much unlike the normal giant blue and gray battleships. They're smaller, lower buildings (by suburban grocery store standards). They have a red-brick facade, and big windows with awning over them, and a lit green sign. It is about the size and external appearance of a Whole Foods Market. (There was a Whole Foods Market across the street from one of them.) The parking lots looked small as well, not much bigger than the store. Pretty much, it looks absolutely nothing like a Wal-Mart. I'm guessing it's about half the square footage of a regular Wal-Mart, maybe less. (I'm guessing around 35,000 or 40,000 square feet, vs around 100,000 for a regular Wal-Mart, and about 60,000 for a big suburban supermarket.)

On the inside, again, it looks nothing like a Wal-Mart. The shelving and aisles and layout are like a regular grocery store: lower shelves, no clutter in the aisles. Good. The lighting and decor is softer and nicer than in a normal grocery store. I think it's largely because of ceiling and floor. The ceiling is a slight bit lower than in a typical strip retail store, and while it exposes all the beams, pipes, and cabling, everything is painted a dark bluish gray. The floor is a smooth-polished brown concrete, pretty nice (and pretty easy to clean). I think this softens the light compared with the usual white ceiling and white floor tile.

The selection of items is of course a bit smaller than in a full-size grocery, but it's still pretty good. I think it's a bit better than it was at the SuperCenter in Carson City, NV, but that may be just because in the more intimate environment, a smaller selection seems fine. (When I complain about a smaller selection, by the way, I'm judging against the standard of the ridiculous: For example, they carried Pepperidge Farm Mint Milanos, but not the Mini Mint Milanos; they carried Coke, but only in two-liters, 6x24 oz bottles, and 12-packs of cans, but not 8 oz glass bottles or 6-packs of cans or three-liter bottles.)

This is just a nice place to shop. With the Wal-Mart pricing, about the only reason to go to a Kroger or Safeway would be for a better fruit, vegetable, meats, and other fresh items selection. (Even then, the Neighborhood Market has sufficient of the basics that it would have to be "Signature" or "Flagship" competitor to make it worthwhile.)

I believed that the Wal-Mart's greatest weakness was the shoddiness of its shopping experience, and that a clever competitor could engage and defeat it by being a nicer, more comfortable place to shop.

But if Wal-Mart learns anything about style from building and running these Neighborhood Market stores, and if they take the lessons and apply them to their regular stores, Target and the grocery stores had better look out.

Posted by gkanapathy at 11:07 PM

It's About Prices

Don Boudreaux links to this Scotsman article by John Blundell:

Wal-Mart is rather more than a chain of shops. It is a force for change. It has vociferous critics but I think it is a force for good.
Let me repeat. WM is the cutting edge of creative destruction.

Posted by Kevin at 11:01 AM

Check Cashing @ WM

Wal-Mart announced that it will charge a maximum fee of $3 for cashing preprinted and government checks up to $1000, and will cash the checks of all its employees for free.

As you might have guessed, the competition is furious:

Free standing check cashing services are not happy about Wal-Mart's newest low priced foray. The California Department of Justice, which regulates the industry, allows check cashers to charge as much as 3.5 percent, depending on the amount of the check, reports the Knight Ridder/ Tribune Business News. Nationwide, there are an estimated 10,000 check-cashing stores that handle an average of 180 million checks a year totaling $55 billion, according to Financial Service Centers of America, the industry's major trade group. About 35 percent of these stores belong to major operations like Ace Cash Express in Irving, Texas, and Berwyn, Pa.-based Dollar Financial Corp., the trade group reports. Smaller companies own the rest.

Check-cashing stores primarily serve lower- to middle-income people making less than $40,000 a year and generate fees of about $1.5 billion per year. Many are unable to afford bank account fees or maintain a minimum balance.

"It is a very, very competitive business, and very fragmented," said Bernard Flaherty, president and chief executive of Chicago-based Popular Cash Express, a division of Banco Popular and the nation's third-largest check-cashing chain.

Folks, this is what WM is doing to the low-end retail sector all around. It is making all sorts of goods, and now services, into commodities. It profits by serving consumers with prices lower than its competition has ever tried:
Interestingly, consumer groups are, for once, taking the side of Wal-Mart, reports the Knight-Ridder/Tribune. Many believe check-cashing fees have traditionally been too high and take advantage of lower income people. The Federal Deposit Insurance Corp., which regulates the country's banking industry, estimates that 10 percent to 12 percent of U.S. households don't have a bank account. Some consumer groups say the number is even higher.

The unbanked population, as this segment is called, typically have lower incomes, don't own their homes and are under 35 years old, nonwhite or Hispanic, unemployed and lack a high level of education, the FDIC reports.

Posted by Kevin at 8:15 AM

May 13, 2004

Earnings at WM and Target

WM and Target not only have their fans among consumers, but also among stock pickers. However, the performance of their stocks is, in my opinion, far closer than the customer experience of their stores.

Earnings per share at Target came in at 48¢, while they came in at 50¢ for WM.

Both Target and WM expect same-store sales growth of 4-6% in May (over last year).

Posted by Kevin at 4:21 PM

Dan Drezner on WM (Again)

Dan Drezner points to Steve Chapman's Op-Ed in the Chicago Tribune.

Does the company resist unions? Sure. But that doesn't exactly make it unusual, since 92 percent of private-sector workers in the United States lack a union. Does it hurt small businesses? Only by offering consumers goods they want at lower prices than established retailers....
An interesting comments thread is forming at Dan's post. But I have some comments I'd like to share here.

Let me make this clear: WM is the cutting edge of creative destruction, and in the here-and-now creative destruction makes winners out of some and losers out of others. But in the long run has made all of us far wealthier than we would have been if we tried to stop it or slow it down.

WM--and the people who are willing to work for it-- are threatening the wages of unionized grocers everywhere. WMs entry into food sales is likely to drive some unionized competitors out of business. In the long run, WM is likely to convert many unionized grocery jobs into cheaper, non-union, positions.

Shoppers will benefit through lower prices--raising their real wages. WM gives the same goods to the end users for less, meaning more is left to be spent on other goods and services.

Keeping grocers unionized not only has the effect of keeping real wages lower for consumers, but prevents consumers from spending those higher incomes on other goods.

What will happen to labor when WM enters the grocery business in cities? Most current unionized grocery employees will see their artificially high real wages stay the same or rise, but at far smaller rates. New unionized grocery employees will see noticeably lower starting salaries and benefits than their more experienced colleages earned starting out.

WM will convert many full-time unionized grocery jobs into entry-level, senior-citizen or part-time positions.

It will likely make those considering becoming union grocers turn to other occupations that pay more--for instance, nursing. The full-time, middle-class jobs will appear elsewhere in the economy--not in retail.

Right now, we see the middle class unionized jobs in grocers; we don't see the middle class healthcare and professional service jobs that will not be created if grocers stay unionized.

On net, how many more "middle-class" jobs are sustained by grocer unionization? I can't answer that completely, but I suspect that unionization lowers the total number of middle-class jobs. Others will, respectfully or otherwise, disagree.

WM competing with grocers is neither a completely bad or good thing, but it is how the economy grows and channels labor into its most profitable uses.

Why should all jobs provide incomes to support a family of four? Is it not OK for there to be jobs for those just starting out? Is there to be no premium in pay and benefits for those more skilled and experienced?

Posted by Kevin at 2:33 PM

WM Donut Wars Anyone?: *Yet Another Update*

It appears that someone at Wal-Mart (WM) headquarters has managed to start what could easily turn into a major mess between competitors Dunkin Donuts and Krispy Kreme Donuts Inc., each of whom are setting up shop(s) inside certain WM stores.

CNN/Money reports that Dunkin' Donuts Set to Open 10 Shops in Wal-Mart Stores

Dunkin' Donuts said it agreed to open 10 shops inside Wal-Mart stores in the next three months, adding to the retailer's growing roster of restaurants in its stores, Thursday's Wall Street Journal reported.

The deal could offer a major boost to Dunkin' Donuts' goal of stretching beyond its Northeast stronghold to have a national market. If the initial test is successful, Dunkin' Donuts, one of the biggest coffee retailers in the U.S., says it hopes to expand to additional Wal-Mart outlets.

However, Dunkin' Donuts, which is part of British spirits company Allied Domecq PLC (AED), could come up against Krispy Kreme Donuts Inc. Wal-Mart Stores Inc. (WMT) already has an agreement with Krispy Kreme to test two of its outlets inside Wal-Mart stores, with a plan to open five more this quarter. Furthermore, Wal-Mart, which has about 3,000 U.S. stores, already sells boxed Krispy Kreme donuts in the main area of more than 500 of its stores.

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

It will be quite interesting to watch this particular WM sponsored food fight as it evolves.


In addition, via Business Wire -- which came my way via a Google News Alert re: Wal-Mart, is this recent Dunkin Donuts press release:

Dunkin' Donuts to Establish Retail Presence in Select Wal-Mart Stores; Famous Brand Names Join Forces to Open Store-within-a-Store Concept

RANDOLPH, Mass.--(BUSINESS WIRE)--May 13, 2004--Wal-Mart and Dunkin' Donuts, the world's largest coffee-and-baked goods chain, announced today the opening of the first Dunkin' Donuts shop within a Wal-Mart store. The store-within-a-Wal-Mart concept will celebrate its grand opening Friday, May 14, in North Wyndham, Connecticut. The brands announced plans to open ten stores in the next three months in Wal-Mart locations in Connecticut, Massachusetts, New York, Ohio, Pennsylvania, and Vermont.


Prominently positioned in the front of each Wal-Mart, the in-store Dunkin' Donuts shops will look and feel just like a neighborhood Dunkin' Donuts store. Each shop will offer a full menu, complete with Dunkin' Donuts' legendary hot coffee, recently named Best Coffee in America on NBC's "Today" Show. The menu will also include lattes, cappuccinos, breakfast sandwiches and, of course, donuts. Shoppers and Wal-Mart associates will be able to take a break in a comfortable restaurant environment.

For an added treat, some of the Dunkin' Donuts stores will also feature ice cream from Baskin-Robbins, a sister ADQSR brand. Shoppers will also have the option to pre-pay for certain Dunkin' Donuts and Baskin-Robbins menu items at the Wal-Mart registers, along with the rest of their purchases, and have these items ready for pick up at the in-store Dunkin' Donuts shop to take home or to enjoy in the store.

The Dunkin' Donuts and combined Baskin-Robbins will be owned and operated by franchisees and located in markets where Dunkin' Donuts enjoys a strong retail presence. The next in-store shops will open in Walpole, Massachusetts and Monaca, Pennsylvania within a month.


Hmmm, donuts a la mode anyone?

*Yet Another Update*

Two related items with additional information or news tid bits (donut holes I suppose) and, lastly, a little food for thought.

FoxNews: Business
Dunkin' Donuts to Enter Some Wal-Mart Stores in Blow to Krispy Kreme

Thursday, May 13, 2004

CHICAGO���Dunkin' Donuts Thursday said it will open 10 shops inside Wal-Mart stores, helping the world's largest retailer broaden its branded fast-food offerings.

News of the deal could be a further blow to Dunkin' Donuts' rival Krispy Kreme Doughnuts Inc. (KKD), which has already set up shop inside seven Wal-Mart Stores Inc. (WMT)�locations. Krispy Kreme warned earlier this month that the low-carbohydrate dieting craze would dampen profits, and it cut its expansion plans.


Bentonville, Arkansas-based Wal-Mart has been steadily broadening its offerings of fast food in an effort to provide respite to shoppers navigating its vast, large-format stores.

The retailer also houses some 950 hamburger McDonald's Corp. hamburger stands, and it recently entered a deal to offer 100 sandwich shops run by Blimpie International Inc.

In addition, Wal-Mart has about 1,700 of its own Radio Grill and Wal-Mart snack bars, said Sharon Weber, a company spokeswoman. Wal-Mart limits its restaurant offerings to one format per store, she said.

"We really are looking at different formats and different plans to offer our customers," Weber said, adding that it was too early to determine how many total Dunkin' Donuts were planned. "It is important for us that they can sit and relax."

And, finally, some food for thought?

Motley Fool: Our Take
Slam Dunkin' at Wal-Mart?

*Note*: Added more, including excerpts of a (as well as links to) corporate press release, news article and commentary: last updated on Thursday, May 13, 2004 at 7:17 PM [EDT].

Posted by Morgan at 9:50 AM

May 12, 2004

To WM or Not to WM, is that the Question?: *Updated*

Concerning the many deeply rooted and challenging troubles of the day faced by society, families and individuals alike; if William Shakespeare were alive and blogging today, with his being the artist and writer (as well as the activist or social critic, whom I think) he truly was, would he rather have had Hamlet pondering:

"To WM or not to WM, --that is the question:--
Whether 'tis nobler in the mind to suffer
The slings and arrows of outrageous fortune
Or to take arms against a sea of troubles,
And by opposing end them?"
instead of pondering
"To be or not to be, --that is the question:--
Whether 'tis nobler in the mind to suffer
The slings and arrows of outrageous fortune
Or to take arms against a sea of troubles,
And by opposing end them?"
Or would he have gone farther and deeper into these matters, challenging such things on a much broader level?

Who knows really? Does it matter? What do you think?

It is simply a thought, probably not an original one either, that somehow found its way into my thinking from out of the blue and is, using my own version of a very dry Massachusetts sense of humor of course, also just a little tongue in cheek as well.

*Note*: Made mostly minor edits to the first, third to last and last paragraphs for the purposes of clarification and readability: last updated on Wednesday, May 12, 2004 at 8:03 PM [EDT].

Posted by Morgan at 4:07 PM

WM Pays $3.1 Million for Water Pollution

WM settled with the EPA after it sued for gross violations of environmental regulations during new store construction:

The complaint filed against Wal-Mart alleged violations at 24 sites in nine states. It included charges it failed to get a permit before beginning construction and did not develop a plan to control polluted runoff water.
The problem was not large or pervasive or universal at their construction sites--WM builds over 200 stores a year. But it was the second time in 3 years it had been sued by the EPA. (EPA determined WM's compliance was not full the first time around). Regardless of your view of the benefits and costs of such regulation, WM must follow these laws, and must be held accountable when it doesn't.

Still, I don't know which government will get to spend most of the $3.1 million collected as a civil penalty.

Today's settlement requires Wal-Mart to comply with storm water permitting requirements and ensures rigorous oversight of its 150 contractors at its construction sites across the country through an aggressive compliance program. Wal-Mart will be required to use qualified personnel to oversee construction, conduct training and frequent inspections, report to EPA and take quick corrective actions.

In addition to paying a $3.1 million civil penalty to the United States, Tennessee and Utah, Wal-Mart has agreed to spend $250,000 on an environmental project that will help protect sensitive wetlands or waterways in one of the affected states, which are California, Colorado, Delaware, Michigan, New Jersey, South Dakota, Tennessee, Texas and Utah.

Full details of the settlement can be found here.

Posted by Kevin at 3:45 PM

The Other WM Blog

Stephen Greenhouse of The New York Times writes about Andrew Stern of the other WM blog, Fight for the Future. I found many--not all--of the other WM blog's posts to be a mix of propaganda, pep, and outrageous, unfounded allegations. And I probably wouldn't have written about them yet if the Times' Mr. Greenhouse hadn't chosen to highlight the blog as part of a wider movement:

Union leaders, academics and community activists plan to hold an unusual meeting in Washington today to begin mapping out a strategy to check Wal-Mart's growing power and to press the company to improve its wages and benefits.

The meeting was organized largely because union leaders fear that Wal-Mart Stores, the nation's largest company, is pushing down wages and benefits, not just among retailers but throughout the economy

Mr. Greenhouse, you can check out the actual effect of WM on wages by looking at wage data in retail and throughout the economy. Why didn't you bother? If real wages have gone down in retail, or other sectors of the economy, don't tell readers what some organization believes, tell us what really happened. This argument is not a political contest, a wr of opinion, or a popularity contest; it is an argument about something that can be verified.

I don't claim the last word on the subject, but according the the BLS, as WM has expanded throughout the nation, retail wages (pictured below)--not to mention wages in other industries--are increasing in real terms:

So much for the "ripple effect" of low wages. Here's an excel spreadsheet with the data and chart.

The article also closes with this flagrant error:

"Wal-Mart is the largest employer in the U.S.,'' Mr. Wilhelm said. "It's incredibly pervasive in its race-to-the-bottom influence.''
Give me a break. How many times must I debunk this? Did Mr. Greenhouse even bother to check this one out? The federal government by far is the largest employer in the U.S. (the military itself being larger than WM, and the federal government about 15x larger than WM), although WM is the largest private employer in the U.S..

Posted by Kevin at 9:01 AM

BusinessWeek Profile of WM CIO

BusinessWeek peeks into the tech world of WM, profiling its CIO and executive VP Linda Dillman:

Dillman, who has been with Wal-Mart for 12 years, following a five-year stint at computer giant Hewlett-Packard (HPQ ), helps the retail chain use technology to figure out things like the right mix between self-service checkouts and live cash registers in a typical store. More important, she has helped cut weeks off invoice-processing time and billions off its costs of managing inventory.
READ THE WHOLE THING! IN case you won't here's another key paragraph:
More efficient inventory management is another of Dillman's priorities. Six weeks ago, she introduced the so-called FISH (First In and Still Here) report, distributed to key merchants and Wal-Mart execs, that traces how long various inventory items have remained on the chain's shelves. The idea is to discover which products aren't selling well and to adjust inventory levels accordingly. Even below-cost price reductions can translate into huge savings for Wal-Mart, which carries $25 billion to $30 billion in inventory at a given moment.

Posted by Kevin at 8:16 AM

May 11, 2004

Unions Sue City, Challenge WM

Unions have sued Gilroy, CA, saying that its approval of a WM supercenter violates state environmental and economic blight laws. :

In March, Council sifted through nearly three hours of economic, environmental and ethical arguments before voting 5-2 to allow Wal-Mart to move from its existing Wal-Mart store on Arroyo Circle to the big-box enclave at Pacheco Pass Center off Highway 152 and U.S. 101.
Some of the stipulations required of WM border on the asinine:
When Council approved the Supercenter in March, it did so with a list of 10 conditions the store would have to meet. The conditions ranged from providing a children�s play room with information on protecting the environment to sponsoring seminars that teach small business owners how to compete with the retail giant.

Posted by Kevin at 5:18 PM

Around the Blogosphere (Serious)

The Kitchen Cabinet debates the efficiency of buying pickles at WM. If it's cheaper to purchase a gallon jar at WM and throw the rest away, than to buy a half gallon elsewhere, is doing so economically efficent? YES.

Dave's not here reports that an Army PX as big as a WM.

Boy as car thinks $14 Levis and $1.98 per gallon OJ make Wal-Mart an amazing place.

Posted by Kevin at 8:45 AM

Around the Blogosphere (Humor)

There are some good things about WM. If you happen to be shopping for clothes, but didn't put on underwear, WM can supply it cheaply and quickly.

WM wine has received plenty of nicknames.

WM keeps families together; its glasses are large enough to get the entire family drunk.

Posted by Kevin at 8:38 AM

Bailian: WM Meets its Match?

For quite some time now, Americans have been focusing on the transfer of manfacturing jobs to China. While this doesn't really represent what is happening--manufacturing is become so productive that jobs are vanishing, leading to a higher percentage of manufacturing jobs being done in China--it does represent a real shift in economic activity.

And that shift is a dramatic increase in the size and purchasing power of the Chinese middle class. So much so, that they have their own "big-box" stores, 7 of which recently combined into the Bailian Group. And Forbes reports that the Bailan Group is ready to take on its foreign competitors:

Born of a seven-way merger last year, Bailian said in March it aimed to expand sales by 20 percent this year to more than $13 billion, and squeeze into the Fortune 500 circle of the world's largest companies by 2010.

For now, foreign firms maintain a tiny footprint. Sales generated by overseas companies accounted for less than 3.5 percent of retail sales in China, state media have said.

But they are making their presence felt.

Wang said Carrefour, Wal-Mart, Germany's Metro AG and three other unspecified foreign enterprises posted sales of 49.5 billion yuan last year -- equivalent to about 18.3 percent of revenues for the industry's top 30 players.

They ran 1,748 stores, or 16.9 percent of total outlets. ($1= 8.277 yuan)

Posted by Kevin at 8:06 AM

May 10, 2004

The Unions are Closing In

Businesspundit notes a subscription-only Fortune article on attempts to unionize WM:

Wal-Mart is the nation's largest employer, and not a single one of its 1.3 million workers ("associates" in Wal-Martese) is a union member. Changing that statistic, some union leaders argue, is the labor movement's most important challenge right now. "If we want to survive," says Stewart Acuff, organizing director of the AFL-CIO, "labor has no choice but to organize Wal-Mart." Though individual unions usually do not band together across turf lines for organizing drives, discussions are now underway across the labor community about what they call "the Wal-Mart problem." "What they do affects the standard of living across the globe," explains Acuff, referring to the retailer's ability to force...
What they have done is raise the standard of living across the globe. The massive increase in the Chinese middle class might have something to do with the usually well-noted statistic that 85% of WM goods are produced in China. In the US, WM has lowered the wages of unionized grocery clerks; as a result, people who would have become grocery clerks are finding other means of employment at equivalent or higher wages--just not in grocers. (No, their real wages are NOT decreasing).

The Businesspundit has some more material than is available for free.

Posted by Kevin at 10:49 AM

Video Game Survey

Kevin below posted a story on how Wal-Mart isn't the low price leader for video games. Here's the report in its near entirety:

Game Pricing At Retail; Confession Time For WMT
RETAIL PRICING SURVEY: We surveyed seven leading retailers of video game software for best pricing practices and included a count on used game software. We picked 30 video game software products to price including a mix of new and older games for various hardware platforms. Below we highlight the pricing results for the "basket of video game software" by retailer.

Total Price - All 30
% Over
Low Price
#1. $1,134.51
#2. Best Buy $1,164.70 2.7%
#3. Target $1,179.70 4.0%
#4. GameStop $1,189.70 4.9%
#5. Electronic Boutique $1,204.70 6.2%
#6. ToysRus $1,212.69 6.9%
#7. WalMart $1,231.76 8.6%
Average $1,188.25
Electronic Boutique
$995.70 -12.2%
GameStop (used) $983.70 -13.3%
WALMART IS THE MOST EXPENSIVE RETAILER: We continue to be surprised that retailers generally do not break minimum advertised price (MAP) levels in the video game software category. Much to our surprise, WalMart was the most expensive retailer of video game software according to our survey, boasting an average price point 9% higher than, and 6% higher than Best Buy. Moms, dads, and kids know that GameStop and Electronic Boutique are the video game destination of choice as they accept games on trade-in, have a huge selection, and sell used video games at significant discounts to new. On average, used video game software price points were 13% below the lowest priced retailer of new games and more than 16% lower than the average retail selling price of new games.
GOOD NEWS FOR VIDEO GAME PUBLISHERS: The good news for game publishers is that pricing is holding up very well on new games with no retailer pressuring ASPs. According to our survey, retailers pick their spots and mark down very few games. With a retail mark-up of only 20-23%, retailers appear unwilling to sacrifice profits on video game software...yet.
THE USED VIDEO GAME MARKET IS HUGE: We calculate the size of the used video game market (ELBO and GME) in the U.S. between $630 and $790 million for 2004. We estimate that well over 10% of console software dollar sales at retail come from used video game software (not in NPD). We estimate that over 8% of all video game sales in the U.S. are used games (console, handheld, PC). At some point we think video game publishers like Activision and EA could stick their hand out to share in the profits from used game sales. To date, the importance of the publisher's relationship with specialty retailer outweighs lost sales and profits.

Posted by Bob at 10:03 AM

May 9, 2004

Rookie grocery-shopping at a SuperCenter

On the way home from the airport this past Friday, I stopped at the Wal-Mart SuperCenter in south Carson City to get some groceries. While I've been in SuperCenters before, this was the first time I've ever grocery-shopped at a Wal-Mart.

Nice things:

  • the aisles in the grocery section were wide and not filled with crap, and the lighting seemed better. (This may have been either because of brighter lights, or more open floor space and lower shelves, or because it was a beautiful day outside and that came through the skylights. I think a combination of the first two.)

  • The deli section was better stocked than I expected. Basic, but not much different than a standard suburban grocery store.

  • Prices.

Not so nice things:

  • The selection of fresh items (vegetables, fish, fruit) was pretty small, and didn't look all that great. It wasn't terrible, just mediocre. They were all out of grape tomatoes, pretty thin on the cherry tomatoes, and their Roma tomatoes were a little picked-over and beaten-up.

  • It was not well integrated into the rest of the store. Basically, the store was a regular Wal-Mart, with a food section stuck to the right side. The rest of the Wal-Mart was laid out like a regular Wal-Mart. So, food was to the right, soap and laundry detergent was to the back right, paper towels in front of the soap. But right next to the food was the clothing section. To get to, say kitchenware and utensils, you have to cross the clothing section, passing by the furniture. Toothpaste, shampoo, etc, are in the front-left of the store, so again, you have to go through or around the entire clothing section. In a store the size of a SuperCenter, this is a real pain. It doesn't help that once you leave the grocery section, you're piloting your cart thru the narrow-aisle obstacle-course part of the store as well.

    I don't know if all SuperCenters are like this. This one is pretty new, though, less than a year old.

Surprising psychological effect:

  • It was quite liberating shopping for groceries at Wal-Mart, compared with going to a Safeway. At a normal grocery store, you tend to look out for the specials and avoid buying things that aren't on special, or buy up extra when something is on sale. You think "Hey, it's Wal-Mart, it's not going to get much cheaper" instead of "Maybe it's on special at Albertson's," or "Should I buy four of them now, or just get one and come back when it's on sale?"

    I don't check the grocery store flyers to figure out every week who has the best price for what, but growing up my mother did so, and I know that many family shoppers do. They read all the flyers, compare items, and makes trips to different stores and stock up on items on special that week at each place. There's quite a bit of time and effort involved in figuring all this out, but it can save a lot of money on a grocery bill vs just shopping at one store. Shopping at Wal-Mart changes that calculation. While you can probably still do better by picking through all the grocery store flyers (at least for some goods), the relative advantage is decreased. You can get most of your savings without doing all the work, just going to one place. For a lot of people, getting all that time back is a nice little luxury that Wal-Mart gives them.

Oh, and one more thing I noticed: Seems now you can actually order and pay for McDonald's meals (from a limited list of items and combos) at the Wal-Mart checkout stand, then pick it up at the in-store McD's counter. I don't really see this taking off.

Posted by gkanapathy at 11:16 PM

Is Walgreens a Threat to WM?

I didn't know that Walgreens was the largest and fastest growing pharmacy chain, and that they perceive Wal-Mart and Target to be one of their main competitors. But if Walgreens competes with Wal-Mart, then Wal-Mart must compete with Walgreens:

�Walgreen[s] shouldn�t be worried" about its rival�s increased presence in Texas, Florida and several southern states, said Hastings, of the New York-based credit advisory firm Bernard Sands. ��Their biggest threat is Wal-Mart and Target stores, not CVS.��

Unlike those two retail giants, however, Walgreen[s] remains focused on the pharmacy business that brought it into being and not on selling every product imaginable. It�s been that way for the last quarter-century since then-CEO Charles Walgreen III decided to sell off side ventures, including its Globe discount stores, travel agency, optical centers, Sanborns department stores in Mexico and Wag�s fast-food restaurants.

The company has flourished for most of its 103-year history despite periodic challenges to its standing atop the drugstore industry. The newest: Mail order drug suppliers. Mail orders accounted for 17.2 percent of drugs sold in the United States in 2003, a figure that is steadily rising.

But David Bernauer, CEO since 2002, downplays the threats and recalls all the previous ones that were supposed to doom retail pharmacies since he joined the company in 1966: Kmart and other discount stores, then food-and-drug combination stores, then deep-discount drugstores such as now-defunct Phar-Mor, and now the mail.

��It seems like in our industry you always have to have some nemesis out there, something ahead that�s just going to decimate you,�� Bernauer, 60, said in an interview at company headquarters in Deerfield, Ill. ��Mail�s going to continue to grow, for sure. But it will top out at some point and not be able to grow any faster than the industry.��

Walgreen is moving to claim its share of the new business, introducing 90-day prescriptions in its stores last fall and announcing it won�t sign new contracts with drugbenefit-plan providers that require members to get maintenance drugs through the mail.

Walgreen also has a wary eye on Wal-Mart, now No. 4 in the pharmacy business and rising, particularly since Walgreen�s own sales of cosmetics and other general merchandise are less stellar than prescriptions.

��We�re always thinking about how do we compete against the Wal-Marts and the Krogers as much as we�re thinking about how do we compete against the CVSes,�� Bernauer said.

The company has a history as an aggressive competitor, pioneering store format changes such as larger and more profitable freestanding sites, drive-thru pharmacies and 24-hour stores. Walgreen has more 24-hour pharmacies than all its competitors combined, adding 266 over the past year.

They sound like a rough competitor.

Posted by Kevin at 7:34 PM

Anti-WM Activists won't Compromise

Activists have recently claimed that WM's failure in Inglewood wouldn't have been necessary if it would only compromise with their demands. One editorial writer sees it in reverse--it's activists who are the obstructionists and non-compromisers:

It's becoming increasingly clear, however, that no matter how carefully or extensively city officials examined this issue, Wal-Mart's opponents would not accept approval of a new store.

The premise of this lawsuit is the City Commission rezoned the property without properly investigating the impact the development would have on the community. Wal-Mart foes called for economic- and traffic-impact studies.

It is reasonable to assume that both the city planning commission and the city commissioners are capable of making such decisions with or without these investigations.

No one doubts a Wal-Mart store would change the landscape. The question is whether that change ultimately is beneficial to Marine City.

The battle over a Marine Wal-Mart store is part of a greater war. Wal-Mart's expansion plans in California and Chicago have organized opposition with pretty much the same arguments raised in Marine City: The store offers low-paying jobs, it will harm local businesses and residential property values.

There is one twist: William Watch, president of First Commercial Realty and Development Co., which owns the Kmart plaza on M-29, submitted written testimony in the lawsuit. Watch stated that even if Wal-Mart gets all the retail business possible in Marine City, the store still would be $12 million short of making a profit. He said the worst case would be that the Kmart store is driven out of business, but Wal-Mart eventually closes, too.

With all due respect to Watch, Wal-Mart is the nation's leading retailer. It is hard to believe its officials would enter into a losing proposition.

The truth is some folks don't want to see a new Wal-Mart store under any circumstances. It's regrettable Marine City is being drawn into that war.

The economic sense (and commonsense) of this editorial writer shocked me.

Posted by Kevin at 7:26 PM

May 8, 2004

High Prices for Video Games at WM reports results from a survey in this Reuter's aricle comparing prices of new video game console and handheld game titles in different outlets.

For the 30 titles in the survey, which were a mix of older and newer games on console and handheld platforms, Wal-Mart's total price was $1,231.76, nearly 9 percent, or $97.25, more expensive than the overall low-price leader, Inc. (AMZN.O: Quote, Profile, Research)

"We haven't had ample opportunity to review this survey, however as a company that brought $12 billion in ... savings to our customers last year alone, we find this hard to believe," Wal-Mart spokeswoman Karen Burk said. "But given our pledge to everyday low prices, we'll look into this."

CNN Money reports:

More people buy video games at Wal-Mart than any other store in the country, but according to a new Piper Jaffray retail survey, they're paying more than they have to....

"Retailers generally do not break minimum advertised price levels in ... video game software," Gikas wrote.

Slashdot has their usual analysis.

This is the guy who headed the survey.. Note that I have big reservations about the validity of consumer surveys like this. I find it difficult to assess without reading the original study...

Posted by Kevin at 12:26 PM

WM Remembers What you Buy

Many people fear that Wal-Mart will replace their small-town general store and grocer. Some of these same people fear that WM will use its information tracking system illicitly, even though they don't worry about people at the local general store gossiping about their purchases. Crammed in the middle of this article is a description of who WM uses its information about you:

Ted Walnofer, Wal-Mart Manager says, � Big ticket purchases. If there's a grill to be bought a microwave a bike, a king size comforter, higher ticket items, will always spike first of the month, middle of the month.�

Since it began tracking, Wal-Mart had seen customer spending level off toward the middle of the month. But in the last year, something has changed. Instead of a curve, where spending dips, it's a sharp V, where spending nearly collapses around the 11th, until people get paid again on the 15th.

Walnofer says, �The consumer has become strapped. You can see with the job losses and concern in economy.�

How does Wal-Mart know we're living paycheck to paycheck? Because 100 million people shop in U.S. Wal-Mart's every week and the company takes in 6 to 8 cents of every dollar spent on U.S. retail, other than automobiles.

Walnofer says, �Only the United States department of defense has a better information system, computers, other than Wal-Mart.�

No, Wal-Mart's are better.

Posted by Kevin at 12:05 PM

WM Pay Much Higher than Expected

WM's new distribution center in St. Lucie, FL will pay $11.75 as a starting wage, with 50 cent raises after 90 days and 6 months. Some people are shocked:

Wal-Mart had previously said only that its wages would be "competitive," without releasing any specifics because it was conducting the wage survey.

The pay scale announced Friday brought a smile to the face of JoAnna McHugh, the One Stop Career Center system manager for the Port St. Lucie-based Workforce Development Board of the Treasure Coast, which is handling the Wal-Mart appli- cation process.

Because the company was required to pay an average wage of only $11.78 an hour [to receive $1000 grants], she said, some expected wages two or three dollars per hour lower than that.

"We're thrilled � $11.75 is only the entry level, which means it can only go up," McHugh said. "We thought that with a $11.78 average wage, there might be some $9 or $10 jobs in there ..."

Local economist Merle Dimbath added, "They are going in with the brute force of cold, hard cash."

The pay scale should have a positive impact on the wage market in St. Lucie County, which is much needed because the current level is below the state average, he said....

Craig Ridgway, general manager of the distribution center, said not only are the wages "very good" for the area, the benefits are also excellent. The benefit package includes a 401K plan, profit sharing, life insurance, vacation and holidays and health/dental insurance...

Without doing any advertising about the pay scale, Wal-Mart has received more than 4,300 applications...

Posted by Kevin at 11:57 AM

May 7, 2004

WM's Effect on Rural Police

An excellent survey article on the challenges that a WM can put on a rural police force:

But different agencies report varying experiences. The majority of the more than 30 small to mid-sized police agencies around the country who agreed to be interviewed for this story said their departments are able to effectively handle the increased calls for service Wal-Mart brings. A few reported no corresponding crime spike and only negligible increases in calls to police.

Overwhelmingly, police chiefs defended Wal-Mart as an asset to the community and helpful to law enforcement, providing full access and information for investigations and grants to fund police projects, to say nothing of the tax benefits the store brings the community.

The only thing I would add is that if crime increases in one rural town, it is likely to decrease in the neighboring towns.

Posted by Kevin at 5:52 PM

May 5, 2004

Welcome to the New ALP!

Welcome to the new Wal-Mart blog--Always Low Prices.

Besides the posts above, you can find the most recent posts before these here.

Posted by Kevin at 3:18 PM