October 30, 2004

WM Pickles

We've previously noted a Kitchen Cabinet post debating the efficiency of purchasing the mammoth jar of WM pickles. I'd also note this post on Gaper's Block for the sparring the author and I had in the comments.

I had almost forgot about the infamous Fast Company Vlasic pickle article (The Wal-Mart you Don't Know) until Tyler Cowen reminded me.

Although the article is an excellent story, more amazing is that even though it was published about 10 months ago, it continues to draw a great number of comments... 441 as of today...

Posted by Kevin at 12:05 PM

October 29, 2004

WM Hinders Poverty Reduction

New research indicates that WM's creative destruction made poverty reduction slightly harder in the 1990s:

Counties that gained a Wal-Mart store experienced smaller reductions in family poverty rates during the economically strong 1990s than did counties not gaining a Wal-Mart store, according to a new study by a rural economist in Penn State's College of Agricultural Sciences.

The study examined the effect of the retailing chain on county poverty rates. Stephan Goetz, professor of agricultural and regional economics and faculty affiliate in Penn State's Center for Economic and Community Development, explains that, even during the economic upswing of the 1990s, counties that added a Wal-Mart store during the decade saw their poverty rate decline by a smaller amount than did counties not adding a store.

"The average family poverty rate declined nationwide by more than 18 percent between 1990 and 2000," he says. "The statistical model developed for this study suggests that the net predicted effect of a new store was relatively small, amounting to a 0.2 percentage point higher poverty rate for one new store, 0.4 percentage points for two new stores, and so forth compared to the counties where no new store was added.

"Furthermore, the 0.2 percent increase in the family poverty rate associated with one new store represents 8.3 percent of the 18.3 percent national reduction in the poverty rate during the 1990s. In other words, the ability of those counties that gained a Wal-Mart to decrease the poverty rate during the decade was reduced by about 8 percent relative to those counties that did not gain a new store."

Goetz says the effect, while small, is statistically significant and remains after other factors affecting changes in poverty over time are accounted for, including initial poverty and whether the county already had a Wal-Mart at the beginning of the decade. A possible explanation for this finding -- that Wal-Mart deliberately seeks out impoverished communities to locate new stores, and that these communities may in turn have more difficulty reducing poverty over time -- doesn't hold up, according to the researcher.

Press release here. Full report here. (I'm still reading it). The analyses seem straightforward, but I'm not convinced of any of the explanations offered... They admittedly don't adjust for the relatively lower price level in WM dominated areas.

Posted by Kevin at 10:04 AM

CA Dems to Investigate WM Healthcare Plan

I understand sincere motives to get better healthcare for the poor, but this seems more like political intimidation to me:

SAN FRANCISCO, Oct 28 (Reuters) - California lawmakers said on Thursday they would hold hearings to investigate claims that Wal-Mart Stores Inc. (WMT.N: Quote, Profile, Research) burdens the state with an unfair portion of the retailer's employee health-care costs.

Democratic members of the Senate Budget Committee also questioned whether California pension fund Calpers should consider selling off its estimated $1 billion investment in Wal-Mart stock because of the company's policies.

"The Senate Budget Committee will, as part of the budget process next year, investigate the extent that Wal-Mart does not provide coverage, and the extent that California taxpayers then pay for care for Wal-Mart's workers," said Senate Budget Committee chairman Wes Chesbro...

The decision to hold hearings follows Wal-Mart's aggressive campaign against a measure on the Nov. 2 ballot that would require larger employers in California to pay for health care coverage for workers.

On Tuesday, the world's biggest retailer said it would spend $500,000 to defeat Proposition 72 because supporters of the measure featured the company in a television ad claiming taxpayers paid millions more because Wal-Mart "won't provide affordable health coverage."

Walmart spokeswoman Cynthia Lin in a statement on Thursday said the advertisements claiming the company did not provide affordable health care were "outright lies" and that workers could get quality plans.

Posted by Kevin at 9:57 AM

RFID to Sam's Club & Consumers

The future is already here:

Wal-Mart Stores Inc. is extending radio-frequency identification to its chain of Sam's Club outlets, a move that could put RFID tags in the hands of consumers.

This fall, RFID will be put to use in a Sam's Club store at the southwest corner of Highway 121 and Ohio Drive in Plano, Texas. Like other club outlet chains, Sam's Club sells much of its goods in bulk--in cases, for example--so customers can take advantage of volume discounts. That means there's a good chance customers will fill their shopping carts with RFID-tagged products....

Meanwhile, Wal-Mart's use of RFID in its flagship stores continues. By January, Wal-Mart says it will expand RFID deployments from one to three distribution centers in Texas and increase the number of participating stores from seven to more than 130. Most will be located in northern Texas, the remainder in south-central Oklahoma.

Posted by Kevin at 9:53 AM

Shopper Petitions for Ferry Farm WM

In Fredricksburg, a man became upset that a WM where his son works won't become a supercenter, after petitions from anti-WM activists. So he began his own petition:

Charles Cooper, who lives near the store, was one of the few who spoke in favor of the plan. He believed supervisors weren't hearing the whole story. He decided to do something about it.

"People who come to Wal-Mart really aren't political, let's be honest," Cooper said. "They are raising families, trying to make ends meet, trying to make their budget stretch. They don't go out of their way to go to Board of Supervisors meetings."

Cooper feels strongly about supporting Wal-Mart because his son, Chuck, works there. Chuck has Down syndrome. Since the store opened, he has been in charge of corralling the shopping carts in the parking lot and pushing them back to the store.

"My son makes a reasonable salary. Chuck gets a $1,000 bonus every year; he gets vacation," his father said. "Wal-Mart treats its customers with dignity."

Cooper approached White about starting a petition shoppers could sign if they wanted to see the expansion go through. White said he had heard the same thing from other customers, so he set up a table at the front of the store.

After two months or so, the petition had collected 4,800 signatures from Wal-Mart shoppers. Cooper presented the petition to the supervisors last week.

Pete Fields, the supervisor who represents the Ferry Farm area, said that even before he received the petition, he knew some residents supported the store's plan.

"My sense is that half the people I represent love Wal-Mart and half the people I represent loathe Wal-Mart," he said. "The district is divided and I'm going to do the best I can."

Nobody speaks for all the people...
Posted by Kevin at 9:50 AM

October 28, 2004

Tit for Tat

Jim Hightower takes on the subsidies given to WM:

The average payout to a Wal-mart store was $2.8 million. Imagine being an independent pharmacy, hardware store, grocery or other shop and having to compete with a multibillion-dollar giant that is then handed an extra $2.8 million taxpaid advantage over you.

The actual subsidy is much larger, for the center was able to look at only a portion of the 2,900 Wal-Mart stores. Also, the report covers only the direct development subsidies, not counting the huge, wage subsidy it gets. Wal-Mart pays at a poverty level and provides no health coverage for a majority of its workers, instead, counting on food stamps, emergency rooms, and other publicly-financed services to underwrite its workforce.

Sarah Clark, Director of Corporate Communications at WM, responds:

Finally, on health care and jobs, Wal-Mart will spend more than $4.3 billion for our associates� benefits in 2004, including health coverage. That money will go to cover more than 500,000 associates and their families. In addition, Wal-Mart pays wages that are highly competitive in the retail industry, with an average hourly wage of $9.98 nationally and $10.38 in metro areas.

Wal-Mart always pays above the federal minimum wage, and provides a profit sharing/401(k) plan, company-paid life insurance, discounts on company stock and discounts on merchandise for associates. Thousands of people line up for jobs at Wal-Mart. Our turnover rate is one-third below the average for the retail industry. Clearly, associates find value in working here.

Folks, here's the truth. WM gets a lot in subsidies; so does everyone else. Does WM get more or less? We don't know. Does WM pay "poverty wages"? Yes, if you're an unskilled worthless drunkard with 12 children who can't keep any other position. And it will be your fault. Working as a stock boy or cashier at WM, it will be difficult to support your entire family. You should have thought of that a long time ago.

But, if you plan ahead, work hard and consisently, and show what you're worth, you will rise up in the ranks, and will not be earning "poverty wages".

Posted by Kevin at 12:56 PM

Select Pittsfield Township Residents vs. WM

WM wants to expand greatly in Michigan, and some residents are using national connections to help them in their fight against it:

Almost half of the 60 or more residents in attendance addressed the Board, all echoing the same theme: stop the Wal-Mart. The majority of residents refused to believe that township officials had exhausted all avenues of obstruction to the project...

The store�s initial site plan was rejected about a year ago, but the Pittsfield Township Planning Commission approved a conditional use permit early last month that would allow Wal-Mart to build a drive-through pharmacy, a tire and lube facility, and an outdoor garden center. Developers would like to open the store next fall, according to Nick Miller, the project manager at Atwell-Hicks.

As residents learned of the plans, opposition to Wal-Mart swelled and the issue took on political overtones that could effect the Township Board election next week...

Nonetheless, Pittsfield Township Clerk Christina Lirones, who chairs the Planning Commission, said that because the parcel has been zoned commercial since 1977, it would be difficult to keep Wal-Mart out.

"We are working within the framework of the law," said Lirones. "I have tried to be honest and forthright about what we can do and what we cannot do." She added: "The things we can change, we are changing. What we can do, we are doing."

But Robert Hoffman heard the same argument from his planning commission before he organized a 30-member citizen group called This is Our Town to fight the construction of a Wal-Mart in Charlevoix Township.

"They told us it was a done deal," said Hoffman. "That Wal-Mart would outspend and outlast us."

But Hoffman�s group drew statewide attention as it collected 5,000 signatures opposing the proposed Wal-Mart, and in May the store announced in a three-sentence e-mail to Charlevoix� planning commission that it was withdrawing its plans, which had included a supermarket, general merchandise, a garden center, and a tire and lube station.

"They didn�t expect any opposition to it," said Hoffman. "They characterized us as a small interest group. We�re not sure of the impact we had, but we know we got their attention. We got public sentiment turned around."

Hoffman enlisted the help of Al Norman, who wrote a 1999 book entitled "Slam-Dunking Wal-Mart," which recounts his successful effort to keep Wal-Mart out of Greenfield, Mass., in 1993. Norman, Hoffman said, was invaluable....

At the end of the public comment period, the township supervisor said he agreed with much of what he had heard....

Posted by Kevin at 12:46 PM

WM Discriminates Against George Carlin

In addition to refusing to carry Jon Stewart's new book in stores, WM is refusing to carry George Carlin's:

News > Newsmakers
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Carlin's no joke for Wal-Mart
Report: Discounter returns 3,500 copies of George Carlin's new book; cites ordering "error."
October 28, 2004: 11:50 AM EDT

NEW YORK (CNN/Money) - Funnyman George Carlin's new book "When will Jesus Bring the Pork Chops," is no laughing matter for discounter Wal-Mart.

According to the New York Post, the world's largest retailer reportedly has returned 3,500 copies of Carlin's book, citing an ordering error.

The book, published by Hyperion, is currently No. 28 on Amazon.com's top-sellers list.

Carlin, popular for his subversive comedy, addresses politics, religion and hygiene in the book. Its cover is a rendition of the "Last Supper" with Carlin pictured sitting next to Jesus' empty chair, the report said.

Posted by Kevin at 12:38 PM

October 27, 2004

WM Politically Active in CA

Rent seeking is defined as the use of resources to defend one's "rents" (or profits above the norm). Here, WM is using resources to defend the right of free contract:

SACRAMENTO, Calif. - After years of waging its political wars almost exclusively on the local level, Wal-Mart Stores Inc. is spending aggressively this election in support of favored statewide candidates and ballot measures - including donations to Gov. Arnold Schwarzenegger and the state Republican Party.

The world's largest corporation, which once had a tradition of trying to stay out of politics, has given more than $2.4 million on California races so far this year - well beyond any previous sum the company has spent here in one year.

And Tuesday, the Bentonville, Ark.-based company announced it would donate an additional $500,000 to the opponents of Proposition 72, a measure that will require employers to provide basic health insurance to workers.

Wal-Mart representatives said the escalation

Wal-Mart is not alone:
More than $12.8 million has been raised from opponents of the law, including McDonald's Corp. and Target Corp.

"If it happens in California, it rolls eastward and that will have damaging effects nationwide," said Jot Condie, vice president of the California Restaurant Association, a Sacramento trade group that has given more than $3 million.

That slippery slope...

Posted by Kevin at 7:11 AM

October 26, 2004

WM Threatens to Close Unionized Store!

You can unionize a store, but you can't make WM keep it open:

Employees at Wal-Mart's only unionised shop in North America were told that their organising drive makes team effort "impossible" and that the store may shut down if an agreement is not soon reached with the union.

The Jonqui�re outlet, 500 km northeast of Montreal, employs about 170 people and has been unionised since August.

Wal-Mart Canada has expressed impatience waiting for contract talks to begin...

"If the store can't be efficient and profitable," warned a company release, "it's possible that the store will close." The union insists Wal-Mart's hourly workers make just less than the average supermarket employee in salaries and benefits.

Readers, if you don't like these completely legal tactics, don't shop at WM.

The employees in this store really are at each other's throats:

There has been angry name-calling by workers riven into pro-union and anti-union factions and accusations of intimidation by managers and threats of a lawsuit by the United Food and Commercial Workers Union....

The buzz at the Jonquiere store is no accident. It is just the current focus in a larger chess game, waged by labor organizers in stores scattered across Canada � including two other Wal-Marts in Quebec, where union spokesman Michael Forman said employees have also applied to the provincial labor board for union certification...

Their clandestine discussions were almost out of character in a region where union membership has long been worn proudly.

While union membership levels have declined in the United States to about 13 percent of the labor force, about a third of Canadian workers are unionized. Quebec is even higher, with about 41 percent of its workers in unions.

''You can't live in Jonquiere � and not have a friend or a relative, a wife or a husband or a father who is unionized,'' says Serge Lemelin, a reporter for regional newspaper Le Quotidien. ''It's a chateau-fort � a kind of fortress for the unions here.''

Even so, the talk about a union did not win universal support in the new Wal-Mart, with some workers worried it might cost them their jobs, others rejecting the idea of paying union dues.

Here's the text of the entire WM release:

Wal-Mart Canada issues statement regarding union situation in Jonquiere, Quebec

Company concerned about economic viability of the Jonquiere store,
urges labour-relations process to move forward quickly.

MISSISSAUGA, ON, Oct. 13 /CNW/ - Wal-Mart Canada today issued the
following statement with respect to the union situation in Jonquiere, Quebec.

It has been several weeks since the Jonquiere store was automatically
certified with the United Food and Commercial Workers union (UFCW), but no
communication from the union has been received with regard to beginning talks
with the company. The Jonquiere store is not meeting its business plan, and
the company is concerned about the economic viability of the store. Wal-Mart
Canada believes the unresolved labour situation at the Jonquiere store is
proving detrimental to improving the performance of the store.

Since the UFCW union has not communicated at all with Wal-Mart Canada,
the company has issued a letter to the union (Local 503) urging that a meeting
take place with the union on October 26 to begin the labour-relations process,
for the following reasons:

- The Wal-Mart associates in Jonquiere know their store is not meeting
its business goals, and they would like the labour-relations process
to move forward as quickly as possible so they can have certainty over
operating conditions at the store.

- Wal-Mart Canada is concerned about the fractured environment in the
Jonquiere store resulting from the exclusion of more than 30 hourly
workers from the bargaining unit. This makes it difficult to operate
the store in a collaborative team environment. This exclusion of
workers was described as having no "rational" or "defensible" basis in
the British Columbia Labour Relations Board's decision to dismiss this
same union's application for certification of the Wal-Mart store in
Terrace, B.C.

- The failure of the union to contact us to begin negotiations is
causing anxiety and uncertainty among our associates in Jonquiere.

To this end, Wal-Mart Canada has issued the letter to the union
requesting that the labour-relations process begin as soon as possible so that
these matters can be addressed.

The Jonquiere store was automatically certified with the United Food and
Commercial Workers union (UFCW) on August 2 on the basis of signed union cards submitted by the union to the Quebec Labour Commission. Wal-Mart associates in the Jonquiere store rejected this same union in a democratic, secret-ballot vote that was held on April 2 of this year.

Wal-Mart Canada employs more than 65,000 Canadians and has been ranked Canada's best retail employer twice during the past three years by
international human-resources firm Hewitt Associates and Report on Business
Magazine. The company is committed to community involvement and has
contributed more than $35 million to Canadian charities. Wal-Mart Canada was
established in 1994, is headquartered in Mississauga, Ontario, and operates
234 Wal-Mart discount stores and six SAM'S CLUBS in Canada.

For further information: Contact Andrew Pelletier, (905) 821-2111, ext

Posted by Kevin at 10:36 AM

October 25, 2004

$10 CDs

Barry Ritholtz has combed Rolling Stone to tell us that WM wants $10 CDs:

Does a CD have to cost $15.99? That's the question mass retailers like Wal-Mart and Best Buy have been asking for some time now. The Major labels have come to realize that when Wal-mart asks a question, well, it not a request. The nation's largest retailer is also the country's biggest record seller, and if it cannot lower its prices -- they are threatening to take their ball and go home. Wal-Mart has quietly implied it will back out of the music retialing business.
This is a must-read post.

Posted by Kevin at 12:05 PM

When a Mile is too Short

Here's a unique WM protest--perform ancient tribal ceremonies on a sacred site one mile away from the store being constructed:

TEOTIHUACAN, State of Mexico More than 300 demonstrators streamed into the ancient ruins of Teotihuacan on Sunday and climbed part way up the towering Pyramid of the Sun...

Lugging huge banners and waving signs decrying WalMart and other international corporations, protesters who had chosen to stay out of the national park during previous demonstrations surprised tourists and visitors by setting up near the ruins' tallest pyramid.

Many on hand wore traditional Aztec headdresses and danced to a steady drum beat. Others handed out fliers, sang songs, chanted, or hung banners from trees, brush and smaller ruin structures...

Though almost a mile (1.6 kilometers) from the national park, the store site can be seen from the top of the Pyramid of the Sun and Pyramid of the Moon, as well as from the summits of most of Teotihuacan's tallest structures. But so can other commercial developments built in the community nearby.

Many local residents support the idea of a discount retailer in the area, saying it will create jobs and bring lower prices.

Archaeologists said that so far, only minor cultural remains have been found at the store site.

In earlier years, Mexico also has seen campaigns to ease development at other notable sites such as the Mayan ruins of Tulum and remains of the preTeotihuacan culture of Cuicuilco in Mexico City.

So they hate WM for being WM. Typical.

Posted by Kevin at 11:45 AM

Amazon Entry into DVD's will hit WM too

As I noted elsewhere, Amazon's entry into the DVD delivery business scared Netflix to lower its prices. It has also made WM reevaluate their own strategy:

The other key player in the market, Walmart.com, the online service from Wal-Mart Stores, said last week that the company was evaluating its own pricing strategy, having gone from offering the lowest to the highest price in a matter of about 10 days.
Sometimes the threat of entry is enough to lower prices! Also important:
Walmart.com has been quietly building its DVD rental service since its debut in June 2003. Kevin Swint, Walmart.com's director of entertainment and photo, would not disclose the number of DVD rental subscribers the company has, but he said that business had "grown beyond our expectations."

And despite the price cuts from Blockbuster and Netflix, Walmart.com's service remains the least expensive in at least one regard, Mr. Swint said. It offers a program in which subscribers can rent an unlimited number of movies over the course of the month for $15.54, while keeping only two at a time. (Other services allow customers to keep three at a time.)

That offering, Mr. Swint said, is the site's most popular DVD rental option. "We're really bullish about this service," he said, "and our customers are enthusiastic."

The structure of sales is crucial to understanding price differences.

Posted by Kevin at 11:41 AM

WM Discriminates Against Jon Stewart

WM has cancelled an order for Jon Stewart's new book, "because it has a photo of naked older bodies with the faces of the U.S. Supreme Court judges pasted on them."

The book also contains robes that can be cut out, and tells readers to "restore their dignity by matching each justice with his or her respective robe."

But Wal-Mart execs felt that the shock of full frontal nudity might be too much for the unsuspecting shopper's eyes.

"We felt a majority of our customers would not be comfortable with the image in our stores," Wal-Mart spokeswomen Karen Burk told the New York Daily News. The book is still available at Walmart.com at 45 percent off the $24.95 list price. We still wanted to give the option of buying it from Walmart.com," Burk explained.

Posted by Kevin at 11:35 AM

October 24, 2004

Parking at WM

Parking is usually considered difficult at most Wal-Marts. But consider the causes an consequences of far worse parking at most universities:

Picture an enterprise outside of academia, say Walmart, and imagine the customers being unable to find parking spots because a wildly disproportionate number of spots--the best spots, in fact--had been allotted to Walmart employees. Imagine, further, that huge numbers of these coveted spots were usually empty. Customers, if they could find parking spots at all, would park hundreds of yards from the Walmart entrance, and then they would pass dozens of empty parking spots--reserved for boxboys and checkers--as they trudged along to the entrance. Imagine, now, that they had paid for their parking in advance, only to find no available spots. Imagine also that if they happened to park in an empty and perpetually vacant red spot, they would be ticketed and charged an enormous fine equal to many times the daily cost of parking.

This, of course, is what a university does.

Posted by Kevin at 2:25 PM

October 4, 2004

Posting to Resume Shortly

Sorry for the blank slate, but I've been swamped. ALP will have new info in short order.

Posted by Kevin at 2:42 PM