June 30, 2004

Shaking Up the Big Boxes: The Bigger Picture

Being that I believe the court battle in question really has more to do about the bigger picture and the retail industry across the board, hence less to do about Wal-Mart itself, anyway; I found this Associated Press article from last week (Thursday, June 24, 2004) of interest, because it explores how the:

Wal-Mart Case May Prompt Industry Change [emphasis mine]:

By MELISSA NELSON Associated Press Writer

LITTLE ROCK (AP) - Retail experts say a nationwide class-action sex-discrimination lawsuit against Wal-Mart Stores Inc. could lead to changes within the world's largest retailer and among competitors.

"If the allegations are true, it will very fast lead to radical improvement of the situation. It is absolutely in (Wal-Mart's) best interest to resolve this as fast as possible," said Kurt Barnard, president of Retail Forecasting LLC in Upper Montclair, N.J.

Another analyst noted that those changes may already have begun before the decision Tuesday by a federal judge in San Francisco to grant class-action status to a suit filed three years ago.

The suit originally filed on behalf of six women will now represent as many as 1.6 million current and former employees - the largest private civil rights case in U.S. history. The suit claims Wal-Mart set up a system that often pays female workers less than their male counterparts for comparable jobs and bypasses women for promotions.


Robert Blattberg, director of the Center for Retail Management at Northwestern University's Kellogg School of Management, said the lawsuit will force all retailers to look at whether they are complying with equity laws.

"Most companies spend a lot of time trying to avoid these types of problems," he said. "If these cases start becoming prevalent, it will significantly increase the cost to retailers to track and determine if they are in compliance."

Wal-Mart's size and its staunch opposition to unions make it any easy target for such lawsuits, he said. "They are admittedly anti-union, and the unions like these types of lawsuits because they would like to see Wal-Mart bend," he said.


Yet the most noteworthy portion of the article happen to be found within the three closing paragraphs [emphasis mine]:

But retail experts said negative publicity from the lawsuit is unlikely to hurt the company's bottom line.

"In the long run, it doesn't hurt Wal-Mart because Wal-Mart is Wal-Mart; they are resistant," Barnard said.

"People don't go to Wal-Mart because they love Wal-Mart," Blattberg agreed, "they go to Wal-Mart because they like their prices."

Read the rest of the article, here.

The fact remains that Wal-mart can of course afford to continue fighting this as they have vowed to, even if they should end up losing the actual case in the long run. As far as they are concerned anyway, it is a no lose proposition for them either way the case turns out.

As the article points out however, since this is an industry-wide practice and thus more of a major problem for Wal-Mart's competitors, they are not as likely to fare as well as Wal-Mart is inclined to do and, smelling blood as well as a potential gain of the market share in addition, may change their own practices where they need changing in these regards.

Posted by Morgan on June, 30 2004 at 12:09 PM